Presidents Jinping and Obama doing some hand-shaking at the Rancho Mirage summit. (Image via)
This weekend, two of the world's most powerful men met at a summit in California. American President Barack Obama and his Chinese counterpart, Xi Jinping, were in Rancho Mirage to smooth over the bumpy issues that have been causing some awkward tension between their respective countries, the most pressing of which being the almost constant allegations of cyber espionage. That, and making the most of multiple opportunities to smile for the cameras, incessantly shake hands and generally look relaxed about being in the same room together.
But no matter how wide and chummy the smiles, the fact remains that the cyber-war between China and the US is still very much ongoing, with countless hacking accusations already being thrown around this year. The most recent report accused China of hacking into US networks and stealing blueprints of missile systems and military aircraft. And – as you might be aware of from that time US troops exploded their own multi-million-dollar stealth helicopter on the side of Bin Laden's compound – America aren't too keen on other countries getting a look at their sophisticated killing technology. (Although, coincidentally enough, it's been alleged that Pakistan allowed China to do just that before clearing away the wreckage.)
In the wake of last week's massive leak about the secret American surveillance programme PRISM (which secured direct access to the servers of Google, Facebook, Apple and other huge US online companies), the issue of cyber security and the protection of intellectual property became a domestic issue for many Americans. So the line, "The United States and China [can] work together to address issues like cyber security and the protection of intellectual property," in Obama's opening speech was a little uncomfortable, to say the least.
An American F-35 jet, technology that China is alleged to have stolen research data for. (Image via)
Although that new information confirms that the two countries are most likely just as bad as each other, China have a long-documented history of cyber snooping, as well as an impressive heritage of counterfeiting – an industry known as Shanzhai. And beyond the dubious Corcs sandals and Bucksstar coffee outlets, China is incredibly gifted at thieving intellectual property and bootlegging technology from rival countries, from the Apple iPhone to the F-35 stealth jet – research and development that’s worth millions and millions of dollars.
These hacking thefts are now so ingrained within the Chinese government that, earlier this year, a private security company managed to track an "overwhelming percentage" of cyber attacks on American corporations back to a military building in Shanghai. It turned out that the building allegedly houses a group known as Advanced Persistent Threat One – a cyber espionage unit that cracked into hundreds of supposedly secure servers. The Chinese Ministry of Foreign Affairs said that the allegations were "unprofessional". But when I called Phil Muncaster, a British technology journalist based in Hong Kong, he told me that attacks from China have been going on for years, and it's only recently that the US have found the stones to go public with their complaints.
“I think China has been doing this kind of stuff for at least eight to ten years or so – as long as there has been an internet,” he said. “I think it’s that the means to detect where these attacks are coming from, geographically, have got better, so people are becoming more confident that they can blame China than saying it came generally from that direction.”
While suspicions of China stealing military designs from Western defence companies date back to the beginning of the internet as we know it today, more recent accusations keep on flooding in. Two of which are the theft of blueprints for America's F-35 and F-22 fighter jets (worth a reported $1 trillion) and the swiping of drone designs from various UK defence firms. Both hacks, if legitimate, will benefit the country's flailing defence industry without any of the time, cost or work you'd normally hurl at those types of projects, which seems a very efficient way of doing things if you don't mind pissing off your rival superpower.
When I spoke to Joseph Menn – Reuters’ cyber security reporter and author of Fatal System Error, a book detailing, among other things, the Chinese government's role in cyber espionage – he told me how China has been breaking the "unwritten rules" of cyber spying that most countries tend to follow pretty rigorously. “The primary objectives with full-on state-sponsored cyber espionage are military plans, strategic plans, military designs and things like that. They first start to hack the White House, other government agencies and defence contractors, and then your larger private companies that have intellectual property," he told me. “It’s clear that [America] has lost a lot of designs over the years.”
Although governments around the world largely expect to be targeted by cyber espionage, Joseph told me that China’s foul play is agitating the White House more than you'd expect. In fact, US Congress has even introduced a new law to restrict America’s purchase of Chinese computer equipment. Weirdly, it's not the hacks into the multi-trillion-dollar killing industry they're so worried about, but the theft of designs by consumer corporations.
Joseph Menn talking about the Chinese government allegedly hacking Google's servers.
“Right now, if I stole Pepsi’s formula and said to Coca-Cola, ‘I’d like to offer you this for $100,000,’ they’d immediately kick me out and call the FBI,” Joseph explained. “When the US complains to China and says, ‘Hey look, it’s fair game to go after our military and government just like everybody, but you’ve got to stop with the commercial stuff because we don’t do that,’ the Chinese basically don't see a distinction there. If you want your country to do well on the world stage, then you need to have companies that make good stuff…”
Just like those Corc sandals, there aren't really any downsides to stealing someone else's work. And, as Joseph pointed out to me, China definitely doesn’t care who it hacks, who it steals from and if it eventually ends up getting rumbled.
“China is seen as the biggest threat in cyberspace,” he told me. “I think it’s impossible to think they’re the only serious threat; there are a number of other countries doing things, but they seem to care more about their operational security – they don’t want to be identified as the source of a given breach, whereas some folks in China clearly do not care if we know it’s them.”
So despite Barack and Xi’s photo-opp cosy-up this weekend, it's unlikely that China are going to stop brazenly hacking into foreign servers and stealing their intellectual property. Given the economic grip China has clasped around the globe, it's also just as unlikely that anyone's going to do that much about it.
Follow Sam on Twitter: @sambobclements
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