Security Insiders: Cyberspying Indictments Will Not Stop China From Hacking U.S. Businesses

Attorney General Eric Holder Justice Department DOJ Decision Makers 6/8/2009, 12:52:41 PM
© 2009 Liz Lynch/202-744-8737
May 27, 2014, 6:46 p.m.

The high-pro­file U.S. in­dict­ments against five Chinese mil­it­ary of­ficers will not en­cour­age China to stop hack­ing Amer­ic­an busi­nesses to steal valu­able trade secrets, vir­tu­ally all of Na­tion­al Journ­al’s Na­tion­al Se­cur­ity In­siders said.

It was the first time the U.S. brought a crim­in­al case against a for­eign gov­ern­ment for cy­ber­spy­ing, but 91.5 per­cent of NJ‘s pool of se­cur­ity ex­perts down­played the move, call­ing the charges “simply silly” and “an empty ges­ture.”

“China will con­tin­ue to pur­sue its in­terests in ac­quir­ing ac­cess to U.S. secrets at any cost,” one In­sider said. China will meet last week’s in­dict­ments, an­oth­er In­sider ad­ded, “with a big yawn (and lots of self-serving rhet­or­ic) and con­tin­ue busi­ness as usu­al.”

The leg­al ac­tion might in­stead en­cour­age China to try harder to avoid de­tec­tion, In­siders said. “The door to the bank vault is still open.” 

The real solu­tion, one In­sider said, “is to stop com­plain­ing and start de­vel­op­ing ro­bust wide­spread en­cryp­tion to pro­tect every­one from China and the NSA.” One In­sider said China “won’t stop un­til the U.S. finds an ef­fect­ive sanc­tions mech­an­ism — and we don’t have that yet.” 

A slim 8.5 per­cent minor­ity said the cyberes­pi­on­age in­dict­ments might make an im­pact on China. “It will in­furi­ate them, but it will also un­der­score to them the po­ten­tial costs as­so­ci­ated with what they have as­sumed, up un­til now, is risk-free (and po­ten­tially very prof­it­able) be­ha­vi­or,” one In­sider said. 

Just days after the charges, Beijing ac­cused the U.S. of launch­ing its own large-scale cy­ber­at­tacks against the Chinese gov­ern­ment and Chinese com­pan­ies. Yet 76 per­cent of In­siders said At­tor­ney Gen­er­al Eric Hold­er’s high-pro­file, pub­lic an­nounce­ment of the charges — the Obama ad­min­is­tra­tion’s most dir­ect con­front­a­tion over China’s al­leged theft of in­tel­lec­tu­al prop­erty — was the right ap­proach. 

The prob­lem of China’s cy­ber­spy­ing has “already been raised at the head of state level, the sec­ret­ary of De­fense level, and mul­tiple polit­ic­al and dip­lo­mat­ic av­en­ues, to little ef­fect,” an­oth­er In­sider said. “The Chinese min­is­ter of de­fense chal­lenged the U.S. to provide evid­ence of the al­leg­a­tions; … well, here it is. In it­self, the in­dict­ments are not suf­fi­cient, but in tan­dem [with] oth­er means, it is an im­port­ant tool in our tool kit.”

The in­dict­ments are also an im­port­ant sig­nal to the U.S. busi­ness com­munity, an In­sider said, “that the U.S. gov­ern­ment is tak­ing ac­tion to pro­tect U.S. in­terests.”

A vo­cal 26 per­cent ob­jec­ted to the new tack, es­pe­cially after Ed­ward Snowden re­vealed the Na­tion­al Se­cur­ity Agency’s mass sur­veil­lance op­er­a­tions. “The Obama ad­min­is­tra­tion’s ap­proach looks like blatant hy­po­crisy,” one In­sider said. “It would seem that we would be in a much stronger po­s­i­tion to make such strong al­leg­a­tions were we not en­gaged in so many ques­tion­able cy­ber­prac­tices across the globe, not to men­tion against Amer­ic­an cit­izens.”

The Chinese, an­oth­er In­sider said, “will do their home­work, build the case against our own elec­tron­ic in­tru­sions, and quite pos­sibly re­gain the high ground here. The old rule of es­pi­on­age ap­plies here: ‘Read my mail once, shame on you; read my mail twice, shame on me.’ Like so many of our for­eign ad­ven­tures, this will not end well for us.”

1. Will the re­cent U.S. cyberes­pi­on­age in­dict­ments against Chinese mil­it­ary of­ficers en­cour­age China to stop hack­ing U.S. busi­nesses?
(59 votes)  

  • No - 91.5%
  • Yes - 8.5 %

No

“Nor will they stop the U.S. from hack­ing Chinese gov­ern­ment and cor­por­ate sys­tems.”

“No, the risk-versus-re­ward is far too big for them to give up. What they gain in the theft of in­tel­lec­tu­al prop­erty in tens of bil­lions of dol­lar versus U.S. pub­lic op­pro­bri­um is well worth it.”

“Keith Al­ex­an­der has de­scribed Chinese cy­ber­theft as ‘the greatest trans­fer of wealth in his­tory.’ A few in­dict­ments will not de­ter them.”

“This is a soph­ist­ic­ated, gov­ern­ment-owned-and-op­er­ated en­ter­prise which sub­sid­izes the Chinese eco­nomy.”

“The eco­nom­ic gains from Chinese hack­ing of U.S. busi­nesses amount to bil­lions or tens of bil­lions of dol­lars per year. Moreover, China, Rus­sia, and oth­er U.S. ad­versar­ies can be ex­pec­ted to muddy in­ter­na­tion­al per­cep­tions by in­dict­ing U.S. of­fi­cials al­legedly en­gaged in cov­ert ac­tion and for­eign es­pi­on­age.”

“It was an empty ges­ture. The real solu­tion is to stop com­plain­ing and start de­vel­op­ing ro­bust wide­spread en­cryp­tion to pro­tect every­one from China and the NSA.”

“The in­dict­ments are an im­port­ant step, but it’s a step that’s in­suf­fi­cient to change state be­ha­vi­or.”

“They re­gard it as a le­git­im­ate in­tel­li­gence activ­ity and will not stop.”

“This is all about the op­tics. We have known about this for years, and they know we know. Just a dance.”

“They have no reas­on to change their be­ha­vi­or, and a ‘line in the sand’ by the U.S. means little to noth­ing.”

“What are a few of­ficers to China? There are so many more hack­ers they can use.”

“The in­dict­ments are one tool aimed to dis­suade and de­ter the Chinese gov­ern­ment from us­ing their mil­it­ary and in­tel­li­gence ser­vices to en­gage in es­pi­on­age against U.S. com­pan­ies. Will it stop? No. But it may cause them to think about their activ­it­ies and in­duce some small changes in be­ha­vi­or.”

“Beijing will see its hoped-for eco­nom­ic be­ne­fits from the es­pi­on­age as out­weigh­ing any dip­lo­mat­ic fric­tion.”

“It will take much more ef­fect­ive ac­tion than a few purely sym­bol­ic charges of low-level mil­it­ary of­ficers.”

“The in­dict­ment was simply silly.”

“China sees its eco­nom­ic de­vel­op­ment as its na­tion­al se­cur­ity. There­fore, it is both mer­cant­il­ist/zero-sum in its ap­proach, and does not agree with the dis­tinc­tion the U.S. is mak­ing between com­mer­cial and state es­pi­on­age.”

“In fact, in the short term it may get worse.”

Yes

“Pos­sibly, could sig­nal to the Chinese that U.S. will not only de­fend cy­berter­rit­ory but will take leg­al meas­ures as well.”

“They will lower activ­ity for a while.”

“The move raises the cost for the Chinese, at least in pub­lic. Not sure how deep or long-last­ing this move will be to re­duce cy­ber­snoop­ing on U.S. busi­nesses.”

2. Was the high-pro­file, pub­lic an­nounce­ment — the Obama ad­min­is­tra­tion’s most dir­ect con­front­a­tion over China’s al­leged theft of valu­able trade secrets — the right ap­proach?
(59 votes)  

  • Yes - 76%
  • No - 24% 

Yes

“The in­dict­ments are not aimed at China, which will not change its ways. But they serve no­tice to the rest of the world that we know what China is do­ing, and what China does to us, [we] can do to them. In this sense the in­dict­ments are a cru­cial tool of in­ter­na­tion­al dip­lomacy.”

“The United States, be­cause its gov­ern­ment does not do es­pi­on­age for com­mer­cial ad­vant­age, is on strong ground in com­plain­ing loudly about those who do.”

“This is just the start of what will be a long in­ter­na­tion­al jour­ney to fig­ur­ing out norms for be­ha­vi­or in cy­ber­space. This case alone doesn’t mean much, bey­ond in­dic­at­ing that the U.S. gov­ern­ment fi­nally has made steps on at­tri­bu­tion (de­term­in­ing, with some cer­tainty and spe­cificity, who’s at the oth­er end of state-sponsored hack­ing). Over time, though, these kinds of cases will be­come more com­mon; this is a start to un­der­stand­ing how to con­trol this kind of in­dis­crim­in­ate cy­ber­theft.”

“As­sum­ing private dip­lo­mat­ic meas­ures have not been suc­cess­ful, then pub­lic steps show U.S. will to the Chinese, and is an im­port­ant sig­nal to the U.S. busi­ness com­munity that the U.S. gov­ern­ment is tak­ing ac­tion to pro­tect U.S. in­terests.”

“It sig­nals the prob­lem; but we are a long way from an agreed in­ter­na­tion­al solu­tion.”

“Of course China would prefer a quiet dia­logue — be­cause they want to keep on do­ing what they’ve been do­ing, with the vic­tims too em­bar­rassed to talk about what’s been done to them.”

“But it was per­haps more of an at­tempt to demon­strate strength dip­lo­mat­ic­ally in the face of much cri­ti­cism that the Obama ad­min­is­tra­tion is not lead­ing from be­hind but has been left be­hind by its rivals Rus­sia and China on the na­tion­al se­cur­ity front.”

“An over­due but wel­come step.”

“It’s high time to call them on it.”

“Why not? It puts them on no­tice.”

“As long as there is fol­low-up, something rare in this ad­min­is­tra­tion.”

“Pre­tend­ing it isn’t hap­pen­ing only en­cour­ages more hack­ing.”

“Pres­id­ent Obama very much needs to show po­ten­tial trouble­makers he is not a weak­ling. He has a huge im­age prob­lem over­seas of his own mak­ing.”

“Ab­so­lutely and long over­due. Now it must be fol­lowed up by oth­er meas­ures to demon­strate to the Chinese that their cy­ber be­ha­vi­or will have con­sequences throughout the Sino-Amer­ic­an re­la­tion­ship.”

“As long as it is fol­lowed up with ad­di­tion­al leg­al ac­tions as pos­sible trade re­stric­tions. Oth­er­wise, it will be an ir­rit­ant at best.”

“It is an im­port­ant stake in the ground and starts to cre­ate a stronger in­ter­na­tion­al norm that China may some day fol­low.”

“Yes, but poorly ex­ecuted. The in­tent to draw a dis­tinc­tion between na­tion­al se­cur­ity spy­ing and [in­tel­lec­tu­al prop­erty] theft was a good idea, but the head­line was bur­ied and had no White House fol­low-through. An un­ser­i­ous ef­fort.”

“Some­times this is the only way to bring at­ten­tion to or shine a light on this is­sue. The more that the Chinese push back against these meas­ures, the more likely that they feel they have been ex­posed.”

“There will un­doubtedly be neg­at­ive re­per­cus­sions, but this is a sens­ible step to take to try to garner broad, in­ter­na­tion­al busi­ness and gov­ern­ment sup­port to de­ter China’s activ­it­ies.”

No

“It was little more than a pub­li­city stunt, since there is no pos­sib­il­ity of China ex­tra­dit­ing them. It is also the height of hy­po­crisy, since the U.S. is steal­ing every­one’s pri­vacy around the world.”

“A bet­ter ap­proach would be pas­sage of le­gis­la­tion with man­dat­ory cy­ber­se­cur­ity stand­ards for all crit­ic­al in­fra­struc­ture in­dus­tries, and li­ab­il­ity pro­tec­tion and cy­ber­assist­ance if they agree to share threat sig­na­tures with the De­part­ment of Home­land Se­cur­ity. Bet­ter U.S. cy­be­rhy­giene is the most ef­fect­ive tool.”

“China has already de­cided to sus­pend a dia­logue on cy­beris­sues with the United States, and China could eas­ily re­tali­ate by in­dict­ing U.S. of­fi­cials for hack­ing Chinese firms.”

“Only if it was the high level re­sponse for pub­lic con­sump­tion that was ac­com­pan­ied by a dir­ect, no-non­sense demon­stra­tion of our net­work de­fense, ex­ploit­a­tion, and at­tack cap­ab­il­ity that would have a com­bined chilling ef­fect. Oth­er­wise just an­oth­er line-in-the-sand min­uet.”

“Someone in the White House has fallen in love with per­son­ally dir­ec­ted sanc­tions like against Putin’s friends. These sanc­tions are ‘easy’ and ‘sym­bol­ic’ [and] ap­pear to call the in­di­vidu­al miscre­ants on the car­pet. They are also laugh­able. In real­ity, the only ef­fect­ive sanc­tions are those that cause polit­ic­al pain on a mass scale. And we are not go­ing to do that to one of main trad­ing part­ners.”

Na­tion­al Journ­al‘s Na­tion­al Se­cur­ity In­siders Poll is a peri­od­ic sur­vey of more than 100 de­fense and for­eign policy ex­perts. They in­clude: Gor­don Adams, Charles Al­len, Mi­chael Al­len, Thad Al­len, Gra­ham Al­lis­on, James Bam­ford, Dav­id Barno, Milt Bearden, Peter Ber­gen, Samuel “Sandy” Ber­ger, Dav­id Ber­teau, Steph­en Biddle, Nancy Bird­sall, Mari­on Blakey, Kit Bond, Stu­art Bowen, Paula Broad­well, Mike Breen, Mark Brun­ner, Steven Bucci, Nich­olas Burns, Dan By­man, James Jay Cara­fano, Phil­lip Carter, Wendy Cham­ber­lin, Mi­chael Cher­toff, Frank Cil­luffo, James Clad, Richard Clarke, Steve Clem­ons, Joseph Collins, Wil­li­am Court­ney, Lorne Cran­er, Ro­ger Cres­sey, Gregory Dahl­berg, Robert Dan­in, Richard Dan­zig, Jan­ine Dav­id­son, Daniel Drezn­er, Mack­en­zie Eaglen, Paul Eaton, An­drew Ex­um, Wil­li­am Fal­lon, Eric Farns­worth, Jacques Gansler, Steph­en Gan­yard, Daniel Goure, Mark Green, Mike Green, Mark Gun­zinger, Todd Har­ris­on, John Hamre, Jim Harp­er, Marty Haus­er, Mi­chael Hay­den, Mi­chael Her­son, Pete Hoek­stra, Bruce Hoff­man, Linda Hud­son, Paul Hughes, Colin Kahl, Don­ald Ker­rick, Rachel Klein­feld, Lawrence Korb, Dav­id Kramer, An­drew Kre­pinev­ich, Charlie Kupchan, W. Patrick Lang, Cedric Leighton, Mi­chael Leit­er, James Lind­say, Justin Lo­gan, Trent Lott, Peter Mansoor, Ron­ald Marks, Bri­an Mc­Caf­frey, Steven Metz, Frank­lin Miller, Mi­chael Mo­rell, Philip Mudd, John Nagl, Shuja Nawaz, Kev­in Neal­er, Mi­chael Oates, Thomas Pick­er­ing, Paul Pil­lar, Larry Pri­or, Steph­en Rade­maker, Celina Realuyo, Bruce Riedel, Barry Rhoads, Marc Ro­ten­berg, Frank Rug­giero, Gary Sam­ore, Kori Schake, Mark Schneider, John Scofield, Tammy Schultz, Steph­en Ses­t­an­ovich, Sarah Se­wall, Mat­thew Sher­man, Jen­nifer Sims, Su­z­anne Spauld­ing, James Stav­rid­is, Con­stan­ze Stelzen­müller, Ted Stroup, Guy Swan, Frances Town­send, Mick Train­or, Richard Wil­helm, Tamara Wittes, Dov Za­kheim, and Juan Za­r­ate.

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