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China Has a History of Not Trusting Microsoft on Cybersecurity

by Adam Segal
A visitor walks past a Microsoft booth at a computer software expo in Beijing, June 2, 2010. Microsoft Corp appears to be the latest U.S. company targeted by China for anti-trust investigation after government officials paid sudden visits to the software firm's Chinese offices on July 28, 2014. Picture taken June 2, 2010. REUTERS/Stringer (CHINA - Tags: BUSINESS SCIENCE TECHNOLOGY POLITICS) CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA A visitor walks past a Microsoft booth at a computer software expo in Beijing on June 2, 2010. (Stringer/Courtesy Reuters)

Reports of China investigating Microsoft for possible violations of anti-monopoly laws have tied the action to continuing tensions over cybersecurity. In response to the Department of Justice’s indictment of five alleged PLA hackers, as well as revelations in some of the documents released by Edward Snowden that appear to expose the NSA hacking into Chinese targets, Beijing has increased focus on the security of the products of Microsoft, Cisco, Oracle, Intel, and others. Newspaper articles have called these companies the guardian warriors, highlighted the alleged vulnerabilities that China’s reliance on these companies creates, and pushed for banks, government offices, and others to shift to Chinese competitors. Read more »

How China Becomes a Cyber Power

by Adam Segal
Employees work inside a LCD factory in Wuhan, Hubei province, on May 8, 2013. Chinese flat screen makers, once dismissed as second-class players in the global LCD market, are drawing envious looks from big names such as LG Display Co Ltd and Samsung. (China Daily/Courtesy Reuters) Employees work inside a LCD factory in Wuhan, Hubei province, on May 8, 2013. Chinese flat screen makers, once dismissed as second-class players in the global LCD market, are drawing envious looks from big names such as LG Display Co Ltd and Samsung. (China Daily/Courtesy Reuters)

One of the justifications for the creation of the Chinese leading group on cybersecurity and information technology was the need to move China from a “big” network country to a “strong” cyber power (从网络大国走向网络强国). While China has the world’s largest number of Internet users and a vibrant domestic market, policymakers and outside analysts seem to have significant concerns about Beijing’s technological prowess, the coherence of its international strategy, and its ability to respond to the growing sophistication of cyberattacks. It is one thing to be big, it is another to be powerful.
Read more »

Chinese Cyber Espionage: We Know the Who, How, Why, and Why it Matters–We’re Missing the What to Do

by Adam Segal
A demonstrator from the pro-China "Caring Hong Kong Power" group protests over claims from former U.S. spy agency contractor Edward Snowden that the National Security Agency (NSA) hacked computers in the Chinese territory, outside the U.S. Consulate in Hong Kong July on 9, 2013. (Bobby Yip/Courtesy Reuters) A demonstrator from the pro-China "Caring Hong Kong Power" group protests over claims from former U.S. spy agency contractor Edward Snowden that the National Security Agency (NSA) hacked computers in the Chinese territory, outside the U.S. Consulate in Hong Kong July on 9, 2013. (Bobby Yip/Courtesy Reuters)

Three documents that came out this week lay out the “who,” “how,” “why,” and “why it matters” of Chinese cyber espionage. Unfortunately, we still lack the “what to do.”

The “who” and “how” was contained in a new report, Putter Panda, by the cybersecurity company CrowdStrike [Full disclosure: CrowdStrike helps fund a speaker series at CFR]. The report, like the Department of Justice (DoJ) indictment of five hackers alleged to be part of the People’s Liberation Army (PLA) and Mandiant’s 2013 APT1 report, uses IP addresses, email accounts, and other forensic details to describe attacks on European and U.S. businesses and government agencies, with a particular focus on the satellite, aerospace, and communications sectors. CrowdStrike identified a hacker using the handle “cppy”, and through images posted on a picture sharing website and other clues linked the individual to PLA 3rd Department 12th Bureau Unit 61486 in Shanghai. Read more »

Is Washington Getting China Policy Wrong?

by Elizabeth C. Economy
Russia's President Vladimir Putin (L) and his Chinese counterpart Xi Jinping talk before the opening ceremony of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Shanghai May 21, 2014. REUTERS/Aly Song Russia's President Vladimir Putin (L) and his Chinese counterpart Xi Jinping talk before the opening ceremony of the fourth Conference on Interaction and Confidence Building Measures in Asia (CICA) summit in Shanghai on May 21, 2014. (Aly Song/Courtesy Reuters)

It would be easy to think that U.S. policy toward China has gone off the rails. Washington is at odds with Beijing in the East and South China Seas; accusations of cyber espionage are flying across the Pacific; and Beijing is signing big oil and gas deals and talking about shared security concerns with Moscow, even as the United States is trying to coordinate sanctions against Russia for its crisis-inducing behavior in Ukraine. Read more »

Department of Justice Indicts Chinese Hackers: What Next?

by Adam Segal
Eric Holder Department of Justice DOJ China hackers espionage United States Attorney General Eric Holder speaks at the National Association of Attorneys General in Washington on May 5, 2014. (Gary Cameron/Courtesy Reuters)

It has been a pretty remarkable morning. The Department of Justice has indicted five officers in Unit 61398 of the Chinese People’s Liberation Army (PLA)—Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui—for hacking into six American companies. The indictment alleges that the five stole trade secrets, information that would be useful to state-owned enterprises in China, and the strategies of American companies that could be useful to a competitor in litigation. Read more »

Hunter Gross: Despite Cyber Espionage, U.S.-China Relations Are Business as Usual

by Guest Blogger for Elizabeth C. Economy
U.S. Secretary of Defense Chuck Hagel (L) shakes hands with Chinese Minister of Defense Chang Wanquan at the end of a joint news conference at the Chinese Defense Ministry headquarters in Beijing on April 8, 2014. (Alex Wong/Courtesy Reuters) U.S. secretary of defense Chuck Hagel (L) shakes hands with Chinese minister of defense Chang Wanquan at the end of a joint news conference at the Chinese Defense Ministry headquarters in Beijing on April 8, 2014. (Alex Wong/Courtesy Reuters)

Hunter Gross is an intern for Asia Studies at the Council on Foreign Relations.

Just as U.S. president Barack Obama and Chinese president Xi Jinping were set to meet in The Hague, documents leaked by Edward Snowden revealed that the National Security Agency installed backdoors in the computer networks of the Chinese telecommunications firm Huawei. Despite extensive U.S. media coverage and angry reactions from Chinese news sources such as Xinhua and the Global Times, this revelation follows the pattern of previous cyber-related disclosures; the issue first flares up, and then quickly fades until the next disclosure. Why does such a divisive issue neither strain U.S.-China relations or trigger significant actions to address the problem? Read more »

What Briefing Chinese Officials on Cyber Really Accomplishes

by Adam Segal
U.S. President Barack Obama, U.N. Secretary-General Ban Ki-moon and China's President Xi Jinping talk during a family photo at the Nuclear Security Summit in The Hague March 25, 2014. (Doug Mills/Courtesy Reuters) U.S. President Barack Obama, U.N. Secretary-General Ban Ki-moon and China's President Xi Jinping talk during a family photo at the Nuclear Security Summit in The Hague March 25, 2014. (Doug Mills/Courtesy Reuters)

David Sanger wrote an interesting article in the New York Times about Washington’s efforts to prevent escalating cyberattacks with Beijing. According to Sanger, U.S. officials have tried to allay the concerns of their Chinese counterparts about the buildup of Pentagon capabilities through greater transparency. They have briefed them on the “emerging doctrine for defending against cyberattacks against the United States—and for using its cybertechnology against adversaries, including the Chinese.” We should, however, be clear about their real purpose. These briefings have more to do with deterring China than assuring it. Read more »

China’s New Small Leading Group on Cybersecurity and Internet Management

by Adam Segal
China's Politburo Standing Committee member Liu Yunshan (R ) and China's Vice Premier Li Keqiang attend the opening ceremony of the Chinese People's Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing on March 3, 2013. (Jason Lee/Courtesy Reuters) China's Politburo Standing Committee member Liu Yunshan (R ) and China's Vice Premier Li Keqiang attend the opening ceremony of the Chinese People's Political Consultative Conference (CPPCC) at the Great Hall of the People in Beijing on March 3, 2013. (Jason Lee/Courtesy Reuters)

China announced the first meeting of a leading group on Internet security and informatization earlier today. The group is chaired by President Xi Jinping, while Premier Li Keqiang and Liu Yunshan, a member of the Standing Committee of the Political Bureau and the director of the Propaganda Department, serve as the group’s deputies. There have been reports of a leading small group on cyber issues meeting in the past, but this is the first public meeting in at least four years. The announcement of this new group is significant. Read more »

Piekos and Tobias: China’s Place in ‘House of Cards’

by Guest Blogger for Elizabeth C. Economy
Cast member Kevin Spacey poses at the premiere for the second season of the television series "House of Cards" at the Directors Guild of America in Los Angeles, California on February 13, 2014. (Mario Anzuoni/Courtesy Reuters) Cast member Kevin Spacey poses at the premiere for the second season of the television series "House of Cards" at the Directors Guild of America in Los Angeles, California on February 13, 2014. (Mario Anzuoni/Courtesy Reuters)

Will Piekos is a program coordinator and Sharone Tobias is a research associate in the Council on Foreign Relation’s Asia Studies program.

Warning: This blog post contains spoilers for House of Cards.

Netflix’s original series House of Cards returned with a second season on Valentine’s Day this year. Read more »

Chinese Predictions for Cyberspace in 2014: Intense Competition and National Conflict

by Adam Segal
An officer of the Chinese People's Liberation Army (PLA) uses a string to ensure that the soldiers making up a guard of honour, stand in a straight line before an official welcoming ceremony for Afghan President Hamid Karzai outside the Great Hall of the People in Beijing on September 27, 2013. (Kim Kyung-Hoon/Courtesy Reuters) An officer of the Chinese People's Liberation Army (PLA) uses a string to ensure that the soldiers making up a guard of honour, stand in a straight line before an official welcoming ceremony for Afghan President Hamid Karzai outside the Great Hall of the People in Beijing on September 27, 2013. (Kim Kyung-Hoon/Courtesy Reuters)

The U.S.-China cybersecurity working group recently met for the second time during the first week in December. There have been no public reports of what was discussed or what progress, if any, was made. As with many of these dialogues, one of the main goals is not concrete deliverables, but reducing mistrust between the two sides. Yet some recent articles suggest that mutual understanding is going to be hard to find, and that some in China see cyberspace as increasingly antagonistic and dangerous. Read more »