Warning on Espionage Got China’s Attention

Non-Imperial Chinese dragon in ShanghaiImage via Wikipedia

AP report: China Slams US Report Warning Of Spying By Beijing (via HuffPo). The report that got the sleeping dragon’s attention is the U.S.-China Economic and Security Review Commission’s Annual Report to Congress which was released last week. The Report cites trends for U.S. economic and national security interests, and offers 42 recommendations for Congressional action. On US-China trade and economic relationship, the report says:

“China’s trade surplus with the United States remains near record levels, despite the global economic slowdown that has reduced imports from other nations. While the U.S. trade deficit in goods with China through August 2009 was $143.7 billion, representing a decline of 17.6 percent over the same period in 2008, China now accounts for an increasing share of the U.S. global deficit in goods. By September 2009, China had accumulated more than $2.27 trillion in foreign currency reserves.”

Not really surprising, is it? But the part that presumably offended China appears to be the following conclusions from the Committee report:

China’s Human Espionage Activities that Target the United States, and the Resulting Impacts on U.S. National Security

  • The intelligence services of the Chinese government are actively involved in operations directed against the United States and against U.S. interests. China is the most aggressive country conducting espionage against the United States, focusing on obtaining U.S. information and technologies beneficial to China’s military modernization and economic development.

  • Some of the espionage carried out on behalf of China is conducted by nonprofessional collectors. These nonprofessional collectors may be motivated by profit, patriotism, feelings of ethnic kinship, or coercion. Even in many cases where there is no obvious direct state involvement in the theft or illegal export of controlled technology, the Chinese government encourages such efforts and has benefited from them.

  • Recent cases of espionage involving China show evidence of more focused efforts at information collection employing sources outside of the Chinese-American community.

  • Chinese operatives and consular officials are actively engaged in the surveillance and harassment of Chinese dissident groups on U.S. soil.

The AP report did not say if the Chinese also protested on the Commission’s report on its cyber activities:

China’s Cyber Activities that Target the United States, and the Resulting Impacts on U.S. Security Interests

  • The quantity of malicious computer activities against the United States increased in 2008 and is rising sharply in 2009; much of this activity appears to originate in China.

  • The direct attribution of such activities targeting the United States presents challenges due to hackers’ ability to conceal their locations. Nonetheless, a significant and increasing body of circumstantial and forensic evidence strongly indicates the involvement of Chinese state or state-supported entities.

  • The Chinese government has institutionalized many of its capabilities for computer network operations within elements of the People’s Liberation Army. The PRC is also recruiting from its growing population of technically skilled people, including those from the private sector, to increase its cyber capabilities. It is recruiting skilled cyber operators from information technology firms and computer science programs into the ranks of numerous Information Warfare Militia units.

  • China’s peacetime computer exploitation efforts are primarily focused on intelligence collection against U.S. targets and Chinese dissident groups abroad.

  • In the early stages of a conflict, the PLA would employ computer network operations against opposition government and military information systems.

  • Critical infrastructure in the United States is vulnerable to malicious cyber activity. Chinese military doctrine calls for exploiting these vulnerabilities in the case of a conflict.

The Commission has 10 key recommendations to Congress including the following:

Meeting the rising challenge of Chinese espionage. The Commission recommends that Congress assess the adequacy of resources available for intelligence, counterintelligence, and export control enforcement programs to ensure that U.S. government agencies are able to meet the rising challenge of Chinese human intelligence and illicit technology collection.

Ensuring adequate funding to respond to computer exploitation and computer attacks. The Commission recommends that Congress assess the effectiveness of and resourcing for law enforcement, defense, and intelligence community initiatives that aim to develop effective and reliable attribution techniques for computer exploitation and computer attacks.

The complete list of 42 recommendations appears at the Report’s conclusion on page 325.

The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001. Its purpose: To monitor, investigate, and submit to congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action. Public Law 109-108 directs the Commission to focus its work and study on the following eight areas: proliferation practices, economic transfers, energy, U.S. capital markets, regional economic and security impacts, U.S.-China bilateral programs, WTO compliance, and the implications of restrictions on speech and access to information in the People’s Republic of China.

Related Items:

  • View the complete report. (PDF)
  • Executive Summary (PDF)

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