February 20, 2013

White House weighs trade actions against China over cyberespionage

The White House is expected to suggest aggressive steps Wednesday in response to evidence that China's military is stealing government and corporate data.

The Associated Press

WASHINGTON — As public evidence mounts that the Chinese military is responsible for stealing massive amounts of U.S. government data and corporate trade secrets, the Obama administration is eyeing fines and other trade actions it may take against Beijing or any other country guilty of cyberespionage.

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A U.S. security firm alleges that years of systematic cyberattacks on U.S. companies have been traced to the Chinese military unit in this building on Shanghai’s outskirts.

The Associated Press

APPLE, MACS HIT IN MALWARE ATTACK

Apple says a small number of Mac computers at its offices were infected by malicious software, in an attack similar to the one Facebook acknowledged last week.

In both cases, computers were infected through software downloaded from a site for software developers. The attacks took advantage of flaws in the Java plug-in for Web browsers.

Neither company said that there was any evidence that the attackers gleaned any data from their attacks.

The Java vulnerability is well known, and Apple has taken measures to disable the plug-in on all Macs. It says it would release an update malware removal tool to remove infections.

In January, the U.S. Department of Homeland Security recommended disabling Java in Web browsers to avoid hacking attacks.

– The Associated Press

According to officials familiar with the plans, the White House will lay out a new report Wednesday that suggests initial, more-aggressive steps the U.S. would take in response to what top authorities say has been an unrelenting campaign of cyberstealing linked to the Chinese government. The officials spoke on condition of anonymity because they were not authorized to speak publicly about the threatened action.

The White House plans come after a Virginia-based cybersecurity firm released a torrent of details Monday that tied a secret Chinese military unit in Shanghai to years of cyberattacks against U.S. companies. After analyzing breaches that compromised more than 140 companies, Mandiant has concluded that they can be linked to the People's Liberation Army's Unit 61398.

Military experts believe the unit is part of the People's Liberation Army's cyber-command, which is under the direct authority of the General Staff Department, China's version of the Joint Chiefs of Staff. As such, its activities would be likely to be authorized at the highest levels of China's military.

The release of Mandiant's report makes public what U.S. authorities have said less publicly for years. But it also increases the pressure on the U.S. to take more forceful action against the Chinese for what experts say has been years of systematic espionage.

"If the Chinese government flew planes into our airspace, our planes would escort them away. If it happened two, three or four times, the president would be on the phone and there would be threats of retaliation," said former FBI executive assistant director Shawn Henry. "This is happening thousands of times a day. There needs to be some definition of where the red line is and what the repercussions would be."

Henry, now president of the security firm CrowdStrike, said that rather than tell companies to increase their cybersecurity, the government must focus more on how to deter hackers and the nations that are backing them.

James Lewis, a cybersecurity expert at the Center for Strategic and International Studies, said that in the past year the White House has been taking a serious look at responding to China, adding, "This will be the year they will put more pressure on, even while realizing it will be hard for the Chinese to change. There's not an on-off switch."

The Chinese government, meanwhile, has denied involvement in the cyber-attacks tracked by Mandiant. Instead, the Foreign Ministry said that China, too, is a victim of hacking, some of it traced to the U.S. Foreign Ministry spokesman Hong Lei cited a report by an agency under the Ministry of Information Technology and Industry that said in 2012 alone, foreign hackers used viruses and other malicious software to seize control of 1,400 computers in China and 38,000 websites.

"Among the above attacks, those from the U.S. numbered the most," Hong said at a daily media briefing, lodging the most specific allegations the Chinese government has made about foreign hacking.

Cybersecurity experts say U.S. authorities do not conduct similar attacks or steal data from Chinese companies, but acknowledge that intelligence agencies routinely spy on other countries.

China is clearly a target of interest, said Lewis, noting that the U.S. would be interested in Beijing's military policies, such as any plans for action against Taiwan or Japan.

In its report, Mandiant said it traced the hacking back to a neighborhood in the outskirts of Shanghai that includes a white 12-story office building run by the PLA's Unit 61398.

(Continued on page 2)

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