Three documents 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 is contained in a new report, Putter Panda, by the cybersecurity company CrowdStrike [Full disclosure: CrowdStrike helps fund a speaker series at the Council on Foreign Relations]. The report, like the Department of Justice’s indictment of five hackers alleged to be part of the People’s Liberation Army and Mandiant’s 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 identifies a hacker using the handle “cppy,” and through images posted on a picture sharing website and other clues links the individual to the PLA 3rd Department 12th Bureau Unit 61486 in Shanghai.
The why is laid out in a speech President Xi Jinping made on science and technology to the Chinese Academy of Sciences and Chinese Academy of Engineering. As the New York Times notes, Xi hit many of the nationalistic notes that have motivated technology policy over the last twenty years: China was in the past a great science and technology power; China is now too dependent on the West for critical technologies and must spur its own indigenous innovation; and science and technology are key to economic and national security. China is pursuing this goal through massive investments in science, technology, and education; the continued reform of research institutes, state-owned enterprises, and government agencies; and efforts to create incentives for entrepreneurship and innovation. R&D investments have increased by double digits annually for each of the past 20 years, and in 2011 China passed Japan as the world’s second largest spender on research and development. There is, however, a darker side to these efforts. The illicit transfer of intellectual property (IP), through the failure to protect IP in the domestic market, industrial espionage, or cyber theft, also plays a role in efforts to move the economy up the value chain and to bolster the competitiveness of Chinese companies.