China's Cyberespionage Will Continue Unabated, Say Experts

SAN FRANCISCO -- RSA CONFERENCE 2013 -- Reports that blame China for the vast majority of information-stealing attacks and cyberespionage are accurate, but companies should not expect the public naming of China to offer much respite from the attacks, security experts told attendees on Tuesday at the RSA Security Conference.

A group of four policy experts discussed the reasons behind Chinese efforts to steal U.S. intellectual property during a panel discussion at the conference. Unless the U.S. backs the investigations with sanctions against Chinese companies or other punitive actions, the Asian giant's government will be unlikely to stop, said Jason Healey, director of the Cyber Statecraft Initiative for the Atlantic Council.

Escalation of attacks in cyberspace is new territory and fraught with the potential to destabilize trade and relationships, so policy-makers will likely first see if "naming and shaming" of the actors works before moving on to other options, he said.

"We have known about Chinese espionage for 10 years, at least, Russian espionage before that, and we haven't tried this tactic, [but it seems we are saying], 'We know what we are doing hasn't worked, let's do more of it,-" Healey said. "I think going public with this can be good if we pick it up with energy ... and try to do full naming and shaming."

Companies have only slowly, with many fits and starts, gathered the evidence needed to accuse China of hacking their systems and stealing corporate data. In 2010, Google and Adobe blamed China for attacks that attempted to steal intellectual property from almost two dozen companies. The following year, McAfee revealed its investigations into a series of attacks, which the firm dubbed "Night Dragon," that led back to Beijing. And the year after that, consulting firm Cyber Squared found evidence of widespread attacks on a number of groups of interest to China, such as a lobbyist for Taiwan and human rights organizations.

[Sure, politicians have some fodder for their diplomatic cannons, but do companies gain much from identifying their attackers? Experts debate the merits of attribution. See Attribution Delivers Questionable Security Value.]

Yet, for the most part, U.S. businesses and lawmakers have refrained from discussing the impact of China's sustained policy of hacking into rival nations' systems, and that has hurt the nation's ability to find other governments willing to oppose China's policy, said Dmitri Alperovitch, chief technology officer with incident-responder CrowdStrike, who moderated the discussion.

"Over there [internationally], they still do not understand, it or they believe it is a U.S.-only problem," he said. "And I wonder, if by not talking about the threat actors, we are making the problem worse."

Even China does not want to talk about the issues: In proxy discussions between U.S. think tanks and Chinese government officials, the topic of espionage is generally not welcome, says James Lewis, a senior fellow at the Center for Strategic and International Studies (CSIS). In one exchange, the Chinese declined to talk about espionage, and when pressed, ask participants to avoid using the term "espionage," he said.

"At the end of the day, a senior PLA colonel said, 'In the U.S., military espionage is heroic and economic espionage is a crime, but in China the line is not so clear,'" Lewis said. "So the best thing for policy is to make the line more clear. We have done this with countries in the past. We got them to recognize that there are informal rules -- that they are crossing the boundary and need to step back."

Between the espionage from China, and attacks on U.S. financial institutions that have been connected to Iran, the U.S. will have little choice but to blaze new trails in terms of policy in cyberspace, said Martin Libicki, a senior management scientist with the policy think tank RAND Corp. Expect a lot of missteps because the laws of armed conflict are an unfinished standard, even more so on the Internet, he said.

"The things we do with kinetic [weapons], with which we've had tens or hundreds of years of history, get misinterpreted" under international law, he said. "Why should we have any greater fidelity in cyber?"

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