For state-backed cyber spies such as a Chinese military unit implicated
by a U.S. security firm in a computer crime wave, hacking foreign
companies can produce high-value secrets ranging from details on oil
fields to advanced manufacturing technology.
This week's report by
Mandiant Inc. adds to mounting suspicion that Chinese military experts
are helping state industry by stealing secrets from Western companies
possibly worth hundreds of millions of dollars. The Chinese military has
denied involvement in the attacks.
"This is really the new era of
cyber-crime," said Graham Cluley, a British security expert. "We've
moved from kids in their bedroom and financially motivated crime to
state-sponsored cyber-crime, which is interested in stealing secrets and
getting military or commercial advantage."
Instead of credit card
numbers and other consumer data sought by crime gangs, security experts
say cyber spies with resources that suggest they work for governments
aim at better-guarded but more valuable information.
fields from petrochemicals to software can cut costs by receiving stolen
secrets. An energy company bidding for access to an oil field abroad
can save money if spies can tell it what foreign rivals might pay.
Suppliers can press customers to pay more if they know details of their
finances. For China, advanced technology and other information from the
West could help speed the rise of giant state owned companies seen as
"It's like an ongoing war," said Ryusuke
Masuoka, a cyber-security expert at Tokyo's Center for International
Public Policy Studies, a private think tank. "It is going to spread and
get deeper and deeper."
Mandiant, headquartered in Alexandria,
Va., said it found attacks on 141 entities, mostly in the United States
but also in Canada, Britain and elsewhere.
information about pricing, contract negotiations, manufacturing, product
testing and corporate acquisitions, the company said. It said multiple
details indicated the attackers, dubbed APT1 in its report, were from a
military unit in Shanghai, though there was a small chance others might
Target companies were in four of the seven
strategic industries identified in the Communist Party's latest
five-year development plan, it said.
"We do believe that this
stolen information can be used to obvious advantage" by China's
government and state enterprises, said Mandiant.
is a leader in cyberwarfare research, along with its counterparts in the
United States and Russia. The People's Liberation Army supports hacker
hobby clubs with as many as 100,000 members to develop a pool of
possible recruits, according to security consultants.
said it traced attacks to a neighborhood in Shanghai's Pudong district
where the PLA's Unit 61398 is housed in a 12-story building. The unit
has advertised online for recruits with computer skills. Mandiant
estimated its personnel at anywhere from hundreds to several thousand.
Wednesday, the PLA rejected Mandiant's findings and said computer
addresses linked to the attacks could have been hijacked by attackers
elsewhere. A military statement complained that "one-sided attacks in
the media" destroy the atmosphere for cooperation in fighting online
Many experts are not swayed by the denials.
are a lot of hackers that are sponsored by the Chinese government who
conduct cyber attacks," said Lim Jong-in, dean of Korea University's
Graduate School of Information Security.
The United States and
other major governments are developing cyberspying technology for
intelligence and security purposes, though how much that might be used
for commercial spying is unclear.
"All countries who can do
conduct cyber operations," said Alastair MacGibbon, the former director
of the Australian Federal Police's High Tech Crime Center.
think the thing that has upset people mostly about the Chinese is ...
that they're doing it on an industrialized scale and in some ways in a
brazen and audacious manner," said MacGibbon, who now runs an Internet
safety institute at the University of Canberra.
party has ambitious plans to build up state-owned champions in
industries from banking and telecoms to oil and steel. State companies
benefit from monopolies and other official favors but lack skills and
Last year, a group of Chinese state companies were
charged in U.S. federal court in San Francisco in the theft of DuPont
Co. technology for making titanium dioxide, a chemical used in paints
In 2011, another security company, Symantec Inc.,
announced it detected attacks on 29 chemical companies and 19 other
companies that it traced to China. It said the attackers wanted to steal
secrets about chemical processing and advanced materials manufacturing.
Australia, a report by the attorney general this week said 20 percent
of 225 companies surveyed had experienced a cyberattack in the previous
Australian mining companies make a tempting target because
of their knowledge about global resources, said Tobias Feakin, head of
national security at the Australian Strategic Policy Institute, a think
As Chinese resource producers expand abroad, "you could see
the motivation for understanding the Australian competition and
infiltrating their systems," Feakin said.
China has long been
cited by security experts as a center for Internet crime. They say some
crimes might be carried out by attackers abroad who remotely control
Chinese computers. But experts see growing evidence of Chinese
Few companies are willing to confirm they are victims of cyberspying, possibly for fear it might erode trust in their business.
companies admit their servers were hacked, they become the target of
hackers. Because the admission shows the weakness, they cannot admit,"
said Kwon Seok-chul, president of Cuvepia Inc., a security firm in
An exception was Google Inc., which announced in 2010 that
it and at least 20 other companies were hit by attacks traced to China.
Only two other companies disclosed they were targets. Google cited the
hacking and efforts to snoop on Chinese dissidents' email as among
reasons for closing its China-based search service that year.
cited the example of an unidentified company with which it said a
Chinese commodity supplier negotiated a double-digit price increase
after attackers stole files and emails from the customer's chief
executive over 2years beginning in 2008.
would be surprising if APT1 could continue perpetrating such a broad
mandate of cyber espionage and data theft if the results of the group's
efforts were not finding their way into the hands of entities able to
capitalize on them," the report said.