Is China waging a cyber-war on the US?

The attacks on key pieces of the country's infrastructure and corporate computer networks are growing increasingly sophisticated.

By Jonathan Berr Feb 20, 2013 8:41AM

Image: Dollar sign on keyboard ( Corbis)When the Chinese government blocked Coca-Cola's (KO) planned $2.4 billion acquisition of Huiyuan Juice in 2009, it argued that the deal would harm competition in the drinks market.  Investors had no idea at the time that a secret Chinese Army unit had hacked the networks of the Atlanta company to gain an advantage in the negotiations over the transaction.

That's one of the revelations in a frightening article published Tuesday by The New York Times on China's undeclared cyber-war on the U.S. The ramifications go beyond Coca-Cola's deal, which would have been the largest purchase of a Chinese company by a foreigner.

A group known as the "Comment Crew" or the "Shanghai Group" has targeted critical U.S. infrastructure such as water treatment plants, gas pipelines and electrical grids along with computer-security firm RSA, whose codes protect many Fortune 500 computer networks, according to the paper. More than 140 Comment Crew intrusions have been detected by the computer-security firm Mandiant since 2006, the Times says.

According to a report by Mandiant, the Army group, known Unit 63198, is staffed by hundreds and maybe thousands of people. One of the prerequisites for joining the unit is proficiency in English, which raises the possibility that many of its members may have been educated at U.S. universities. Exposing the Comment Crew is not without risks.

"When Unit 61398 changes their techniques after reading this report, they will undoubtedly force us to work harder to continue tracking them with such accuracy," the company said, adding that it hopes to be able to "impede" the Comment Crew's progress. "We expect reprisals from China as well as an onslaught of criticism. "

It's started already.

According to Fast Company, the Chinese government has attacked the Times' story as "groundless."

Chinese hackers have targeted foreign media companies working in China, including the Times, The Wall Street Journal and Bloomberg News. The Times report underscores the growing concern about the scope of economic espionage carried out by the world's most populous country. Lockheed Martin (LMT), DuPont (DD) and Chesapeake Energy (CHK) are among the companies that Chinese hackers have targeted.

"The U.S.-China economic relationship is not infinitely resilient," wrote Derek Scissors of the Heritage Foundation last year. "Beijing must understand that economic espionage is alienating China’s best American friends."

More on moneyNOW

Feb 20, 2013 9:59AM
Most Fortune 500 companies already have counter-intelligence units.  This is not only limited to computer hacks, but also industrial espionage, etc...  Risk management and asset protection isn't just about catching shoplifters and dealing with slip-and-fall incidents anymore.

China is waging a silent war on the US and they are winning and have been for decades.  They are a patient people and we have reached the point now where they can take over North America any time they want to.   They're winning the currency wars against us, they own tons of American real estate and investments not to mention bonds, and they are consistently able to gain access to most of our infrastructure, including everything from locks and dams to electrical grids to water treatment plants.  Plus, as the makers of most of the products we rely on for our everyday needs, they are slowly taking away our knowledge of manufacturing, design and engineering.  We are now dependent on China, and we've become so willingly and enthusiastically, and ignorantly.   With every passing month, we are becoming less and less self-sufficient, and therefore less safe and secure.

Feb 20, 2013 12:45PM
When they were showing the building where this hacking originates, justice would have been served if it had crumbled before our eyes as Uncle Sam reached out and touched them. We have the technology but lack the guts. We could say, "not us" just like they do.
Feb 20, 2013 1:56PM
F    u 
c    k china hard. It's time for them to loose their status.

Feb 20, 2013 9:25AM
It looks like the Fortune 500 companies need their own counter intelligence units.
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