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Chinese Hacking May Slow, But...

Author: Adam Segal, Maurice R. Greenberg Senior Fellow for China Studies
February 21, 2012
SC Magazine

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By now, the process is almost routine. A major technology or defense company announces a serious security breach and suspicion quickly falls on China-based attackers. While U.S. officials have been coy about naming the culprit, preferring to say only that a nation-state was most likely behind the attacks, they have recently been more willing to raise the heat on Beijing by calling China out. So far, this naming and shaming does not seem to have had any effect on the calculus of Chinese hacking, and this is unlikely to change in the near-term. As a result, companies will have to continue to remain vigilant and take defense into their own hands.

The motivations for Chinese hacking are not mysterious. Government officials there are unhappy with China being the "factory to the world" – it is labor- and energy-intensive and damages the environment – and desperately want to move the country into higher-value sectors. To do this, China has significantly ramped up research-and-development spending, but it has also relied on foreign industrial espionage directed at high-tech companies. Hackers have also targeted the negotiation strategies and financial information of energy and banking companies.

Some types of hacking also act as a societal release valve, venting nationalistic feelings. Chinese officials, for example, turned a blind eye when hackers defaced the Nobel Foundation website after rights activist Liu Xiaobo won the Nobel Peace Prize in October 2010. Finally, open-source Chinese defense writings stress the importance of cyber attacks – both in the opening stage of a military conflict and as a deterrent to "outside powers."

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