China biggest, but not the only country engaged in cyberespionage

Sensitive U.S. data and technologies are targets for state-sponsored entities around the world

China is by far the most aggressive, but not the only, country attempting the sort of extensive cyberespionage described in security firm Mandiant's dramatic report, released this week.

Several other countries, most notably Russia, are involved in similar campaigns against U.S. companies from a wide range of industries, security experts said.

Companies in the information technology and communications sectors, as well as those in the marine systems, aerospace, clean technologies, healthcare, pharmaceuticals and agricultural industries have all been targets of such campaigns in recent years, they said.

"We are now in an era where global intelligence regimes within many countries are capable of extracting data and intelligence from across the world with very little effort and almost complete impunity," said Lawrence Pingree, an analyst with Gartner. "The most important aspect of these developments is that these capabilities can now be targeted and persistent at the individual actor-level with unprecedented precision."

China has attracted the most effort not only because it has been the most aggressive actor, but also because it is widely perceived as having the most to gain from such campaigns. But the fact is that other countries almost certainly have similar capabilities, Pingree said.

Mandiant on Monday released a report identifying a unit of the People's Liberation Army (PLA) of China as being behind a systematic cyberespionage campaign against the U.S. and several other countries since at least 2006. The PLA's Unit 61398, based out of a 130,663 square-foot building in Shanghai, is believed to have compromised over 140 companies from 20 major industries in countries that are considered as strategic by China, the report said.

The security firm's report provides what many believe is the best evidence yet of the extensive cyberespionage activities being directed out of China.

"[The report] goes way beyond the reports we have seen in the past that point a finger at China's cyberespionage," said Richard Stiennon, principal at IT-Harvest. "The Mandiant report establishes the extent, methodology, and scope of a single group's activity emanating from China and most probably under the direct command of a unit of the PLA.".

In releasing the report, Mandiant appears to have also burned a huge amount of critical information on major cyberthreat actors, Stiennon added. Many of the IP addresses and malware tools used to craft the attacks described in the report are likely to be abandoned by Unit 61398 in short order, Stiennon said. "It is still of extreme value to anyone who has been breached but the value for future attack detection will diminish quickly," he said.

Mandiant's report bolsters a long-held view within the U.S that entities based out of China are working on behalf of, or with the knowledge of, the Chinese government to steal U.S. intellectual property and trade secrets.

"Chinese actors are the world's most active and persistent perpetrators of economic espionage," a report by the Office of the National Counterintelligence Executive (NCIX) had noted back in October 2011. "U.S. private sector firms and cybersecurity specialists have reported an onslaught of computer network intrusions that have originated in China," the NCIX said.

The report pointed to a Chinese government initiative called Project 863, which provides funding and guidance for efforts to steal sensitive U.S. economic information and technology. "China will continue to be driven by its longstanding policy of 'catching up fast and surpassing' Western powers," it noted.

But China is not alone. Several intelligence reports, some dating back to 2005, have consistently warned about the U.S. being a target of economic espionage from state-sponsored entities around the world.

A 2012 report from the U.S. Department of Defense's Defense Security Service (DSS) says entities linked to East Asia, where China is located, and the Pacific region, accounted for 42% of all attempts to collect sensitive U.S. data illegally. The report considered a range of espionage activities, and not just cyberespionage.

The second most active region, with 18% of all reported attempts, was the Near East, which is identified in the report as a region comprising of countries like Iran, Israel, Libya and Saudi Arabia. Entities based in Europe accounted for about 15% of the attempted attacks since 2007, the report said.

DSS said there is a moderate likelihood of increased exploitation attempts from cyber actors from South and Central Asian countries such as India, Pakistan and Bangladesh over the next few years. "The region's active and growing IT sector produces and employs individuals capable of hacking computer systems," the report noted.

"While no reporting indicates these South and Central Asia IT companies are acting as intelligence collection sources at this time, their capabilities are likely advanced enough for them to be exploited as a collection tool," the report cautioned.

In its 2011 report, the NCIX noted that many countries view economic espionage as vital to their national security and economic prosperity. Several of those countries are engaged in programs that combine collection of information from open sources, human intelligence and cyber operations that include network intrusions and insider access to corporate and proprietary networks.

"The relative threat to sensitive U.S. economic information and technologies from different countries is likely to evolve as a function of international economic and political developments," the NCIX report had noted. "China and Russia view themselves as strategic competitors of the United States and are the most aggressive collectors of U.S. economic information and technology."

But over the next few years, U.S. companies must be prepared for the eventuality that one or more fast-growing regional powers could launch aggressive cyberespionage campaigns if they felt it would benefit them economically or from a security standpoint, the report noted.

Importantly, it's not just state-sponsored entities that are launching cyberespionage campaigns.

In January, the security firm Kaspersky Labs released details of a massive cyberespionage campaign, dubbed Red October, that has been targeting companies in Western Europe and North America for at least the past five years. The attacks, which targeted companies from a total fo 69 countries were not state-sponsored, but rather the work of sophisticated hackers operating out Russia.

"Signs point to Chinese actors most often when attacks or compromises are discovered," said Dale Peterson, CEO of Digital Bond, a consulting company that specializes in control system security. That doesn't mean that other nations are not active as well, especially in the area of industrial control systems (ICS), he said.

"I'd imagine every major country in the world, including the U.S. and non-governmental entities, are learning what control systems run their potential adversaries critical infrastructure, getting detailed design information on those systems, developing offensive weapons, and in some cases pre-staging those weapons," Peterson said.

Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan or subscribe to Jaikumar's RSS feed. His e-mail address is jvijayan@computerworld.com.

See more by Jaikumar Vijayan on Computerworld.com.

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