News / Asia

US Analysts Long Suspected China Hacking

The building housing “Unit 61398” of the People’s Liberation Army is seen in the outskirts of Shanghai, Tuesday Feb. 19, 2013.
The building housing “Unit 61398” of the People’s Liberation Army is seen in the outskirts of Shanghai, Tuesday Feb. 19, 2013.
For Internet security analysts, the announcement this week that the U.S. Department of Justice was charging members of China’s military with cyber-espionage hardly comes as a surprise.
Long before Washington began publicly complaining about hacking attacks coming from China, analysts have been tracking increasingly sophisticated efforts coming from somewhere in China to pry open and steal millions of secure data files from U.S. corporations, interest groups, media and even the government.

Increasingly, those analysts have been connecting the hacks with specific elements of the Chinese government; most notably the People’s Liberation Army, or PLA.
VOA spoke with four prominent cyber security analysts about the forensic examinations, techniques used by the Chinese hackers, and best suggestions to fight against the onslaught of Chinese hacking.

Jonathan Katz is the director of the Cybersecurity Center at the University of Maryland, Christopher Burgess is CEO and director of the cyber security firm Prevendra, Marcus Ranum is a firewall engineer and chief of security for Tenable Security, Inc., and Bruce Schneier is a leading cryptographer and author of the book “Schneier on Security”.  
VOA: How surprised are you that these attacks appear to be directed by or coming from the Chinese military, and how certain of that can we be?
Jonathan Katz: That’s a good question. According to the Mandiant report* from last year, it’s alleged that these Chinese hackers are state-sponsored actors that are breaking into U.S. corporations. As to why the military is doing it, we can speculate. But it seems clear that by targeting U.S. corporations, they’re interested in seizing intellectual property which would potentially be of use for the Chinese economy, for innovation, and potentially for other purposes to bolster China. The Mandiant report pinpointed a specific location in China where these attacks were coming from and named specific individuals by their Internet handle, but not actual names. So I’m not sure how the Department of Justice was able to make the jump to specific names, although we’ll probably learn more in the coming weeks.
Christopher Burgess: I’m not surprised the Chinese are purloining intellectual property from U.S. companies. They’ve been systematically stealing information since 1986. How certain can we be? I’d like to see the information coming out the indictment, and the subsequent trial, because it is difficult to trace back point-of-origin on cyber-attacks, but not impossible. The fact that the military was doing it isn’t surprising. All governments go with their ‘A-team’ when they’re going after information that is of national interest. In this case, they clearly were going after energy and natural resource information.
Marcus Ranum: Usually nations authorize such activities under their military because they feel that the fundamentally offensive nature doesn't fall under the purview of civilian agencies. That appears to apply whether we're talking about the US, UK, Germany, France or China. Probably a certain amount of it is also that historically, the military has more experience (in theory) handling secrets.
Bruce Schneier: It’s really no surprise at all. We’ve known for years there’s a lot of hacking coming from China and that much of it is either state-sponsored or state-approved. How you know about it is through investigation. It’s actually very hard to trace attacks. When we can, it’s often because hackers have made mistakes in hiding their tracks and it’s not something we can do quickly. In other cases, we’ve known with reasonable assurance the attacks came from certain buildings and offices in China and that the government knew about it and approved it.
VOA: What are the hallmarks or signatures, if any, of a Chinese hack attack? How are they doing it?
Jonathan Katz: They’re obviously very well-funded and they have a whole lot of resources. If you look at the techniques they’re using to get in, they’re using classical social engineering – malicious links in an email for example, or a spear phishing attack – in order to get a toe-hold into the system. After that, they seem to be very good at installing back doors into the compromised system that will allow them to have persistent access to the target. They’re also downloading huge amounts of data from the targets, which seems to be something unique to the Chinese. They do seem to be doing their background research, which makes the spear phishing emails look more legitimate, so getting names of people who work for the company to make it look as if they’re coming from someone inside, or crafting the emails in such a way as to convince people to click on it.
Christopher Burgess: The Chinese are doing what they’re doing by using what we call Advanced Persistent Threat technologies. It appears that this was on-going from 2006, so over eight years it indicates they were doing this in a very professional manner, with the intent to collect and not be detected. That’s different than organized crime where they’re trying to monetize something immediately. This was straight-up intelligence collection.

Marcus Ranum: The Chinese appear to be doing the same sorts of stuff that everyone else is/has been doing: attempting to collect economic and strategic information that will give them an edge over their competition. At the level of states, there is really not much of a line between economic activity and any other strategic area of conflict. War is a continuation of state-craft, which is a continuation of economics.
Bruce Schneier: There’s absolutely nothing unique about a Chinese hack, and this is one of the problems. It’s not just the Chinese; there’s nothing unique about government attacks. You used to be able to tell who it was by the weaponry. But governments, researchers, criminals; everybody’s using the same techniques. So there’s nothing unique about a Chinese attack except that it comes from China.
VOA: What are the best suggestions to U.S. corporations to protect themselves from these kinds of attacks?
Jonathan Katz: One of the things you can point to right away is the need for better user education. What you see with these phishing attacks is the need to train your workers to not be susceptible. Specifically, to be very careful when they see an email that doesn’t look legitimate, to be very careful when clicking on any links embedded in emails, or to use only their own passwords. These are the kinds of things that can go a very long way to preventing these hacks.
Christopher Burgess: First and foremost, you identify the location of your most sensitive data, and you isolate that away from where it can be access by anyone coming in through the Internet or social engineering. Far too many companies just don’t know where their information is, and thus they don’t know where they’re vulnerable.
Marcus Ranum:
They should be securing their systems and sharing information with their peers about how to maintain and improve their security. As we have seen, it really doesn't matter if it's the NSA hacking you or the Chinese – these activities maintain security weaknesses in the infrastructure that also make organizations more vulnerable to other criminals. Yes, this activity is criminal even when governments do it. It is a tremendous shame that some governments – most notably the U.S. lately – go on the offense, rather than defense.
Bruce Schneier: Against these sorts of attacks, the sad answer is there’s not much that can be done. Directed attacks tend to be extremely sophisticated – it’s what we call “advanced persistent threats” – and most companies are not equipped to defend themselves. The best most can do is to detect the attacks after they’ve occurred and mitigate the best they can. After that, good security hygiene is the best you can do, but if the attacker is tenacious enough, it’s not going to be enough.
VOA: How aware are you of any attacks or espionage going the other way, from the U.S. to China?
Jonathan Katz: I’m not aware of anything of this nature – U.S.-sponsored entities attacking Chinese corporations to steal intellectual property. There surely may be individuals in the U.S. or elsewhere doing that, but I haven’t seen it be state-sponsored from anywhere else other than China.  
Christopher Burgess: I would have no comment as I have no knowledge of such activity. That said, China has in the past made that accusation. Most recently they attributed the crash of .cn to foreign hands when it was actually domestic hackers. They have uncovered other countries hacking or trying to purloin information from Chinese government entities. There are lots of rumors. I would look to those nations that are publicly advertising that they’re creating offensive cyber-warfare capacity.
Marcus Ranum: What!?  Have you been asleep? Snowden's disclosure that the US has been back-dooring systems all around the world is far from new. Also, the U.S. has been compromising devices that are being exported – just as the U.S. was accusing Chinese router-maker Huawei of having back-doored routers, we now know the U.S. has been back-dooring Cisco gear. I think this is all a tremendous waste of time. If you invest your effort in defending your systems you are defending against all comers. If you simply attack a single target, you are only gaining inroads against one target. The logistics of war favor defense for its ubiquity.
Bruce Schneier: Oh, of course we’re doing this. The odds are zero that we’re not. We know that from the Snowden documents, we know that from U.S. policy, we know that from what the NSA does. The difference is, we don’t actually attack foreign companies and pass that information on to U.S. companies. That kind of industrial espionage is something the U.S. does not do. But when it’s government vs. government, we both do it. Everybody does.
*In February 2013, the Virginia-based Internet security firm Mandiant issued a comprehensive 76-page report titled “Exposing One of China’s Cyber Espionage Units.”

The report outlines over 150 instances of cyber espionage or hacking against 141 private targets that they conclude originated from the same source, which the report calls “APT1.”

The report authors detail where they attacks came from, the Internet handles of some of those behind them, and eventually conclude that “APT1” is, in fact, a Chinese military unit responsible for cyber intelligence known as 61398.

While the Department of Justice indictment goes further, and is much more detailed, much of its summary specifically tracks with the Mandiant report.

Doug Bernard

Doug Bernard covers cyber-issues for VOA, focusing on Internet privacy, security and censorship circumvention. Previously he edited VOA’s “Digital Frontiers” blog, produced the “Daily Download” webcast and hosted “Talk to America”, for which he won the International Presenter of the Year award from the Association for International Broadcasting. He began his career at Michigan Public Radio, and has contributed to "The New York Times," the "Christian Science Monitor," SPIN and NPR, among others. You can follow him @dfrontiers.

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Comment Sorting
by: eggerist from: USA
May 20, 2014 7:27 AM
Since time began appears to be the norm. Security has always been a thorn for any innovating company/ person.Stealing information by ALL countries,

by: Stephen Real from: Columbia USA
May 20, 2014 7:24 AM
China's PLA hacking unit "61398" is so famous in the USA. I wonder if the PLA offers tourist a chance to meet the rock star hackers? Since the whole world knows now who the team is by name.

by: rab from: Toronto
May 20, 2014 7:02 AM
How did VOA end up in Google as "news"? There are other articles that show China presenting evidence that US snooping is just as bad and likely worse. This article is poorly written propaganda.

In Response

by: Doug Bernard
May 20, 2014 8:38 AM
Rab, I think you'll see several of the analysts we spoke with said exactly as much. How is this propaganda?

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