Cyber Attacks From China Are Bleeding the U.S.

Gordon Chang is a contributor at Forbes and the author of “The Coming Collapse of China.”

He recently appeared on Secure Freedom Radio with Frank Gaffney to discuss cyber attacks from China, among other things. Gaffney suggests that China may not be honoring a recent promise to Obama to stop cyber attacks on America. Chang agreed:

“Last November, America’s top counter intelligence official said that American companies lose about $400 billion dollars in intellectual property to cyber attacks and then he mentioned that China is responsible for about 90 percent of those attacks. Well if you do the arithmetic, it means that China’s responsible for upwards of $360 billion dollars. Now, of course we don’t know and we don’t have a precise figure but nonetheless, that estimate comes very close to what we can glean from the Blair Huntsman report of May 2013, so these estimates are broadly consistent with one another and the United States has yet to deal with and end up with an effective solution for China’s cyber attacks. The agreement of last September between President Obama and China’s President Xi Jinping just does not seem to have worked.”

Gaffney asked how confident we can be that these attacks are coming from communist China but Chang suggests that the U.S. government has gotten much better at attribution. Chang went on:

“The FBI has issued two recent warnings about cyber attacks on U.S. companies, one on May 2^nd and the other on February 12^th. Although the FBI did not name the hackers it is believed that both warnings relate to APT6 (Advanced Persistent Threat 6). The FBI said that this group was attacking the U.S. since at least 2011. Private security firms believe actually they go back to 2008, this is one of the first groups designated an APT and this is serious because they’ve been doing this now for quite some time and the U.S. is not responding and this is a failure on the part of our political system, both this administration and the one before it because we know where these attacks are coming from, as I just mentioned we have better and better ability to trace them back. We know that China is involved and yet year in, year out we do not impose costs on the Chinese which is the only way we’re going to get them to stop doing this.”

Chang said these attacks also come from Russia, Iran and North Korea which prompted Gaffney to ask about a recent development. It seems the North Korean congress is meeting for the first time since 1980. He asked Chang to comment:

“The most important thing is that Kim Jong Un tried to use this to convince everyone that he was firmly in control and so for instance, he was given the title of chairman of the party and that is significant at least from a North Korean context. The other thing that he did which was fascinating is that he set out a five year plan for economic development. This is sort of putting himself in a little bit of a tight spot because he can now be held accountable. This is important because in North Korea right now there is what’s called a money culture. People are much more concerned about prosperity than ideology, people don’t believe that Kim Jong Un is derived from the gods and so therefore he has to prove his legitimacy by, among other things, making sure that people can eat.”

Gaffney wondered if the Obama administration will consider talking with North Korea as it has done with Cuba. Chang said that John Kerry has indicated that they are open to it and that it would be the wrong thing to do.