US Takes First Stand Against Chinese Cyber Espionage

Daily News Article — Posted on April 1, 2013

(from NTD TV) – The Chinese regime is criticizing the first real step the United States has taken in response to Chinese cyber espionage.

The Chinese military has been accused of hacking critical U.S. networks. On Tuesday, President Barack Obama signed new laws to ban most sectors of the U.S. government from buying information technology made by companies linked to the Chinese government.

China’s Foreign Ministry says the U.S. should abandon the law.

“This bill uses Internet security as an excuse to take discriminatory steps against Chinese companies. It is not beneficial to mutual trust between China and the United States nor to the development of trade and economic relations.”

But that trust has already been violated. Years of research by the security firm Mandiant led to revelations that the Chinese regime has waged an aggressive campaign of cyber espionage against the United States and other countries around the world.

The new legislation effectively prohibits the Commerce and Justice Department, NASA, and the National Science Foundation from buying IT made by companies that are, “owned, operated, or subsidized,” by the Chinese regime.

The provision is only good until September 30th. That’s when the fiscal year ends. So this is only a move against China in the short term.

There are also questions over how the provisions will be implemented. IT systems are often the product of complex assembly, sourced from different companies from around the world. Tracing every component to its source could be difficult.

China has been called an “IT menace” by Google founder Eric Schmidt and former senior official at the Homeland Security Department Stewart Baker says the provision is a sign of things to come.

Reprinted here for educational purposes only. May not be reproduced on other websites without permission from NTD Television. Visit the website at ntdtv.org.

Questions

Note to Students: Before answering the questions, read the "Background" and "Resources" below.

1. What has Congress done in response to the Chinese government's cyber espionage against the U.S.? Be specific.

2. How has the Chinese government responded to the ban?

3. After years of research, what did security firm Mandiant reveal about the Chinese government?

4. For how long will the ban be in effect?

5. Why will the ban be problematic to implement?

6. Despite the difficulties associated with implementing the ban, do you think it is necessary? Explain your answer.

Background

THE BAN ON U.S. GOVERNMENT AGENCIES PURCHASING ANY INFORMATION TECHNOLOGY FROM CHINA:

The new rule, which was buried in a spending bill signed this week, comes after a string of hacks traced back to China hit some of America's most important companies.
Lawmakers tucked the provision into the latest budget resolution, which enables the government to pay for day-to day operations for the rest of the fiscal year, under the innocuous heading 'section 156.'
It bans the Commerce and Justice departments, NASA and the National Science Foundation from buying hardware 'produced, manufactured or assembled' by any entity 'owned, operated or subsidized' by the People's Republic of China.
The agencies can only acquire the technology if, after consulting with the FBI, they determine that there is no risk of 'cyberespionage or sabotage associated with the acquisition of the system'.
It will only be in effect until the end of the fiscal year on September 30, but could yet pave the way for broader, more permanent changes in how the U.S. government buys technology. (from a report in the dailymail)
The provision came to attention via a blog post by lawyer Stewart A. Baker, a former Assistant Secretary in the U.S. Department of Homeland Security under George W. Bush. Baker wrote that the sanctions “[demonstrate] remarkable bipartisan angst about Chinese hacking and the risks in Chinese high tech equipment.” The law means that NASA, the National Science Federation, and the Justice and Commerce Departments, need to get approval from federal law enforcement officials before buying information technology systems in order to assess “cyber-espionage or sabotage” risk. In particular, federal law officials must first assess “any risk associated with such system being produced, manufactured or assembled by one or more entities that are owned, directed or subsidized” by China.
But Chinese tech companies may not be the only ones impacted by the new law. Baker also wrote that the legislation may bring “some surprises for American companies selling commercial IT gear to the government” because they might not know which suppliers and assemblers are directed or subsidized by the Chinese government. As Baker noted in another post, the new law restricts purchases from Chinese state-influenced companies, no matter where they manufacture their products. “This means that the provision could prevent purchases of Lenovo computers manufactured in Germany, or Huawei handsets designed in Britain,” Baker said.(from techcrunch)