Cyber Espionage and Cyberwarfare Capabilities.
In 2011, computer networks and systems around the world continued to be targets of intrusions and data theft, many of which originated within China. Although some of the targeted systems were U.S. government-owned, others were commercial networks owned by private companies whose stolen data represents valuable intellectual property. In the hands of overseas competitors, this information could diminish commercial and technological advantages earned through years of hard work and investment. Intrusions in 2011 occurred in key sectors, including companies that directly support U.S. defense programs.
Authoritative writings and China’s persistent cyber intrusions indicates the likelihood that Beijing is using cyber network operations (CNOs) as a tool to collect strategic intelligence. In parallel with its military preparations, China has increased diplomatic engagement and advocacy in multilateral and international forums where cyber issues are discussed and debated. Beijing’s agenda is frequently in line with Russia’s e&orts to promote cyber norms under a UN framework. In September 2011, China and Russia were the primary sponsors of an Information Security Code of Conduct that would have governments exercise sovereign authority over the %ow of information in cyberspace. China has not yet accepted that existing mechanisms (such as the Law of Armed Con%ict), apply in cyberspace. However, China’s thinking in this area may evolve as its own exposure increases through greater investment in global networks.
Technology Transfer, Strategic Trade Policy, and Military Modernization.
The PRC continues to modernize its military by incorporating Western (mostly U.S.) dual-use technologies, which have also assisted its overall indigenous industrial, military industrial, and high-technology sector development. One of the PRC’s stated national security objectives is to leverage legally and illegally acquired dual-use and military-related technologies to its advantage. China has a long history of cooperation between its civilian and military sectors and openly espouses the need to exploit civilian technologies for use in its military modernization. In this context, the cumulative e&ect of U.S. dual-use technology transfers to China could also make a substantial material contribution to its military capabilities. For example, interactions with Western aviation manufacturing !rms may also inadvertently provide bene!t to China’s defense aviation industry. “rough its advisory role within the U.S. export control process, DoD will continue to identify and mitigate risk, and seek to prevent critical advanced technologies exports to China that could be diverted to unauthorized end-use or to third-country end-users of concern, or contribute to overall modernization of China’s military and defense industrial base.
Chinese actors are the world’s most active and persistent perpetrators of economic espionage. Chinese attempts to collect U.S. technological and economic information will continue at a high level and will represent a growing and persistent threat to U.S. economic security. “e nature of the cyber threat will evolve with continuing technological advances in the global information environment.
Sensitive U.S. economic information and technology are targeted by intelligence services, private sector companies, academic/research institutions, and citizens of dozens of countries. China is likely to remain an aggressive and capable collector of sensitive U.S. economic information and technologies, particularly in cyberspace.
Civil-Military Integration. :
China’s defense industry has bene!ted from China’s rapidly expanding civilian economy, particularly its science and technology sector. Access to foreign advanced dual-use technology assists China’s civilian economic integration into the global production and research and development (R&D) chain. For example, with increasing globalization and integration of information technologies, companies such as Huawei, Datang, and Zhongxing, with their ties to the PRC government and PLA entities, pose potential challenges in the blurring lines between commercial and government/military-associated entities.