US Clamps Down on Spying by China, Others

First it was copyright and patent infringement, now the White House warned China and other countries there will be trade and diplomatic actions over recent corporate espionage discoveries. The White House has cataloged more than a dozen cases of cyber attacks and commercial thefts at some of the U.S.'s biggest companies. The US has documented the impact costs of espionage, competitive disadvantages, job losses, and product losses that American firms as such as General Motors and DuPont have already had to confront.

"There are only two categories of companies affected by trade-secret theft: those that know they've been compromised and those that don't know it yet," Attorney General Eric Holder said at a White House conference Wednesday. "A hacker in China can acquire source code from a software company in Virginia without leaving his or her desk."

The White House on did not specify actions it would take against China, but a strategy document is loaded with examples of Chinese theft of corporate secrets from top American firms, and officials said the administration has repeatedly raised the theft issue at senior levels of the Chinese government.

"With respect to China, protection of intellectual property and trade secrets remains a serious and highly troubling issue," said Undersecretary of State for Economic Affairs Robert Hormats, at the White House event, which marked the beginning of the new strategy.

Of the 19 cases that had resulted in charges and convictions detailed in the strategy document, 16 involve theft aimed to benefit entities in China, such as stolen hybrid technology from GM and military secrets from defense contractor L-3 Communications Holdings Inc., among others.

In addition to denying it condones computer hacking, China also has said that it is itself a victim of cyber attacks and that Chinese law forbids such attacks.

Akamai Technologies, which monitors large amounts of web traffic, said in the third quarter of 2012 China was the world's No. 1 source of observed attack traffic, with 33% of such traffic. The U.S. was second, at 13%.

U.S. intelligence agencies issued a rare public report in 2011 that identified Chinese hackers as the "most active and persistent perpetrators of economic espionage." Senior intelligence officials said the Chinese government and sympathetic hackers are behind the cyber spying.

It is reassuring to see the US finally taking a tough stance on cyber criminal activities. These actions follow an executive order that President Barack Obama signed last week to create voluntary cyber security standards for companies running critical infrastructure like the electric grid.




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