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China vs. the machine (learning)

Taylor Armerding | Feb. 10, 2016
If American businesses want to curb the theft of their trade secrets and intellectual property by other countries, they are going to have to do it themselves. Experts say their best hope is machine learning.

In the ongoing war against economic espionage – especially by China - the good news for the American private sector is that machine learning (ML) and behavioral analytics, are offering some promise of detecting hackers before they start exfiltrating trade secrets and intellectual property (IP).

The not so good news is that those businesses are not going to be getting much help from the government.

That, say most experts, is the reality, even after last September’s agreement between the U.S. and China that neither country would, “conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors.”

Even mainstream media organizations are reporting that the agreement has had little effect. The CBS TV news magazine “60 Minutes” devoted a segment of its Jan. 17 show – four months after the agreement – to the continuing theft of trade secrets and IP of American companies, labeling it, "the great brain robbery of America."

In the segment, Dmitri Alperovitch, cofounder and CTO of CrowdStrike, told correspondent Leslie Stahl that following the agreement between President Obama and Chinese President Xi Jinping, the hacking of U.S. companies continues. It has simply been transferred from the infamous Unit 61398 of the People’s Liberation Army that has hacked multiple American businesses including the New York Times, to an intelligence unit that is China’s version of the CIA.

“In effect, they said, ‘You guys are incompetent. You got caught. We'll give it to the guys that know better,’” Alperovitch said.

CrowdStrike’s “2015 Global Threat Report” put it in somewhat more muted language, but the message was the same: The wording of the agreement, “was described by most analysts as extremely vague and largely open to interpretation,” the report said, adding that, “China has demonstrated that their operators will resume normal activities when scrutiny has diminished. The cyber agreements appear to be an attempt to appease the U.S. (and) avoid economic sanctions …”

Experts also say that even the highly publicized arrests last fall by the Chinese government of “a handful of hackers” connected to the catastrophic breach that exposed the personal data of more than 22 million current and former U.S. federal workers don’t really change things.

“The Chinese government has a history of sacrificing individuals for the good of the state,” said William Munroe, vice president of marketing at Interset. “Arrests, convictions and jail sentences create a justifiable defense that the Chinese are following the agreement while covering up their illicit activities.”

And, while the U.S. government has issued multiple threats over the past several years that it will impose sanctions on China if the cyber economic espionage continues, it has not imposed any yet and nobody expects it will.


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