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Chinese hackers hurt business, Congressional committee told

Kenneth Corbin | July 15, 2013
Amid a week of economic meetings between top U.S. and Chinese officials, lawmakers hear warnings about escalating costs of theft of U.S. firms' intellectual property.

Cultural challenge

Witnesses at the recent hearing contended that the Chinese perspective often does not draw a distinction between the espionage that countries-even allies-routinely conduct on one another and hacking into businesses to steal trade secrets.

James Lewis, a senior fellow at the Center for Strategic and International Studies, where he directs the Technology and Public Policy Program, recalled a meeting with Chinese officials when a senior colonel in the People's Liberation Army told him: "'Look, in the U.S. military espionage is heroic, and economic espionage is a crime, but in China the line is not so clear.' So one of the things we can do is make the line a little clearer to them."

Much of the problem can be traced to a weak legal structure in China, Russia, and other countries that are identified with intellectual property theft, Lewis explains.

"They have no tradition of protecting intellectual property," he says. "One of the differences between the U.S. and countries like China and Russia is that we have laws and we enforce them. They either don't have laws and they certainly don't enforce them."

Apart from the legal factors, Lewis' diagnosis of China's stance on intellectual property notes a fear among party leaders that rapid economic growth is crucial to their ability to hold onto power, and the concern that businesses in the state-controlled economy are unable to innovate to achieve that growth.

Lewis says that the defenses of U.S. companies vary widely by sector-he gives high marks to the banking industry while he says many utilities are soft targets-but sums up the security posture of the private sector as "feeble," and has advocated for strong legislation to prod businesses to "harden their networks."

 

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