China syndromeU.S. weighing retaliatory measures against China for hacking campaign

As incontrovertible evidence emerged for the role of Chinese government in initiating and orchestrating the massive, sustained Chinese hacking campaign against U.S. private companies, government agencies, and critical infrastructure assets, the administration has intensified discussions of retaliatory measures the United States may take against China.

Fox news reports that among the measures being considered are fines and trade penalties.

The Obama administration has been considering different ways to respond to China’s brazen hacking, but a recent report detailing the role of Chinese government agencies in the hacking campaign has caused these discussions to be accelerated.

The report, by U.S. computer-security firm Mandiant, details the role of People’s Liberation Army’s Unit 61398 in initiating and guiding the cyberattacks. The PLA 61398 Unit  is part of the People’s Liberation Army’s cybercommand, which is under the direct authority of the General Staff Department, China’s version of the Joint Chiefs of Staff.

State Department spokeswoman Victoria Nuland and White House press secretary Jay Carney said U.S. officials have started a dialogue with the “highest levels” of the Chinese government, including with “officials in the military.”

“It is a major challenge for us in the national security arena,” Carney said Monday, adding that it is known that foreign countries and companies “swipe” sensitive U.S. information.

Security experts urged U.S. action against China. “If the Chinese government flew planes into our airspace, our planes would escort them away. If it happened two, three or four times, the president would be on the phone and there would be threats of retaliation,” Shawn Henry, former FBI executive assistant director, told Fox News. “This is happening thousands of times a day. There needs to be some definition of where the red line is and what the repercussions would be.”

Henry, the president of the security firm CrowdStrike, said that rather than tell companies to increase their cybersecurity, the government needs to focus more on how to deter the hackers and the nations that are backing them.

James Lewis, a cybersecurity expert at the Center for Strategic and International Studies, said that in the past year the White House has been taking a serious look at responding to China. “This will be the year they will put more pressure on, even while realizing it will be hard for the Chinese to change. There’s not an on-off switch,” Lewis said (also see “HSNW conversation with James Lewis,” HSNW, 29 August 2012).

China is clearly a target of interest, said Lewis, noting that the U.S. would be interested in Beijing’s military policies, such as any plans for action against Taiwan or Japan.

Mandiant says in its report that PLA 61398 Unit “has systematically stolen hundreds of terabytes of data from at least 141 organizations.” A terabyte is 1,000 gigabytes. The most popular version of the new iPhone 5, for example, has 16 gigabytes of space, while the more expensive iPads have as much as 64 gigabytes of space. The U.S. Library of Congress’ 2006-10 Twitter archive of about 170 billion tweets totals 133.2 terabytes.