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Wednesday, February 21, 2024

The Cyber Combat: An Eagle in the Dragon’s Shadow

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The Eagle is in the Dragon’s shadow and the cyber combat is getting fierce and vicious. US has been keeping its focus on China’s slithering moves in the US through their investments and also with US companies engaged in business in China.

As geopolitical powers align with the US and China in no-holds-barred combat post-COVID-19 pandemic and its impact globally, the Eagle is strategizing to defend its territory from the snares of the Dragon.

According to the statement of Eric Rosenbach Co-Director, Belfer Center for Science and International Affairs, Harvard Kennedy School Former DoD Chief of Staff; former Assistant Secretary of Defense for Homeland Defense and Global Security before the United States Senate Committee on Commerce, Science, and Transportation – Hearing on “China: Challenges to US Commerce:

Over the past decade, China has pursued a national strategy to challenge the United States’ global leadership in the Information Age through a conscious strategy of state-backed investment, loose consumer data privacy protections, a centralized AI and technology deployment strategy, and intelligence operations to steal crucial data and intellectual property.

The Chinese government has invested heavily in the research and development of technology that underpins supercomputing, artificial intelligence, broadband networks, and big data. Those investments have resulted in genuine achievements.

In 2016, for example, China unveiled the world’s fastest supercomputer – and announced that it owned more of the top 500 supercomputers than any other nation in the world. ​Chinese firms and research institutions, nearly always supported with state funds, have made advances in artificial intelligence that some corporate leaders believe will make China the world leader in hardware-based AI.

President Xi has also advanced his nation’s strategic plans by developing and supporting firms in key areas of economic power with state-sponsored loans, contracts, and research and development. One of the best known of these Chinese “national champions” is Huawei, now the largest telecommunications equipment maker in the world. The significant resources Huawei derives from the backing of the Chinese government puts American and European telecommunications equipment providers at a clear disadvantage, particularly when it comes to developing and deploying some of the technology necessary for next-generation broadband networks.

The Chinese government has also devoted significant military intelligence capabilities to steal the data and intellectual property needed to fulfill the ambitious goals established for President Xi’s “Made in China 2025 Plan.” Over the past decade, Chinese intelligence officers from the People’s Liberation Army (PLA) have conducted thousands of cyberattacks against both private sector and government targets. The Chinese, for example, was almost certainly responsible for the hacks and the theft of hundreds of millions of Americans’ data from the Office of Personnel Management, Marriot, Anthem Health, and Equifax. Although the PLA undoubtedly used this for intelligence purposes, it’s highly likely that this high-quality data was also used to help the government-sponsored development of AI capabilities.

Over the past decade, Chinese intelligence operatives have been equally aggressive in systematically stealing intellectual property and trade secrets from American organizations essential to national competitiveness. ​“More than 90 percent of the department’s cases alleging economic espionage over the past seven years involve China,” deputy attorney general Rod Rosenstein said after an indictment unsealed in December 2018.

The Obama Administration’s response to these attacks was slow and initially weak, but by 2015 the Administration finally recognized the need to confront Chinese leadership with explicit attribution, sanctions, and improved cyber defenses. These actions resulted in a short-term drop in Chinese cyberattacks against the US. Over the past 18 months, however, Chinese cyber operations have resumed. In the most recent annual national threat assessment, for example, Director of National Intelligence Daniel Coats said that ​”China will continue to use cyber-espionage and bolster cyberattack capabilities to support [its] national security priorities.” This past December, the FBI’s top counterintelligence official asserted that “Our prosperity and place in the world are at risk.

Eric Rosenbach further opined in his testimony to US Senate Committee:

The United States needs to recognize that data collection and technology deployment are critical both from the perspective of economic competitiveness and national security. Looking over the horizon, adversaries will greatly increase operations to steal sensitive and valuable information in order to advance their strategic and economic advantage over the United States. Given the richness of data held by the largest companies and research centers in the tech, financial and healthcare sectors, it is highly likely that adversary intelligence services will expand their traditional targets to include corporate datasets that could be used to train AI systems and to hone information operations.

US policy responses to these threats should be centered around a few guiding principles:

1. The Information Age demands data-centric security and economic strategy: America needs to develop a data-focused strategy for competitiveness. From a security perspective, a network-centric approach to national security is failing. Focus on the threat of a low probability catastrophic attack on critical infrastructure networks, for example, has distracted leaders from the reality that we are not defending the nation’s most precious resource: information. Likewise, the government has done very little to prioritize the centers of gravity for an economy powered for the Information Age.

  1. The privacy of personal information is national security and economic priority. Policies aimed at bolstering US national security and promoting US economic competitiveness must go hand-in-hand with consumer protection. Authoritarian governments may ignore consumer rights in pursuit of acquiring information power, but democracies cannot. Bolstering the global competitiveness of American companies should remain a top priority, but not at the expense of allowing these companies to collect, use, and sell information without user consent or under-invest in cybersecurity measures.
  2. America needs a whole-of-government strategy to improve national competitiveness in the Information Age. ​Information geopolitics cuts across all aspects of the economy, society, and state security apparatus. Authoritarian governments have adopted a highly centralized, mercantilist approach to protecting, acquiring, and using information. Centralization will not be the answer for democracies, but coordination must be. Unprecedented cooperation is required, across economic, social, defense, intelligence, state department, and homeland security portfolios. For example, the American government can no silo regulatory decisions about information-related companies separate from foreign policy decisions on cyberspace.
  3. Even further, America needs a whole-of-nation strategy that includes coordination with the private sector. ​The US intelligence community needs to share threat information about foreign intelligence organizations with the social media platforms that so directly influence Americans’ economic and political decisions. Policymakers must be willing to work with private actors to ensure the regulatory red tape does not stand in the way of innovation, and that public-private partnerships continue to create incentives to accelerate technology development. At the same time, American technology firms need to understand, and be held accountable for, their role in protecting national security interests.

One of the suggestions of Eric Rosenbach that would be pivotal is to limit foreign ownership and provide resources to support firms in key information sectors. ​​Over the past decade China has systematically targeted investment in and ownership of firms developing technology, such as AI, that will drive strategic advantage in the Information Age.

Rosenbach further added that the US response to Chinese cyber-attacks that steal personal data and intellectual property has been weak, resulting in the perception by China that an attack on the American economy will not incur costs. The US needs a strong national response to demonstrate that interference with American information and infrastructure assets in any manner is unacceptable. We have to raise the cost of attacks and decrease the benefits that our adversaries seek.

China Rosenbach Testimony

 

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