Time to Retaliate Against China’s Cyber Espionage

“To my Chinese counterparts, I would remind them, increasingly you are as vulnerable as any other major industrialized nation state,” said Admiral Mike Rogers, director of the National Security Agency and the chief of US Cyber Command, on November 21st at the Halifax Security Forum. “The idea you can somehow exist outside the broader global cyber challenges I don’t think is workable.” 

That, in all probability, was not an observation. A year ago, it was inconceivable that an American four-star officer would talk like this—in other words, make a threat—in public. 

The temperature over cyber matters in the American capital has risen fast in recent weeks. If there has been any reason for the change in attitude, it may well be China’s not honoring its agreement, reached while President Xi Jinping was in Washington in September, to stop cyber attacks for commercial espionage purposes.

Suddenly, Dialogue with North Korea Is in Vogue

On Friday, Seoul’s Unification Ministry announced that North Korea had accepted the South’s invitation to hold a working-level meeting in the truce village of Panmunjom, in the Demilitarized Zone. The talks, scheduled for Thursday, are supposed to prepare the way for high-level discussions between the two Koreas, to be held in either Pyongyang or Seoul.

South Korea's Dual Agendas Undermine Allies' Unity

“It is our stance that freedom of navigation and freedom of flight should be ensured in this area, and that any conflicts be resolved according to relevant agreements and established international norms,”said South Korean Defense Minister Han Min-koo, referring to the South China Sea, in a recent news briefing with his American counterpart in Seoul. 

The remark, made on the heels of a trilateral meeting in the South Korean capital among Premier Li Keqiang of China, President Park Geun-hye of South Korea, and President Shinzo Abe of Japan, was tentative. According to an account in the Wall Street Journal, “South Korean officials appeared eager to avoid the topic.”

China Militarizes the South China Sea

Photographs posted on Chinese websites late last month suggest the People’s Liberation Army is now basing its J-11 fighters on Woody Island, the largest of the Paracels, a chain of islands near Vietnam and China in the middle portion of the South China Sea.

The PLA might not keep the advanced fighters there long—the salty air degrades sophisticated planes quickly—but the introduction of J-11s on that island will surely cause alarm in the contested region for many reasons. 

Challenging China in the South China Sea

On Tuesday, the USS Lassen, an Arleigh Burke–class guided-missile destroyer, conducted a freedom of navigation exercise around Subi and Mischief Reefs in the Spratly chain in the South China Sea. Beijing had been huffing and puffing before the much-anticipated event but carried through on none of its implied threats to harass the vessel as it made its “transit,” which took it within 12 nautical miles of the reefs that China has made into island bases.

How Effective Is Obama’s Cyber Deal with China?

On Monday, Dmitri Alperovitch of CrowdStrike revealed that his firm had detected a number of cyber attacks from China since the White House’s announcement of an agreement with Beijing on the hacking of companies. “The primary benefit of the intrusions,” wrote Alperovitch, “seems clearly aligned to facilitate theft of intellectual property and trade secrets, rather than to conduct traditional national-security related intelligence collection which the Cyber agreement does not prohibit.”

CrowdStrike’s co-founder and chief technology officer stated there was an attack on September 26th, the day after the White House announcement of the deal, and that there had since been attempted intrusions on 10 more days. Seven of his firm’s tech and pharmaceutical clients had been the targets.

Is a US-China Showdown in South China Sea Imminent?

“We will never allow any country to violate China’s territorial waters and airspace in the Spratly Islands, in the name of protecting freedom of navigation and overflight,” said Chinese Foreign Ministry spokeswoman Hua Chunying at Friday’s regular news briefing. “We urge the related parties not to take any provocative actions, and genuinely take a responsible stance on regional peace and stability.”

Hua was evidently reacting to a Navy Times report that the US Navy was planning to send a surface combatant within 12 nautical miles of a Chinese island in the South China Sea in a bid to preserve freedom of navigation for itself and others.

China Stock Crash Imperils Proposed Nicaragua Canal

The net worth of Chinese entrepreneur Wang Jing, the driving force behind a proposed canal across Nicaragua, has fallen $9.1 billion since mid-June, when China’s stock market collapsed. No other individual in the Bloomberg Billionaires Index during this period has lost a greater proportion of assets, 84 percent in his case.

Chinese ambition in recent years has been stunning, and no person outside officialdom has been more optimistic than Wang, 42, who owns 35 percent of publicly listed Beijing Xinwei Telecom Technology Group Co.

In 2013, Wang announced he would build the waterway, three times longer than the Panama Canal. His plans also contemplated two deep-water ports, an airport, an artificial lake, a tourist area, a free-trade zone, roads, and factories to make cement and steel. Wang’s closely held vehicle, the Hong Kong Nicaragua Canal Development Investment Group Co., has an initial 50-year concession awarded by Daniel Ortega’s government.

China Imposes New Capital Controls

The State Administration of Foreign Exchange, China’s foreign exchange regulator, has imposed annual limitations on cash withdrawals outside China on China UnionPay bank cards, the Wall Street Journal learned on Tuesday. The limitations are reportedly contained in a circular SAFE, as the regulator is known, sent to banks.

Cardholders, under the new rules, may withdraw a maximum 50,000 yuan ($7,854) in the last three months of this year and a maximum 100,000 yuan next year.

Because UnionPay processes virtually all card transactions in China, the new limits apply to all Chinese credit and bank cards. Beijing already imposes a 10,000-yuan daily limit on withdrawals.

And why should the rest of the world care about how much money a holder of a Chinese credit card can get from an ATM in, say, New York? The new rules could be the first in a series of measures leading to draconian prohibitions of transfers of money from China.

Draconian prohibitions, in turn, could spark a global panic.

China Intercepts US Aircraft Over Yellow Sea in Dangerous Maneuver

On September 15th, a Chinese military jet intercepted a US Air Force RC-135 reconnaissance aircraft over the Yellow Sea, about 80 miles east of China’s northern Shandong Peninsula. The Chinese jet crossed the nose of the American plane, passing within 500 feet, a dangerous maneuver.

The US regularly conducts surveillance flights over international water along China’s coast, airspace that Beijing wrongly claims to be its own. As a result, there has been a series of Chinese intercepts of these flights.

“One of the maneuvers conducted by the Chinese aircraft during this intercept was perceived as unsafe by the RC-135 air crew and at this point, right now, there’s no indication this was a near collision, but the report that came back was that the plane operated in an unsafe fashion,” said Pentagon spokesman Peter Cook last week.

China Official Creates Controversy in Hong Kong

Tuesday, Leung Chun-ying, Hong Kong’s chief executive, lent support to controversial remarks made Saturday by China’s top official in Hong Kong. Zhang Xiaoming, head of Beijing’s Liaison Office, precipitated a new controversy over the weekend with comments about the supremacy of the powers of the city’s top political official.

Zhang said the CE, as the chief executive is sometimes called, has “a special legal position which overrides administrative, legislative, and judicial organs.”

Beijing, in the Sino-British Joint Declaration of 1984, promised Hong Kong “a high degree of autonomy” until 2047. The city has been a special administrative region of the People’s Republic since 1997.

Chinese Warships Sail into American Waters

Last Thursday, the Pentagon confirmed five Chinese warships had sailed within 12 nautical miles of the Alaskan coast. The US, in accordance with international law, claims as territorial water a band of sea extending 12 miles from its shores. The Chinese vessels, therefore, entered American waters.

US authorities did not grant permission for the Chinese transit, and the waters in question are not an internationally recognized strait. The Pentagon did not complain, however, maintaining the warships “transited expeditiously and continuously through the Aleutian Island chain in a manner consistent with international law.” As a US official explained to CNN, the intrusion constituted “innocent passage.”

Beijing at the Corner of Desperation and Panic

Monday, China Central Television, the state broadcaster, carried the “confession” of a weary Wang Xiaolu. The journalist from Caijing Magazine, a prominent financial publication, admitted to adding his “own subjective judgment” to information he obtained “through private channels” about the central government’s stock rescue plan.

Wang’s crime, in Beijing’s eyes, was to pen a July 20th article stating that the China Securities Regulatory Commission was considering halting intervention in the Chinese stock market. Since early July, the central government had been buying blue chip stocks in an effort to keep prices high.

Guess Who’s Coming to China’s Military Parade

Tuesday, Beijing revealed the list of countries participating in its military parade, scheduled for September 3rd, commemorating the 70th anniversary of the defeat of Japan in the Second World War.

Belarus, Cuba, Egypt, Kazakhstan, Kyrgyzstan, Mexico, Mongolia, Pakistan, Serbia, Tajikistan, and Russia will each send about 75 marchers. Afghanistan, Cambodia, Fiji, Laos, Vanuatu, and Venezuela will contribute about seven troops each. The 17 countries, Beijing said, will chip in about 1,000 soldiers.

This is an odd group celebrating the end of World War II in the Pacific. Fiji remained untouched in the struggle, but can at least say it’s in the Pacific. Belarus, on the other hand, resides in Europe. It did not exist 70 years ago. When Japanese diplomats signed instruments of surrender on the deck of the Missouri, the territory that now comprises Belarus was part of the Soviet Union.

Obama Toughens Stance Against China's 'Fox Hunt'

On Monday, Beijing revealed that the US had demanded it withdraw agents from American soil.

The revelation came on the same day of a CNN report saying US officials had confirmed that they had told China to stop covert operations in the US aimed at pressuring Chinese citizens to return to China.

The activity, part of Beijing’s “Fox Hunt” and “Sky Net” operations, was illegal, Washington reportedly told Chinese officials. CNN’s confirmation followed New York Times reporting on the topic Sunday.


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