September 5, 2018 | Press Release

Chinese cyber campaigns undermine U.S. prosperity and security: FDD Study

(Washington, D.C., Sept. 5, 2018) – China’s wide-ranging cyber intrusions and network exploitations cause massive damage to U.S. firms and cumulatively degrade U.S. national security, according to a new report issued today by the Foundation for Defense of Democracies (FDD).

Zack Cooper writes in, “Understanding the Chinese Communist Party’s Approach to Cyber-Enabled Economic Warfare,” that China’s cyber espionage and intrusions into U.S. companies are integral parts of the Chinese Communist Party’s strategy. Not only do these campaigns advantage Chinese enterprises over their foreign counterparts by stealing intellectual property and gaining leverage in economic deals, but Beijing also uses cyber tools to pressure foreign governments, Dr. Cooper explains.

In a notable example last year, China launched cyber attacks against a private South Korean company as retribution for the deployment of the THAAD missile defense system to South Korea.

“Even as costs and effects of Chinese cyber espionage, theft, and malfeasance are becoming clearer, China’s evolving strategies for their use remain opaque to U.S. policy and decisionmakers,” said Samantha Ravich, senior advisor and Principal Investigator of FDD’s cyber-enabled economic warfare (CEEW) project. “This report analyzes China’s cyber-enabled capabilities in order to pierce the opacity of the strategy behind the Chinese Communist Party’s offensive cyber operations. Beijing likely recognizes the most effective way to undermine U.S. military capabilities is by attacking private companies that create, innovate, build, deploy, and maintain the technology at the heart of Washington’s ability to advance its national interests and security.”

Cooper, a member of the board of advisors of FDD’s Center on Sanctions and Illicit Finance, writes that in today’s business environment, many companies are hesitant to reveal information about data breaches and exploitations. However, there is sufficient information to demonstrate the types of intrusions that are typical of Chinese hackers. The report provides illustrative examples of Chinese cyber intrusions against private and public entities demonstrating the scope and scale of the challenge.

Previous U.S. government studies have also found that China’s malicious cyber activity poses an economic and national security challenge, yet Washington’s response has failed to curb China’s offensive cyber operations. Concluding that only concerted and consistent U.S. pressure will change Chinese behavior, Cooper recommends the U.S. government demonstrate to Beijing that failure to cease its cyber intrusions against American private industry will impair progress on all other bilateral issues of concern to the Chinese government.

This report is the second in a series of studies on the capabilities and strategies of U.S. competitors and adversaries to engage in CEEW against America and its allies. The previous study examined Russia’s CEEW strategy. CEEW is a campaign launched against a nation’s economic assets using cyber technology to weaken an adversary politically and militarily.

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About FDD:
The Foundation for Defense of Democracies (FDD) is a Washington, DC-based non-partisan policy institute focusing on foreign policy and national security. Visit our website at http://www.defenddemocracy.org/and connect with us on TwitterFacebook, and YouTube.

Issues:

Cyber Cyber-Enabled Economic Warfare