Chinese hackers resume attacks on US targets

Shanghai-based cyberunit renews onslaught from new servers, say US officials

After a “naming and shaming” exercise by US authorities in February, Chinese hackers stopped their activities but have now renewed them.

After a “naming and shaming” exercise by US authorities in February, Chinese hackers stopped their activities but have now renewed them.

Mon, May 20, 2013, 13:01

Three months after hackers working for a cyberunit of China’s People’s Liberation Army went silent amid evidence that they had stolen data from scores of US companies and government agencies, they appear to have resumed their attacks using different techniques, according to computer industry security experts and US officials.

The Obama administration had bet that “naming and shaming” the groups, first in industry reports and then in the Pentagon’s own detailed survey of Chinese military capabilities, might prompt China’s new leadership to crack down on the military’s highly organised team of hackers - or at least urge them to become more subtle.

But Unit 61398, whose well-guarded 12-storey white headquarters on the edges of Shanghai became the symbol of Chinese cyberpower, is back in business, according to US officials and security companies.

It is not clear precisely who has been affected by the latest attacks. Mandiant, a private security company which helps companies and government agencies defend themselves from hackers, said the attacks had resumed but would not identify the targets, citing agreements with its clients. But it did say the victims were many of the same ones the unit had attacked before.

The hackers were behind scores of thefts of intellectual property and government documents over the past five years, according to a report by Mandiant in February that was confirmed by US officials. They have stolen product blueprints, manufacturing plans, clinical trial results, pricing documents, negotiation strategies and other proprietary information from more than 100 of Mandiant’s clients, predominantly in the US.

According to security experts, the cyberunit was responsible for a 2009 attack on Coca-Cola that coincided with its failed attempt to acquire the China Huiyuan Juice Group.

Information gleaned

In 2011, it attacked RSA, a maker of data security products used by US government agencies and defence contractors, and used the information gleaned to break into aerospace contractor Lockheed Martin’s computer systems.

More recently, security experts said, the group took aim at companies with access to the US power grid. In September, it broke into the Canadian arm of Telvent, now Schneider Electric, which keeps detailed blueprints on more than half the oil and gas pipelines in North America.

In interviews, Obama administration officials said they were not surprised by the resumption of hacking activity. One senior official said “this is something we are going to have to come back at time and again with the Chinese leadership”, who, he said, “have to be convinced there is a real cost to this kind of activity”.

Mandiant said the Chinese hackers had stopped their attacks after they were exposed in February and removed their spying tools from the organisations they had infiltrated. But during the past two months they have gradually begun attacking the same victims from new servers and have reinserted many of the tools that enable them to seek out data without detection.

They are now operating at 60 to 70 per cent of the level they were working at before, according to a study by Mandiant requested by the New York Times.

That newspaper hired Mandiant to investigate an attack that originated in China on its news operations last fall. Mandiant is not currently working for The New York Times Co.

Mandiant’s findings match those of Crowdstrike, another security company that has also been tracking the group. Adam Meyers, director of intelligence at Crowdstrike, said that apart from a few minor changes in tactics, it was “business as usual” for the Chinese hackers.

The subject of Chinese attacks is expected to be a central issue in an upcoming visit to China by President Barack Obama’s national security adviser, Thomas Donilon, who has said that dealing with China’s actions in cyberspace is now moving to the centre of the complex security and economic relationship between the two countries.

But hopes for progress on the issue are limited. When the Pentagon released its report this month officially identifying the Chinese military as the source of years of attacks, the Chinese Foreign Ministry denied the accusation, and People’s Daily, which reflects the views of the Communist Party, called the US “the real ‘hacking empire’ ”, saying it “has continued to strengthen its network tools for political subversion against other countries”.

Other Chinese organisations and scholars cited US and Israeli cyberattacks on Iran’s nuclear facilities as evidence of US hypocrisy. At the White House, Caitlin Hayden, the spokeswoman for the National Security Council, said yesterday that “what we have been seeking from China is for it to investigate our concerns and to start a dialogue with us on cyberissues”.

She noted that China “agreed last month to start a new working group”, and that the administration hoped to win “longer-term changes in China’s behaviour, including by working together to establish norms against the theft of trade secrets and confidential business information”.

Proposed actions

In a report to be issued on Wednesday, a private task force led by Obama’s former director of national intelligence, Dennis C Blair, and his former ambassador to China, Jon M Huntsman jnr, lays out a series of proposed executive actions and congressional legislation intended to raise the stakes for China.

“Jawboning alone won’t work,” said Mr Blair. “Something has to change China’s calculus.” The exposure of Unit 61398’s actions, which have long been well-known to US intelligence agencies, did not accomplish that task.

One day after Mandiant and the US government revealed the PLA unit as the culprit behind hundreds of attacks on agencies and companies, the unit began a haphazard clean-up operation, Mandiant said. Attack tools were unplugged from victims’ systems. Command and control servers went silent. And of the 3,000 technical indicators Mandiant identified in its initial report, only a sliver kept operating. Some of the unit’s most visible operatives, hackers with names like “DOTA”, “SuperHard” and “UglyGorilla”, disappeared, as cybersleuths scoured the internet for clues to their real identities.

In the case of UglyGorilla, web sleuths found digital evidence that linked him to a Chinese national named Wang Dong, who kept a blog about his experience as a PLA hacker from 2006 to 2009, in which he lamented his low pay, long hours and instant ramen meals.

But in the weeks that followed, the group picked up where it had left off. From its Shanghai headquarters, the unit’s hackers set up new beachheads from compromised computers all over the world, many of them small internet service providers or businesses whose owners do not realise that by failing to rigorously apply software patches for known threats, they are enabling state-sponsored espionage.

“They dialled it back for a little while, though other groups that also wear uniforms didn’t even bother to do that,” Kevin Mandia, the chief executive of Mandiant, said in an interview on Friday. “I think you have to view this as the new normal.”

- New York Times News Service