Earlier this year, the United States Trade Representative completed a seven-month long investigation into China's intellectual property theft and found that "Chinese theft of American Intellectual Property currently costs between $225 billion and $600 billion annually."
Although Chinese officials have previously stated that protecting foreign companies' intellectual property rights is important to China, the U.S. trade representative's findings were in line with a similar 2017 report from the Commission on the Theft of American Intellectual Property.
In terms of pure figures, although President Trump’s claim that, "Last year we lost $500 billion on trade with China” was rated as "Mostly False" by the factchecking website PolitiFact, the generally accepted figure of a $336 billion trade deficit with China looks markedly worse when considering the estimated cost of intellectual property theft.
Also absent from those figures, is the portion of losses suffered by private American citizens via spyware and malware attacks carried out by not only China, but other nation states including Russia, Iran and North Korea.
According to a February 2018 report from The Council of Economic Advisors, malicious cyber activity was estimated to have cost the U.S. economy between $57 and $109 billion in 2016. The report also describes these foreign perpetrators as well-funded and looking to engage in sophisticated, targeted attacks, for "political, economic, technical, or military" purposes.
As we can clearly see, this ongoing problem is far reaching, and the long-running cyberwar element of this international nuisance recently added another chapter to its story, when reports surfaced that Chinese government backed hackers compromised the computers of a Naval contractor working on a Navy submarine and underwater programs project. The unnamed entity was working for the Naval Undersea Warfare Center based in Newport, Rhode Island.
U.S. officials have claimed publicly that the breach from earlier this year involved unclassified data, as it was stored on the contractor’s unclassified network, but The Washington Post still described the stolen information as "highly sensitive."
The official statement from Lt. Marycate Walsh, a U.S. Navy spokesperson, alluded to "measures in place that require companies to notify the government when a cyber incident has occurred that has actual or potential adverse effects on their networks that contain controlled unclassified information," while adding that it would be "inappropriate to discuss further details at this time."
The hack reportedly netted the Chinese government 614 gigabytes of data, including plans related to a supersonic anti-ship missile intended to be usable by 2020 and other details about undersea warfare. Among the items of interest to the Chinese, was information related to a project known as Sea Dragon as well as signals and sensor data, submarine radio room information related to cryptography, and the Navy Submarine Development Unit’s electronic warfare library."
It is not yet known how the Chinese managed to compromise the contractors. One possible method of infiltration could have been a targeted phishing campaign. Phishing and social engineering have long proven to be successful tactics when it comes to cyber espionage and the Chinese government has proven to be adept at it.
This was hardly the first instance of eye poking against the United States Armed Forces by the Chinese. In 2013, Chinese hacks led to the compromise of more than two dozen U.S. weapon systems, including the Aegis Ballistic Missile Defense System, the F-35 Lighting II Joint Strike Fighter, the Littoral Combat Ship, electromagnetic railguns and the Terminal High Altitude Area Defense (THAAD).
Although many supporters of President Trump are lauding his perceived foreign policy victory in regard to Chinese ally North Korea, the celebratory sentiment should be tempered until we learn how the growing tensions between perhaps the last two true superpowers on earth regarding China’s claim over South China Sea and its subsequent militarization is handled by Trump, Secretary of State Mike Pompeo and key advisers including National Security Adviser John Bolton.
Julio Rivera is a small business consultant, political activist, writer and Editorial Director for Reactionary Times. He has been a regular contributor to Newsmax TV and columnist for Newsmax.com since 2016. His writing, which is concentrated on politics, cybersecurity and sports, has also been published by websites including The Hill, The Washington Times, LifeZette, The Washington Examiner, American Thinker, The Toronto Sun and PJ Media and many others. For more of his reports, Go Here Now.
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