Clapper Breaks with Obama’s Threat Crisis Plank

North Korea has restarted plutonium reactor: US

North Korea has restarted a plutonium reactor that could fuel a nuclear bomb and is seeking missile technology that could threaten the United States, Washington’s top spy said on Tuesday.

Intel Chief Breaks From Obama Narrative On Iran Deal

DailyCaller: The head of U.S. intelligence believes that Iran’s recent actions speak loudly to its intentions, particularly given the country’s recent provocations since the Iran nuclear deal came into effect.

Testifying to the Senate Committee on Armed Services Tuesday, director of national intelligence James Clapper gave a very somber description of what he sees as Iran’s intentions toward the U.S. now that last summer’s nuclear deal has commenced. In particular, his statements offered little assurance that Iran is acting as an honest actor with the U.S. and the other states involved in last year’s negotiations, or that the nuclear deal will stop Iran from obtaining a nuclear weapon.

“Iran probably views JCPOA [Iran deal] as a means to remove sanctions while preserving nuclear capabilities, as well as the option to eventually expand its nuclear infrastructure,” said Clapper, who also noted that, so far, he sees no evidence that Iran is violating the nuclear deal.

Clapper’s statements stand in stark contrast with those made by President Barack Obama, who lauded the nuclear accord last summer, claiming it would not only stop all of Iran’s possible pathways to a nuclear weapon, but that “under its terms, Iran is never allowed to build a nuclear weapon.” More here.

***

Clapper went into all specifics on the threat matrix both at home and globally. He did not leave anything behind, from cyber wars, space wars, weapons systems, human trafficking, terror organizations, economic instability, migrants, disinformation and drug cartels.

 STATEMENT FOR THE RECORD WORLDWIDE THREAT ASSESSMENT of the US INTELLIGENCE COMMUNITY
February 9, 2016
INTRODUCTION
Chairman McCain, Vice Chairman Reed, Members of the Committee, thank you for the invitation to offer
the United States Intelligence Community’s 2016 assessment of threats to US national security. My statement reflects the collective insights of the Intelligence Community’s extraordinary men and women, whom I am privileged and honored to lead. We in the Intelligence Community are committed every day to provide the nuanced, multidisciplinary intelligence that policymakers, warfighters, and domestic law enforcement personnel need to protect American lives and America’s interests anywhere in the world.
 The order of the topics presented in this statement does not necessarily indicate the relative importance or magnitude of the threat in the view of the Intelligence Community. Information available as of February 3, 2016 was used in the preparation of this assessment.
 
TABLE OF CONTENTS
 
GLOBAL THREATS Cyber and Technology Terrorism Weapons of Mass Destruction and Proliferation Space and Counterspace
 
Counterintelligence Transnational Organized Crime
 
Economics and Natural Resources Human Security
 
REGIONAL THREATS East Asia
China Southeast Asia North Korea
Russia and Eurasia
Russia Ukraine, Belarus, and Moldova The Caucasus and Central Asia
Europe
 
Key Partners The Balkans Turkey Middle East and North Africa 
Iraq Syria Libya  Yemen Iran  Lebanon Egypt Tunisia
 
South Asia
Afghanistan Bangladesh Pakistan and India
Sub-Saharan Africa  Central Africa Somalia South Sudan Sudan Nigeria
 
Latin America and Caribbean
 
Central America Cuba Venezuela Brazil
 

 

 

 

 

Obama’s Final Cyber Offense, Einstein?

Sheesh, just the name points to a misguided failure since 2008. Einstein has a price tag, $ 5 billion. There are other questions to be asked like what does the NSA have to offer or the countless cyber security professionals in the private sector?

From the White House, there has been a 12 point plan and it has not advanced at all.

In May 2009, the President accepted the recommendations of the resulting Cyberspace Policy Review, including the selection of an Executive Branch Cybersecurity Coordinator who will have regular access to the President.

Meanwhile, hacks are real, dangerous and coming at mach speed. Using old software language such as COBOL speaks volumes as to how antiquated protections are and how dysfunctional all agencies are in maintaining crack-proof.

The Department of Homeland Security appears to be the lead agency for Einstein compliance, what could go wrong and has? The fact sheet from DHS is here.

Obama makes final push to cement cyber legacy

TheHill: President Obama on Tuesday made what is likely his last major push to bolster the government’s digital defenses before leaving office.

As part of the annual White House budget proposal, the Obama administration rolled out a sweeping plan to inject billions of extra dollars into federal cybersecurity funding, establish a new senior federal cyber official and create a presidential commission on cyber that will establish a long-term road map.

The move is likely to complete Obama’s cyber legacy, which will include an historic attention to digital security, unprecedented executive orders on the topic, and shepherding through Congress the largest-ever cyber bill, as well as numerous bruising hacks at federal agencies and allegations that government networks were woefully outdated.

In a release, the White House called the plan “the capstone of more than seven years of determined effort.”

“[Obama] is the first president that is making a big cybersecurity push and I think that’s tremendously important,” Rep. Ted Lieu (D-Calif.), one of Congress’s most prominent cyber voices, told The Hill.

The proposal aims to inject more than $5 billion in new funding across the government to strengthen network defenses that have been repeatedly infiltrated by suspected foreign government spies.

The ask is a 35-percent increase over last year’s allotment of $14 billion, and would put overall federal cyber spending at over $19 billion.

The budget request earmarks $3.1 billion for an “Information Technology Modernization Fund” that the White House described as a “down payment on the comprehensive overhaul” of federal IT systems.

Lieu said this fund could help solve one of the inherent budgeting problems when it comes to defending interconnected networks from hackers.

“What’s important about [the fund] is it can go across agencies and upgrade systems that touch more than one agency,” said Lieu, who sits on both the House Budget and Oversight committees.

Currently, each agency has its own individual cybersecurity budget that can be spent on its network, but that cannot necessarily be expended on portions of the agency’s IT infrastructure at other agencies.

Hackers have exploited this balkanized budgeting process.

Over the summer, suspected Chinese cyber spies cracked into the Office of Personnel Management (OPM), pilfering over 22 million people’s personal information in two separate hacks. The initial intrusion — which exposed roughly 4.2 federal workers’ personnel files — occurred at an OPM database that was housed at the Interior Department.

The OPM hacks also exposed the antiquated legacy systems the government relied on to run its networks.

Congress bashed OPM officials for not fully encrypting all their sensitive data. But the agency’s systems were simply too old to even accept modern encryption, they repeatedly explained.

The network also relied on the dated COBOL programming language, which initially became popular in the 1960s and is now eschewed by younger programmers.

A new federal official will oversee much of these update efforts.

As part of its proposal, the White House is establishing a federal chief information security officer, or CISO. The official will be housed within the Office of Management and Budget (OMB) and report to federal chief information officer, Tony Scott, who oversees government technology.

“This is the first time that there will be a dedicated senior official who is solely focused on developing, managing, and coordinating cybersecurity strategy, policy and operations across the entire federal domain,” the White House said.

Centralizing cybersecurity oversight is an attempt to help overcome the lack of agency-to-agency communication on the subject.

“For a while, I’ve seen the argument that there are too many lines of authority in the federal government on cybersecurity,” said Lieu. “Sometimes it’s not clear who is responsible for what.”

The CISO will also help monitor the government’s digital defense spending, which has been knocked as cost-ineffective.

Recently, a federal watchdog report concluded that the government’s main cyber defense system, known as “Einstein,” was largely ineffectual at thwarting sophisticated hackers. The report echoed long-standing criticism from security experts who say the program is a much-delayed boondoggle that is already obsolete.

Federal officials insist the system is in its final phase of implementation and will soon serve as a platform to add on leading cyber tools.

This budget infusion and new federal CISO will with these technology updates, the White House said.

The proposal also includes a robust research and public awareness component.

In a bid to build a bridge to the next administration, Obama is launching a “Commission on Enhancing National Cybersecurity.”

The administration is directing a bipartisan group of lawmakers to appoint top industry representatives and leading technologists to the commission. The group will be tasked with taking the long view.

“The commission will make recommendations on actions that can be taken over the next decade to strengthen cybersecurity in both the public and private sectors while protecting privacy,” the White House said.

Security experts almost unanimously agree that one of these actions will be eliminating the traditional online password.

Since 2011, the White House has been trying to push people away from passwords. Tuesday’s plan includes a last bid to encourage stronger people to adopt stronger login practices.

The proposal creates a new public awareness campaign that includes leading tech firms such as Google, Facebook and Microsoft.

“By judiciously combining a strong password with additional factors, such as a fingerprint or a single-use code delivered in a text message, Americans can make their accounts even more secure,” the White House said.

The proposal is likely Obama’s concluding statement on cybersecurity.

During his presidency, cybersecurity has gone from a fringe issue to one that most leaders acknowledge is vital to national and economic security. The topic received an increasing amount of attention in all but Obama’s final State of the Union address.

In recent years, the U.S. has seen the dramatic rise of global cyber crime syndicates that have pillaged banks, department stores and hotels.

According to an October report from Hewlett Packard and the Ponemon Institute, cyber crime costs the average American firm $15.4 million annually, up 82 percent over the last six years. By 2019, it’s believed the cost of data breaches will reach $2.1 trillion globally.

Digital adversaries such as China, Russia, Iran and North Korea have also swooped in unexpectedly, plundering health insurers, airlines, nuclear plants, government agencies and, most memorably, a major movie studio.

Even terrorist groups such as the Islamic State in Iraq and Syria (ISIS) are causing fears by hijacking high-profile twitter accounts and digitally defacing websites around the world.

These trends are bound to continue after Obama leaves the White House, but this ultimate cyber thrust could help cement his reputation as the first president to actively address the digital security challenge.

“If we can get this through, the funding, I think that would be very positive for his legacy,” Lieu said. “This is not just a federal government problem, it’s endemic in the private sector.”

N. Korea Launch Flew Over the Super Bowl

TOKYO—Here’s a bit of Super Bowl trivia: North Korea’s newest satellite passed almost right over the stadium just an hour after it ended.

Whatever motives Pyongyang may have about using its rocket launches to develop nuclear-tipped long-range missiles, it now has two satellites circling the Earth, according to Norad, the North American Aerospace Command, which monitors all satellites in orbit.

Both of the Kwangmyongsong, or “Shining Star,” satellites complete their orbits in about 94 minutes and based on data released by international organizations tracking them, the new one passed almost right over Levi’s Stadium about an hour after the Super Bowl ended.

“It passed almost directly overhead Silicon Valley, which is where I am and where the stadium is,” tech watcher Martyn Williams said in an e-mail to the Associated Press. “The pass happened at 8:26 p.m., after the game. I would put it down to nothing more than a coincidence, but an interesting one.”

***

WASHINGTON (Reuters) – The Pentagon confirmed on Monday that it will start formal talks with South Korea on deploying an advanced missile defense system to South Korea to counter the growing threat of North Korea’s weapons capabilities after its rocket launch this weekend.

U.S. military officials have said the sophisticated system called Terminal High Altitude Area Defense (THAAD) was needed in South Korea. South Korea said on Sunday it and the United States would begin talks on the THAAD, after North Korea launched a long-range rocket earlier carrying what it has called a satellite.

Chang/DailyBeast: On Sunday, North Korea completed its second-in-a-row successful test of a three-stage launcher, showing the regime’s mastery of an especially complex technology.  

Pyongyang claims it put an earth observation satellite — the Kwangmyongsong-4 — in a polar orbit. More likely, the object now circling the earth is a decoy. In 2012, after the North’s last long-range test, it announced it had put a communications satellite in space. No signal, however, has ever been detected from the device.  

That “satellite,” and the one launched this week, are about the same weight as a nuclear warhead, and that was the point of these elaborate exercises.

North Korea has been putting dead objects in orbit so that it can test, in violation of four sets of UN Security Council resolutions, its ballistic missile technology under the guise of a civilian rocket program.  

The rocket the North Koreans call the Unha-3 was probably the most advanced version of their Taepodong missile. It appears, from the location of Sunday’s splashdown zones, that the launcher has a range of 10,000 kilometers, the same as that of the 2012 version.  

Some have taken comfort that the North Koreans have not improved the reach of their missile, but that would be a mistake. “This test launch took less time to set up and was conducted more covertly than any other launch in North Korean history,” notes North Korea analyst Bruce Bechtol, in comments circulated to The Daily Beast and others on Sunday.  

Up to now, the North’s longest-range missile was never much of a weapon. It required weeks to transport, assemble, fuel, and test before launch. The calculus was that the U.S., in a wartime setting, would have plenty of time to destroy the launcher on the ground.  

The North Koreans since 2012 have obviously been able to compress the cycle.  This time, Pyongyang moved up the launch window and sent the Unha-3 into space on the window’s first day, surprising just about every observer.  

That means, of course, the North Koreans are perfecting their launch skills, thereby decreasing on-the-ground vulnerability.  

The Taepodong is still an easy target before launch, but once it reaches the edge of space it becomes fearsome. It has the range to make a dent in more than half of the continental United States. If its warhead is nuclear and explodes high above the American homeland, an electromagnetic pulse could disable electronics across vast swatches of the country.  

The American intelligence community does not think the North Koreans have built a miniaturized nuclear warhead to go along with the Taepodong yet, but it’s clear they are on their way to developing such a device. The launch this week was one month and one day after their fourth nuclear detonation.

Pyongyang, for all the snickering and derision it attracts, is capable of sneaking up on us and becoming an existential threat.  

Why has the United States, the most powerful nation in history, not been able to stop destitute North Korea’s missile and nuclear programs? As Stapleton Roy, the former American diplomat told me in 2004, “No one has found a way to persuade North Korea to move in sensible directions.”  

Certainly not the Obama administration. A multi-faceted bargain in 2012, the so-called Leap Day deal, fell apart weeks after it was put in place, when Kim Jong-un, the ruler of the despotic state, launched what his regime called a rocket.  

Then a new approach, backed by existing sanctions, also failed to produce results. The White House during this phase essentially left North Korea alone, ignoring Kim with a policy now known as “strategic patience.” It has been more like “strategic paralysis,” as David Maxwell of Georgetown University’s Center for Security Studies aptly termed it after the Sunday launch.  

The evident failure of the current administration follows failures of different kinds by its two immediate predecessors. These days, like in past ones, American officials tell us how the North’s actions are “unacceptable,”

the words of Secretary of State John Kerry, or “flagrant,” the term used by National Security Advisor Susan Rice, but the U.S. never seems to do anything effective.  

Similarly, an emergency session of the Security Council on Sunday “strongly condemned” the launch but did nothing else. The UN still has not imposed any sanctions for the Jan. 6 detonation of what North Korea claims is a “hydrogen” device. Veto-wielding Beijing has made it clear it will not support a fifth set of UN sanctions.  

Ultimately, the problem, as Maxwell notes, is that no country wants to pressure Kim so much that either he decides he has nothing to lose and go to war or his decrepit state falls apart, causing tragedy of a different sort. Yet as long as the Kim family regime stays in power, it will continue to build horrific weapons.  

“What North Korea wants most,” said Ashton Carter before he became secretary of defense “is oddly to be left alone, to run this rather odd country, a throwback to Stalinism.” If that were indeed true, President Obama’s strategic patience would have worked by now. Yet the North’s leaders are not content to misrule their 25 million subjects. They have institutionalized crisis.  

When we examine evidence of the most recent crisis — scraps of the missile that fell into the sea Sunday and flight data — we will probably learn the North Koreans in fact tested their new 80-ton booster, which they have been developing for at least two years. It is almost certain Iran has paid for its development.  

That’s why Bechtol, author of North Korea and Regional Security in the Kim Jong-un Era, thinks America in the months ahead should be looking for evidence of sales of the new missile to Iran. Larry Niksch of the Center for Strategic and International Studies told the House Committee on Foreign Affairs in July that North Korea earns “upwards of two to three billion dollars annually from Iran for the various forms of collaboration between them.”  

Even if one thinks Washington should not sanction North Korea to the brink of war or collapse, the U.S. at a minimum needs to stop sales of the launcher North Korea fired off this week. The Bush administration’s Proliferation Security Initiative, a comprehensive program to stop such transfers, has languished in Washington in recent years.  

At this point, American policymakers are not trying very hard to stop North Korea’s trade in dangerous weapons. That, to borrow a phrase, is unacceptable.

*** Why did North Korea launch this now? Rand Corporation explains.

 

 

The DoJ Hacked, DHS Files Compromised

Hackers leaked DHS staff records, 200GB of files are in their hands

A hacker accessed an employee’s email account at the Department of Justice and stole 200GB of files including records of 9,000 DHS staffers and 20,000 FBI employees.

SecurityAffairs: Yesterday, the data related a Department of Homeland Security (DHS) staff directory were leaked online, a Twitter account shared the link to an archive containing 9,355 names.

The responsible for the data leakage first contacted Motherboard to share the precious archive.

Each record of the DHS Staff Directory includes name, title, email address, and phone number.

Going deep in the archive it is possible to note that it includes information of DHS security specialists, program analysts, InfoSec and IT and also 100 employees with a title “Intelligence”.

The same Twitter account has announced later the imminent release of an additional data dump containing 20,000 FBI employees.

DHS firewall

Are the records authentic?

Motherboard that obtained the archive reached the operations center of the FBI, and in one case the individual who pick up the phone presented himself with the same name associated with that number in the archive. A similar circumstance occurred with a DHS employee, Motherboard so confirmed that the information is legit.

Which is the source of data?

According to Motherboard, a hacker accessed an employee’s email account at the Department of Justice. As proof, the hacker sent the email message to Motherboard’s contributor Joseph Cox directly from the compromised account.

“A hacker, who wishes to remain anonymous, plans to dump the apparent names, job titles, email addresses and phone numbers of over 20,000 supposed Federal Bureau of Investigation (FBI) employees, as well as over 9,000 alleged Department of Homeland Security (DHS) employees, Motherboard has learned.” wrote Cox in a blog post.

“The hacker also claims to have downloaded hundreds of gigabytes of data from a Department of Justice (DOJ) computer, although that data has not been published.”

The hacker first tried to use the compromised credentials to access a DOJ staff portal, but without success, then he called the department directly and obtained the access through social engineering techniques.

The hacker accessed the DoJ intranet where the database is hosted, then he downloaded around the, out of 1TB that he had access to.

“I HAD access to it, I couldn’t take all of the 1TB,” the hacker told to MotherBoard.

The hackers confirmed his intention to release the rest of the data in the near future.Which is the motivation behind the attack?

It is not clear at the moment why the hacker released the archive, surely it’s not financially motivated. The hacker only left the following message when has leaked the data-

“This is for Palestine, Ramallah, West Bank, Gaza, This is for the child that is searching for an answer…” which are the verses of “Long Live Palestine”

The only certainty right now is that similar incidents are becoming too frequent, apparently the government staff is not properly trained on the main cyber threats or the hacking technique. Similar incidents show the lack of knowledge on the most basic security measures.
Whenever a hacker leaks so sensitive data, I think the number of his peers who had access to the same information with the intent to use them in other attacks or resell them, perhaps to a foreign government.

Pierluigi Paganini

*** As a reminder, in 2014 a much more dangerous hack intrusion happened at the DHS:

The Department of Homeland Security (DHS) alerted critical infrastructure operators to recent breaches within the sector – including the hack of a U.S. public utility that was vulnerable to brute-force attacks.

This week, the Industrial Control Systems Cyber Emergency Response Team (ICS-CERT), a subgroup of DHS, revealed information about the incidents in a newsletter (PDF).

According to ICS-CERT, industrial control systems were compromised in two, new incidents: one, involving the hack of an unnamed public utility, and another scenario where a control system server was remotely accessed by a “sophisticated threat actor.”

After investigating the public utility hack, ICS-CERT found that the system’s authentication mechanism was susceptible to brute-force attacks – where saboteurs routinely run through a list of passwords or characters to gain access to targeted systems. The control system used a simple password mechanism, the newsletter revealed.

In

China’s Best Method of Industrial Espionage

Obscure Chinese Firm Dives Into $22 Trillion U.S. Market

Bloomberg: When Cromwell Coulson heard that an obscure Chinese real estate firm had agreed to buy the Chicago Stock Exchange, he was shocked.

“My first reaction was, ‘Wow, that’s who they’re selling to?”’ said Coulson, the chief executive officer of OTC Markets Group Inc. in New York. “These new buyers have no connection to Chicago’s existing business. They’re completely disconnected from the current business of supporting the Chicago trading community. So wow, that’s out of left field.”

While the world has gotten used to seeing Chinese companies snap up overseas businesses, the purchase of a 134-year-old U.S. stock market by Chongqing Casin Enterprise Group — a little-known property and investment firm from southwestern China — raises a whole host of questions. For starters, why does a provincial Chinese business with no apparent ties to the securities industry have any interest in buying one of America’s smallest equity exchanges? And will U.S. regulators sign off?

So far, Casin Group’s intentions are unclear, with calls to the company’s Chongqing headquarters going unanswered on Friday. If the deal does pass muster with American regulators, it would mark the first-ever Chinese purchase of a U.S. equity exchange, giving Casin Group a foothold in a $22 trillion market where even the smallest bourses have room to grow if they can provide the best price for a stock at any given moment.

The Chicago Stock Exchange — a subsidiary of CHX Holdings Inc. — is minority-owned by a group including E*Trade Financial Corp., Bank of America Corp., Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to the company. The minority shareholders are also selling their stake, Chicago Stock Exchange Chief Executive Officer John Kerin said in a phone interview.

The deal values the exchange at less than $100 million, according to a person familiar with the matter, who asked to not be identified because the terms weren’t disclosed publicly. Mark O’Connor, a spokesman for the exchange, declined to comment on the size of the transaction.

Overseas Shopping

Casin Group’s offer, announced on Friday in a statement from the Chicago exchange, comes amid an unprecedented overseas shopping spree by Chinese companies. Businesses from Asia’s largest economy have announced $70 billion of cross-border acquisitions and investments this year, on track to break last year’s record of $123 billion, according to data compiled by Bloomberg.

While many of those deals had obvious business rationales, the reasons for Casin Group’s bid are less clear. The company, founded in the 1990s through a privatization of state-owned assets, initially focused on developing real estate projects in Chongqing, before expanding into the environmental and financial industries. While the firm owns stakes in banks and insurers, it has no previous experience owning an exchange.

Chinese Growth

Lu Shengju, the majority owner and chairman of Casin Group, wants to help bring Chinese companies to U.S. markets, according to the statement from Chicago’s bourse.

“We have reviewed CHX’s plans to improve market share through new growth initiatives and fully support them,” Lu, a torch bearer during the Beijing Olympic games in 2008, said in the statement, which didn’t disclose terms of the deal. “Together, we have a unique opportunity to help develop financial markets in China over the longer term and to bring exciting Chinese growth companies to U.S. investors.”

The Chicago Stock Exchange could serve as a venue for Chinese companies to list, said Dale Rosenthal, a clinical assistant professor of finance at the University of Illinois at Chicago.

“Because they’re an exchange, they can list stock,” Rosenthal said. “It has the potential to raise Chicago’s profile in China.”

Casin Group is no stranger to investing in outside businesses, including overseas targets. Three years ago, the firm increased its stake in Shenzhen-listed Guoxing Property to 30 percent, becoming the biggest shareholder. Guoxing, now 60 percent owned by Casin Group, has soared 170 percent in the past two months, versus a 19 percent drop in the CSI 300 Index, data compiled by Bloomberg show. Casin Group bought a 25 percent stake in Singapore-based Great Eastern Life Assurance in 2013.

“It’s interesting to see the Chinese increase their footprint in the U.S.,” said Ramon Camacho, a principal at RSM US LLP, an audit, tax and consulting company based in Chicago. “These investors are looking for a platform to showcase and bring to market Chinese companies.”

The company’s bid for the Chicago bourse could face political opposition, with American regulators and politicians taking a skeptical approach toward foreign investments in industries deemed important to national interests. When Germany’s Deutsche Boerse AG wanted to buy the owner of the New York Stock Exchange in 2011, U.S. Senator Charles Schumer, a Democrat from New York, raised obstacles. The deal was finally scrapped on monopoly concerns.

Heavy Scrutiny

Some Chinese companies have come under heavy scrutiny as they tried to enter U.S. markets. Huawei Technologies Co., China’s largest phone-network equipment maker, was barred by the U.S. in 2011 from participating in building a nationwide emergency network.

The U.S. Securities and Exchange Commission would have to approve the deal, because the exchange is a self-regulatory organization. The new owners will have to show they intend to follow all of the regulations imposed on stock exchanges, whose listing and trading rules also must be approved by the SEC.

Additionally, the takeover would probably be reviewed by the Committee on Foreign Investment in the U.S., said Anne Salladin, a lawyer at Stroock & Stroock & Lavan LLP in Washington. CFIUS, a panel of government officials led by the Treasury Department that examines purchases of American businesses by foreign investors, can recommend the president block transactions it believes compromise national security. It can also impose changes to address any concerns.

“It’s a Chinese investment, and it’s in a potentially sensitive sector: financial infrastructure,” Salladin said.

CFIUS has been closely scrutinizing purchases of American businesses by Chinese buyers. Last month, Royal Philips NV abandoned its plan to sell its lighting-components unit to a Chinese-led investment group following opposition from CFIUS.

“If you have a U.S. stock exchange that’s primarily satisfying Chinese companies, the regulators are gonna look very closely at it,” Coulson said. “If your core business is listing Chinese companies in the U.S., that’s going to pick up a lot of regulatory scrutiny and caution.”

China Industrial Espionage:

This new book is the first full account, inside or outside government, of China’s efforts to acquire foreign technology.

Based on primary sources and meticulously researched, the book lays bare China’s efforts to prosper technologically through others’ achievements. For decades, China has operated an elaborate system to spot foreign technologies, acquire them by all conceivable means, and convert them into weapons and competitive goods—without compensating the owners. The director of the US National Security Agency recently called it “the greatest transfer of wealth in history.”

Written by two of America’s leading government analysts and an expert on Chinese cyber networks, this book describes these transfer processes comprehensively and in detail, providing the breadth and depth missing in other works. Drawing upon previously unexploited Chinese language sources, the authors begin by placing the new research within historical context, before examining the People’s Republic of China’s policy support for economic espionage, clandestine technology transfers, theft through cyberspace and its impact on the future of the US.

This book will be of much interest to students of Chinese politics, Asian security studies, US defence, US foreign policy and IR in general.

***

China’s long history of spying on business

CNN: The United States indicted five members of China’s People’s Liberation Army Monday, accusing them of hacking into American companies and pilfering closely-guarded trade secrets.  The charges — rejected by Beijing as “purely ungrounded and with ulterior purpose” — are a dramatic escalation in a squabble between the two countries over spying. But they will surprise few Americans working in sensitive industries.

While many countries engage in industrial espionage, China has long been among the most aggressive collectors of economic secrets — both online and off, experts say.

“I can tell you they [China] are the most pervasive,” Kevin Mandia, founder of cybersecurity firm Mandiant, told CNN. “The indictment is about taking intellectual property … it’s the theft of trade secrets, it’s economic espionage.” Full article here.