Sunday 22 November 2009

Hong Kong implicated in US report on Chinese spying

A US congressional advisory panel has voiced concern about Hong Kong’s export controls, fearing the mainland could use the city to import sensitive technology.

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Guanyu said...

Hong Kong implicated in US report on Chinese spying

City may be ‘way station for transferring sensitive technology’

Ambrose Leung and Stephen Chen in Beijing
21 November 2009

A US congressional advisory panel has voiced concern about Hong Kong’s export controls, fearing the mainland could use the city to import sensitive technology.

In its annual report to the US Congress, the US-China Economic Security Review Commission also says that Hong Kong’s autonomy is being “chipped away” by Beijing, which has mobilised its local representatives to increase its influence.

It describes Hong Kong as a “loophole for transferring sensitive technology to the mainland”.

The report also accuses Beijing of sharply stepping up espionage against the US through increasingly sophisticated cyber warfare and recruitment of spies.

The commission - a bipartisan panel formed by Congress in 2000 to investigate security implications of America’s dealings with China - has regularly issued reports accusing Beijing of spying on the US. But this time it directly accuses Hong Kong of having a role in such activities.

The report comes at a sensitive time for Sino-US relations, with US President Barack Obama having completed his first state visit to China three days ago. Both sides hoped the trip could help build mutual trust and understanding for a relationship that will shape the region and the world in years to come.

The report says Chinese spying is “growing in scale, intensity and sophistication”. And China is “the most aggressive country conducting espionage against the United States”.

It cites a steep rise in disruption and infiltration of websites of the US government. Colonel Gary McAlum, a senior military officer, told the commission that the US Defence Department detected 54,640 malicious cyber incidents to its systems in 2008, a 20 per cent rise from a year earlier. The figure is on track to jump another 60 per cent this year.

While the attacks came from around the world, the commission says China is the largest culprit. Some Chinese “patriotic hackers” might not receive official support, but the report says Beijing probably plans to use them during a conflict to disrupt an adversary’s computers.

The commission also expresses concern that Hong Kong is “serving as a way station for illegal dual-use technology exports” into the mainland, because US customs laws treat Hong Kong as a separate trading entity from the mainland.

“The ease of transhipment from addresses in Hong Kong to [mainland China] represents a significant and exploitable weakness”, the report says.

The commission recommends that top US officials should visit Hong Kong when travelling to express concerns. It also recommends the US re-enact a law that requires regular reporting by the US government on Hong Kong affairs.

Drawing heavily from testimony by Hong Kong pro-democracy activists whom commission members met in May this year, the report says Beijing has “continued to expand its influence” over the governance and economy of Hong Kong.

“Beijing has moved decisively in several areas to exert increased influence over the Hong Kong government,” says the 367-page document, seven of which deal with Hong Kong.

The central and Hong Kong governments dismissed the report.

A spokesman for the Chinese embassy in Washington, called the spying allegations “baseless, unwarranted and irresponsible”. He called a suggestion that China’s navy was being built up to challenge the US in the Pacific a “cold war fantasy”.

Guanyu said...

The spokesman also accused the commission of recycling old, unproven allegations and issuing an annual report “aimed at misleading the American public”.

In a statement, the Hong Kong government said Beijing had not interfered in Hong Kong affairs.

“We are very concerned and consider it regrettable that the report has made groundless comments,” the statement said. “It is also not true that the central authorities have exerted pressure over Hong Kong’s visa policy” regarding the barring of dissidents from visiting, it said, adding that the technology transhipment allegations were also “unfounded”.

A Beijing internet security expert working for the government, who refused to be named, said he believed “the figure of [cyber] attacks against the US government cited in the report is accurate”.

But he said it would be wrong to blame Beijing for orchestrating these attacks because China itself was also a victim of rampant cyber-hacking and cyber-spying activities.

“Each month we have to fend off more than a million attempts to infiltrate our network. This is an issue faced by every government in the world. From an obscure island country in the middle of the Pacific Ocean to global powers like the US and China, our societies just have never been so vulnerable,” he said.

“A small group of talented hackers with limited resources can spy on top military secrets or cut off power supply for an entire city. A decade ago this could be a science fiction plot but now it is a real threat.”

The expert questioned the tone of the report, which portrays China as an aggressive cyber-espionage power and the US as the victim.

“Chinese government servers suffer constant attacks, most coming from outside mainland China. Can we too conclude that these were launched by hackers controlled by foreign governments? Tracing the source of these attacks is technically impossible. A responsible [organisation] would never release such a report making wild accusations against other countries without facts to back them up,” he said.

While many experts on Sino-US relations shrugged off the report, some said it indicated that the basis for co-operation and mutual trust between the two sides was fragile.

Pang Zhongying, a professor of international relations at Renmin University, said the report put a damper on the achievements of the visit by Obama, who had wanted to use his trip to boost bilateral ties.

“The report shows that the relationship is still very complicated,” he said. “Both sides have a lot to do [to balance] relations. The allegations in this report are just a cold war approach and mentality that the US has been using against China.”

China also frequently accuses foreign powers of interfering in its internal affairs through espionage. State-run media, for example, often claim ethnic strife in Xinjiang and Tibet is instigated or aided by foreign agents or governments.

Additional reporting by Kristine Kwok, Associated Press