"WASHINGTON—The U.S. government accused the Chinese of being the world's "most active and persistent" perpetrators of economic spying, an unusual move designed to spur stronger U.S. and international action to combat rampant industrial espionage that threatens economic growth"
"Russian intelligence agents are also conducting extensive spying to collect U.S. economic data and technology, according to a U.S. intelligence report released Thursday that concluded China and Russia are "the most aggressive collectors" of U.S economic information and technology."
Interesting story from today's WSJ, FYI,
David
NOVEMBER 3, 2011, 9:08 A.M. ET
U.S. Report Cites 'Persistent' Chinese, Russian Spying for Economic Gain
By SIOBHAN GORMAN
WASHINGTON—The U.S. government accused the Chinese of being the world's "most active and persistent" perpetrators of economic spying, an unusual move designed to spur stronger U.S. and international action to combat rampant industrial espionage that threatens economic growth.
Russian intelligence agents are also conducting extensive spying to collect U.S. economic data and technology, according to a U.S. intelligence report released Thursday that concluded China and Russia are "the most aggressive collectors" of U.S economic information and technology.
The bulk of this spying is carried out in cyberspace, where vast volumes of data can be stolen in seconds, according to U.S. intelligence officials. The spying campaigns have reached a crescendo, they said, as U.S. government and business operations have grown extraordinarily reliant on communication technology.
"Cyber has become the great game-changer," said a senior intelligence official. "Our research and development is under attack."
Economic cyber espionage is targeting key components of the U.S. economy: information technology, military technology, and clean energy and medical technology.
The threat will accelerate in the coming years and presents "a growing and persistent threat" to U.S. economic security, according to the intelligence report, which reflects the views of 14 U.S. intelligence agencies. Fueling that threat is the increasing intermingling between U.S. and Chinese companies and the increasing employment by U.S. companies of Russian immigrants with high-tech skills who may be recruited by Russian spies.
The senior official said it was necessary to single out specific countries in order to confront the problem and attempt contain a threat that gotten out of control. Economic espionage is condoned by both China and Russia and is part of each country's national economic development policy, the official said. Industrial espionage is illegal in the U.S.
The Chinese see the theft of intellectual property as a way to fuel economic growth, the intelligence report concluded. Russia's dependence on natural resources, desire to diversify its economy, and its belief that the global economic order favors the West drives its spying campaigns, according to the report.
The Chinese government is believed to have been behind a number of recent high-profile cyber attacks, including multiple hacks of Google Inc. and the EMC Corp.'s RSA unit, a security company that makes the numerical tokens used by millions of corporate employees to access their network. A cyber attack earlier this year on the International Monetary Fund was also said to have connections to China.
The Chinese and Russian governments routinely deny any involvement in such activities. The senior U.S. intelligence official declined to cite evidence of Chinese involvement or say whether the U.S. had presented evidence to the Chinese government. The U.S. does have evidence, he said, "We didn't pull this out of the air."
The U.S. government doesn't have calculations of the economic losses due to cyber economic espionage. A senior U.S. intelligence official cited estimates of $50 billion in losses in 2009 due to lost intellectual property and counterfeiting, through all means of theft, including cyber break-ins. Prosecutions of Chinese spying in recent years have set losses to an individual U.S. company at as much as $600 million.
Industrial espionage poses a number of national security threats to the U.S., including the risk that stolen military technology will be handed to hostile countries like North Korea or Iran, the intelligence report concluded.
Government-sponsored economic spying is growing, the senior official said. Officials wouldn't say, however, how much of the industrial spying is believed to be from government agents, though they said government, intelligence services, and private organizations and individuals all took part.
U.S. officials have confronted foreign counterparts with allegations of industrial espionage, the senior U.S. official said, but the official declined to provide an example or cite a particular country's government. More confrontations are necessary, the official said, to begin to curb the spying.
One proposal intelligence officials are considering building the cyber-attack equivalent of the National Counterterrorism Center, which merges terrorism data from intelligence agencies and state and local governments.
A major challenge to collecting cyber attack data, however, is that so much of the information resides with private companies that are not required to share it with the government.
Write to Siobhan Gorman at siobhan.gorman@wsj.com