Wednesday, June 23, 2021

How China’s PLA Is Jeopardizing Global Tech Business Worth ‘Trillions Of Dollars’: Analysis

China’s tech giants are at the risk of losing trillions of dollars in the global market owing to the PLA’s cyber espionage activity. 

In 2015, the US-based e-commerce giant, Amazon, decided to acquire Elemental Technologies, a startup specializing in video compression software, to help expand its Prime Video segment.

The company hired a third party to perform security checks on the systems of Elemental Technologies. What the hardware checks revealed astonished not only the Amazon top brass but the whole American government.

When the security experts were having a closer look at the company’s servers, they found tiny microchips implanted on the motherboards, something which wasn’t in the original designs shared with them. The discovery, which shocked the intelligence community, was immediately reported to the US authorities, who began a probe into the matter.

Elemental Technologies had hired Supermicro, a San Jose-based company, which supplies its motherboards everywhere from the adult film industry to the US military and intelligence. The presence of the microchip on Elemental’s servers meant that the threat of data breach had reached the highest levels of the US government, many of which employed Elemental’s servers.

It was found that Supermicro manufactured its motherboards in Taiwan and China’s Shanghai and further investigations by the US government revealed that the grain-sized microchips were placed on the motherboards at the Shanghai plant. The Chinese had pulled the most dangerous hack hardware ever in the history of the digital age.

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The US investigation, which lasted for many years, pointed to the hand of PLA operatives, who were planting the microchips at the manufacturing process itself, at the Shanghai plants on the motherboards, which found their way into more than 30 top-notch US companies and the US government departments.

“Hardware hacks are more difficult to pull off and potentially more devastating, promising the kind of long-term, stealth access that spy agencies are willing to invest millions of dollars and many years to get,” concluded Bloomberg in its October 2018 investigative piece, which presented a detailed report on the incident.

According to the investigation, corroborated by multiple top US security officials, the purpose of the implants was long-term access to high-value corporate secrets and government networks.

However, according to Bloomberg, which quoted US officials in the matter, the American intelligence got the whiff of what the Chinese military was planning at the beginning of 2014 itself. “Intelligence officials went to the White House with something more concrete: China’s military was preparing to insert the chips into Supermicro motherboards bound for U.S. companies,” the report adds. And just one year later, the evidence was for everyone to see.

The seriousness of the US government after this finding became conspicuous when the Trump administration contemplated sanctions on China, especially the computer and networking hardware, including motherboards. The White House officials said the companies could be shifting their manufacturing bases from China soon after the revelation.

These microchips offered Chinese hackers the backdoors into the top US government networks, “remotely and clandestinely, with absolute ease.” The hackers could manipulate the servers and insert their own instructions to tell the servers how to perform, while directly interfering with the flow of data.

The PLA has been relentless in its pursuit of cyberattacks on adversarial countries and its activities have only grown over time. The recent report revealing how in the aftermath of India’s border clashes with China, the state-sponsored Chinese hackers crippled the power grid in the financial capital Mumbai only reinforced the suspicion.

According to reports, Chinese equipment forms around 70 percent of India’s critical infrastructure in power and electronics. And, therefore, the country becomes highly vulnerable to Chinese espionage attempts.

There is now a growing outcry against the use of Chinese electronics in communication networks around the world. As the Amazon finding has proved, the security of the global supply chain is at perpetual risk, the experts contend.

The most notable damage has been suffered by the Chinese telecommunications firm Huawei, a leading developer and vendor of 5G technology, whose global businesses were crippled by the US-led campaign, with many partner countries also prohibiting its entry.

The security risks that could come with using Huawei’s telecommunication gear pushed more and more countries in Europe and Asia to look for other companies, resulting in the Chinese company losing billions in contracts.

With the increasing hacking attempts by the Chinese groups, it is feared the companies in China may face trillions in losses in the coming years as more and more countries prohibit Chinese software and hardware imports. The global distrust in the Chinese imports is growing and it is unlikely that it will be built again for a long time, a cyber expert who refused to be identified told The EurAsian Times.

Experts are calling for a ban on Chinese electronics equipment around the world after a spate of cyberattacks. They believe the presence of Chinese components in a system makes it vulnerable to hacking attempts by the state-sponsored groups in China, which have been repeatedly identified.

Reportedly, the Chinese equipment is so commonly employed around the world that even the most critical defense equipment such as the Russian S-400 air defense system is thought to be containing Chinese-made components.

India’s telecom giant Bharti Airtel on March 6 signed a Rs 300 crore deal with Huawei to expand its telecom infrastructure in the country drawing sharp criticism from Indian strategic experts.

Experts in India are urging the government not to depend on the Chinese equipment and usher in self-sufficiency. They believe that it will be prudent for the country to import all its sensitive electronic hardware from its Western allies to keep the country safe from any security risk.

Cyberwarfare forms an essential domain of PLA’s future warfare strategies, and if India is to remain invulnerable to any contingency in the future, it will have to forego the Chinese hardware imports, the experts add.

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