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Originally published May 19, 2013 at 9:40 PM | Page modified May 20, 2013 at 1:48 PM

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Chinese back hacking U.S. businesses, government

Hackers working for a cyberunit of China’s People’s Liberation Army appear to have resumed their attacks using different techniques, computer-security experts and U.S. officials say.

The New York Times

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WASHINGTON — Three months after hackers working for a cyberunit of China’s People’s Liberation Army went silent amid evidence that they had stolen data from scores of U.S. companies and government agencies, they appear to have resumed their attacks using different techniques, according to computer-industry security experts and U.S. officials.

The Obama administration had bet that “naming and shaming” the groups, first in industry reports and then in the Pentagon’s own detailed survey of Chinese military capabilities, might prompt China’s new leadership to crack down on the military’s highly organized team of hackers — or at least urge them to become more subtle.

But Unit 61398, whose well-guarded 12-story white headquarters on the edges of Shanghai became the symbol of Chinese cyberpower, is back in business, according to U.S. officials and security companies.

It is not clear precisely who has been affected by the latest attacks. Mandiant, a private security company that helps companies and government agencies defend themselves from hackers, said the attacks had resumed but would not identify the targets, citing agreements with its clients.

It did say the victims were many of the same ones the unit had attacked before.

The hackers were behind scores of thefts of intellectual property and government documents over the past five years, according to a report by Mandiant in February that was confirmed by U.S. officials. They have stolen product blueprints, manufacturing plans, clinical-trial results, pricing documents, negotiation strategies and other proprietary information from more than 100 of Mandiant’s clients, predominantly in the United States.

In interviews, Obama administration officials said the resumption of the hacking activity did not surprise them. One senior official said Friday that “this is something we are going to have to come back at time and again with the Chinese leadership,” who, he said, “have to be convinced there is a real cost to this kind of activity.”

Mandiant said the hackers had stopped their attacks after they were exposed in February and removed their spying tools from the organizations they had infiltrated. But during the past two months, they have gradually begun attacking the same victims from new servers and have reinserted many of the tools that enable them to seek out data without detection.

They are now operating at 60 to 70 percent of the level they were working at before, according to a study by Mandiant requested by The New York Times.

The Times hired Mandiant to investigate an attack that originated in China on its news operations last fall. Mandiant is not now working for the company.

Mandiant’s findings match those of Crowdstrike, another security company that has also been tracking the group. Adam Meyers, director of intelligence at Crowdstrike, said that apart from a few minor changes in tactics, it was “business as usual” for the Chinese hackers.

The subject of Chinese attacks is expected to be a central issue in an upcoming visit to China by President Obama’s national security adviser, Thomas Donilon, who has said that dealing with China’s actions in cyberspace is moving to the center of the complex security and economic relationship between the two countries.

But hopes for progress on the issue are limited. When the Pentagon released its report this month officially identifying the Chinese military as the source of years of attacks, the Chinese Foreign Ministry denied the accusation, and People’s Daily, which reflects the views of the Communist Party, called the U.S. “the real ‘hacking empire,’” saying it “has continued to strengthen its network tools for political subversion against other countries.”

In a report to be issued Wednesday, a private task force led by Obama’s former director of national intelligence, Dennis Blair, and his former ambassador to China, Jon Huntsman Jr., lays out a series of proposed executive actions and congressional legislation intended to raise the stakes for China.

“Jawboning alone won’t work,” Blair said Saturday. “Something has to change China’s calculus.”

The exposure of Unit 61398’s actions, which have long been well-known to U.S. intelligence agencies, did not accomplish that task.

One day after Mandiant and the U.S. government revealed the PLA unit as the culprit behind hundreds of attacks on agencies and companies, the unit began a haphazard cleanup operation, Mandiant said.

Attack tools were unplugged from victims’ systems. Command and control servers went silent. And of the 3,000 technical indicators Mandiant identified in its initial report, only a sliver kept operating.

Some of the unit’s most visible operatives, hackers with names like “DOTA,” “SuperHard” and “UglyGorilla,” disappeared, as cybersleuths scoured the Internet for clues to their real identities.

In the case of UglyGorilla, Web sleuths found digital evidence that linked him to a Chinese national named Wang Dong, who kept a blog about his experience as a PLA hacker from 2006 to 2009, in which he lamented his low pay, long hours and instant ramen meals.

But in the weeks that followed, the group picked up where it had left off. From its Shanghai headquarters, the unit’s hackers set up new beachheads from compromised computers all over the world, many of them small Internet service providers and mom-and-pop shops whose owners do not realize that by failing to rigorously apply software patches for known threats, they are enabling state-sponsored espionage.

“They dialed it back for a little while, though other groups that also wear uniforms didn’t even bother to do that,” Kevin Mandia, the chief executive of Mandiant, said Friday. “I think you have to view this as the new normal.”

The hackers now use the same malicious software they used to break into the same organizations in the past, only with minor modifications to the code.

While U.S. officials and corporate executives say they are trying to persuade President Xi Jinping’s government that a pattern of theft by the PLA will damage China’s growth prospects — and the willingness of companies to invest in China — their longer-term concern is that China may be trying to establish a new set of rules for Internet commerce, with more censorship and fewer penalties for the theft of intellectual property.

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