Is China Hacking US Corporations for Commercial Intelligence?

The US has become increasingly confrontational in its criticism of the Chinese government over alleged cyber attacks on US corporations. Official sanctions are being promised by the US although most analysts agree that they won’t be announced until after President Xi Jinping’s first official state visit to Washington in late September.

In May, 2014, in fact, the U.S. formally handed down 31 count indictments against five military officers of Unit 61398 for launching cyber attacks on 6 US corporations. This Shanghai-based unit of the People’s Liberation Army is generally believed to be at the center of much of the alleged cyber-spying coming out of China.

The Chinese government denies that China is hacking US corporations, and as one Chinese official logically noted on a local talk show, the US refuses to share how they have determined that such attacks are coming out of China so the Chinese are essentially powerless to identify and stop whoever may be doing it. (The US obviously doesn’t want to compromise its counter-cyber-espionage capabilities lest the offending parties simply find a way around them.)

One Western commentator recently explained that government spying on other governments is not the issue. To paraphrase: ‘Every government hacks every other government for intelligence. This is commonly accepted. The issue here, he went on, is commercial hacking – the invasion of computers in the foreign corporate sector for purposes of unfairly assisting local competitors.’

I have absolutely no idea whether or not China is hacking US corporations but I can say with certainty that here is where any meaningful dialogue breaks down. In issues like this the US and China are speaking two different languages – ‘private’ capitalism versus socialism with Chinese characteristics.

To Americans, there is a stark distinction between the ‘private’ sector and the ‘public’ sector. To the Chinese, however, the economy is as much a part of the government as is the military. In both cases the government has both an impact and a responsibility. Both are critical to the quality of life for which the government ultimately exists.

Without the many corporate subsidies built into the US Tax Code, without outright grants from government entities like the National Institute for Health or the direct and indirect support of the US university system that is behind much of our research and innovation, without the extraordinary injection of capital into US private companies by the US military each year, or without the ports, exhibition halls, and roadways constructed with taxpayer dollars, would the creation and allocation of wealth look anything like it does now in the US?

According to a story on the Pando website run in February, 2014, a taxpayer watch dog group called Good Jobs First concluded that the Fortune 500 companies alone are receiving $63 billion in government handouts each year. And the list includes some of the wealthiest US tech companies in the world.

And what about the Internet itself, over which virtually all of this hacking takes place? Is it not really a public resource, not much different than a road or a waterway? It was, as every school child knows, created by the Department of Defense and while much of the infrastructure is currently maintained by private companies, so, too, is the power grid. Would anyone really argue that the power grid is not a public resource? If it isn’t, then why is it regulated?

I am all for the protection of Intellectual Property. It’s essential to the development of an advanced economy. It is, nonetheless, a slippery slope, which is why the courts often assign time limits to IP rights. (When you think about it, time limits are illogical in such a case. Why is the right universally valid during one period and carries no validity during another? Is it digital or is it not? It can’t be both.)

And why patent attorneys speak about the need for a ‘forest’ of patents to protect a single idea. Very few ideas or objects of commercial value exist at a single level or in a single form. Who should get credit for what part and of what importance is that part without the rest of the parts?

If I take another author’s book and sell copies with my name on the cover, that is clearly unfair from any perspective. But what if I am a former government official and the only reason anyone has any interest in my book is because of that? Is it really my story or the story of the group I served (and got paid to serve)?

Who invented the Internet? A handful of government-funded engineers created bits and pieces of technology that got the ball rolling but in the end there were literally thousands of inventors who ultimately contributed to its current release. Like most of the most far-reaching inventions it literally sprang from an ecosystem of knowledge and creativity.

And then, of course, there is the issue of culpability. Even if the Chinese government is aware, or even behind, these cyber attacks, who knew what when? Even the US intelligence community, as we now know from the disclosures of Edward Snowden, does things that the lawmakers theoretically responsible for their activities are innocently in the dark about.

Does anyone really believe that if US government intelligence officials discovered that a Russian corporation created a revolutionary new wing design for fighter aircraft that they would keep that information out of the hands of the corporations that make American fighter aircraft on the basis that there is a legal and/or moral line between public and private enterprises? I would need some convincing that they would – nor would I want them to, necessarily – since their overriding responsibility is to protect the public.

My point is very simple. We live in an era of convergence. No matter what political and economic system you have the distinction between public and private is quickly eroding. We should stop pretending that there is a clear line of demarcation between the two. When private sector banks are too big to fail; when the tax code is used to benefit specific industries; when the government spends billions outsourcing defense activities long considered the exclusive domain of the official US military, it is time to stop pretending that the ‘isms’ of global politics and economics are as distinct as they once were believed to be.

Ditto for our public and private lives. Technology has – whether we wanted it to or not – merged our lives into one giant social ecosystem. The Law of Unintended Consequences. We don’t go to the movies; we are the movies. There are no secrets any more. There is no privacy. And no one can put the genie back into the bottle.

These two realities, I believe, render the rhetorical tactics of the Cold War ineffective and potentially counter-productive. Whatever China is or is not doing, political grandstanding, or even sanctions, aren’t going to help. Neither will change anyone’s behavior – even our own, whatever it might be.

The key to influencing behavior in a converged, integrated world is cooperation, not confrontation or containment. If it used to be that, ‘You must fight fire with fire,’ our only hope, in a converged world, is to ‘fight fire with harmony.’

Gary Moreau's latest fictional novel written under the pen name of Avam Hale.
Gary Moreau’s latest fictional novel written under the pen name of Avam Hale.

Copyright © 2015 Gary Moreau

Note:  The views expressed in this post are strictly those of the writer acting in a personal capacity.

You may contact the author at