Background: China has long used cyber espionage to steal intellectual property, trade secrets and proprietary information from U.S. and European companies, including the defense sector.
- The PLA’s General State Department’s (GSD) Third Department is primarily responsible for many of China’s cyber espionage operations, managing an estimated 12 operational bureaus. Beijing’s Ministry of State Security and Ministry of Public Security are also authorized to carry out network operations, while nongovernmental actors, such as criminals or “patriotic hackers,” can be mobilized by the PLA if necessary. Notable cyber actors affiliated with the PLA are commonly known in private industry as APT1 and APT12, while APT3 has been linked to the Ministry of State Security.
- In May 2014, the U.S. Justice Department released indictments for five People’s Liberation Army (PLA) officers from Unit 61398 for stealing business plans, internal communications and other intellectual property from Westinghouse Electric, United States Steel Corporation and other U.S. companies, thereby exerting overt diplomatic pressure against Beijing in response to its malign cyber activities. The scope of China’s cyber espionage was further detailed in July 2015, when a series of NSA presentation slides were leaked to the media after the hack of the Office of Personnel Management (OPM) in which 22 million files on past and present U.S. federal employees were stolen. The leaked NSA material revealed 600 corporate and government victims of Chinese cyber espionage between 2009 and 2014.
- After the U.S. threatened economic sanctions against Beijing for its theft of U.S. intellectual property in September 2015, Chinese President Xi Jinping and former U.S. President Barack Obama met in Washington and agreed to halt economic espionage. Since then, several other Western countries have reached similar agreements with Beijing. By June 2016, the volume of detected Chinese economic espionage operations in the U.S. had dropped significantly.
- However, Chinese economic espionage continues unabated in Asia, Latin America and Scandinavia.
- China’s internet regulatory system, namely the June 2017 Cybersecurity Law, essentially enables intellectual property theft by the Chinese government. It mandates government access to the source code of foreign companies before they can tap into the Chinese market to ensure that it is “secure and controllable.” This dissuades foreign companies from entering China’s 1.3 billion-customer market out of fear of intellectual property theft. For those that do provide source code, the Chinese government could use that information to bolster local competitors through the provision of stolen foreign intellectual property.
Issue: Beijing’s establishment of the People’s Liberation Army’s (PLA) Strategic Support Force (SSF) in December 2015 – which combines cyber, electronic and space warfare under a single command – suggests an emphasis on a coordinated use of these capabilities to potentially blind and deafen U.S. military communications and reconnaissance infrastructure across the globe. While Chinese economic espionage against the West has slowed in recent years, it could be reinvigorated, particularly as the race to lead the world into a fourth industrial revolution fueled by artificial intelligence heats up.
Cyber Warfare: China is building up its offensive military cyber capabilities to support its conventional military operations. Beijing is meshing cyber intelligence and electronic and information warfare capabilities into what is referred to as “Integrated Network-Electronic Warfare,” with formerly independent PLA departments – 3PLA and 4PLA – now charged with jointly managing electronic warfare and running computer network operations.
Jill Singer, Former CIO for the National Reconnaissance Office
'Inspections of source code, thinly veiled as processes designed to ensure vendors’ technology products won’t undermine the importing country’s cybersecurity protections, provide ample opportunity for theft of intellectual property under the guise of ‘protecting national interests’
China’s cyber warfare strategy consists of neutralizing the infrastructure that permits U.S. forces to operate far from home by corrupting U.S. information systems – such as for military logistics – and disrupting the information links associated with command and control. Beijing could also target early warning radar systems used by the U.S. military or its regional allies to cause blind spots and create opportunities for Beijing to deploy sorties or launch ballistic missile strikes early in hostilities. Such tactics, integrated with technologies that could sabotage U.S. weapons systems or U.S. critical infrastructure, may inhibit U.S. forces from responding in a timely way.
- To effectively disrupt critical U.S. platforms in a potential confrontation, the PLA – notably Unit 61938 and Unit 61486 – has already initiated reconnaissance of critical U.S. targets, including elements of the U.S. power grid and the designs of weapons systems such as the F-35 combat aircraft, the Patriot missile defense system and U.S. Navy littoral combat ships. If the U.S. detects Chinese espionage within its critical infrastructure, military or defense industrial base, it might view Beijing’s reconnaissance as a step toward war.
- Artificial Intelligence (AI): In July 2017, Beijing’s State Council released the “New Generation AI Development Plan,” laying out China’s strategy to lead the world in artificial intelligence by 2030. Broadly speaking, advancements in Chinese AI can: augment military command and control and intelligence deduction; advance combat training and military readiness; tailor and scale cyber and information operations; and create counterintelligence vulnerabilities. It appears likely that China will increasingly use cyber tools to steal AI-related intellectual property from U.S. research and development organizations.
- Of particular concern is Beijing’s incorporation of AI into military robotics, such as ground, maritime and aerial drones. Manned-unmanned teaming operations, such as those involving the Caihong-5 (CH-5) aerial combat drone or the D3000 stealth maritime combat drone, could be particularly useful in controlling the airspace and waters beyond the Chinese mainland. Notably, however, China seeks to foster drones that will enable an asymmetric capability – such as swarms of small, low-tech, possibly 3-D printable drones linked together through artificial intelligence to create a cognitive hive mind – rather than large, sophisticated platforms.
- Counter-Space Warfare: China is aggressively pursuing anti-satellite (ASAT) weapons, including direct-ascent missiles and co-orbital platforms travelling alongside satellites in space, which could be deployed to diminish the U.S. military’s reconnaissance, navigation and communications in the South or East China Sea or on the Korean Peninsula. In January 2007, China demonstrated its anti-satellite capacity by shooting down its oldest meteorological satellite, Fengyun 1 (FY-1C), at about 500 miles in low orbit, creating over 3,000 pieces of space debris that continue to endanger the world’s assets in space. Since then, China’s counter-space activity has largely incorporated ballistic missile defense tests and other dual-use capabilities that provide a layer of deniability for Beijing’s intent to deploy ASAT capabilities during a time of crisis. In July 2014, Beijing conducted a missile defense test that the Pentagon openly characterized as an ASAT-capabilities test.
- While ISR satellites might be the most vulnerable to Chinese ASAT weapons, U.S. strategic communications and navigation satellites in medium orbit (1,242 miles – 21,748 miles) could also be targeted. China first demonstrated these capabilities in May 2013 when it launched a mission that Beijing said was intended to reach an altitude of 6,214 miles. However, the U.S. government said that the launch “appeared to be on a ballistic trajectory nearly to geosynchronous Earth orbit,” or somewhere close to 22,369 miles and within reach of many U.S. communications and navigation satellites.
- Beijing has also been pursuing “co-orbital” anti-satellite capabilities, whereby a Chinese satellite maneuvers through orbit until it nears enemy satellites and disrupts them through both kinetic means, such as ramming or targeting them with explosives, and non-kinetic, directed-energy means, such as lasers or radio frequency jammers. In June 2016, China launched the Aolong-1 spacecraft with a robotic arm for space debris removal that could also be used as an ASAT weapon. China has also long been acquiring ground-based satellite jammers and targeting space-affiliated organizations with cyber operations.
Deborah Lee James, Former Secretary of the U.S. Air Force
‘One of the greatest advantages we have in combat is a superior set of technologies that gives our troops access to information from multiple sources. Our military assets in space provide a good amount of that information and would be targets in any engagement with hostile forces.’
Joseph DeTrani, Former Director for East Asia Operations, CIA
‘It’s fair to assume that China, for contingency planning purposes, has been pursuing the capability to interfere with U.S. communications and ISR capabilities that are dependent on our space-based satellite architecture in times of conflict.’
John McLaughlin, Former Acting Director, CIA
‘China’s military modernization program clearly includes an attempt to up its game in space. Weapons for space involve more than just anti-satellite systems, but these are the most overt signs of China’s progress.’
Response: The U.S. continues to maintain an advantage over China in the realm of military, cyber and space capabilities, and China remains more vulnerable to U.S. ASAT capabilities than vice versa. Yet, denying Beijing success in offensive cyber and counter-space operations – likely through active defense measures – represents a critical objective for the United States to better ensure its continued information advantage over China.
Look Ahead: As China’s economic, diplomatic and security interests rapidly expand, the PLA strives to develop more robust power projection and increasingly advanced cyber capabilities. In the short-term, Chinese cyber operations will continue to infiltrate and corrupt networks across the globe, but China’s growing constellation of satellites will eventually provide Beijing with over-the-horizon weapons control, expanding the reach of Chinese combat drones to new and remote theaters.
Doug Wise, Former Deputy Director, Defense Intelligence Agency
‘As the Chinese now have a full-edged multidimensional military base in Djibouti, I would be surprised if the Chinese didn’t begin using drone technology to provide that safety and security or to enable the Chinese military investment there to actually conduct operations – whether that is counter terrorism, maritime interdiction, or simply self-preservation.’
With analysis by Levi Maxey.
