It's no secret that China has a robust cyber-espionage industry. While the White House has acknowledged and condemned Chinese cyber attacks before — especially after the high-profile hacking of The New York Times and The Wall Street Journal — the latest Pentagon report to Congress is the administration's most direct accusation yet.
"In 2012, numerous computer systems around the world, including those owned by the U.S. government, continued to be targeted for intrusions, some of which appear to be attributable directly to the Chinese government and military," reads the 83-page report.
That's a big deal. As NPR's Scott Neuman points out, in the past the Pentagon "has linked computer attacks to China, but not its government." And Chinese officials are not happy about this latest development. Hua Chunying, spokeswoman for the Chinese Ministry of Foreign Affairs, denied everything, according to The New York Times:
China has repeatedly said that we resolutely oppose all forms of hacker attacks. We're willing to carry out an even-tempered and constructive dialogue with the U.S. on the issue of internet security. But we are firmly opposed to any groundless accusations and speculations, since they will only damage the cooperation efforts and atmosphere between the two sides to strengthen dialogue and cooperation. [New York Times]
Why is China (its government or otherwise) hacking U.S. government computers anyway? Partly to gain industrial secrets and insight into what U.S. lawmakers think of China on key issues, according to the report.
More disturbing is the assertion that Beijing is collecting information for military purposes. China views electronic warfare "equally with traditional ground, sea, and air forces," reads the report, which also describes three ways the Chinese military could use cyberwarfare: To attack computer networks, slow an enemy's response time during a conflict, and serve as a "force multiplier" to make its weapons more effective.
As The Guardian notes, this report comes at a time when China is seriously beefing up its traditional military. In March, China announced a 10.7 percent increase in military spending to a total of $114 billion. Last year, it commissioned its first domestically built aircraft carrier and is currently testing its second advanced stealth fighter.
Military concerns aside, Chinese cyber-espionage could have serious effects on U.S. commerce because "if Chinese businesses can steal U.S. technology, they can blunt the one big advantage U.S. companies have in the global economy, which is their capacity to innovate," writes NPR's Tom Gjelten.
In other words, China's economy is driven partly by manufacturing what U.S. companies like Apple and Microsoft spend lots of research and development money creating. If a Chinese company instead of an American company were to unveil the next big technological breakthrough, that could change the global economic landscape in a big way.