China's Internet policy begins new arms race

China's Internet policy begins new arms race

Summary: Did Google oversimplify its ambitions with its expansion into China and give the government signals that said they would comply and then have second thoughts? Did the Chinese government underestimate the consequences it has had on Google and was Google appropriately prepared to do business in China?

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Agendas: Every government always has them and not all are public. Competition for attracting local and foreign investments to their country is a balance of agendas being accomplished. The variables considered to attract capital account for how policies are both complex and simple in nature to implement.  The type of industry plays a significant role in government policies and its agendas it wants to achieve. The level of oversight in an industry plays a significant role in the balance equation. Some, such as the automotive industry, pose little threat to the security of a nation while others bring significant concern, such as telecommunications. These are big concerns from the Chinese government's point of view.

Did Google oversimplify its ambitions with its expansion into China and give the government signals that said they would comply and then have second thoughts? Did the Chinese government underestimate the consequences it has had on Google and was Google appropriately prepared to do business in China?

China's initial silence was not a surprise, until it passed a week and then continued to be silent until Secretary of State Clinton issued several statements which required some kind of reaction from the Chinese Minister of Trade which simply denied government involvement and reinforced that China's Internet laws will be strictly adhered to. China's political experience on the world stage is one that is steep in traditional views and concepts, rarely wavering from public announcements of policies dating back to the end of World War II. Its message has always been a simple one: China is a great, free, democratic nation with a happy population and will prosper regardless of what the rest of the world does. Rarely has it voiced its opinion on world affairs on its own unless linked to the former Soviet Union throughout the 1970's to the mid '80's. When it has had disagreements, it has done so quietly through diplomatic channels. Defense of its policies in the press are always short and to the point sequence of events. The heavy lifting has always been behind the scenes. This incident changes the complexity of its response and the decision to follow traditional denials is going over like a 404 file not found disaster. Some are beginning to wonder if China recognizes the diplomatic and commercial stakes involved. This is China's first modern corporate challenge and it does not have vast amount of experience to deal with multiple corporate government affairs executives relaying concerns back to their respective governments, who are in turn calling in ambassadors to have a nice little chat.

China is country that is attempting to achieve what the former USSR did in the 1980's without the chaos, civil disobedience and instability that has shaken every former border of Russia since Mikhail Gorbachev introduced the former Soviet Union to perestroika in 1986 and dissolution 1991 through Glasnost. Needless to say, the Government of China not only observed the good, bad and ugly which transpired over the next 30 years, it knows that if it attempted an identical path it would likely unfold with even worse results. China's political institutions are also younger versions of Stalin and Lenin's versions of communism, and Mao certainly took a far different approach to the management of what was to become China's version of the Politburo.

Even with all the difficulties it saw Russia go through, China's political apparatus knows it needs to reform. If there is one talent the Chinese government officials know anything about, it's arithmetic and the number of people, systems, infrastructure and elements of government that have been in place since 1949 are in need of significant change, overhaul and reform, let alone maintainenance. There is an old guard within the government and change does not come easy to them. Others know it is far overdue but some patience and careful planning is required; it cannot be achieved overnight. China is evolving to a market-based economy, along with freedom and new policies. In a country where change is rare, the past 15 years have seen nothing but constant change since the repatriation of Hong Kong in 1997. China in one repect is renewing itself, hoping to avoid the mistakes of what has happened to its ally in the west and yet still has many that want to maintain the ideals of the past. Technology is practically forcing the two ideologies on a collision course.

If there is one constant belief that the political old guard has, it's the doctrine of control and strength in preventing outside interference which was reinforced by the Japanese invasion during World War II and was the principle rationale why it exists today. This doctrine combined with technology offers powerful tools to the old guard that still has significant power in China. Knowledge of the opposition is the value of any intelligence agency and the Ministry of State Security (MSS) in China is a master with few equals, particularly when harnessed with a scientific and mathematics community that is one of the strongest in the world. This brings about the other possible reason why China's MSS hackers and agents carried out this attack. The government's old guard is suspicious about all outside influences, not just one issue or set of policies (such as human rights), but all issues. Commerce is something China does out of necessity, not desire. It would rather be left alone in isolation if it was possible. It could be argued that commerce is why China throughout its history has gone through so many variants of feudalism and communism.

This incident doesn't just impact Google, but every foreign high tech company doing business in China like Nokia, Motorola, Cisco, HP, Microsoft and many others.  Google found security breaches that go beyond a simple intrusion, but actual network connection tampering has been suggested. Articles are coming out suggesting that Google's Chinese staff is away from the office because the MSS has placed intelligence agents within the company. None of this should be surprising in anyway given the nature and conditions that should be expected. Google didn't calculate the consequence and China did and succeeded, perhaps too well. Concerns should be raised about Chinese access to technology manufacturing under the management and direction of some of the companies I just mentioned. Imagine your new cell phone or laptop WIFI Digital Signaling Processor (DSP) chipset that has a Chinese designed and embedded Trojan program built right into the one of hundreds of chips in it. Think it hasn't happened before? You would be wrong in that assumption. China's industries have been hammered over the past two years over management of its commodity industries like pet food, milk products and medical information handling of the SARs virus in 2005.

Corporate security professionals have learned valuable lessons from this incident. China's intelligence ability internally and externally has now become more difficult. This exploit has clearly put the international world on the defensive.  The intrusion detection and firewall technology battle now elevates to the next level. China will continue collecting intelligence data via the Internet and as a consequence, a different kind of arms race has begun.

Topics: China, Browser, Government, Government US

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14 comments
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  • Dreaming

    of a B52 load of thuosand pound bombs.
    HollywoodDog
    • B52??? Dream on

      maybe first you had better look at the defeat in Viet Nam, the long war in Iraq against insurgents (not even a rag tag army!), the loosing war in Afganistan against another ragtag group of insurgents. A loosing streak by any measure so maybe keep the B52 in the hangar and you might not loose again
      Bradish@...
      • Japan owned China (WWII), and US owned Japan

        US will own China

        ha, just kidding

        P.S. it's "lose" not "loose", maybe your mandarin->english translator doesn't work well?
        markbn
        • lose...loose

          I stand corrected!
          Bradish@...
  • RE: China's Internet policy begins new arms race

    The traditional Internet was designed to be a long range communications network. The USA military, some high tech development firms, and later universities were the first real players in place. The whole concept was to make communication easy, not necessarily "secure".

    When the network was opened up to basically "the public". It was a disaster waiting to happen. The infrastructure was designed to make communication easier, not secure. So if you have an environment that is open and willing to have open access to any information you put out on the Internet, it works. When you try to lock the information down and secure it, you really need to redesign the Internet itself. The security is a bandage and doesn't always work because it is trying to secure a network that was not designed in the first place to be secure.

    I do not understand why companies and governments have put so many sensitive matters on the Internet. They are just begging for problems to occur. If a government or corporation wanted the benefits of a network but a secure network, they needed to build one that was set up as a secure network from day one.

    Encrypted by default data streams. Encrypted by default network storage, Randomized routing schedules so that every single data connection goes through different areas of the internet from the start point to the end point. Multiple and randomized starting and ending points for data transmissions. So instead of your entire encrypted stream going through one gateway router, it would go through a series of gateways. The schema could be negotiated before the transmission and changed randomly. Non-networked local smart terminals that clearly list the software stored on the local terminal and flag new or foreign software on the terminal before the terminal can access the network or access user stored data. (This would help reduce key loggers and other terminal based security breaches.)
    mr1972
    • Disagree.

      The Internet can be very secure in its present state. Poor network management is the major problem. Not so smart users is another. The Internet can be locked down tight. Then you bring people into the equation. And no design change will remedy that.

      There is nothing wrong or insecure about the Internet. It can be locked down as tight as your local network. And your local network can be just as easily cracked when people are brought into the equation.

      The Internet is just fine, people are the problem.
      bjbrock
  • wow.

    "China is a great, free, democratic nation with a happy population and will prosper regardless of what the rest of the world does."

    "great," and maybe to some extent "happy."

    But arguably not free. And definitely not democratic in the same sense that we would use the word.

    That's simply not the type of government they have.

    That they are allowing some free market economics is great - but unless their constitution has been completely overhauled, it's still based on the old communist ideal of state ownership of the means of production. The vast majority of industries are still state owned, not privately owned.

    They still have a long way to go before I'd use the word "democracy" to describe them.
    CobraA1
    • Wait a second

      I wasn't describing them that way, that's how THEY describe themselves...

      thanks for writing,
      Doug
      doug.hanchard@...
      • Yeah, it's amusing . . .

        Yeah, it's amusing how they try to present themselves in that way.

        Their constitution begins in this way:

        "The People's Republic of China is a socialist state under the people's democratic dictatorship"

        They've managed to fit "socialist," "democratic," and "dictatorship" all in the same sentence. I'm not sure which one they want to be.

        . . . and socialism tends to abhor private ownership of property in favor of state ownership. So, yeah, unless that wording in their constitution is changed, I remain worried that private ownership can be taken away from their people at any point.
        CobraA1
        • private ownership can be taken away from their people at any point.

          sounds like the US my friend...read a newspaper from time to time and read about the banks, AIG, GM etc etc....
          Bradish@...
        • Socialism and Democracy are NOT two things that cannot go together

          You can have voting on laws, etc. under socialism...... it's just that when the PEOPLE say that something is not good, that stands..... unlike over here in the BAD OLD United States where the person with the best or most lawyers win arguments.

          You need to get off your hatred of socialism, the world is moving more and more towards it, and I say (for some things)..... it's damned well about time!
          Lerianis10
    • Like private ownership of factories and other things has worked well....NOT

      We just had a economic MELTDOWN because of the lack of regulation and lack of nationalization of some industries.... need I keep on going?

      Wake up and realize that communism is NOT a bad thing, nor is socialism.... as long as they are not taken too far.
      Lerianis10
  • You have no idea of US involvement in China, know your history

    Do you honestly think that the US doesn't interfere in
    China? The US has its own cyber warfare with China, and
    in many other countries, but these don't seem to be
    publicised much. Flying spy planes in Chinese air space.
    Hmm, I wonder how the US would like it of Chinese spy
    planes flew over the US.

    Articles like this are so one sided. Please learn, and you
    will see that the USA does the same but more effectively.
    root12
    • Spy planes over China?

      I suspect that we learned not to fly spy planes over advanced military establishments back in 1960 with the Gary Francis Powers thing.

      Spy satellites are quite another. You can be sure those pass over China all the time just as you can be sure that Chinese satellites are peeking at us. Remember the Popular Science aerial photos of Area 51? Those were low resolution Russian pictures and the low resolution pictures were about as good as we saw from aircraft pictures taken over Cuba back in the missile crisis.

      Radio snooping from aircraft near the border? Sure. Everybody does that. "Fishing trawlers" are cheaper than planes though.
      Bill4