Richard Clarke: China has hacked every major US company

Richard Clarke: China has hacked every major US company

Summary: Cybersecurity advisor Richard Clarke is warning the U.S. that its major companies are being regularly infiltrated by Chinese hackers employed by the Chinese government to steal R&D.

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Richard Clarke, a former cybersecurity and cyberterrorism advisor for the White House, was a U.S. government employee for 30 years: between 1973 and 2003. He worked during the times of Ronald Reagan, George H.W. Bush, Bill Clinton, and even George W. Bush. He may not be working under current U.S. president Barack Obama, but that doesn't mean he doesn't have something to warning about. He says state-sanctioned Chinese hackers are stealing R&D from U.S. companies, threatening the long-term competitiveness of America. We've heard this before, but the way Clarke puts it makes the situation look even more dire.

"I'm about to say something that people think is an exaggeration, but I think the evidence is pretty strong," Clarke said during an interview with the Smithsonian. "Every major company in the United States has already been penetrated by China. My greatest fear is that, rather than having a cyber-Pearl Harbor event, we will instead have this death of a thousand cuts. Where we lose our competitiveness by having all of our research and development stolen by the Chinese. And we never really see the single event that makes us do something about it. That it’s always just below our pain threshold. That company after company in the United States spends millions, hundreds of millions, in some cases billions of dollars on R&D and that information goes free to China....After a while you can't compete."

Clarke notes that while the U.S. government is involved in espionage against other governments, it doesn't hack Chinese companies and then hand over intelligence to their American counterparts. He argues that the same cannot be said for the Chinese government.

Clarke's most famous warning came 10 weeks in advance of the events of 9/11: on July 5, 2001. The FAA, the Coast Guard, the FBI, the Secret Service, and the INS had gathered at the White House, where Clarke stated that "something really spectacular is going to happen here, and it's going to happen soon." For the sake of the U.S. economy, let's hope his warning about China doesn't eclipse the one from over 10 years ago.

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Topics: Government US, Emerging Tech, Enterprise Software, Government, China

Emil Protalinski

About Emil Protalinski

Emil is a freelance journalist writing for CNET and ZDNet. Over the years,
he has covered the tech industry for multiple publications, including Ars
Technica, Neowin, and TechSpot.

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121 comments
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  • Sure, there was never going to be an issue...

    With MS giving the Chinese government access to the full source code for their operating system;-)
    Richard Flude
    • Owe ya one.

      I downranked your comment prior to looking up the facts... Sorry, owe ya one.
      TechNickle
    • Source code availability and exploits

      Don't forget that Linus Torvalds and Richard Stallman made their Linux kernel and GNU source code (think GNU/Linux), respectively, available to [i][b]everyone[/b][/i]. As did Google with Android, Mozilla with Firefox and Sun Microsystems with Java (mostly). And a very recent ZDNet Zero Day blog article showed that zero-day exploits associated with open-source software, including Firefox, the Java plug-in and Android, currently fetch anywhere from $40,000 to $150,000. That's a lot of money for exploits associated with source code that is viewed by "many eyes".
      Rabid Howler Monkey
      • Proprietary

        If you would have read a bit more about this, you would haveknown that OSS projects on average has LESS holes than their closed counterparts. Less bugs per line of code, etc... Did you know most holes are found by automated tools running against binaries, not the code? That the binaries often are debugged and decompiled for analysis?


        Open source is not less secure in ANY way because of being open.
        Natanael_L
      • @Natanael_L

        Till an extent you are true, but defect resolution time of OSS is better as most proprietary software vendors do not accept a defect easily, until exploited.
        But at the same time, stopping a motivated hacker is difficult. :(
        kashyap.bikram@...
  • If only the Russians had access to the Internet during the cold war...

    ...they'd have saved even more on R&D than having to steal it the old-fashioned way.
    JohnMcGrew@...
  • Yep

    And China isn't the problem right? We need to pull back all manufacturing and shut them off from US Networks as much as possible.

    Also, Any company dealing with the Govenrment should be on an isolated Network so we don't completely lose that advantage.
    slickjim
    • True

      ... but to a large degree this is a smoke screen, the multinationals that took manufacturing and investment to South East Asia and Asia-proper are as guilty here as any hacking group could ever be.

      The outsourcing and short-sighted greed of the corporations that moved from Silicon Valley to Asia *had to have* seen the warning signs. And yet here we are ... after the horse has well and truly bolted, griping over the loss of R&D ... i mean really? So, so late in the piece? When all the damage has already been done?

      It's like this: the corporations that deserted the U.S and Silicon Valley are as much the culprit here as any hacking group. We all need to step back, take a breath and look at the bigger picture.

      Chinese hackers (and any other nationals) are a big issue, to be sure, but they are the thin edge of the sword. The guilty parties would have us all shift focus from those that really began the rot when off-shoring and outsourcing became the currency of greed in the U.S. (and Western society, in general), in the first place.

      You are right ... unfortunately for us all in the West, so am i.
      thx-1138_
      • And yet congress can't stop the corporate welfare they still receive

        Never mind extortion like this:

        http://www.businessinsider.com/ballmer-threatens-obama-says-hell-move-jobs-overseas-2009-6
        HypnoToad72
    • Agree

      And all occidental and european countries should do the same.
      gacouture@...
  • Scissors!!

    This must be stopped somehow... and I hope soon. Sometimes, the more radical decision is the best, give me scissors for wires!! :D
    carofe
  • China

    We're their biggest customer and therefore swing the weight -- but we don't!
    rttedrow@...
    • biggest customer?

      Probablly true, but we also owe them the most money...they don't have to listen to anything we say...they already own more than you would care to know in our nation.
      brianscook
      • foreclose

        one of these days, they are going to foreclose on the White House
        bb1040
      • Oh yeah?

        You think so? If we refuse to pay, what are they going to do? Nothing, just not loan us anymore and then we start dealing with other countries for manufacturing.

        It is time to bite the bullet and remove most favored nation status. We also need to setup those economic zones that McCain was talking about so there are tax havens in the USA for manufacturing! Once we get at least 50% of the jobs back, yank away their status and throw tariffs on anything else coming in from China!
        slickjim
      • @Peter Perry .. run for office

        ... with political thinking like that, you'd get my vote.
        thx-1138_
      • They already have ...

        ... foreclosed on the White House.

        Why do you think its current occupant is hellbent on destroying our economy? From his campaign pledge to raise gas prices to wasting billions on Solyndra, etc. ... China has called in their markers, friends.
        harvey_rabbit
      • Holding bonds isn't like owing the bank

        While China does hold treasury bonds, it actually has less leverage than a debtor to a bank. For example, the economic reality is far more complex, but if the US decided to default China would have no where to go to collect. Ultimately, it's only recourse would be military action and that's a nonstarter. A bank has the law behind it, while there is no such thing internationally with respect to nations. As far as them owning anything in the US, the fact that it is in the US matters. The fact is that China and the US understand how global economics operates and neither really wants to upset what is working for both.
        jeff@...
      • @Peter Perry

        Peter perry needs a reality check! Most favoured nation status? What delusion are you under fella? China joind the WTO back in the early 2000's, this is not the 90's.

        Default on sovereign debt? Yes, you can either 1) default on all treasury bonds outstanding, sending the fiancial system to crawling stall, losing the nations coveted AAA credits rating to a D and have the world move away from the greenback as the universal currency and all the advantages that come with it. deluded. 2) selectively target all treasury bonds held by the PRC in specific; How about they confiscated all assets held by US interest over there in response? How many billions of dollars of FDI over the years now?
        kl_iscool@...
  • What is there to hack?

    We send all the work over there for them to make the things we then buy. Not much that can't be copied that way.
    mike21b@...