China's US$90B ups cyberwar stakes

Rumor of country's cyber military muscle reignited after Australian intelligence agencies report China's defense spending to be double the US$45 million figure publicly announced by Beijing.

Last year, Northrup Grumman released a report warning that China had a mighty cyber arsenal which it could use in a possible future cyber conflict. News last week that Chinese defense spending could be double the public figure could mean that such claims are true, and perhaps even conservative.

The news arose in diplomatic cables dating back to 2006 obtained from Wikileaks by Fairfax newspapers. Australian diplomats reported to the United States that the Australian Government believed China's military budget was US$90 billion, double the US$45 billion publicly announced by Beijing.

Australian intelligence and defence agencies told the U.S. that China was building a military capability well above that needed to repel a move for independence by Taiwan, and said it had become a risk to stability in the region.

"China's longer-term agenda is to develop 'comprehensive national power', including a strong military, that is in keeping with its view of itself as a great power," the cables said.

A document (PDF) provided to the U.S.-China Economic and Security Review Commission by Northrop Grumman in October last year claimed that China's had a significant cyber warfare capability, including a military and civilian militia comprised of network specialists, and fully-functional offensive hacking and counter-intelligence wings.

The document also claimed the country has stockpiled a kinetic arsenal that includes lasers, high-power microwave systems and nuclear-generated electromagnetic pulses to supplement its cyber warfare force. It also claimed the country is training its forces to work under "complex electromagnetic conditions".

While it is unclear if defense specialists espousing China's cyber warfare capabilities, such as Northrop Grumman, were privy to this information, the larger defense budget would seem to lend credence to their claims.

It's something governments do not like to discuss. Last year, the United States opened its Cyber Command, but that is still heavily dependent on private industry. Meanwhile, the Australian Defence Force revealed in its Defence Whitepaper that it will "invest in a major enhancement of [its] cyber warfare capability", yet that appears to centre on response and defensive means.

The extent and intent of cyber warfare arsenals is hotly contested and there are as many cyberwar sceptics as proponents.

Yet, it's certainly reasonable to suggest China did not splurge US$90 billion on guns and bombs alone. In a time heavy with cyberwar rhetoric, it would make sense for them to hedge their bets.

This article was first published at ZDNet Australia.