World View: Huawei Scandal Exposes Potential 'Cyberwar Pearl Harbor' from China
This morning's key headlines from GenerationalDynamics.com
- Defense Secretary Panetta warns of 'Cyberwar Pearl Harbor'
- House Intelligence Committee warns against doing business with Huawei and ZTE
- China continues economic warfare against Japan over Senkaku islands
Defense Secretary Panetta warns of 'Cyberwar Pearl Harbor'
Huawei office in Wuhan, China
In a speech on Friday, Secretary of Defense Leon Panetta described
described the dangers of cyberwar. His remarks were timely, coming
just after the House Intelligence Committee issued a report warning of
potential cyberattacks through devices sold by the Chinese companies
Huawei and ZTE. Panetta said:
"These attacks mark a significant escalation of the
cyber threat and they have renewed concerns about still more
destructive scenarios that could unfold.
For example, we know that foreign cyber actors are probing
America's critical infrastructure networks. They are targeting the
computer control systems that operate chemical, electricity and
water plants and those that guide transportation throughout this
We know of specific instances where intruders have successfully
gained access to these control systems.
We also know that they are seeking to create advanced tools to
attack these systems and cause panic and destruction and even the
loss of life.
Let me explain how this could unfold. An aggressor nation or
extremist group could use these kinds of cyber tools to gain
control of critical switches. They could, for example, derail
passenger trains or even more dangerous, derail trains loaded with
They could contaminate the water supply in major cities or
shutdown the power grid across large parts of the country.
The most destructive scenarios involve cyber actors launching
several attacks on our critical infrastructure at one time, in
combination with a physical attack on our country. Attackers
could also seek to disable or degrade critical military systems
and communication networks.
The collective result of these kinds of attacks could be a cyber
Pearl Harbor; an attack that would cause physical destruction and
the loss of life. In fact, it would paralyze and shock the nation
and create a new, profound sense of vulnerability.
As director of the CIA and now Secretary of Defense, I have
understood that cyber attacks are every bit as real as the more
well-known threats like terrorism, nuclear weapons proliferation
and the turmoil that we see in the Middle East."
It's pretty clear that Panetta was referring to an attack by China. China
is thought to have some 3,000 long-range missiles, many of them nuclear
weapons targeted at American cities, has developed missiles specifically
designed to target American aircraft carriers, and has been conducting cyberwar
at the business espionage level for years. Panetta is saying that a full-scale
attack is coming, and that when it comes it will paralyze the nation.
His phrase "create a new, profound sense of vulnerability" might be an allusion
to the words of Carl von Clausewitz in his 1832 book "On War," in which he
describes what happens to the initial war euphoria of a country when it suffers
its first defeat:
"The effect of defeat outside the army -- on the
people and on the government -- is a sudden collapse of the
wildest expectations, and total destruction of self-confidence.
The destruction of these feelings creates a vacuum, and that
vacuum gets filled by a fear that grows corrosively, leading to
total paralysis. It's a blow to the whole nervous system of the
losing side, as if caused by an electric charge. This effect may
appear to a greater or lesser degree, but it's never completely
missing. Then, instead of rushing to repair the misfortune with a
spirit of determination, everyone fears that his efforts will be
futile; or he does nothing, leaving everything to
In other words, it's like the reaction to 9/11 a million times over.
Dept. of Defense and Carl von Clausewitz
House Intelligence Committee warns against doing business with Huawei and ZTE
On Monday, the House Intelligence Committee issued a report warning
government agencies and private companies of the substantial risks of
doing business with Chinese companies Huawei [pronounced WAH way]
Technologies Company and ZTE Corporation because of their links to the
Chinese Communist Party and the People's Liberation Army (PLA). After
a year long investigation, the committee said that Huawei and ZTE
provided incomplete, contradictory, and evasive responses to the
Committee’s core concerns. According to the report:
"Despite hours of interviews, extensive and repeated
document requests, a review of open-source information, and an
open hearing with witnesses from both companies, the Committee
remains unsatisfied with the level of cooperation and candor
provided by each company. Neither company was willing to provide
sufficient evidence to ameliorate the Committee’s
concerns. Neither company was forthcoming with detailed
information about its formal relationships or regulatory
interaction with Chinese authorities. Neither company provided
specific details about the precise role of each company’s Chinese
Communist Party Committee. Furthermore, neither company provided
detailed information about its operations in the United
States. Huawei, in particular, failed to provide thorough
information about its corporate structure, history, ownership,
operations, financial arrangements, or management. Most
importantly, neither company provided sufficient internal
documentation or other evidence to support the limited answers
they did provide to Committee investigators.
During the investigation, the Committee received information from
industry experts and current and former Huawei employees
suggesting that Huawei, in particular, may be violating United
States laws. These allegations describe a company that has not
followed United States legal obligations or international
standards of business behavior. The Committee will be referring
these allegations to Executive Branch agencies for further review,
including possible investigation."
Huawei and ZTE's primary business is selling high-end computer
networking switches and other equipment used by cell phone carriers,
Internet service providers, and other companies to run communications
networks. American companies like Cisco sell similar equipment, but the
Chinese versions are much cheaper, supposedly because of cheaper labor
in China. There are Huawei and ZTE equipment used in internet switches
and phone switches around the world. The fear is that the Chinese have
installed "backdoor" capabilities into this equipment so that, at the
appropriate times, the PLA could send out commands over the internet telling
these devices to spy or to shut down, or to cause the kind of disasters
that Panetta outlined in his "Cyberwar Pearl Harbor" warning.
I'd now like to address a comment to those morons who claim that this
idea is so fantastical that it could never be done, or that if it was
done it would be easily detected through extensive testing of these
devices, such as what is already being done on a regular basis.
Anyone who, like myself, has spent part of his career developing
chip-level operating system software for embedded systems can tell you
that not only is this doable, it's not even particularly difficult for
someone with the right skills. A backdoor capability would not be
detected by testing because it would be designed not to do anything
until a particular encrypted command was sent to it to enable it. The
backdoor capability could be hidden so deeply in the chip structure of
a device that even other programmers working on the same project would
not be aware of it. And of course the company managers might not even
be aware of it, especially the president of the American division of
the Chinese company.
Now, having said that can be done easily, there's no doubt that it HAS
been done. The PLA has been preparing for war with the U.S. in every
possible way, as I've been writing about for years. In addition to
the forces I've already described, China is has stationed military
forces in the South China Sea, taking possession of islands that
belong to other countries; they've declare economic warfare against
Japan for the same reason; they have thousands of missiles ready to
launch against Taiwan; they have large military deployments in western
Tibet ready to invade India; and they've demonstrated a capability to
destroy American communications and GPS satellites.
What would be absolutely fantastical is to think that after China has
made all these war preparations in other areas, the Chinese haven't
bothered to do the easiest thing of all: Implement backdoors in
internet and phone switches, and subsidize the equipment so that it
can be sold cheaply and in high volume to companies and governments
around the world. One can be absolutely certain that this has
happened. House Intelligence Committee and Technology Review
China continues economic warfare against Japan over Senkaku islands
For years, people have been telling me that the predictions of war
by Generational Dynamics are certainly wrong because businessmen would prevent
these wars from occurring and harming their businesses. This was always a
moronic argument, but the conflict between China over the
Senkaku/Diayou islands emphasizes what really happens. China's levels
of nationalism and xenophobia towards the Japanese have reached
astronomical levels. Even the businessmen are highly nationalistic,
and believe (or are forced to believe) that it's their patriotic
duty to give some business for the good of the country. Thus,
China has been conducting an economic war against Japan: Japanese
car sales in China re in free fall; Japanese speakers in China are
booed or threatened; Chinese tourists in droves are canceling trips
to Japan; China's government has encouraged riots to smash Japanese
cars, Japanese businesses and Japanese manufacturing plants in China.
Contrary to the naive criticisms that have been leveled at me and
Generational Dynamics over the years, wars are not prevented because
they're bad for business. To the contrary, business ties are used as
economic warfare, usually in preparation for military warfare.
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