Chinese Hackers Steal Financial Data of U.S. Corporations to Gain Competitive Advantage

A man wears a mask of the Anonymous hacker group as he and other people take part in a protest for the cause of late Chinese dissident Li Wangyang in Hong Kong on June 10, 2012. Li, 62, who spent 22 years in jail for his role in the Tiananmen …
PHILIPPE LOPEZ/AFP/GettyImages

The latest survey of online threats from cybersecurity firm FireEye includes a warning that Chinese hackers are ramping up attacks against American corporations, with an emphasis on stealing financial information that could give Chinese companies a competitive advantage.

The FireEye report judges that the September 2015 meeting between U.S. President Barack Obama and Chinese President Xi Jinping produced a “significant decrease in Chinese government-controlled cyber operations specifically stealing intellectual property.”

Some analysts believe this was less a matter of China behaving itself after Xi had a heart-to-heart talk with Obama, and more because China decided to shift its cyber warfare away from general intellectual property theft and toward supporting Chinese aggression in the South China Sea.

Chinese hackers remained quite active in other areas, even during the post-2015 slowdown, and have lately been stepping up their activity against U.S. corporate interests. FireEye reports the information stolen by these hackers includes “bid prices, contracts, and information related to mergers and acquisitions,” along with sustained attacks on business services such as “cloud providers, telecommunications companies, and law firms.”

“Attacking service providers could allow Beijing to collect intelligence on a broad group of targets in a manner that is less likely to be detected,” the report notes.

FireEye also detected hacker campaigns taking shape against the most “revolutionary technologies,” including artificial intelligence research and advanced power storage technology.

“China may be willing to risk upsetting the status quo to obtain the economic and military advances these technologies could provide,” the security company warns, sensing a growing Chinese appetite for violating the security agreement between Obama and Xi in cases where Beijing believes the “diplomatic consequences can be minimized.”

Intellectual property theft has of course been a major concern of the current U.S. president, with annual damages against American businesses ranging as high as $600 billion. Much of China’s intellectual property theft is not accomplished through hacking, however; the Chinese government simply extorts what it wants from foreign companies eager to access the lucrative but tightly-controlled Chinese market. Another often-cited problem is loose Chinese intellectual property law, which gives domestic operations too much leeway to copy what foreign companies bring into China. The Chinese government is supposedly addressing this problem by strengthening the laws.

The new wave of activity described by FireEye seems more like espionage or sabotage than data theft. FireEye’s chief Asia Pacific technology officer Bryce Boland suggested it could be all of the above: “Rather than stealing intellectual property and potentially devaluing it, buying the company at a good price may be another way to get access to the intellectual property and maintain the economic value.”

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