Chinazism

China Sharpens Hacking to Hound Its Minorities, Far and Wide
By Nicole Perlroth, Kate Conger and Paul Mozur

Uighur teenagers on their phones in Kashgar in China’s East Turkestan colony. Chinese hackers have secretly monitored the cellphones of Uighurs and Tibetans around the globe.

SAN FRANCISCO — China’s state-sponsored hackers have drastically changed how they operate over the last three years, substituting selectivity for what had been a scattershot approach to their targets and showing a new determination by Beijing to push its surveillance state beyond its borders.
The government has poured considerable resources into the change, which is part of a reorganization of the national People’s Liberation Army that Xi Jinping initiated in 2016, security researchers and intelligence officials said.
China’s hackers have since built up a new arsenal of techniques, such as elaborate hacks of iPhone and Android software, pushing them beyond email attacks and the other, more basic tactics that they had previously employed.
The primary targets for these more sophisticated attacks: China’s ethnic minorities and their diaspora in other countries, the researchers said. 

In several instances, hackers targeted the cellphones of a minority known as Uighurs, whose home region, East Turkestan, has been the site of a vast build-out of surveillance tech in recent years.
“The Chinese use their best tools against their own people first because that is who they’re most afraid of,” said James A. Lewis, a former United States government official who writes on cybersecurity and espionage for the Center for Strategic Studies in Washington. 

“Then they turn those tools on foreign targets.”
China’s willingness to extend the reach of its surveillance and censorship was on display after an executive for the National Basketball Association’s Houston Rockets tweeted support for protesters in Hong Kong this month. 

The response from China was swift, threatening a range of business relationships the N.B.A. had forged in the country.
In August, Facebook and Twitter said they had taken down a large network of Chinese bots that was spreading disinformation around the protests. 

And in recent weeks, a security firm traced a monthslong attack on Hong Kong media companies to Chinese hackers. 

Security experts say Chinese hackers are very likely targeting protesters’ phones, but they have yet to publish any evidence.

A security checkpoint with facial recognition technology in Hotan in East Turkestan.

Security researchers said the improved abilities of the Chinese hackers had put them on a par with elite Russian cyberunits. 

And the attacks on cellphones of Uighurs offered a rare glimpse of how some of China’s most advanced hacking tools are now being used to silence or punish critics.
Google researchers who tracked the attacks against iPhones said details about the software flaws that the hackers had preyed on would have been worth tens of millions of dollars on black market sites where information about software vulnerabilities is sold.
On the streets in East Turkestan, huge numbers of high-end surveillance cameras run facial recognition software to identify and track people. 

Specially designed apps have been used to screen Uighurs’ phones, monitor their communications and register their whereabouts.
Gaining access to the phones of Uighurs who have fled China — a diaspora that has grown as many have been locked away at home — would be a logical extension of those total surveillance efforts. Such communities in other countries have long been a concern to Beijing, and many in East Turkestan have been sent to camps because relatives traveled or live abroad.
The Chinese police have also made less sophisticated efforts to control Uighurs who have fled, using the chat app WeChat to entice them to return home or to threaten their families.
China’s Ministry of Foreign Affairs did not respond to a request for comment. 

Security researchers recently discovered that the Chinese used National Security Agency hacking tools after apparently discovering an N.S.A. cyberattack on their own systems. 

And several weeks ago, a Chinese security firm, Qianxin, published an analysis tying the Central Intelligence Agency to a hack of China’s aviation industry.

Xi Jinping visiting President Barack Obama in 2015. Their agreement to halt certain cyberoperations gave China time to hone its abilities.

Breaking into iPhones has long been considered the Holy Grail of cyberespionage. 

“If you can get inside an iPhone, you have yourself a spy phone,” said John Hultquist, director of intelligence analysis at FireEye, a cybersecurity firm.
The F.B.I. couldn’t do it without help during a showdown with Apple in 2016. 

The bureau paid more than $1 million to an anonymous third party to hack an iPhone used by a gunman involved in the killing of 14 people in San Bernardino, Calif.
Google researchers said they had discovered that iPhone vulnerabilities were being exploited to infect visitors to a set of websites. 

Although Google did not release the names of the targets, Apple said they had been found on about a dozen websites focused on Uighurs.
“You can hit a high school student from Japan who is visiting the site to write a research report, but you are also going to hit Uighurs who have family members back in China and are supporting the cause,” said Steven Adair, the president and founder of the security firm Volexity in Virginia.
The technology news site TechCrunch first reported the Uighur connection. 

A software update from Apple fixed the flaw.
In recent weeks, security researchers at Volexity uncovered Chinese hacking campaigns that exploited vulnerabilities in Google’s Android software as well. 

Volexity found that several websites that focused on Uighur issues had been infected with Android malware. 

It traced the attacks to two Chinese hacking groups.
Because the hacks targeted Android and iPhone users — even though Uighurs in East Turkestan don’t commonly use iPhones — Mr. Adair said he believed that they had been aimed in part at Uighurs living abroad.

An analyst at FireEye. “If you can get inside an iPhone, you have yourself a spy phone,” said John Hultquist, the company’s director of intelligence analysis.

“China is expanding their digital surveillance outside their borders,” he said. 

“It seems like it really is going after the diaspora.”
Another group of researchers, at the Citizen Lab at the Munk School of Global Affairs at the University of Toronto, recently uncovered an overlapping effort, using some of the same code discovered by Google and Volexity. 

It attacked the iPhones and Android phones of Tibetans until as recently as May.
Using WhatsApp messages, Chinese hackers posing as New York Times reporters and representatives of Amnesty International and other organizations targeted the private office of the Dalai Lama, members of the Tibetan Parliament and Tibetan nongovernmental organizations, among others.
Lobsang Gyatso, the secretary of TibCERT, an organization that works with Tibetan organizations on cybersecurity threats, said in an interview that the recent attacks were a notable escalation from previous Chinese surveillance attempts.
For a decade, Chinese hackers blasted Tibetans with emails containing malicious attachments, Mr. Lobsang said. 

If they hacked one person’s computer, they hit everyone in the victim’s address books, casting as wide a net as possible. 

But in the last three years, Mr. Lobsang said, there has been a big shift.
“The recent targeting was something we haven’t seen in the community before,” he said. 

“It was a huge shift in resources. They were targeting mobile phones, and there was a lot more reconnaissance involved. They had private phone numbers of individuals, even those that were not online. They knew who they were, where their offices were located, what they did.”
Adam Meyers, the vice president of intelligence at CrowdStrike, said these operations were notably more sophisticated than five years ago, when security firms discovered that Chinese hackers were targeting the phones of Hong Kong protesters in the so-called Umbrella Revolution.

The attacks on iPhones, which Uighurs in East Turkestan don’t typically use, suggested that Uighurs abroad were among the targets, said Steven Adair, president of Volexity.

At the time, Chinese hackers could break only into phones that had been “jailbroken,” or altered in some way to allow the installation of apps not vetted by Apple’s official store. 

The recent attacks against the Uighurs broke into up-to-date iPhones without tipping off the owner.
“In terms of how the Chinese rank threats, the highest threats are domestic,” Mr. Lewis said. 

“The No. 1 threat, as the Chinese see it, is the loss of information control on their own population. But the United States is firmly No. 2.”
Chinese hackers have also used their improved skills to attack the computer networks of foreign governments and companies. 

They have targeted internet and telecommunications companies and have broken into the computer networks of foreign tech, chemical, manufacturing and mining companies. 

Airbus recently said China had hacked it through a supplier.
In 2016, Xi Jinping consolidated several army hacking divisions under a new Strategic Support Force, similar to the United States’ Cyber Command, and moved much of the country’s foreign hacking operation from the army to the more advanced Ministry of State Security, China’s main spy agency.
The restructuring coincided with a lull in Chinese cyberattacks after a 2015 agreement between Xi and President Barack Obama to cease cyberespionage operations for commercial gain.
“The deal gave the Chinese the time and space to focus on professionalizing their cyberespionage capabilities,” Mr. Lewis said. 

“We didn’t expect that.”
Chinese officials also cracked down on moonlighting in moneymaking schemes by its state-sponsored hackers — a “corruption” issue that Xi concluded had sometimes compromised the hackers’ identities and tools, according to security researchers.
While China was revamping its operations, security experts said, it was also clamping down on security research in order to keep advanced hacking methods in house. 

The Chinese police recently said they planned to enforce national laws against unauthorized vulnerability disclosure, and Chinese researchers were recently banned from competing in Western hacking conferences.
“They are circling the wagons,” Mr. Hultquist of FireEye said. 

“They’ve recognized that they could use these resources to aid their offensive and defensive cyberoperations.”

China hacked iPhones and Android devices to target Uyghur Muslims

By Kevin Collier

Some of the sites had the capability to infect both Android phones and iPhones, a source familiar with multiple companies' research on the sites, some of which is not public, confirmed to CNN. 

It wasn't clear, however, that the sites were capable of hacking both types of phones at the same time.
The findings highlight just how powerful cyberespionage campaigns can be when governments with sufficient resources decide to spy on particular groups by compromising entire categories of websites and indiscriminately hacking the mobile users who access them.
The broad approach of the attacks could easily be repurposed for other groups, like Hong Kong protesters, said Adam Segal, the director of the Digital and Cyberspace Policy program at the Council on Foreign Relations.

"These are all outwardly facing websites, so you would expect that the capacity would be able to do the same to Taiwanese parties or Hong Kong student websites, or any other websites," Segal told CNN.
China has been resoundingly condemned by the international community recently for its treatment of Uyghurs, including putting them under intense, multifaceted surveillance.
Researchers at the cybersecurity company Volexity, whose specialties include tracking how the Chinese government spies on Uyghurs, released a report Monday showing how certain websites tailored for a Uyghur audience would automatically hack the Android phones of some people who visit them. 

Called a "watering hole" attack, the tactic allows a hacker to compromise sites their targets are likely to go to rather than seek them out directly.
As many as a million Uyghur Muslims have been detained in concentration camps by the Chinese government in East Turkestan colony and they are among the most surveilled groups of people on the planet. 

Areas with heavy Uyghur populations are rife with security cameras and facial recognition systems, and residents are relentlessly tracked.
Compromised websites include relatively popular Uyghur news sites and learning resources like the online Uyghur Academy.
"If you literally go searching for Uyghur websites, Uyghur news, these are the search results. They picked a pretty good set of targets to go after the Uyghur population," Volexity CEO Steven Adair told CNN.

iPhones also targeted
Volexity's research helps shed light on recent groundbreaking but mysterious research.
Last week Google's Project Zero, a research team that studies undiscovered, critical software vulnerabilities that leave developers scrambling to write updates to patch them, revealed an unprecedented finding from earlier this year.
The team also described watering hole attacks. 

But unlike the attacks Volexity documented on Android phones, which exploited known vulnerabilities and wouldn't affect users who had updated their phones to the latest version of Android, the iPhone findings were shocking.
The team found that anyone who visited one of a handful of particular websites on an iPhone, generally regarded as one of the safest common devices on the planet, would be at risk of a monitoring implant being installed on their phone. 

Apple has since patched the vulnerability on all phones with the latest version of the iOS operating system.

Google declined to share who was affected, prompting a minor controversy in the security community. 

But a source familiar with Google's research confirmed that at least some of the URLs Volexity found targeting Uyghur Android users also went after iPhones.
The news that websites referred to in Project Zero's research were aimed at Uyghurs was first reported by TechCrunch.
On Wednesday, a source familiar with Project Zero's research confirmed that some of the URLs it saw overlapped with those in Volexity's report.
Google declined to comment on the record about the issue. 

Its refusal has led some in the information security community to question why Google would announce a campaign that targeted its competitors' phones but not mention a similar campaign against its own smartphone operating system. 

But Project Zero manager Tim Willis defended the company's decisions on Twitter, saying specifically that Google had found iOS exploits in January. 

Volexity's research found Android exploits later in the year.
Nury Turkel, chairman of the Uyghur Human Rights Project, told CNN that while he had been unaware of the watering hole attacks, they were in line with what he has come to expect from China.
"This is the first time I'm seeing this particular report," Turkel told CNN. 

"But I can tell you that I am not surprised at this."
"When I was the head of the Uyghur American Association and the Uyghur Human Rights Project, we were constantly attacked. Our websites were shut down at times, and I was personally the target of email-based hacking attempts," Turkel said.
China has a long history of aggressively surveilling the digital lives of not only Uyghurs, but also other minorities who either live in China or have fled the country. 

In 2014, for example, Tibetan Buddhists, a regular target of spearphishing attacks, began a campaign to avoid using email attachments.
Google and Apple declined to comment on the record for this story.

Nation of Thieves

The lie behind the ‘Made in China’ claim
By Dinny McMahon

CHINA makes 80 per cent of the world’s pens, producing about 38 billion a year, yet, according to Premier Li Keqiang, none of them are up to snuff.
While attending the 2015 World Economic Forum in Davos, Switzerland, Li purportedly enjoyed using Swiss ballpoint pens so much that, when he returned to China, he went looking for an explanation as to “why China can’t produce a pen that writes as smoothly and easily”.
The key to producing a quality ballpoint pen is the tiny ball bearing fitted into the pen’s nib. 

It spins as it rolls across the paper, picking up ink that’s distributed from the cartridge via tiny grooves carved into the nib.
Interviewed on state television in a soul-searching program into China’s pen-quality deficit, Qiu Zhiming, the chief executive of Beifa Group, China’s biggest pen maker, explained that not only do the balls require high-quality steel but also producing them requires state-of-the-art machinery and computerised measuring equipment that leaves no space for error.
If the ball is too big, it won’t spin in the nib. 

One that’s too small will allow the ink to leak. 

One that’s not perfectly round won’t write smoothly. 

One that’s too smooth won’t turn as it runs along the paper. 

And the bottom line was that China was incapable of producing the balls.
“Even though we’re suffering from overcapacity in the steel industry ... we still don’t possess the ability to produce the type of steel used in the ball bearings that go into ball-point pens. We still need to import them,” an exasperated Premier Li said early in 2016.
China’s 3000 pen manufacturers import almost all of the ball bearings they need from Germany and Japan. 

Moreover, much of the ink used in pens is imported as well.
In fact, China doesn’t make pens so much as merely assemble them. 

That was once done by hand, but with the cost of labour rising, it’s now done by machines that are typically made in Switzerland.
In fact, much of what we think of as being “Made in China” is only assembled there.
While hundreds of thousands of people are employed to “make” iPhones in China, they contribute only a sliver to the overall value of the end product.
According to a 2010 paper from the Asian Development Bank Institute, 34 per cent of the value of an iPhone came from Japan, which supplied the screen and flash memory; 17 per cent from Germany, which made the camera and power-management integrated circuitry; and 13 per cent from South Korea, which made the SDRAM.
China contributed only 3.6 per cent — primarily the labour. 

The ratio has gone up since then, but it’s still less than 10 per cent.
Enter supply-side structural reform. 

At its heart, it is an import-substitution scheme. 

The aim is for China to make a significantly larger share of the components that go into products like iPhones, which are assembled in China.
By 2025, Beijing wants Chinese companies to produce 70 per cent of basic core components and basic materials used in goods manufactured locally. 

(By way of comparison, in 2015, China was still importing about 80 per cent of the chips that were used in locally assembled mobile phones.)
If China is to reach its targets, then its success must come at the expense of those countries which currently produce the guts of an iPhone or the more technologically advanced parts of a pen.

While your iPhone was probably assembled in China, most of the parts weren’t made there. 

However, there’s a major reason why China doesn’t already make those components.
Like China, Switzerland also has a thriving disposable-pen industry, but while China’s pens are typically produced in packs to be sold in stationery stores, the biggest Swiss companies focus on making promotional pens — the sort that the World Economic Forum can put its logo on. 

Moreover, Swiss pens are typically made entirely in Switzerland — “from cap to nib,” in the words of one company — using the companies’ own proprietary technology, which the Chinese can’t buy.

****

So, rather than rely solely on the creativity of its indigenous innovators, Beijing is taking a few shortcuts.
“There are two kinds of big companies in the United States. There are those who’ve been hacked by the Chinese and those who don’t know they’ve been hacked by the Chinese,” said James Comey, then-director of the FBI, in a 2014 interview on 60 Minutes. 

They’re looking for “information that’s useful to them so [Chinese firms] don’t have to invent” it.
China engages in industrial espionage on a vast scale. 

But stealing cutting-edge research from foreign firms before they’ve had a chance to commercialise it is just a small part of a broader campaign to acquire intellectual property developed overseas.
China has long required that foreign companies wanting to sell their products in China must share their proprietary technology with local firms by setting up joint ventures. 

Cars sold in China under GM’s brand, for example, are produced by a company owned half by GM and half by a Shanghai-based state-owned firm.
Such has been the price of admission to the world’s most populous market. 

Foreign companies have tried to hand over only old technology, but Beijing has been raising the price of admission.
“It is now an increasing requirement for more advanced technologies to be shared,” the European Union Chamber of Commerce in China (EUCCC) said in a 2017 paper on China’s industrial policy.
“In the past, some foreign companies managed to at least partially limit transfers ... and therefore did not compromise their long-term competitiveness. But this has become increasingly difficult.”
Chinese firms have also been going out and acquiring foreign companies that have the technology they want.
According to the EUCCC paper, Chinese companies invested €35 billion ($AU56 billion) in Europe in 2016, up 77 per cent from the year before, and more than four times the amount of European investment going into China.
Much of that money has gone into areas like high-end robotics, which the Chinese government had ruled off-limits to foreign companies looking to buy Chinese firms.
Making such acquisitions possible is a massive war chest of state-sponsored funding.
“China’s strategy relies in particular on large-scale spending, including $US150 billion in public and state influenced private funds over a 10-year period, aimed at subsidising investment and acquisitions as well as purchasing technology,” the Obama White house said in a 2017 report on China’s strategy to become a world leader in semiconductors.
“China also places conditions on access to its market to drive localisation and technology transfer.”
Of course, once you have the technology, you then need to build a competitive business around it. 

On the face of it, it would seem that China has no natural advantage over the Japanese, or Koreans, or Germans, or even Americans when it comes to building a world-class robotics or semiconductor industry.
What is making foreign companies and governments so nervous is that China has a disconcerting track record of becoming globally dominant in industries in which it has no natural advantage.

China's Great Wall of Debt is out now

China Threat

China threatens to cut sales of iPhones and US cars if 'naive' Trump pursues trade war
By Tom Phillips in Beijing

China: Donald Trump ‘will be condemned for his recklessness, ignorance and incompetence’ if he wrecks China trade ties

US president-elect Donald Trump would be a “naive” fool to launch an all-out trade war against China, a Communist party-controlled newspaper has claimed.
During the acrimonious race for the White House Trump repeatedly lashed out at China, vowing to punish Beijing with “defensive” 45% tariffs on Chinese imports and to officially declare it a currency manipulator.
“When they see that they will stop the cheating,” the billionaire Republican, who has accused Beijing of “the greatest theft in the history of the world”, told a rally in August.
On Monday the state-run Global Times warned that such measures would be a grave mistake.
“If Trump wrecks Sino-US trade, a number of US industries will be impaired. Finally the new president will be condemned for his recklessness, ignorance and incompetence,” the newspaper said in an editorial.
The Global Times claimed any new tariffs would trigger immediate “countermeasures” and “tit-for-tat approach” from Beijing.
“A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
“Making things difficult for China politically will do him no good,” the newspaper warned.
China’s foreign ministry has used more diplomatic language to caution Trump not to square up to Beijing.
Foreign ministry spokesperson Lu Kang told reporters last week: “I believe that any US politician, if he takes the interests of his own people first, will adopt a policy that is conducive to the economic and trade cooperation between China and the US.”
The excoriating editorial was printed hours after Trump spoke to Xi Jinping. 

The president-elect’s staff said Trump thanked Xi for his well wishes and congratulations on his election victory.
The statement read: “During the call, the leaders established a clear sense of mutual respect for one another, and President-elect Trump stated that he believes the two leaders will have one of the strongest relationships for both countries moving forward.”
However, experts say officials in Beijing are still battling to untangle what a Trump presidency means for relations between the world’s two largest economies but wager he is unlikely to follow through on his most radical campaign pledges such as imposing 45% tariffs on “cheating China”.
Paul Haenle, a veteran US diplomat who is director of the Carnegie-Tsinghua centre at Beijing’s Tsinghua University, said: “The biggest lesson that they draw from watching our presidential campaigns over the years is that he will become more realistic and more pragmatic once he is in the position where he has to govern. That is what they are hoping for when it comes to Trump.”