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Edition: U.S. Article Comments (1) Technology Google Q1 report to kick off era under new CEO Best Buy to open more online, mobile stores Special report: China seen having cyberspy edge Apple suppliers begin making white iPhones: sources Video game developers group slams Amazon pricing Amazon, labels to meet for locker talks: sources U.S. shuts down massive cyber theft ring Video: Wall Street reading Google CEO Page Follow Reuters Facebook Twitter RSS YouTube Read UPDATE 1-Geithner says Congress will pass debt limit increase 13 Apr 2011 Senate panel slams Goldman in scathing crisis report 13 Apr 2011 Senate panel slams Goldman in scathing crisis report 9:15am EDT Q+A-Risks at each reactor of Japan's stricken plant 6:48am EDT Air strikes hit Tripoli, TV reports casualties | 11:38am EDT Discussed 161 China tells U.S. to quit as human rights judge 141 Reid says Republicans want shutdown to close clinics 117 Obama, Congress struggle to find budget deal Watched South Korean "super gun" packs hi-tech killing power Mon, Feb 14 2011 Chinese porn: coming to you in 3D Wed, Apr 13 2011 X-47B - the future of autonomous aerial warfare Fri, Feb 11 2011 SMALL BUSINESS Do fries go with that app? Worried about how many calories you are going to consume in a serving of fries? A new iPhone application may help. After taking a picture of the meal with the phone, the app gives a calorie read-out almost instantly Full Article Caribbean rum maker looks to tap U.S. market Startup targets online vacation rentals Special report: In cyberspy vs. cyberspy, China has the edge Tweet Share this By Brian Grow and Mark Hosenball ATLANTA (Reuters) - As America and China grow more economically and financially intertwined, the two nations have also stepped up spying on each other. Today, most of that is done electronically, with computers... Email Print Related News SPECIAL REPORT-In cyberspy vs. cyberspy, China has the edge 7:04am EDT U.S. shuts down massive cyber theft ring Wed, Apr 13 2011 Special Report: Inside the Egyptian revolution Wed, Apr 13 2011 Special Report: The U.S. and China start an M&A Cold War Tue, Apr 12 2011 Trade data shows growth headwinds Tue, Apr 12 2011 Analysis & Opinion FTC asks Congress for identity theft protections The big chill in U.S.-China M+A Related Topics Technology » Media » China » Aerospace & Defense » U.S. Department of Homeland Security analysts work at the National Cybersecurity & Communications Integration Center (NCCIC) located just outside Washington in Arlington, Virginia, September 24, 2010. Credit: Reuters/Hyungwon Kang By Brian Grow and Mark Hosenball ATLANTA | Thu Apr 14, 2011 8:15am EDT ATLANTA (Reuters) - As America and China grow more economically and financially intertwined, the two nations have also stepped up spying on each other. Today, most of that is done electronically, with computers rather than listening devices in chandeliers or human moles in tuxedos. And at the moment, many experts believe China may have gained the upper hand. Though it is difficult to ascertain the true extent of America's own capabilities and activities in this arena, a series of secret diplomatic cables as well as interviews with experts suggest that when it comes to cyber-espionage, China has leaped ahead of the United States. According to U.S. investigators, China has stolen terabytes of sensitive data -- from usernames and passwords for State Department computers to designs for multi-billion dollar weapons systems. And Chinese hackers show no signs of letting up. "The attacks coming out of China are not only continuing, they are accelerating," says Alan Paller, director of research at information-security training group SANS Institute in Washington, DC. Secret U.S. State Department cables, obtained by WikiLeaks and made available to Reuters by a third party, trace systems breaches -- colorfully code-named "Byzantine Hades" by U.S. investigators -- to the Chinese military. An April 2009 cable even pinpoints the attacks to a specific unit of China's People's Liberation Army. Privately, U.S. officials have long suspected that the Chinese government and in particular the military was behind the cyber-attacks. What was never disclosed publicly, until now, was evidence. U.S. efforts to halt Byzantine Hades hacks are ongoing, according to four sources familiar with investigations. In the April 2009 cable, officials in the State Department's Cyber Threat Analysis Division noted that several Chinese-registered Web sites were "involved in Byzantine Hades intrusion activity in 2006." The sites were registered in the city of Chengdu, the capital of Sichuan Province in central China, according to the cable. A person named Chen Xingpeng set up the sites using the "precise" postal code in Chengdu used by the People's Liberation Army Chengdu Province First Technical Reconnaissance Bureau (TRB), an electronic espionage unit of the Chinese military. "Much of the intrusion activity traced to Chengdu is similar in tactics, techniques and procedures to (Byzantine Hades) activity attributed to other" electronic spying units of the People's Liberation Army, the cable says. Reconnaissance bureaus are part of the People's Liberation Army's Third Department, which oversees China's electronic eavesdropping, according to an October 2009 report by the U.S.-China Economic and Security Commission, a panel created by Congress to monitor potential national security issues related to U.S- China relations. Staffed with linguists and technicians, the Third Department monitors communications systems in China and abroad. At least six Technical Reconnaissance Bureaus, including the Chengdu unit, "are likely focused on defense or exploitation of foreign networks," the commission report states. The precise relationship with the Chinese Army of suspected hacker Chen Xingpeng could not be immediately determined by Reuters. A spokesman for the Chinese embassy in Washington did not respond to multiple requests for comment. The U.S. State Department declined to comment. But the leaked cables and other U.S. government reports underscore how Chinese and other state-sponsored and private hackers have overwhelmed U.S. government computer networks. In the last five years, cyber-intrusions reported to the U.S. Computer Emergency Response Team, a unit of the Department of Homeland Security, have increased more than 650 percent, from 5,503 incidents in fiscal 2006 to 41,776 four years later, according to a March 16 report by the Government Accountability Office. THE BUSINESS OF SPYING The official figures don't account for intrusions into commercial computer networks, which are part of an expanding cyber-espionage campaign attributed to China, according to current and former U.S. national security officials and computer-security experts. In the last two years, dozens of U.S. companies in the technology, oil and gas and financial sectors have disclosed that their computer systems have been infiltrated. In January 2010, Internet search giant Google announced it was the target of a sophisticated cyber-attack using malicious code dubbed "Aurora," which compromised the Gmail accounts of human rights activists and succeeded in accessing Google source code repositories. 1 2 3 4 Next Technology Media China Aerospace & Defense Tweet this Share this Link this Digg this Email Reprints We welcome comments that advance the story directly or with relevant tangential information. We try to block comments that use offensive language, all capital letters or appear to be spam, and we review comments frequently to ensure they meet our standards. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. Comments (1) colonelP wrote: Sure they’re ahead of us. We’re busy panicking at every hint of possible terrorism while combating it with full scale armies rather than the appropriate intelligence responses. We have no time to do anything else but be paranoid and respond inappropriately. Apr 14, 2011 11:45am EDT -- Report as abuse See All Comments » Add Your Comment Social Stream (What's this?) © Copyright 2011 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Reader Feedback Mobile Newsletters RSS Podcasts Widgets Your View Analyst Research Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts Venture Capital Journal International Financing Review Project Finance International PEhub.com PE Week FindLaw Super Lawyers Attorney Rating Service Reuters on Facebook Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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