It’s starting to look like the biggest obstacle to China’s rise as a global technology superpower may well be its own government. As long as countries around the world mistrust China’s Communist regime, they will worry about Beijing using mainland companies to gather data on users, shape media content and interfere with critical infrastructure. If those companies in turn aren’t allowed to expand globally, China could find itself stuck in an increasingly uncompetitive bubble.
That’s what’s so dangerous about the travails of Chinese apps TikTok and WeChat, as well as companies such as telecom giant Huawei Technologies Co. On Thursday, President Donald Trump issued executive orders giving anyone subject to U.S. jurisdiction 45 days to stop dealing with TikTok’s Beijing-based parent, ByteDance Ltd, as well as internet giant Tencent Holdings Ltd. in transactions related to its WeChat app. (Microsoft is aiming to buy TikTok’s U.S. operations before the deadline.) This follows an outright ban on TikTok and WeChat in India.
Meanwhile, last month the U.K. became the latest country to bar Huawei from its 5G telecommunications networks. And the Trump administration seems intent on going further yet. Last week, U.S. Secretary of State Mike Pompeo announced an initiative that suggests the administration’s end goal is to scrub Chinese tech from U.S. communications networks entirely.
Beijing wants to enjoy the advantages of the global order but without playing by the rules that make orderliness possible.
CHINA IS ASSHOLE: Chinese hackers have pillaged Taiwan’s semiconductor industry. “Operation Skeleton Key has stolen source code, SDKs, chip designs, and more.”
At the Black Hat security conference today, researchers from the Taiwanese cybersecurity firm CyCraft plan to present new details of a hacking campaign that compromised at least seven Taiwanese chip firms over the past two years. The series of deep intrusions—called Operation Skeleton Key due to the attackers’ use of a “skeleton key injector” technique—appeared aimed at stealing as much intellectual property as possible, including source code, software development kits, and chip designs. And while CyCraft has previously given this group of hackers the name Chimera, the company’s new findings include evidence that ties them to mainland China and loosely links them to the notorious Chinese state-sponsored hacker group Winnti, also sometimes known as Barium, or Axiom.
“This is very much a state-based attack trying to manipulate Taiwan’s standing and power,” says Chad Duffy, one of the CyCraft researchers who worked on the company’s long-running investigation. The sort of wholesale theft of intellectual property CyCraft observed “fundamentally damages a corporation’s entire ability to do business,” adds Chung-Kuan Chen, another CyCraft researcher who will present the company’s research at Black Hat today. “It’s a strategic attack on the entire industry.”
What Communist China can’t innovate, they steal — and they steal a lot.