2024 Global Cyber Confidence Index

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China's Rise as an Agent of Continuous Compromise

Patrick Dennis

July 12, 2023

I’ve recently written about ways that specific technologies such as quantum computing and large language model AIs are contributing to keep us living in a state of continuous compromise. These technologies offer significant benefits to society, but foreign and domestic actors may also use them to compromise security, spread disinformation, or undermine trust in organizations and institutions.

When it comes to foreign actors, the Chinese government tops my list of concerns. Several other countries present serious cyber- and national security challenges to Western nations, but none have the rapidly growing influence, the massive resources, and the political or economic stability that China has.

In the last decade, China’s influence in world affairs has grown dramatically, with the country’s leaders pushing an agenda that significantly conflicts with the goals and values of most Western nations. For example, the government in China has promoted policies discouraging foreign investment and restricting the size of some M&A deals. The government has also recently enacted a counterespionage law that may be used to access and control data held by U.S. companies operating in China. Even as it maneuvers for more global influence, the Chinese government seems to be tightening its control of business operations within the country.

The government is also aggressively researching areas such as quantum computing and AI. China is well funded and continues to make big advances in these technologies, which the government is able to deploy strategically as it brings together economic coercion, political influence, information operations, cyber operations, and other tools of national power to compete with Western interests.

Meanwhile, as Chinese global influence grows, hackers there, some affiliated with or sponsored by the government, have stepped up their long-running attacks on Western organizations. Several U.S. officials have warned about the growing sophistication of China-based hacking campaigns, with U.S. Cyber Command Director General Paul Nakasone saying in March that China has become “a very formidable foe” in the cyber realm.

This June, U.S. Cybersecurity and Infrastructure Security Agency Director Jen Easterly warned that the Chinese government is making major investments in its capability to sabotage U.S. infrastructure.

It’s clear that Chinese hackers will keep targeting Western organizations to steal trade secrets and other intellectual property, as a way of becoming a more powerful economic competitor. U.S. officials and other observers now believe that Chinese hackers aren’t only trying to give companies in their country a competitive advantage, but in some cases, they want to eliminate U.S. competition, according to a recent documentary, “China’s Corporate Spy War,” from CNBC.

“Their definition of competing, I think, involves embracing the idea of eliminating,” FBI Director Christopher Wray told CNBC. The documentary follows an FBI sting of an alleged Chinese spy who targeted companies in the U.S. aerospace industry, including GE, Boeing, and Honeywell.

These activities raise a major question about China in my mind: How should organizations in the U.S. and other Western nations deal with the country, given the cyber and geopolitical threats its government poses?

Western organizations will need to weigh the risk of engaging with China as part of their long-term market strategies. We should understand that state actors like China are moving down market and bringing their most sophisticated attacks to corporate targets.

In some cases, as China promotes a global agenda, Western organizations will pull back from their engagements with the country. The Chinese government’s push for influence may result in a backlash, with some companies deciding to take their business or their manufacturing elsewhere. This may create economic opportunities for other nations, including the U.S.

ExtraHop’s position is that tension with China will continue to grow over time, and we’re choosing not to do business there. We take these concerns about China and the defense of our country seriously. I expect that many other businesses will take the same view.

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