December 1, 2007

Another Reason Not To Do Business With China

The Chinese Army has targeted British companies that do business in China for Internet espionage. MI-5 has sent warning letters to over 300 firms, advising them that they run the risk of losing vital proprietary secrets through Chinese hacking. The warning casts a pall over Sino-British trade -- and perhaps trade with other nations as well:

The Government has accused China of carrying out an internet spying campaign against vital parts of the economy, it has been reported.

The head of the MI5 sent a letter to more than 300 senior executives at banks, accountants and legal firms earlier this week warning them of a web-based attack from Chinese state organisations.

The letter warns that British firms doing business in China are being targeted by the Chinese army, which is using the internet to steal confidential information to benefit Chinese companies.

It is believed to be the first time the Government has directly accused China of involvement in such tactics and could cast a shadow on Gordon Brown's visit to the country in the new year.

The British believe that the Chinese Army has created software specifically designed to breach security protocols and to retrieve sensitive information. They apparently focus on those firms doing business in or with China as they have to network with their home offices, giving the Chinese the opening they can exploit. They have spent considerable time and effort on this espionage, and MI-5 warns that it can defeat even the best practices of corporate network security.

Does anyone want to assume that the Chinese only have interest in the proprietary information of British firms? Somehow, that seems very unlikely. If MI-5 has taken the extraordinary step of sending hundreds of warning letters to British firms, their suspicions are probably well-founded -- and the Chinese would not hesitate to employ the same tactics against other Western trading partners, including the US.

This year has given Americans plenty of reasons not to buy Chinese products. The Chinese Army now has given Western businesses a good reason to avoid trade with China altogether. If the Chinese government wants to maintain its export business, it needs to shut down its spy ring.


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