US report warns of Russia, China cyber spying

The U.S. can expect more aggressive efforts from countries such as Russia and China to collect information through cyberespionage in areas such as pharmaceuticals, defense and manufacturing, according to a new government report released Thursday.

The two countries were singled out in the report from the Office of the National Counterintelligence Executive, which also issued recommendations for how organizations can strengthen their defenses.

"Chinese actors are the world's most active and persistent perpetrators of economic espionage," the report said. "Russia's intelligence services are conducting a range of activities to collect economic information and technology from U.S. targets."

The growing complexity of IT systems will work to the advantage of cyberspies, as more sensitive information is held on devices such as smartphones and laptops.

Cyberspying is efficient since it can be conducted with relatively limited resources from far away. Once an intrusion is detected, it can be difficult to trace the origin since attacks can be routed through computers worldwide.

The information haul can be devastating. The reported cited the case of Dongfan Chung, who was an engineer with Rockwell and Boeing and was sentenced in 2010. He worked on the B-1 bomber program and was found to have 250,000 pages of documents in his house, which would have filled four, four-drawer filing cabinets.

If converted to digits, the information would fit onto one CD. "Cyberspace makes possible the near instantaneous transfer of enormous quantities of economic and other information," the report said.

China's intelligence agencies often leverage people who have insider access to corporate networks to gain trade secrets and copy them to removable media. Russia's desire to diversify its economy will drive the country to use its highly capable intelligence services, including cybertechniques, to try to gain an economic advantage.

"We judge that the governments of China and Russia will remain aggressive and capable collectors of sensitive U.S. economic information and technologies, particularly in cyberspace," the report said.

It recommended that organizations encrypt information, use multifactor authentication and conduct real-time monitoring of networks, among others.

The report covers 2009 through this year and is part of a law that requires the U.S. president to send Congress a biennial report on the threat to U.S. industry from industrial espionage.

Send news tips and comments to jeremy_kirk@idg.com

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