Web Warfare, Instead of Web Wampum

As each week passes, more swirling cyber intrigue surrounds China’s breeching international law. Accusations are made and the net grows wider around those who are vulnerable. No one is without a theory on what has happened. Google insiders have even been implicated; or perhaps Google employees were held and vigorously interrogated. Stories abound.

Perhaps the least convincing evidence tying China to the cyber attacks is from a "UK leaked MI5 document says that undercover intelligence officers from the People’s Liberation Army and the Ministry of Public Security have also approached UK businessmen at trade fairs and exhibitions with the offer of “gifts” and “lavish hospitality”." Of course, getting a politician tanked up with a babe isn’t terribly difficult to do anywhere, and this really could have been going on for centuries.

The stakes, however, continue to morph in different ways in spite of the two great opposing realities that seem to hold the situation in a state of harmony. In spite of the arguments over the yuan currency’s exchange rate, which U.S. critics say is unfairly low, trade protectionism and U.S. arms sales to Taiwan, the two main forces of equilibrium holding together the relationship with China and the U.S. today are the unstoppable U.S. consumer appetite for cheap goods manufactured in China, which fuels their labor and manufacturing markets and our exploding debt paid for by China by floating our bonds. If the U.S. quits buying Big Box consumer goods from China, their labor will suffer, their growth will slow and they will not be buying any more of our debt.

That may in fact be what has been happening. Markets anticipate the slowdown due to banking fraud, then the loss of jobs, then real estate unravels, and then we see increased volatility. On top of all of this tension, we layer the disruptive potential of espionage run amok.

Cybercrime may be the single biggest threat to global financial markets. This is a very tentative market and has been for some time. You ever get the feeling that if someone yanked the wrong string, the whole ball would unravel?

The public airing of these recent security breeches began filtering through early in January when "Google claimed their intellectual property was stolen and that China’s goal was to get information on Chinese dissidents using Gmail." We outlined here speculation on the provenance of the attack, an intelligence report on China’s master plan for "Informationization" though we have yet to see clear proof that China is doing something different than all other countries that are in the game. Planting bugs in trade show handouts though, that sure sounds pretty desperate.

Something scared Google enough to team up with the NSA, purportedly because they want to avoid regulation, "Google is clearly seeking to avoid having its search engine, e-mail and other Web services regulated as part of the nation’s "critical infrastructure."

This agreement with the NSA first reported on Wednesday evening by The Washington Post, claims: "Google and N.S.A. are entering into a secret agreement that could impact the privacy of millions of users of Google’s products and services around the world," said Marc Rotenberg, executive director of the Electronic Privacy Information Center." All this going on while President Obama is assuring everyone that Net Neutrality was still the plan.

On Tuesday, Dennis Blair, director of national intelligence, began his "annual threat testimony" before Congress by saying, “Malicious cyberactivity is occurring on an unprecedented scale with extraordinary sophistication."

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Piling on last week from the U.K.’s David Leppard

"THE security service MI5 has accused China of bugging and burgling UK business executives and setting up “honeytraps” in a bid to blackmail them into betraying sensitive commercial secrets.

"The gifts — cameras and memory sticks — have been found to contain electronic Trojan bugs which provide the Chinese with remote access to users’ computers.


"MI5 says the Chinese government "represents one of the most significant espionage threats to the UK" because of its use of these methods, as well as widespread electronic hacking."

Intelligence gathering on the Internet is a fact of life. It’s quite amazing we’ve come this far without any serious scars, but what’s ahead is even more challenging. Until the big dogs sit down and decide on some realistic ground rules, people will get into trouble and governments will cling to the hope they can defend themselves against electronic terrorists.

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