Chinese Hackers Target U.S. Telecoms

Welcome to Foreign Policy’s China Brief.

The highlights this week: Chinese government-linked hackers target U.S. telecommunications firms, Taiwanese President Lai Ching-te prepares to deliver a National Day speech that will likely rile Beijing, and militants in Pakistan target Chinese nationals working on a Belt and Road Initiative project.

U.S. Officials Uncover Chinese Hacking

A hack of U.S. telecommunications firms by Chinese government-linked actors has raised serious national security concerns in Washington. The infiltration targeted AT&T, Lumen, and Verizon, among others; it likely sought to uncover how U.S. agencies make use of the service providers for counterintelligence measures, such as wiretapping, against Chinese spying in the United States.

China denied any involvement in the hacking, but Washington has repeatedly issued warnings to Beijing about the activities of the group blamed for the attack, Volt Typhoon. The group was first identified by Microsoft’s China team in May 2023. (Staff on large technology companies’ country-specific security teams tend to have previous experience in Western intelligence agencies.)

The U.S. warnings have done nothing to dissuade Chinese state-sponsored hackers—and it sometimes seems as if such cyber-contestation is asymmetric. There is regular news in the United States about serious hacks by China—including a notorious 2015 breach that exposed the data of millions of U.S. government employees.

In fact, the failure of China to stick to the 2015 cybersecurity agreement signed with the Obama administration—despite initial hopes—is an underrated factor in the sharp degeneration of U.S.-China relations in recent years. The U.S. Justice Department has indicted multiple members of Chinese hacking groups, while the FBI and tech security teams have unearthed major botnets.

Yet the United States has a powerful and sophisticated offensive cybercapability overseen by the military, the National Security Agency, and other groups. The gulf in media coverage when it comes to U.S.-China cyberconflict may not reflect reality: China has rarely publicly reported on U.S. hacking attempts in the past.

Reports on major U.S. government-linked operations that target China (such as Project Sauron or the Equation Group) often came from the Russian cybersecurity firm Kaspersky, itself allegedly linked to Moscow’s Federal Security Service.

However, that has changed somewhat since the COVID-19 pandemic, with China making more frequent accusations of U.S. cyberattacks through the National Computer Virus Emergency Response Center, along with private firms. Yet Beijing still only publicly discusses minor intrusions, in part because of a culture of opaqueness—especially when it comes to official failures.

China’s leadership wants to portray the country as a victim of U.S. aggression, but it is also reluctant to admit that the aggression may have been successful. Beijing’s reports on U.S. cyberactivity also tend toward the politically melodramatic, linking what they say are CIA-sponsored efforts to so-called color revolutions. They have also often focused on attacking U.S. claims.

All of this reflects a broader problem within Chinese intelligence: the absence of independent analysis. As Peter Mattis and Matthew Brazil note in their book on Chinese Communist Party espionage, “foreign targets are viewed in the worst possible light,” and Chinese intelligence services “have internalized that perspective and indeed may be the chief instrument through which Mao Zedong’s paranoia is reinforced.”

There is also a recurring problem with both Chinese and U.S. intelligence gained from hacks: The sheer volume of data in some cases makes processing it more difficult than acquiring it.

Moreover, language presents a challenge. Internal security concerns in both countries hamper the ability to recruit English- and Chinese-speaking staff, respectively. The U.S. clearance process discriminates against Asian Americans, while the Chinese military is wary of contact with foreigners.

A lot of Chinese hacking efforts have routine state-directed goals, such as technological theft, monitoring geopolitical opponents, or—most worryingly—threatening infrastructure. But Beijing is also unusually focused on monitoring the Chinese diaspora, which it sees as a chief threat to political security at home (especially members of ethnic minority groups).

That is where hacking crosses over most with China’s everyday influence efforts, such as those revealed by recent investigations into some New York political figures—who are accused of disrupting recognition of Taiwanese events, disparaging dissidents, and avoiding meetings with figures such as the Dalai Lama.

What We’re Following

Taiwan’s National Day speech. Taiwanese President Lai Ching-te, who took office in May, is set to give his first speech to mark Taiwan’s National Day on Thursday. Lai is a fierce advocate for Taiwanese sovereignty, and he noted in a recent speech that Taiwan is already a “sovereign and independent country” in his view.

In a deliberate attack against Chinese nationalism, Lai also said Taiwan—known officially as the Republic of China—was the older state and thus has a better claim as the “motherland” of the Chinese people than the People’s Republic of China. Lai’s Oct. 10 speech is likely to be equally assertive of Taiwan’s sovereignty—and to spur a fresh round of Chinese military exercises around the island.

China has carried out such drills with increasing frequency since 2018, hoping to intimidate the Taiwanese public. This has largely backfired in Taiwan’s presidential elections, where Lai’s Democratic Progressive Party has continued to win out over the China-friendly Kuomintang despite substantial midterm losses.

Britain’s fake China panic. The planned handover of the Chagos Islands from the United Kingdom to Mauritius has sparked a round of poorly informed takes that the deal plays into China’s hands. Members of the U.K. Conservative Party, which suffered electoral defeat in July, condemned the move, with Shadow Foreign Secretary Andrew Mitchell saying it “gives succour to our enemies.” Other articles have described Mauritius as a “Chinese puppet state” or a “loyal ally of China.”

This isn’t true: Mauritius has economic ties with China, but it has deliberately avoided joining Beijing’s Belt and Road Initiative (BRI). The thriving democracy maintains much closer relations with its former colonizer, the United Kingdom, and India, the ancestral homeland of the majority of Mauritians and the country’s largest trading partner.

The island of Diego Garcia, where the United States and U.K. maintain a critical military base, was excluded from the deal, and the base will remain. The handover talks began under the former U.K. Conservative government.

There are genuine issues over the return of the islands to Mauritius and the rights of their residents. Yet real concerns about Chinese power and influence are diminished when irresponsible and inaccurate rhetoric is used for plainly political ends.

Tech and Business

BRI targeted in Pakistan. An explosion near the Karachi airport in Pakistan on Sunday killed two Chinese nationals—the latest in a series of attacks by the militant Balochistan Liberation Army (BLA). The BLA is a militant group that seeks independence for the large but sparsely populated province of Balochistan in Pakistan’s southwest.

China has invested heavily in Balochistan as part of the BRI, especially the corridor to Gwadar Port—a long-planned project that has yet to have the transformative effects sought by Islamabad and Beijing. The BLA says Chinese investment supports Pakistani imperialism and hopes to terrorize Chinese firms into withdrawing from the province.

Chinese experts have expressed concerns about Chinese firms’ lack of security experience overseas, and kidnappings of Chinese workers are rumored to be more frequent than reported, with firms quietly paying ransoms for staff.

The latest attack comes just ahead of a Shanghai Cooperation Organisation (SCO) summit next week in Islamabad; Pakistan joined the Chinese-led group in 2017. SCO joint exercises often focus on counterterrorism and “stability maintenance,” which critics say serve as practice for the repression of internal revolts with Chinese aid.

Stock market rally falters. On Tuesday, Chinese stocks markets continued their spectacular rally upon the country’s return from October holidays—but then faltered following a disappointing announcement about future economic stimulus plans. Domestic investors want the government to pledge more funds for the stumbling economy, while foreign investors remain increasingly cautious overall.

The last month has seen a stimulus push, but the country’s leadership doesn’t seem inclined to unleash the kind of massive rush that kept China afloat amid the 2008-09 global financial crisis. There were genuine problems with that program, but Chinese President Xi Jinping’s own lack of economic understanding and ideological caution may play a critical role in the decision this time around.

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A Bit of Culture

 Lu Xun is the most famous Chinese writer of the 20th century, but the government has often appropriated his work for nationalist purposes. His Weeds (or Wild Grass)—a 1927 collection of experimental, atmospheric, and often surreal pieces—serves as a useful antidote to the facile caricature of Lu promoted by official curricula. Below is a partial translation of one of his “prose-poems.”—Brendan O’Kane, translator

“Autumn Night” by Lu Xun

Over the wall of my backyard, I can see two trees. One is a date tree; the other is also a date tree.

Above them, the night sky is strange and high. The sky is stranger and higher than I have ever seen him, as if he were preparing to leave the human world behind and go somewhere no one would ever look up at him again. For the moment, he is the most extraordinary blue. He blinks coldly with dozens of starry eyes. The corners of his mouth curl up in a know-it-all smile as he scatters a heavy frost over the wildflowers and grasses in my yard.

I don’t know the proper names of the plants or the common names. One I remember had delicate little pink flowers—still blooming now but more delicately—and in the cold night air, she dreams, shivering, of the coming of spring, of the coming of fall, of the gaunt poet who will wipe his tears with her very last petals and tell her that although the fall has come, although winter will come, another spring will follow after, with butterflies flitting everywhere and bees breaking into springtime song. At this, she smiles, though she is still shivering and crimson with cold.

The date trees have lost every one of their leaves. There had still been one or two children who’d come to beat down the dates people had missed, but now there is nothing left, not even leaves. They know the dream of the pink flowers, of spring after the fall; they know the dream of the fallen leaves, of the fall that will follow the spring.

Every one of their leaves has fallen away, leaving only bare branches that now straighten and stretch, relaxing after laying down their burden of fruit and foliage. A few still droop, protecting the places where the date-beating sticks broke the skin, but the longest, straightest branches are rigid as iron as they silently pierce the strange, high night sky, making him blink wildly, and pierce the full, round moon in the sky, making the moon blanch.