Earlier, I referred to America’s growing awareness of the risks associated with cyber and digital systems, yet many business enterprises still lack hardened security programs capable of protecting confidential information. Nation-state espionage has taken on a popular new form over the past decade, and the civilian United States is slow to grasp this new phenomenon of espionage tactics. Business enterprises and government have fallen in love with the advantages of new technology, but due to a preference for the ease of data that technology provides, many are still hesitant to address this new set of problems and vulnerabilities presented by our technology systems. . Today, the reality is that cybercrime and cyber espionage are huge business opportunities for individuals and nation-states. This new form of espionage is affecting economic and political relations between countries and has changed the form of modern warfare to be filled with sneaky and scrutinized attacks; many times they go completely unnoticed by victims who do not know the attacker’s underlying objectives.

Where does most of the “cyber drain” come from?

A formidable threat to the strength and competitiveness of the US economy is China, but what the American population largely misunderstands are the Chinese strategic goals behind the depletion of trade data and intellectual property. the US industry

China views cyber warfare as a valid form of international commercial and military competition, and pursues what it calls “information dominance.” Recently, Mandiant traced many of the American attacks to a Shanghai office building that is likely home to the People’s Liberation Army. Cyber ​​warfare unit.

These types of low-grade commercial cyberattacks are also increasingly originating in other countries such as Russia, Taiwan, Turkey, and North Korea; many of the most notable and damaging recent intrusions date back to China. Until now, Chinese cyberattack perpetrators have been able to carry out their theft of military and economic secrets at virtually no cost.

Many countries engage in economic espionage using cyberspace, but the Chinese are by far the worst actors. A report generated by the Office of the National Counterintelligence Executive stated that “the People’s Republic of China is the world’s most active and persistent perpetrator of economic espionage. The Chinese government has stolen hundreds of billions in American R&D in this attack. continued to our economy. ” , and America’s competitive advantage will continue to erode until our government defends our national interest by taking effective countermeasures. “I encourage American businesses not to wait for Uncle Sam to provide them with the cyber protection they need – it won’t come quickly and probably not enough.

It is important to note that it is not only the largest companies that are vulnerable, the largest increase has occurred in attacks on small and medium-sized companies. Recently, an industry report noted that a US furniture company with 100 employees had designs stolen and it was reported that six months later, the Chinese were shipping furniture to the states at half the price, rapidly increasing the price. company went bankrupt. Whether it’s dropping steel or stealing secrets, the Chinese motive is the same: to keep their economic engine running and maintain stability at home while undermining America’s economic power.

Researchers at the Heritage Foundation’s Center for Foreign and Homeland Security Policy said: “The Chinese bet on this (stealing secrets) because they have virtually no R&D. The only way to keep up with Western economies is to steal. They take everything. Then they classify what they have and discard what they don’t need. ” To put R&D in perspective between our two countries, per capita, China’s R&D spending is $ 248.16 compared to the United States’ spending of $ 1,275.64. Clearly, the Chinese rely on someone else’s R&D rather than their organic endeavors. Chinese companies have already been sued for stealing DuPont’s proprietary method of making chemicals used in plastics and paints.

What does oil have to do with Cyber?

It is also important to note the game that China’s economic growth rate plays and the significance for other nations behind its continued expansion. Industrial growth in China also requires a high level of energy consumption to drive its continued growth; China currently does not have an excess of energy resources, but barely has enough each year to meet its high demand. Chinese GDP has undergone massive expansion in the past two decades, annual GDP growth rates in China have ranged from 3.8% to 15.4%, and averaged 6.8% increase in recent years . These are staggering growth rates, but just as staggering is the amount of energy sources required to fuel its continued growth. China is the main driver of the increase in energy demand until 2020, its consumables are mainly composed of coal, oil, gas and other resources. One point of concern must be recognized, China has not yet secured an adequate supply of energy resources for its expected future demand. This shortfall in energy supply could have drastic results if not covered; China’s leadership will not sacrifice its GDP to fall a lot due to the mere lack of required energy supply. A very low GDP could have devastating results on China’s economy and also act as a domino effect in continued declines; China is unwilling to consider this option and is therefore taking more extreme measures to increase its supply of energy resources. The energy required for China to produce commodities for world consumption and maintain its high rate of GDP could be seen as a “Red Line” problem for China in the future. These demands have motivated China to be smarter in the methods to meet its future energy demands and complement its economic development; Stealing information and intellectual property is a good option to help meet future needs.

Flawed economic and media reports are still circulating suggesting that China does not have resource deposits similar to the US and Canada, so Chinese motivations for partnering are altruistic to simply get good investments. Reports from China’s Ministry of Lands and Resources and Oil & Gas Journal assessments have estimated that China actually has 24.6 billion barrels of proven oil reserves (a high degree of confidence to be commercially recoverable). How much is technically recoverable? China itself does not have the technology to recover deep or offshore reserves nor can it successfully perform horizontal drilling recovery without the Western companies that developed these capabilities and currently possess this crucial drilling and recovery information.

We see ongoing territorial disputes in the East China Sea, the South China Sea, the Spratly Islands and Paracel, which are home to large-scale oil and gas fields. China is in a “full-fledged press” desperately to secure resources for its future energy demands.

It is also interesting to note that China’s total oil and liquid production has increased over the past 20 years, similar to its rate of corporate and cyber espionage. As China’s supply and production deficit worsens, compared to its increasing rate of consumption, we will also see China’s motivations and tactics increase proportionally.

Chinese oil company Cnooc aggressively pursued overseas deals with Canadian and US oil producers, resulting in its expanded resource base. However, these Chinese companies investing in American and Canadian crude are equally concerned about acquiring the technology and knowledge of these deals, as they are concerned about the promise to send some of that oil home.

How much is China costing the United States?

Today, cyberattacks cost companies between $ 400-500 billion a year; 71% of data breaches now target small businesses and 60% of small businesses that have experienced a data breach are out of business within a year of the breach. The National Crime Prevention Association reports in 2015 that 45 percent of all US businesses have reported specific losses from theft of intellectual property. These digital information thefts cost US businesses $ 250 billion a year. 2014 reports from the Center for Responsible Enterprise and Trade and PricewaterhouseCoopers (PwC) estimated that trade secret theft cost the US and other advanced economies between 1% and 3% of their GDP on average each year. . Intellectual property theft does not discriminate; They threaten all major industries, both medium-sized and small businesses.

It is recognizable that the proliferation of counterfeit products on the market is directly proportional to the reduction in the strength of the US economy. Businesses lose profits, demand for labor declines, employees lose their jobs, and then consumer spending falls.

It is time for citizens to become aware of the growing trends and aggravated impacts of low-grade cyber theft in America. It is critical to understand the global motivations and chameleon tactics that are used, through technological systems, to rob our economy of jobs and global competitiveness.