updated 1/12/2012 3:47:16 PM ET 2012-01-12T20:47:16

It must have been a merry Christmas and a happy New Year for professional cyberwarriors, as extensive new Pentagon plans focusing on Internet security were revealed in mid-December, just after a week's worth of stories appeared in the business press about massive information theft by Chinese hackers.

On the surface, the combination of media reports and defense posturing seem to indicate a new Chinese digital offensive against American interests. Dramatic as that may sound, these events are merely part of the status quo in the brittle relationship between the Chinese economy and innovative American companies, and not the first shots of a digital Pearl Harbor.

Every day, the intelligence agencies of less technologically innovative countries steal trade secrets from tech companies based in more advanced nations. France, Israel, India and Japan have often been accused of industrial espionage in the past two decades.

China stands in a league of its own, though. The tight relationship between its military and its state-owned companies, combined with a system that stifles innovation, creates the motive and the capability for theft on a much greater scale than that perpetrated by other countries.

Rather than an attack against the U.S. homeland, the most recent Chinese hacker attacks were just another attempt to use digital theft as a replacement for business creativity.

"There are other countries that have 'catch-up' economies that are doing the same thing [as China]," said Scott Borg, director and chief economist of the U.S. Cyber Consequences Unit, a non-profit founded by the U.S. government that now independently consults with the government and businesses. "You don't have a lot of countries in catch-up economies that are implementing wonderful new technologies that no one has seen before. But China has been engaged in espionage over a wide range of industries and companies."

"The sheer quantity is orders of magnitude above any of the other countries," Borg added. "They're really going after the state-of-the-art technology, because they don't have the R and D [research and development] themselves."

The articles that appeared in December in the Wall Street Journal , Bloomberg News, the Washington Post and other influential publications portrayed discrete, focused attacks on selected American targets. But Borg said that impression is misleading.

Instead, he told SecurityNewsDaily, the Chinese military-industrial complex constantly probes many American corporations as a crutch to prop up the country's indigenous technology companies.

More of a constant white noise of hacking than single military operations, these kinds of attacks have occurred every day for years on end. In fact, Borg said, Chinese hackers steal so broadly and indiscriminately they often end up harvesting information too advanced for primitive Chinese companies to even use.

"There's a limit to what China can do with the information they've stolen," Borg said. However, he added, "as time goes on, they will have a better ability to exploit the information they have stolen. There's a growth in consequences."

In the long run, Borg warns that those economic consequences pose a much greater threat to the security of America and Europe than the military conflict hyped by news reports and the Department of Defense.

These actions may fall far short of "cyberwar," but the theft of billions of dollars in technical information still qualifies as a problem.

© 2012 SecurityNewsDaily. All rights reserved


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