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Businesses targeted by cyber-spies

China assumed biggest threat

– A new intelligence assessment has concluded that the United States is the target of a massive, sustained cyberespionage campaign that is threatening the country’s economic competitiveness, according to people familiar with the report.

The National Intelligence Estimate identifies China as the country most aggressively seeking to penetrate the computer systems of American businesses and institutions to gain access to data that could be used for economic gain.

The report, which represents the consensus of the U.S. intelligence community, describes a wide range of sectors that have been the focus of hacking over the past five years, including energy, finance, information technology, aerospace and automobiles, according to the individuals familiar with the report, who spoke on the condition of anonymity about the classified document.

The assessment does not quantify the financial effects of the espionage, but outside experts have estimated it in the tens of billions of dollars.

Cyberespionage, which was once viewed as a concern mainly by U.S. intelligence and the military, is increasingly seen as a direct threat to the nation’s economic interests.

In a sign of such concerns, the Obama administration is seeking ways to counter the online theft of trade secrets, according to officials. Analysts have said that the administration’s options include formal protests, the expulsion of diplomatic personnel, the imposition of travel and visa restrictions, and complaints to the World Trade Organization.

Cyberespionage is “just so widespread that it’s known to be a national issue at this point,” said one administration official, who like other current and former officials interviewed spoke on the condition of anonymity to discuss internal deliberations.

The National Intelligence Estimate names three other countries – Russia, Israel and France – as having engaged in hacking for economic intelligence but makes clear that cyberespionage by those countries pales in comparison with China’s effort.

China has staunchly rejected such allegations, saying the Beijing government neither condones nor carries out computer hacking.

At least as far back as the early 1980s, China has made the acquisition of Western technology a centerpiece of its economic development planning. The explosion in computer use has greatly aided that transfer of technology.

China’s intelligence services, as well as private companies, frequently seek to exploit Chinese citizens or people with family ties to China who can use their insider access to U.S. corporate networks to steal trade secrets using thumb drives or email, according to a report by the Office of the National Counterintelligence Executive.

The National Intelligence Estimate comes at a time when the U.S. government is making a determined effort to develop policies that address cyberthreats against the nation.

“We need the NIE on cyber for a systematic and comprehensive understanding of what the most dangerous technologies are, who are the most threatening actors and what are our greatest vulnerabilities,” said former deputy defense secretary William Lynn, who requested the report in 2011.

Some officials have pressed for an unclassified summary to be released publicly. Michael Birmingham, a spokesman for the Office of the Director of National Intelligence, declined to comment on the report, except to say that “as a matter of policy, we do not discuss or acknowledge the existence of NIEs unless directed to do so.”

Much of China’s cyber-espionage is thought to be directed at commercial targets linked to military technology. Companies in other sectors also have been targeted, although the reasons for the espionage are not always related to economic interests. The New York Times, the Wall Street Journal and the Washington Post recently disclosed that they believe their networks were compromised in intrusions that originated in China.

A watershed moment came in January 2010, when the tech titan Google announced that its networks had been hacked and that the intrusions originated in China.

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