• Report: Chinese army tied to widespread US hacking

    Carlos Barria / Reuters

    A general view of 'Unit 61398,' a secretive Chinese military unit on the outskirts of Shanghai on Feb. 19. The unit is believed to be behind a series of hacking attacks, a U.S. computer security company said, prompting a strong denial by China and accusations that it was in fact the victim of U.S. hacking.

    By Ed Flanagan, Producer, NBC News

    BEIJING – A group of hackers linked to the Chinese military has stolen reams of sensitive data from more than 100 prominent American companies and organizations, according to an explosive new report.

    “The details we have analyzed during hundreds of investigations convince us that the groups conducting these activities are based primarily in China and that the Chinese Government is aware of them,” U.S. computer-security firm Mandiant Corp. said in a 74-page report released on Tuesday.

    The story was first reported by The New York Times.

    One group originating from China that Mandiant had been tracking since 2006 and identified in the study as “APT1” allegedly swiped data from 141 companies in 20 industries ranging from aerospace to telecommunications, according to the report. More than 110 of those companies were American, according to Mandiant.

    Mandiant said that the data suggests that the hacker group was either working for or sponsored by China’s People’s Liberation Army. Indeed, according to the organization’s information, APT1’s activity originated from a People’s Liberation Army cyberware division known as “Unit 61398.”

    “Our research found that People’s Liberation Army (PLA’s) Unit 61398 is similar to APT1 in its mission, capabilities, and resources,” it said, according to the report.  “PLA Unit 61398 is also located in precisely the same area from which APT1 activity appears to originate.”

    Mandiant said that the hacking originated from a drab 12-story office building on the outskirts of Shanghai. Hundreds, maybe even thousands, of operatives performed covert corporate espionage and extracted trade secrets, blueprints, pricing data and other corporate information from countless American servers from the innocuous tower, according to Mandiant.

    The Wall Street Journal and The New York Times reported on Thursday that Chinese hackers repeatedly penetrated their computer systems. NBC's Pete Williams reports.

    The hackers used techniques like “spear-phishing” -- using spoof emails to trick users into granting access to internal servers --demonstrating a strong proficiency in the English language and advanced understanding of computer security and network operations, the organization said.

    Media blackout
    Though the story exploded on Twitter and in the foreign news media, it has hardly made any waves in China. Twitter has long been blocked in the country and foreign media companies that broadcast on the mainland like CNN were blacked out when the report was mentioned on air. 

    Coverage of Mandiant’s report was also absent from Chinese news websites, but some discussion of the report could still be found on China’s Twitter-like service, Weibo.

    “Chinese hackers are so capable! I always thought Americans are very powerful!” exclaimed one user.

    “Reports by foreign media cannot be fully trusted,” warned another user, “but there must be something.”

    Related: Wall Street Journal infiltrated by Chinese hackers

    This was a sentiment partly shared by China’s Foreign Ministry spokesman, Hong Lei, who responded today to questions about the hacking report by calling them “groundless” and reiterating the government’s unwavering position on the matter.

    “To make groundless accusations based on some rough material is neither responsible nor professional,” he said, before noting that China was also the victim of hacking attacks.

    Hong also argued that the new evidence provided by Mandiant and the New York Times will not withstand closer scrutiny.

    But China’s cyber activities have been under increasingly closer scrutiny in recent weeks, as a slew of news stories have come out about Beijing’s reported hacking ambitions. Last month, the New York Times reported that its own servers had been attacked by hackers originating in China, possibly in response to an embarrassing expose it published showing the hidden riches of out-going Chinese premier, Wen Jiabao.

    While the White House has largely remained silent on the hacking issue -- President Barack Obama mentioned hacking in his State of the Union but did not specifically cite China -- the government has been noticeably increasing efforts to strengthen cyber security.

    Last week Obama issued an Executive Order calling for the improving of critical infrastructure tied to cyber security. That the move came on the eve of the publication of two similar exposes -- last week Bloomberg printed another story demonstrating PLA hacking of American systems -- suggests the administration could be taking a long called for tougher stance on Chinese hacking by “naming and shaming” known mainland hacking groups.  

    NBC News' Le Li contributed to this report.

    Related:

    Congress urged to probe Chinese cyber-espionage

    Internet Explorer zero-day exploit linked to China

  • Hackers infiltrate New York Times computers

    Visit NBCNews.com for breaking news, world news, and news about the economy

    BEIJING – According to the newspaper, hackers stole the passwords of reporters and other employees in an effort to break into their email accounts. Security experts say there is little doubt the cyber-attack came from China. NBC’s Ian Williams reports.

  • Revelations of vast fortune held by Chinese leader's family may hurt Communist Party image

    China Daily via Reuters, file

    Chinese Premier Wen Jiabao shakes hands with local workers in earthquake-hit Mianzhu, Sichuan province in this Jan. 25, 2009 file photo.

    By Ed Flanagan, NBC News

    BEIJING – When news broke earlier this year that the family of disgraced Chongqing party boss, Bo Xilai, had amassed $160 million in ill-gotten earnings, the story was seen as a proverbial pin in the balloon China’s ruling Communist Party has long floated to its people about its leadership.


    In China the storyline went something like this: local-level officials could be and have been corrupted. But China’s highest leaders were incorruptible, pious men who were sympathetic to the plight of the country’s citizenry.

    Bo’s corruption and the transgressions of his inner circle have been very publicly renounced by the Communist Party. His wife, Gu Kailai, was found guilty of the murder of British businessman Neil Heywood while his former deputy police chief, Wang Lijun, was jailed and held up as a traitor after his now infamous flight to the American Consulate in Chengdu this past winter.

    News Friday that Bo had been stripped of his last party title appears to pave the way for a convenient resolution of the scandal before a critical once-in-a-decade leadership changeover on Nov. 8 at the 18th Communist Party Congress.

    But the revelation in Friday’s New York Times that the family of Chinese Premier Wen Jiabao controlled assets of at least $2.7 billion dollars posed a grave threat to the Party’s preferred narrative of being the honest broker that brings prosperity to all.

    NYT report: China leader Wen Jiabao's family has amassed billions in assets since '98

    So much so that Beijing was forced Friday to kick the censorship gears up a notch, blocking the English- and Chinese-language websites of the New York Times, blacking out mentions of the story on independent cable news channels carried in China, and censoring the names of Wen’s family and other mentions of the story on China’s Internet.     

    At a Foreign Ministry briefing Friday, a spokesman gruffly stated that the Times’ report "blackens China's name and has ulterior motives." When asked why the paper’s website was being censored, he said, "China manages the Internet in accordance with laws and rules."

    One piece of information not censored, however is a report released Thursday by the research group, Global Financial Integrity, which estimated $3.7 trillion dollars had been pilfered and smuggled out of China from 2000 through 2011.

    The report also estimated that $472 billion -- or 8.3 percent of China’s 2011 gross domestic product -- had been stolen last year alone.

    Just how guilty Wen is in his family’s nationwide money grab is up for debate. As the Times’ report noted, a 2007 diplomatic cable published by Wikileaks quoted an executive who noted that the premier was aware of his family’s lucrative business ventures: “Wen is disgusted with his family's activities, but is either unable or unwilling to curtail them."

    Wen’s failure to reign in his family’s financial activities threatens to undermine the carefully scripted public persona he has cultivated over the years.

    Slideshow: The dance of two giants

    AFP - Getty Images

    A click-through history of modern relations between the United States and China.

    Launch slideshow

    Nicknamed “Grandpa Wen” by state media, the premier has relished opportunities to be photographed connecting with members of rural communities and blue-collar workers. During the 2008 Sichuan earthquake, he was a near-daily presence in news reports about the disaster and government rescue and recovery efforts.

    He has also been dogged in his calls for economic reform and greater income equality. At this year’s National People’s Congress, during what was likely his last major press conference in a 45-year-long political career, Wen called for reform.

    “Even with a single breath left, I am ready to dedicate myself fully to the cause of China’s reform,” he was quoted as saying.

    Although Wen was speaking months before the release of the Times piece, he still apparently felt the need to address whispers about relatives trading on the family name. “I have never pursued personal gain,” declared Wen, before adding, “History will have the final say.”

    Communist Party officials hope to control the writing of history. But the institution is starting to feel the strain of having to push an ever heavier stone uphill. The Internet has made information more widely available than ever before on the mainland; what censors just 10 years ago could make disappear – sometimes literally -- has become more problematic today.

    Still, while completely squashing a story in China seems to no longer be possible, it may not be Beijing’s intention or even in its best interest to stifle information. Some Chinese have found ways to circumvent the Great Firewall, while millions have gone abroad, where they have been exposed to the world beyond. Allowing them the safety valve of relatively free information does not pose an immediate threat to Party rule for now.

    That’s because the vast majority of China’s population appears to be apolitical, disinterested in or unwilling to engage in any meaningful political discourse. This situation is changing, quickly at times.

    For now, however, the censorship of unpalatable stories is an effective albeit cumbersome tool for the Party to wield.

    As for the New York Times, its fate in China looks dim. Just two months ago, Bloomberg ran a similar story that showed how the family of China’s likely future president, Xi Jinping, had also accumulated a vast business fortune – though unlike Wen’s kin, Xi’s immediate family did not appear to be reaping the same economic benefits.

    Bloomberg’s website has since been blocked on the mainland. 

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