- - Wednesday, September 28, 2016

U.S. Cyber Command recently reported within secret government channels that China is continuing aggressive cyber espionage against American companies.

An intelligence report disseminated earlier this month stated that one of China’s biggest cyber spying operations involved the theft of 1.65 terabytes of sensitive proprietary data from a major U.S. software company, according to a defense official familiar with the report.

The U.S. company was not identified by name. But the hacker group behind the data theft is part of the Ministry of State Security, China’s main police and intelligence service.

The hacking operation by the MSS was carried out from at least October 2015 and contradicts the U.S.-China agreement on cyber espionage reached between President Obama and Chinese President Xi Jinping in September 2015.

The agreement requires both sides to halt government-backed cyber espionage against private companies. Critics say the accord was skewed in Beijing’s favor because U.S. intelligence agencies are barred from spying for American firms, while most Chinese companies are under government control or influence and regularly benefit from the state’s intelligence-gathering.

American intelligence officials testified earlier this year that they have serious doubts about China halting cyber spying in the United States. Only FBI Director James B. Comey has said he believes the Chinese are abiding by the agreement. The Chinese have stolen massive amounts of American proprietary corporate and defense data over the past decade or more.


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According to National Security Agency documents leaked by renegade contractor Edward Snowden, in 2010 the NSA assessed Chinese data theft totaled 50 terabytes — or five times the holdings of the Library of Congress. Defense industrial espionage by China has compromised information on the B-2 bombers, the F-22 and F-35 jet fighters, space-based lasers and other high technology weapons.

Another NSA document revealed that most of Chinese cyber espionage is carried out by a military, with the MSS a close second.

A Cyber Command spokesman did not respond to email requests for comment.

NSC meddling on China hit

The chairman of the House Armed Services Committee this week criticized the White House for restricting the Pentagon and U.S. military from accurately describing the growing threat posed by China.

“Protecting our national security starts with the truth,” Rep. Mac Thornberry said.

China is not our enemy, but they are our competitors in many areas,” the Texas Republican said in a statement. “Ordering the military to use politically-correct language does not change the reality we face.”

Mr. Thornberry said the U.S. would be better off if National Security Council staff member put more effort into addressing real problems faced by the nation instead of micromanaging politics.

The chairman was responding to a Navy Times report this week that stated a presidential directive ordered Pentagon leaders to stop using the term “great power competition” and similar phrases in public references to China. The restrictions are part of politically correct policies of the White House that has sought to play down the threat posed by China, which has turned increasingly hostile toward the United States despite close trade and financial ties.

Retired Navy Capt. Jim Fanell, a former Pacific Fleet intelligence director, criticized the restrictions.

“The notion that the People's Republic of China is not a competitor to the United States of America is a denial of reality,” he said. “The PRC today is challenging the United States every time a U.S. Navy warship enters the South and East China Sea. Confrontations at sea over the past decade have largely been more assertive in their approach and complete in their coverage.”

Additionally, China has turned away Navy ships from port calls, and has demanded to take part in large U.S.-led military exercises.

China’s new deep-water naval forces is part of what President Xi Jinping has called the “China Dream,” a policy based a strategic competition with the United States, Capt. Fanell said.

“No matter how much we may wish to deny this reality, the fact is that China is a great power and, more worrisome, has become an increasingly aggressive competitor whose sights are set on displacing the United States and her allies from their current positions on the international stage,” he said.

Rick Fisher, a China military expert, said Defense Secretary Ashton Carter’s recent statements warning of the “return of great-power competition” with China reflect the reality of threats to the United States and regional allies.

“White House-ordered semantic disarmament is tantamount to unilateral military disarmament,” Mr. Fisher said. “In a democracy, if you cannot fully debate threats, then you risk military disaster.”

A White House official declined to discuss internal discussions but defended the policy. “We would make the point that portraying the relationship as one of only competition overlooks the cooperative elements of the relationship,” the official said, noting “constructive” ties with China on issues such as global warming and the Iran nuclear deal.

The cooperative elements are “why we have opted not to portray a multifaceted relationship as uni-dimensional,” he added.

Kerry’s failed Syria diplomacy

Secretary of State John F. Kerry has made negotiating an end to the Syria conflict one of his main policy objectives before the Obama administration ends in January. So far, his months of effort have failed.

The cease-fire agreement he negotiated with Moscow collapsed last week. A Russian airstrike hit a U.N. aid convoy headed for the besieged city of Aleppo, scuttling the halt to hostilities that Mr. Kerry had spent months working on. It was the second failed cease-fire.

On Wednesday, the secretary spoke to Russian Foreign Minister Sergey Lavrov and threatened to cut off further talks on Syria, according to an official readout of the call in which Mr. Kerry “expressed grave concern” about the civil war in Syria. State Department spokesman John Kirby said Mr. Kerry voiced concerns for “continued Russian and Syrian regime attacks on hospitals, the water supply network and other civilian infrastructure in Aleppo.”

“The secretary made clear the United States and its partners hold Russia responsible for this situation, including the use of incendiary and bunker buster bombs in an urban environment, a drastic escalation that puts civilians at great risk,” Mr. Kirby said in a statement.

The statement is further proof of what critics say are signs the secretary of state remains ignorant or incapable of understanding Russian goals in Syria, namely keeping the regime of President Bashar Assad in power and helping him defeat the array of anti-government rebels inside the country.

Mr. Kerry told Mr. Lavrov “the United States is making preparations to suspend U.S.-Russia bilateral engagement on Syria — including on the establishment of the Joint Implementation Center — unless Russia takes immediate steps to end the assault on Aleppo and restore the cessation of hostilities,” the spokesman said.

Mr. Kerry defended the failed diplomacy in an interview with Reuters. “In this business of diplomacy, you have to test things sometimes,” he said this week. “It is a mistake to delude yourself. It is also a mistake to avoid putting something to test where there is a reasonable chance something may be able to happen.”

Russian Lt. Gen. Viktor Poznikhir of the military’s General Staff said Wednesday that Russian experts are ready to travel to Geneva to restart consultations with the U.S. to “search for possible ways of normalizing the situation in Aleppo” — the besieged stronghold of rebel groups.

But some in the Pentagon believe Mr. Kerry is deluding himself in seeking to negotiate with the Russians, who appear to playing Mr. Kerry for the fool and using talks and agreements as a tactic to limit outside military support to rebels.

The Pentagon remains deeply skeptical of Mr. Kerry’s appeasement-oriented approach to Russia and the Syria conflict. A senior military officer told Inside the Ring the diplomatic effort will have the likely result of limiting U.S. support for anti-Islamic State rebels backed by U.S. special operations forces on the ground in Syria.

That sentiment was reflected in the statement Monday by Sens. John McCain, chairman of the Senate Armed Services Committee, and Lindsey Graham, South Carolina Republican, who said diplomacy without other forms of power is a recipe for failure.

President Obama’s Syria policy continues to offer gruesome proof of Einstein’s definition of insanity: doing the same thing over and over again and expecting different results,” they said.

“The pattern is as simple as it is predictable: A cease-fire is agreed; Russian, Iranian and Syrian regime forces rest, refit and redeploy their forces; the carnage resumes; and the cease-fire collapses. What the Obama administration calls a quagmire, the Assad regime calls progress.”

Contact Bill Gertz on Twitter at @BillGertz.

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