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Study traces cyberattacks to Chinese military unit

– A U.S. security firm has linked China’s military to cyberattacks on more than 140 U.S. and other foreign corporations and entities, according to a report released Tuesday.

The 60-page study by investigators at the Alexandria, Va.-based Mandiant security firm presents one of the most comprehensive and detailed analyses to date tracing corporate cyberespionage to the doorstep of Chinese military facilities. And it calls into question China’s repeated denials that its military is engaged in such activities.

The document, first reported by the New York Times, draws on data Mandiant collected from what the company said was the systematic theft of data from at least 141 organizations over seven years.

Mandiant traced the attacks back to a single group it designated “Advanced Persistent Threat 1,” or “APT1,” and now has identified the group as a Chinese military unit within the 2nd Bureau of the People’s Liberation Army General Staff Department’s 3rd Department, going by the designation “Unit 61398.”

Although most of the targets were U.S. companies, a Mandiant official said APT1 also hit about a dozen entities that he described as smaller U.S. local, state and federal government agencies unable to protect themselves, as well as international governmental organizations overseas, including bodies in which China might have membership.

At the White House, press secretary Jay Carney declined to address the findings of the Mandiant report or say whether it squared with U.S. intelligence assessments.

“We have repeatedly raised our concerns at highest levels about cyber-theft with senior Chinese officials, including the military, and we will continue to do so. It’s an important challenge, one the president has been working on and urging Congress to work on for quite some time. The United States and China are among the world’s largest cyber-actors, so it’s critical.”

Analysts have long linked the unit to the Chinese military’s 3rd Department, and to extensive cyberespionage. But what Mandiant has done is connect the dots and add new ones by locating the Internet protocol addresses used in commercial cyberattacks, placing them on a map and linking that information to open-source data about people associated with the unit.

“Since 2006, Mandiant has observed APT1 compromise 141 companies spanning 20 major industries,” the firm said in its report. Of those victims, 87 percent “are headquartered in countries where English is the native language,” it said.

Mandiant did not name the victims but said 115 of them are located in the United States, two in Canada and five in Britain. Of the 19 others, all but two operate in English.

The report lists three victims each in Israel and India, two each in Taiwan, Singapore and Switzerland, and one each in Norway, Belgium, France, Luxembourg, Japan, South Africa and the United Arab Emirates.

These targeted entities include “international cooperation and development agencies, foreign governments in which English is one of multiple official languages, and multinational conglomerates that primarily conduct their business in English,” the report said.

The top sectors targeted by the APT1 cyberespionage campaign, Mandiant said, are information technology, aerospace, public administration, satellites and telecommunications, and scientific research and consulting.

“We have figured things out in an unclassified way that the government has known through classified means,” said Richard Bejtlich, Mandiant chief security officer, adding that the company shared the study with U.S. intelligence agencies before it was released.

“Once APT1 has compromised a network, they repeatedly monitor and steal proprietary data and communications from the victim for months or even years,” Mandiant said. It said the activity it has uncovered appears to represent “only a small fraction of the cyberespionage that APT1 has committed.”

The Chinese military has repeatedly denounced accusations that it is engaging in cyberespionage, and did so again Tuesday.

“Similar to other countries, China faces serious threats from cyberattack and is one of the main victims of cyberattacks in the world,” the Ministry of Defense said.

“The Chinese army never supported any hacking activities. The accusation that the Chinese military engaged in cyberattacks is neither professional nor in accordance with facts.”

Chinese Foreign Ministry spokesman Hong Lei on Tuesday also challenged the report’s findings.

“Hacking attacks are transnational and anonymous,” and determining their origins is extremely difficult, he said. “We don’t know how the evidence in this so-called report can be tenable.”

Mandiant investigators said they based their conclusion in part by tracing an overwhelming number of cyberattacks by the APT1 group to networks serving a small area on the edges of Shanghai – the same area where Unit 61398 is believed to be operating in a 12-story building. It also found evidence that China Telecom had provided special high-speed fiber optic lines for those headquarters in the name of national defense.

The only alternative explanation to military involvement, Mandiant argues in the report, is that “a secret, resourced organization full of mainland Chinese speakers with direct access to Shanghai-based telecommunications infrastructure is engaged in a multi-year, enterprise scale computer espionage campaign right outside of Unit 61398’s gates.”

The Mandiant report coincides with the completion of a classified National Intelligence Estimate by the U.S. intelligence community that concluded that China was the most aggressive perpetrator of a massive campaign of cyberespionage against commercial targets in the United States.