Original URL: http://www.theregister.co.uk/2012/04/23/us_china_spying_satellite/

China hits back at US cyber snooping allegations

Satellite exports to China will be tightened

By Phil Muncaster

Posted in Policy, 23rd April 2012 06:51 GMT

The war of words between the US and China escalated at the weekend after the People’s Republic vigorously denied allegations from the Pentagon that its rapid rise as a space superpower has been made possible in part thanks to “successful spying”.

The US report prepared by the departments of State, Commerce and Defence recommended that export restrictions generally be loosened on items used to build satellites and other hi-tech monitoring equipment, in order to give US industry a much-needed economic boost.

However, the same report reportedly went on to advise that controls on exports of satellites to countries including China, Iran and North Korea actually be tightened.

The US government has identified 26 separate occasions since 2006 on which China has tried to get hold of space launch data and sensitive information on cruise missiles and other military equipment, Bloomberg said.

The report had the following:

China’s continuing efforts to acquire US military and dual-use technologies are enabling China’s science and technology base to diminish the U.S. technological edge in areas critical to the development of weapons and communications systems. Additionally, the technologies China has acquired could be used to develop more advanced technologies by shortening Chinese R&D cycles.

Economic espionage, supported by extensive open-source research, computer network exploitation and targeted intelligence operations also enables China to obtain technologies to supplement indigenous military modernisation efforts.

Given that the allegations are some of the most direct and serious yet, it’s not surprising that China has been forced to issue a strong denial, published in most of the country’s state-run media outlets.

Foreign Ministry spokesman Liu Weimin reportedly said in a statement that China’s rapid ascendancy in terms of its military and space achievements are not down to cyber espionage but the "pioneering, innovative and devoted work" of the Chinese people.

"All attempts to limit our space development or defame and abuse it are in vain," he added. “The report recommending the maintenance of restrictions on exports to China, which was a policy formulated more than 20 years ago, does not comply with the consensus reached by leaders of both countries to strengthen bilateral cooperation on space exploration.”

A Xinhua editorial went further, accusing the report’s accusations of being “utterly groundless, irresponsible and detrimental to bilateral relations” and urging the US to reconsider the export restrictions in order to reduce its trade deficit.

The report is the latest salvo in an increasingly bitter cyber stand-off between the two superpowers – with senior US politicians and military figures apparently now emboldened enough to directly accuse their counterparts of cyber espionage, while the Chinese deny, deny, deny.

Given its success with the strategy to date, there’s certainly no indication that China will halt hacking attacks on western companies anytime soon.

The US could always take the hardline option, increasing restrictions on Chinese tech imports and scrutiny of M&A deals involving Chinese companies. ®