Original URL: http://www.theregister.co.uk/2013/02/04/google_schmidt_slams_china/

Schmidt slams China as world's most prolific hacker

Google exec chairman has nothing to lose in book-based rant

By Phil Muncaster

Posted in Security, 4th February 2013 05:18 GMT

Google executive chairman Eric Schmidt has strongly criticised China, claiming the country is the world’s most prolific hacker of foreign firms and predicting that its actions will increasingly drive Western tech vendors closer to their governments.

The remarks came in a new book, The New Digital Age, which the Wall Street Journal has managed to get its hands on.

Co-written with Google Ideas bod Jared Cohen, the book tries to map out the key trends shaping the information society of the future.

In doing so, Schmidt reserves special ire for the People’s Republic – described as “the world’s most active and enthusiastic filterer of information” and “the most sophisticated and prolific” attacker of foreign organisations.

Although the Googler is also sure to point out US involvement in cyber incidents such as Stuxnet and the export of surveillance tech to repressive regimes, the WSJ's extracts claim that US and Chinese firms have fundamentally different values – a fact which puts the former at a distinct strategic and commercial disadvantage.

“The United States will not take the same path of digital corporate espionage, as its laws are much stricter (and better enforced) and because illicit competition violates the American sense of fair play,” the book states, according to the WSJ.

Most interestingly, the book apparently claims that Western tech firms may increasingly find themselves aligned with their governments in opposition to China and work to co-ordinate efforts “on both diplomatic and technical levels”.

Schmidt and Google enjoy a fractious relationship with the Chinese government, ever since 2010's Operation Aurora attacks saw China fingered as the source of an attack on the company. Google subsequently decided to relocate its search servers outside the Great Firewall.

Since then its search market share in China has slipped to under five per cent, while Android phones sold in the country are largely stripped of any Google apps or services, thereby crimping another revenue stream.

In this context, Schmidt has less to lose in slamming the Chinese government and the morality of its firms than, say, Apple, which regards the country as a hugely significant market.

By coincidence, the Obama administration is thought to be preparing a tougher response to Chinese hackers, both to protect national security and the commercial interests of its businesses.

President Obama has already been given the de facto power to launch a pre-emptive strike against a hostile nation if convincing evidence comes to light that it is about to be hit by a large scale cyber attack, according to the New York Times.

In addition, a new National Intelligence Estimate (NIE) is being prepared to assess the extent of the cyber threat from countries like China, said AP. ®