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Chinese Theft and Hacking in the News — Where Lies the Blame?

By Jay Holmes

Headlines this week are reporting the not-very-new “news” that China is—drumroll and sound track of gasping readers please—stealing US technology and hacking into classified US government computer systems. A secondary aspect of the story focuses on daily denials by China. So is China really stealing US technology? If it is, then what does it mean to us US taxpayers and consumers? What does it mean to our allies and their well-bled taxpayers and highly unemployed consumers?

Stealing Data Canstock

Let’s first consider this “news” from the Chinese side of the issue.  Chinese denials are generally orated in monotone fashion by one highly placed spin doctor or another with even less acting skill than the average D.C. government mouthpiece. The denials, themselves, are always about as convincing as those issued by well-paid celebrity lawyers defending their highly privileged clients.

In China, as in Hollywood or D.C., reasonable observers start with the assumption that the spokesman is a well-practiced, lying crook. They then try to extract some grain of truth from the transparently nonsensical denials being issued. In the case of Chinese government spin doctors, the only truth available from them is the simple truth that they have no need to or intention of ever telling the truth about anything to anyone. They don’t have to. Or at least have never had to until recently.

Different cultures view truth-telling in different ways, and in the Chinese culture, telling the truth to the world at large is considered a form of severe naiveté bordering on mental illness. Add to that the fact that China has never had a government that answered to the Chinese people. As a result, in Chinese government culture, the rare and refined art of telling the truth is about as useful as space heaters in a Congolese home. In a Western context, one might imagine how weasel-like White House and Whitehall spokesmen would become if their masters and their masters’ masters never had to face the expense of another election campaign.

And yet there is one group of listeners that the Chinese find more complex and difficult to deal with—the world’s non-Chinese consumers. The Chinese have figured out that while the thoughts and opinions of their own well-policed prisoner-citizens can be easily dismissed or silenced, the image of the Chinese communist police state now matters to the Chinese oligarchy for financial reasons.

China makes trillions of dollars from Western consumers and Western corporations. As the image of the Chinese government rises and falls from the depths of the public opinion sewer, profits rise and fall. Western consumers buy cheap Chinese junk with the same enthusiasm that heroin addicts demonstrate in their methadone lines. But even with the severity of the West’s addiction to low-priced Chinese garbage, sales can and do rise and fall. A small movement in sales levels represents billions of dollars in lost revenue to the economic warlords that now run China.

What if a Chinese nouveau riche politician is considering buying another Caribbean island or US skyscraper, and his profits drop? What if he and his pals desperately need to rent some Western politicians to do their bidding, and the cash flow takes a dive? To those few people in China who are used to getting anything they want when they want it, that would be annoying. That threat of annoyance inspires Chinese devotion to keeping those revenue bumps from happening.

Predictably, the Chinese have recently switched from routinely denying that anyone in China ever would or could hack a computer, steal technology, or violate a patent, to doing the old “shoulder shrug” response. They are now saying “all governments hack other countries’ computers.” And, of course, they’re not quite right. Not all governments hack other countries’ computers. Only governments with the required resources do that. And furthermore, not all governments ignore patent violations. China does.

Now that we’ve had a laugh considering China’s denials, let’s consider the “hacking” from a Western perspective. China’s routine theft of US technology makes Western companies less competitive in the giant sludge pit that we call “the world market.” That means higher unemployment leading to higher tax rates to help the unemployed, which in turn makes the West still less competitive in the world marketplace.

As well as commercial technology, the Chinese hacking efforts also focus on US military secrets, including advanced weapons design. This means that China gets to develop their advanced weapons, such as their stealth fighter or their drones, without the expense of years of scientific research or the subsequent thousands of engineering hours that lead to lots of engineers having strokes and their employers eventually delivering a useful product. It also means that our weapons systems are less useful as deterrents to Chinese imperial aims.

In Maoist times, the Chinese military only needed to be well-enough equipped and trained to keep the Chinese people obedient to Mao. The most important characteristic of the Chinese People’s Liberation Army was obedience to Mao. The emphasis was not on developing a highly skilled, powerful military, but rather a highly obedient one.

In 1978, Viet Nam invaded Laos and Cambodia to overthrow their Chinese-backed governments. In 1979, after yearlong logistical preparations, China confidently invaded Viet Nam. After China’s logistical support for its invading army collapsed, they were forced to withdraw from Viet Nam.

The Chinese military leadership has wanted to do two things since that 1979 disaster. One, it has wanted to continue using its control of the Chinese military and Chinese military industries to acquire personal wealth. In this it has excelled fantastically. In the post-Maoist era they need not hide their profits. They don’t. Their second concern has been to become a more powerful military capable of conquering someone other than themselves. They needed science and technology to do that.

The Chinese suffered decades of “cultural revolution” that included purges of “intellectuals” that would have made even Stalin jealous. The problem with killing all those nasty, opinionated university types, though, is that nobody was left to develop technology. As a result, stealing science and technology became a huge imperative for the Chinese government in the post-Mao age.

Now that China has avoided the routine random slaughter of university professors for a few decades, they have a powerful and effective scientific/engineering community, but that community remains hamstrung by government agencies that are so corrupt that they make Western governments appear to be honest and efficient by comparison. So stealing technology and military secrets remains a priority for China. In fact, it remains a priority for all governments that have the ability to effectively spy.

It’s easy to get angry at the Chinese for being the thieving crooks that they are, but let’s be realistic a moment. The Chinese would give us the standard Chinese answer to that indignation. They would—and frequently do—laugh at us for being so stupid as to allow ourselves to get robbed. In this, they are right.

Most of the Western corporations that whine about the Chinese hacking their computer systems and stealing their technologies have factories in China manned by Chinese employees. While unemployment remains depressingly high in Western nations, these same Western corporations are building yet more factories in China.  Wondering where all your GM bailout cash went? It went to building factories and research centers in communist China. No need for the Chinese to steal GM’s technology. GM gives it to them on a silver platter. And YOU paid for that silver platter!

Whose job is it to secure US military secrets? Is that the job of the Chinese? I don’t think so. Hacking into US intelligence and military networks should not be a “crime.” It should be an impossibility. The fact that it can be done at all is a travesty. Basic compartmentalization to keep top-secret data off of internet systems would prevent that.

So while we listen to the not-so-new news reports about Chinese theft of US technologies and military secrets, we should perhaps not bother questioning China’s spin-doctors. Instead, we should be asking our own government and corporations why it’s happening in the first place.


20 thoughts on “ Chinese Theft and Hacking in the News — Where Lies the Blame?

  1. on ,
    Dave said:


    Well said…Anyone who is offended by the fact that China spies on us and hacks our systems probably skipped history class. We should expect them to and we should do the same in return. Supplying them with the technology to enable some corporate kleptocrats to get wealthy at our expense is the real crime.

  2. on ,
    Jay Holmes said:


    Hi Catherine. Thank you for the compliment.

  3. on ,
    Shantnu said:


    Great conclusion!

    It’s easier to blame the evil Chinese for hacking into our systems, than accept the fact that maybe the fault lies closer to home.

    I read a great Forbes article, which says that you can’t build many things in the West even if you want to, as the technology has been lost. Lost, as in, no one knows how to do that stuff anymore:

    http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/

    (Be sure to read the whole series).

    When I hear there corporate types screaming about Chinese stealing from them, I get the image of a man standing in the dark, wearing dark robes and carrying a bag of stolen goods over his shoulder, screaming, “Thieves! They went over there!”

    No they didn’t pal. They are right here. 😉

  4. I think you just theorised the scientific method of researching politics:
    “In China, as in Hollywood or D.C., reasonable observers start with the assumption that the spokesman is a well-practiced, lying crook. They then try to extract some grain of truth from the transparently nonsensical denials being issued. ”
    Great read

  5. Hi. Jay, i’m not a techno-geek. is it in fact possible to keep military matters on networks not connected to the internet and not accessible by phone lines?

  6. We were just talking about this at home. We’ve been looking a lot at the made in America website so we can start buying more things made here in the States.

    It baffles me that executives make the kinds of deals in China that require they give up source files as part of the requirements for doing business. I’ve seen this in a company that I worked for–It was the price of doing business with them. Really? It’s like the scientists announcing the results from an expensive study: “People who sleep more feel more rested than those who don’t.” Are they really surprised by the piracy?

    • on ,
      Jay Holmes said:


      Hi Diana. “We’ve been looking a lot at the made in America website so we can start buying more things made here in the States.” TY for that Diana. I wonder how difficult it would be to organize a 1 week boycott of Chinese garbage.

  7. It sounds like the “fool me once, shame on you; fool me twice, shame on me” principle. We should be ashamed if we cannot keep our information from being mercilessly hacked by bullying thieves. I do believe that China should be pressured to behave, but not actually expected to behave.

    • on ,
      Jay Holmes said:


      Hi Julie. I agree. We should not ignore their record. If nothing else the communists have been consistent in their intentions toward us and everyone else. For a CEO or government employee to be “surprised” by any of this they would need to be a complete idiot.

  8. Pingback: Economic motivation behind China’s dam building | China Daily Mail

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