China cracks 4,400 cyber criminal cases – or do they?

The Ministry of Public Security of the People’s Republic of China has announced they have solved 4,400 criminal cases after arresting 8,900 individuals in a bid to “earnestly safeguard the legitimate rights and interests of the masses of the people, to purify the internet environment”.

The diversity of the list of offenses – which date back to March – includes internet fraud, hacking, counterfeit goods, firearms and online porn. Chinese officials also claimed success in breaking up a huge illegal “internet PR network”, which is reported to have made over 10 million yuan (£992,000) in extorting businesses by threatening to post negative comments about them.

This practice is apparently a growing problem in China, as is cyber crime in general. As the West fears cyber attacks from China, China itself has huge internal problem.  A recent study from the University of California’s Institute of Global Conflict, entitled ‘Investigating China’s Online Underground Economy’, estimated the damage to China’s economy by the ‘online underground economy’ at £528 million pounds. The report looked at the 4 main areas that drive the underground economy:

(1) Real assets theft: stealing money from stolen bank accounts or credit cards.

(2) Network virtual assets theft: stealing virtual currency or equipment from stolen online gaming accounts, and selling them for real money.

(3)Internet resources and services abuse: taking advantage of hacked Internet resources, including compromised hosts, hacked servers, and infected smart phones, with the intention of abusing these Internet services for profit.

(4) “Blackhat” (malicious hacker) techniques, tools, and training: selling Trojan and attack tools to provide technical support for cybercriminals and training services to industry newcomers (“newbies”).

Commenting on this story said “Whether the arrests will be good news for an international community beset by attacks supposedly originating in China remains to be seen.”  And I’d have to agree.

The Chinese Police have declared this latest operation as a success for the people. The more sceptical will look at the scale of this operation and wonder whether this has been a thinly veiled operation to remove dissenting voices against the regime.  Police statements reveal that this operation removed 1.88 million ‘harmful messages’ (i.e. critical of the government) and 3,500 websites were shut down.  Were all of these solved cyber ‘criminal cases’ actually cyber criminals? Were some of these cases actually the Chinese Police removing dissenting voices against the regime?

Looking in at the issue, to a protective and secretive China, it’s difficult to draw objective conclusions from the reports we hear coming out of China. As we all know though, China’s economy and the West’s fears of cyber threat from China grows apace. Last week Melanie Watson discussed this very issue, and how US companies were being advised not to deal with Chinese telecoms companies, read her post here.

One person who has got behind the Great Wall – and is an expert in Chinese cyber affairs – is William Hagasted III. His recent book, 21st Century Chinese Cyber Warfare, offers up some eye opening facts about Chinese Cyber policies.

Read more about 21st Century Chinese Cyber Warfare here >>>


Sources: BBC, Reuters, The, University of California