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Chinese Agency Linked To Cyber-Espionage Operations Will Review Source Code of Foreign Firms (bleepingcomputer.com)

An anonymous reader shares a report: According to a new law voted in 2016 and which came into effect starting June 1, 2017, foreign companies activating in China could be forced to provide access to their source code to a state agency that has been recently linked to China's nation-state cyber-espionage campaigns. China's new cyber-security law (CSL) gives the China Information Technology Evaluation Center (CNITSEC) the legal power to conduct "national security reviews" of foreign companies that want to activate on the Chinese market. According to articles in the CSL, this also includes the power to request access to any app or service's source code. Chinese authorities say this is to protect citizens by searching the source code of foreign companies for secret mechanisms that collect data on Chinese users and send it to foreign servers.

62 comments

  1. Listen up software companies by LeftCoastThinker · · Score: 3, Insightful

    Bend over and prepare to have your software stolen by the world's number one IP rights violator.

    I hope the Trump administration starts putting real teeth in pushback against this kind of crap. As in blanket embargo on all goods imported from China until they start respecting our IP and stop manipulating their currency... I would be happy to buy lifetime guarantee products from the US instead of the chicom trash that stocks most department store shelves.

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    1. Re:Listen up software companies by ShanghaiBill · · Score: 4, Insightful

      I would be happy to buy lifetime guarantee products from the US instead of the chicom trash

      I would be happy to buy products with open source, regardless of where they are manufactured.

    2. Re:Listen up software companies by AmiMoJo · · Score: 1, Insightful

      You could replace "Chinese" with "American" in the headline.

      The NSA has access to source code, legally or otherwise, and is just as untrustworthy.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    3. Re:Listen up software companies by Anonymous Coward · · Score: 1

      Why should the Chinese respect American IP, do you respect theirs? Almost every company that bitches about their product being stolen by the Chinese never bothered to patent it IN CHINA.

    4. Re:Listen up software companies by LeftCoastThinker · · Score: 3, Insightful

      Not really. Get back to me when source code for software starts walking out the back door of the NSA and starts being sold legally with no recourse under a different brand name in the US. Because that is what we are talking about in China.

      "Get your Wandows 10 here, $10 per license for unlimited use and resale. The same exact thing as Windows 10 at a fraction of the price. Only slightly pirated."

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    5. Re:Listen up software companies by Anonymous Coward · · Score: 0

      That or you could try Open Source development. It's quite nice.

    6. Re:Listen up software companies by LeftCoastThinker · · Score: 0

      Huh... Last time I checked, Hong Kong was a limited democracy form of government and not part of mainland China.

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    7. Re:Listen up software companies by Anonymous Coward · · Score: 0

      I would be happy to buy lifetime guarantee products from the US instead of the chicom trash that stocks most department store shelves

      Not when you saw the actual fucking price you wouldn't. It would literally cost 10x or more.

      Americans are delusionaly nostalgic for a period of US manufacturing which never existed. The most successful US brands could not be profitable without cheap foreign labor and manufacturing, you're simply not able to compete any more.

      Now that Trump is throwing around his "America First" crap, you're about to realize how little the rest of the world gives a shit about your American Exceptionalism bulshit.

      Go ahead, cancel all of those trade deals ... and you might find less people buying your products. And then you'll bluster and whine how we are obligated to buy from you, when in fact we don't give a fuck.

      Yes, China has issues. But stop pretending like America has the ability to actually make this stuff. Your lifestyle has always been subsidized by others.

    8. Re:Listen up software companies by Anonymous Coward · · Score: 0

      The NSA was your code so they can use it. China wants your code so they can use it and sell it. A subtle but important difference.

    9. Re:Listen up software companies by ShanghaiBill · · Score: 3, Insightful

      Last time I checked, Hong Kong was a limited democracy form of government and not part of mainland China.

      Check again. Things changed in 1997.

      Also, when you buy clothes "from Hong Kong", that means they are shipped through HK, not made there.

    10. Re:Listen up software companies by AmiMoJo · · Score: 2

      I seem to recall the NSA had some kind of leak a few years ago. Windows is massively pirated in the West already.

      In any case, I think you vastly overestimate the value of Windows source code.

      --
      const int one = 65536; (Silvermoon, Texture.cs)
      SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    11. Re:Listen up software companies by ShanghaiBill · · Score: 2

      Almost every company that bitches about their product being stolen by the Chinese never bothered to patent it IN CHINA.

      That is not what most of them are bitching about. They are complaining when that Chinese company starts exporting to America.

    12. Re:Listen up software companies by Penguinisto · · Score: 4, Insightful

      This, right here. If its open source, there's nothing to try and steal.

      I am curious, though - what's to stop companies from telling China to piss off, and instead "activate" in India, Vietnam, Taiwan ("...because fuck you Beijing, that's why"), etc... It's not like China has a monopoly on cheap labor (or even on untapped markets...)

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    13. Re:Listen up software companies by Anonymous Coward · · Score: 0

      As in blanket embargo on all goods imported from China until they start respecting our IP, stop buying 'murikin debt, and 'murika stops manipulating currency...

      FTFY.

    14. Re:Listen up software companies by Rick+Schumann · · Score: 1

      Also I'm sure they'll look for any vulnerabilities they can exploit for cyberhacking and cybercrime.

    15. Re:Listen up software companies by Sassinak · · Score: 2

      You do realize that they don't manipulate their currency right?.. that has been proven many MANY times over.

        And its not a matter of respecting IP that's the issue.. The larger cause for concern is basically an espionage group having the ability to review and possibly steal/alter code. IP is stolen all the time.. (from everyone)..

      And a blanket embargo won't do anything other than make the local citizens hurt.. (its not like wages rise as fast as COL).. And salaries have been depressed for the last 30 years.

      --
      God made the Idiot for practice, and then He made the School Board -- Mark Twain Look for http://Thebar.steelbeachca
    16. Re:Listen up software companies by Sassinak · · Score: 1

      Slight Correction.. China wants your code so they can use it to improve their own code and leapfrog.. and in the meantime.. sell it to fund the R&D.

      That is more accurate. China doesn't want other's code.. what they want is a deeper understanding so they can replicate and improve.

      --
      God made the Idiot for practice, and then He made the School Board -- Mark Twain Look for http://Thebar.steelbeachca
    17. Re:Listen up software companies by Anonymous Coward · · Score: 0

      The RMB is a managed float and by definition is manipulated by the central bank to fulfill the "managed". That doesn't even consider the impacts of other policies they institute, such as those on foreign/domestic investment.

    18. Re:Listen up software companies by Knightman · · Score: 3, Interesting

      You are aware that the US economy only functions because of China, right?

      China owns about $1.1 trillion of the US debt, Japan about as much too, in total about 11% of the total US national debt.

      A majority of the consumer goods imported to the US comes from China, an embargo will make a huge impact on the economy and getting into a pissing contest with China will mostly hurt the US badly.

      --
      --- Reality doesn't care about your opinions, it happens anyway and if you are in the way you'll get squished.
    19. Re:Listen up software companies by JohnFen · · Score: 1

      Almost every company that bitches about their product being stolen by the Chinese never bothered to patent it IN CHINA.

      Probably because it isn't necessary to patent it in China. China is a signatory on the Patent Law Treaty and Patent Cooperation Treaty, and is bound to recognize the patents of the other signatories of those treaties.

    20. Re: Listen up software companies by Anonymous Coward · · Score: 0

      Vice versa is also true.

      The Chinese economy is dependent upon someone buying their crap to begin with.

      Your largest consumer stops buying your stuff, your income dies with it.

      They have just as much to lose as we do.

    21. Re:Listen up software companies by JohnFen · · Score: 1

      But do you know who owns more US debt than anyone else in the world?

      Americans.

    22. Re:Listen up software companies by LeftCoastThinker · · Score: 1

      You seem to be confused about how debt works. Debt is only collectible if the governmental authority enforces it to be collected. If I were Trump, I would take that $1.1T and let the Chinese know that if they don't shape up, we will deduct that debt against the value of the IP and business they stole from the US using hacking and currency manipulation for the last 20 years. Care to figure out how much that would add up to? Any debt that China holds can be declared by the US government to be invalid and uncollectible. China could piss and moan but they couldn't get a cent since the rest of the world has also been getting screwed by them and their currency manipulation and IP theft for at least the last 20 years. Since each bond instrument is numbered, they would just become worthless pieces of paper, and China would be unable to sell or get any value from those bonds.

      The theory that working and trading with China would eventually westernize them only made sense when the US was clearly dominant, but for the last 20 years, China has been working steadily to destroy the US using the very hand of friendship that we extended to them. Had we isolated them like we did the USSR they probably would have collapsed by now. As it stands today, they have stolen our technology, our jobs, our manufacturing and are poised to become the dominant power in the world within the next 20 years or less (depending if you are talking economically or militarily).

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    23. Re:Listen up software companies by radarskiy · · Score: 1

      "the US economy only functions because of China"

      The US GDP in 2016 was $18.57 trillion. The US net trade deficit with China in 2016 was $347 billion. The US GDP growth rate in 2016 was 1.6%. The loss of trade with China would represent only 14 months of lost growth at the 2016 rate, assuming no replacement (i.e. no new domestic production to replace former imports, no alternate customers for exports, etc.).

      "China owns about $1.1 trillion of the US debt"

      Why do you think federal budget debt has anything to with trade deficit?

    24. Re:Listen up software companies by Anonymous Coward · · Score: 0

      Open source, everywhere!! If china can have the source code, why can't I?

    25. Re:Listen up software companies by Anonymous Coward · · Score: 0

      Bend over and prepare to have your software stolen by the world's number one IP rights violator.

      The US?

    26. Re:Listen up software companies by Anonymous Coward · · Score: 0

      Don't be a dumb-ass. There's nothing being made or invented today that is not based on hundreds of iterations of previous work, effectively involving scientists from all over the world. Patents only hurt and thwart development, and America itself is the biggest thief of all times when it comes to this, no matter how often it points its slimy fingers at others.

    27. Re:Listen up software companies by drinkypoo · · Score: 1

      I am curious, though - what's to stop companies from telling China to piss off, and instead "activate" in India, Vietnam, Taiwan ("...because fuck you Beijing, that's why"), etc...

      If the companies are owned by Chinese people, it's the difficulty of getting the money out of the country. If the companies are owned by someone else, nothing. In fact, rising labor rates in China are already pushing manufacturing out of the country. They'll solve that with robots, but the manufacturing jobs will still be lost, and China already has several entire cities which have been built and are lying empty or mostly empty because they don't have enough citizens who own anything to actually fill them. So they just rot, as unoccupied buildings do, and presumably breed rats by the zillion.

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    28. Re:Listen up software companies by thejynxed · · Score: 1

      Both hinge on if China beats us to having working hypersonic missiles with EMP warheads. We have the missiles (being tested now, their propulsion and first flight tests already worked), now we just need the warheads. They are working on gaining the missiles, but are not anywhere close to having the warheads.

      Whomever has these can literally snuff out the economy (and power grid) of any rival in a virtual instant in this age of everything being computer controlled. Modern vehicles of all stripes? Toast. Research facilities, hospitals, etc. All toast. Their nuclear arsenal couldn't even be launched, so we wouldn't even have to fear M.A.D. retaliation.

      --
      @Mindless Drivel: 100% of Twitter posts ever Tweeted.
    29. Re:Listen up software companies by LeftCoastThinker · · Score: 1

      Last time I checked, EMP weapons had been around for a long time (basically all you have to do is detonate a nuclear device in the ionosphere.) Most of the US military equipment is hardened against such an attack. I would have to think that China's military, including their ICBMs is also hardened against EMP attack. Hardening means that while the equipment directly in the blast zone of maybe 10 miles still gets fried, everything outside that radius still works. Also, to take out the entire US or China, you would need hundreds if not thousands of EMP devices. Even the largest warheads only have an effective EMP radius of 100-500 miles, depending on the device you are trying to disable ( a cell phone antenna is easy to fry, but trying to take out a PC surrounded by a Faraday cage, plugged in to a well made surge protector is far more difficult.) Most expensive electronics (medical/industrial) these days either have internal fusing and surge protection or are plugged into an external surge protector, since we have lightning storms to deal with that can also fry the electronics.

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    30. Re:Listen up software companies by LeftCoastThinker · · Score: 1

      You do realize that they don't manipulate their currency right?.. that has been proven many MANY times over.

        And its not a matter of respecting IP that's the issue.. The larger cause for concern is basically an espionage group having the ability to review and possibly steal/alter code. IP is stolen all the time.. (from everyone)..

      And a blanket embargo won't do anything other than make the local citizens hurt.. (its not like wages rise as fast as COL).. And salaries have been depressed for the last 30 years.

      Actually, the value of their currency is defined by the central bank which is controlled by the government. It has been well documented that they have manipulated their currency. As AC said: "The RMB is a managed float and by definition is manipulated by the central bank to fulfill the "managed". That doesn't even consider the impacts of other policies they institute, such as those on foreign/domestic investment."

      https://www.forbes.com/sites/j...
      http://foreignpolicy.com/2016/...

      As far as IP theft goes, please show me the Chinese product or military hardware stolen by the US and put into production to damage Chinese business. Drawing equivalence between the US keeping tabs on the world for security purposes and China stealing IP at a massive rate from every successful business on the planet for the purpose of undercutting them and boosting their own economy is not justified by the facts, to the point of being an assinine assertion.

      China's economy is what fuels their military and their government. Their booming economy https://www.google.com/search?...: is the only reason that they have not democratized long ago, in similar fashion to the USSR. When things get bad enough for the citizenry, they start to rebel. When a country can't feed it's army, it either disbands, or overthrows the government.

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    31. Re:Listen up software companies by LeftCoastThinker · · Score: 1

      Fair enough, I stand corrected.

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  2. Because China is SO open... by GerryGilmore · · Score: 1

    ...they're just adding this to their list of technology transfers they require of lots of companies. Within 20 years, max, we'll truly start to appreciate the damage we've done by giving China a monopoly on manufacturing.

  3. Simple by Anonymous Coward · · Score: 0

    Do not do business with or in China.

  4. Start with Microsoft Windows 10 Telemetry . . . by PolygamousRanchKid+ · · Score: 2

    Chinese authorities say this is to protect citizens by searching the source code of foreign companies for secret mechanisms that collect data on Chinese users and send it to foreign servers.

    Isn't that the whole purpose of what Microsoft Windows 10 Telemetry does . . . ?

    Maybe the Chinese authorities have a deal with Microsoft, so that Microsoft collects the data on Chinese users and sends it directly to Chinese authorities' servers . . . ?

    Maybe the Chinese authorities have a deal with Microsoft, so that Microsoft collects the data on US users and sends it directly to Chinese authorities' servers . . . ?

    --
    Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    1. Re:Start with Microsoft Windows 10 Telemetry . . . by Altrag · · Score: 1

      Microsoft collects the data on Chinese users and sends it directly to Chinese authorities' servers

      Could be. Who knows. The Chinese government isn't exactly known for protecting citizens' rights and I don't know why privacy would be given any higher standing than other (lack of) rights.

      Microsoft collects the data on US users and sends it directly to Chinese authorities' servers

      Extremely unlikely. That would literally be treason and even Microsoft's bankroll would have trouble keeping people out of jail if they were caught doing this. Its one thing to fuck over your country for profit, its quite another to fuck over your country to promote another nation's interests, especially one that while not an actual enemy (yet) is generally considered at least moderately hostile.

    2. Re:Start with Microsoft Windows 10 Telemetry . . . by Bruce+Perens · · Score: 2

      It would not be treason unless the information revealed was defense secrets of the country. Not what web sites people are looking at. And even then, it would probably be espionage rather than treason unless we happened to be at war with China at the time.

      It is not inconceivable that Microsoft could be providing information to China on the behavior of US consumers, without breaking any US law.

    3. Re:Start with Microsoft Windows 10 Telemetry . . . by JohnFen · · Score: 1

      It would not be treason unless the information revealed was defense secrets of the country.

      Under the Constitution, it wouldn't be treason even then. The US has an extremely narrow definition of "treason" (that narrow definition is a feature, not a bug).

      A big part of the definition is it has to involve an entity that the US has declared an "enemy". China is not categorized as such.

  5. I'd want that power... by Anonymous Coward · · Score: 0

    {... foreign companies activating in China could be forced to provide access to their source code to a state agency that has been recently linked to China's nation-state cyber-espionage campaigns. China's new cyber-security law (CSL) gives the China Information Technology Evaluation Center (CNITSEC) the legal power to conduct "national security reviews" of foreign companies that want to activate on the Chinese market. }

    Yeah if I ran a country today I'd want that too.

  6. Hong Kong: part of China by XXongo · · Score: 3, Insightful

    Huh... Last time I checked, Hong Kong was a limited democracy form of government and not part of mainland China.

    Right on the first part (with the "limited" the key word here), but it's been part of mainland China since 1997.
    http://www.bbc.com/news/world-asia-china-40426827

    1. Re: Hong Kong: part of China by Anonymous Coward · · Score: 1

      Hong Kong was handed back to China in name in 1997. It is still autonomous,with it's own government, borders, currency, etc., and not ruled by China, and cannot be controlled by China until 2047 at the earliest, although China has tried to control it in illegal ways, like hacking political parties it disagrees with and kidnapping booksellers writing things critical of China.

      Hong Kong is not a part of mainland China. The reason the term "mainland china" even exists is because Chinese were tired of terms like China-Hong Kong relationship, which implied Hong Kong isn't China.

  7. Eh, familiar with the definition of theft? by intellitech · · Score: 1

    Just because somebody neglects to file the patent in another country doesn't mean it wasn't technically stolen. Legality, however, is another question, and probably differs between the originating country and the country where the piracy is occuring.

    --
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  8. Read between the lines. by Gravis+Zero · · Score: 4, Insightful

    Chinese authorities say this is to protect citizens by searching the source code of foreign companies for secret mechanisms that collect data on Chinese users and send it to foreign servers.

    What they really want is for the mechanisms to be on Chinese servers so that they can have access to all your information on their own citizens, lest one of them have some wrongthink.

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:Read between the lines. by Anonymous Coward · · Score: 0

      That's the lure they feed to foreign companies so they hand over the source code.

  9. STOP. DOING. BUSINESS. IN. CHINA. by Anonymous Coward · · Score: 0

    Encourage everyone else to do the same and source your imports elsewhere. Move the mountain on the one fulcrum it respects.

  10. We need to return the favor by Anonymous Coward · · Score: 0

    Turnaround is fair play!

  11. So, status quo, huh? by JohnFen · · Score: 2

    Russia and the US have had requirements like that for years now. China's a late-comer to this game.

    1. Re:So, status quo, huh? by Swave+An+deBwoner · · Score: 1

      I'm sorry but citation needed please.

    2. Re:So, status quo, huh? by JohnFen · · Score: 1

      I have no citation, only personal experience (which I can't go into detail about because NDAs).

      However, I've been a part of several teams where we met with representatives of both the US and Russian governments in order to walk them through source code. They don't get to take the code with them, but they do get pretty much as much supervised time to look it over, on our premises, as they wish.

    3. Re:So, status quo, huh? by Swave+An+deBwoner · · Score: 1

      I'm going to take a wild guess and say that your company was probably trying to sell their product(s) to the federal government (in the US at least), not just displaying the code for random consumer software.

      In the case discussed here I think that China is demanding access to any code that runs within the country. So the average person who wants to run "CandyLand" on their phone can rest assured that the code isn't stealing their PII or, worse, that they are exchanging encrypted political opinions with other CandyLand users.

      Just sayin'

    4. Re:So, status quo, huh? by AHuxley · · Score: 1

      Re "citation needed please."
      How the Electronic Communications Privacy Act of 1986 (ECPA) was used.
      https://en.wikipedia.org/wiki/...
      Prism https://en.wikipedia.org/wiki/... and what it could access.
      Some US states might have changed laws but federally its all about access.
      US states might offer some electronic device searches, real-time GPS tracking protections or the use of cell site simulators.
      For all that access to work in the USA someone in the gov/mil is getting help or been giving help.
      Different nations have laws, some just need for a court to allow access.
      But once granted, access is full.
      Someone is helping with source code in other nations too. If not governments would be locked out thanks to having to work on very different networks and complex secure systems.
      Other governments are not worried so they have found a way into all network or have been helped to access any networks of interest.
      Some nations ask for source code. Other nations just get total legal access as needed as part of their own laws.
      The work of the Equation Group
      https://en.wikipedia.org/wiki/...

      --
      Domestic spying is now "Benign Information Gathering"
  12. Only foreign? by manu0601 · · Score: 1

    foreign companies activating in China could be forced to provide access to their source code to a state agency

    But local companies will be free to include malware without review?

  13. Cherry picking? by s.petry · · Score: 1

    or maybe selective reading? The fact that Windows gets pirated does not mean that there is no legal recourse for Microsoft when they catch people pirating. In fact MS does have legal recourse, almost exclusively in "the West". MS does not have open legal access to sites in China to inspect, they get the access they are given by the Chinese Government and pay the fines agreed to by the Chinese Government instead of the penalized fees seen in "the West."

    I think you are vastly underestimating the value of Windows Source code. There are plenty of things I don't use, don't like, and don't recommend (including Windows) that have value to other people. Hell. I don't find value in designer clothes, pedigreed pets, or fad foods. Enough people do though, so there are plenty of businesses making money from them.

    I'm betting that same statement would be true of you as well, though you may not admit as much.

    --

    -The wise argue that there are few absolutes, the fool argues that there are no probabilities.

    1. Re:Cherry picking? by LeftCoastThinker · · Score: 1

      Well said Petry, well said.

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  14. Simple Solution by nehumanuscrede · · Score: 1

    Simply impose the same requirements on Chinese goods. Problem solved.

    1. Re:Simple Solution by Anonymous Coward · · Score: 0

      Source review would be hilarious.

    2. Re:Simple Solution by Anonymous Coward · · Score: 0

      Or hiralious.

  15. Code Review To Find Exploits by mentil · · Score: 2

    The source code is being reviewed by the state cyberwarfare division? Sounds like they're scouring the code to find exploits they can use to attack enemies/spy on everyone.

    --
    Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
  16. Reminder by Anonymous Coward · · Score: 1

    several U.S. agencies linked to cyber-espionage and sabotage do the same. You may know them as NSA, CIA, etc.