Britain Warned Businesses of Threat of Chinese Spying

[FarCenter]

By JOHN F. BURNS - Published: January 31, 2010
LONDON — British business executives dealing with China were given a formal warning more than a year ago by Britain’s security service, MI5, that Chinese intelligence agencies were engaged in a wide-ranging effort to hack into British companies’ computers and to blackmail British businesspeople over sexual relationships and other improprieties, according to people familiar with the MI5 document.

The warning, in a 14-page document titled “The Threat from Chinese Espionage,” was prepared in 2008 by MI5’s Center for the Protection of National Infrastructure, and distributed in what security officials described as a “restricted” form to hundreds of British banks and other financial institutions and businesses. The document followed public warnings from senior MI5 officials that China posed “one of the most significant espionage threats” to Britain.

Details of the document were confirmed Sunday by two people familiar with its contents, who both spoke on an anonymous basis because of the sensitivity of the subject. The document’s existence was first reported in the British newspaper The Sunday Times.

<SNIP>

But a starkly different picture emerges from the document circulated by MI5, Britain’s domestic security service. The Sunday Times account, quoting from the document, said that officers from the People’s Liberation Army and the Ministry of Public Security had approached British businesspeople at trade fairs and exhibitions with offers of “gifts” that included cameras and computer memory sticks that were found to contain bugs that provided the Chinese with remote access to the recipients’ computers.

“There have been cases where these ‘gifts’ have contained Trojan devices and other types of malware,” the document said, according to The Sunday Times. The accuracy of the paper’s citations from the document was verified by the two people contacted by The New York Times who said they had seen the document.

The MI5 report described how China’s computer hacking campaign had attacked British defense, energy, communications and manufacturing companies, as well as public relations companies and international law firms. The document explicitly warned British executives dealing with China against so-called honey trap methods in which it said the Chinese tried to cultivate personal relationships, “often using lavish hospitality and flattery,” either within China or abroad.

<SNIP>http://www.nytimes.com/2010/02/01/world/europe/01spy.html