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CNN reporter dives into the world of the Chinese hacking underground

“No website is 100% safe,” says Chen Xiao, member of a team of hackers that operate from a bare apartment just off the coast of Shanghai.

“There are websites with high-level security, but there is always a weakness,” adds Chen.

Pensive about his actual identity, Chen and his two colleagues belong to what some are calling a Chinese “civilian cyber militia,” attacking government and private websites around the world for fun and, occasionally, profit.

In a secret meeting with CNN correspondent John Vause, Chen showed the reporter around his apartment and demonstrated how Chan and his group do their business. The meeting was set up after weeks of “on-again, off-again e-mail exchanges.” When Chen finally agreed, “CNN was told to meet them on the island of Zhoushan, just south of Shanghai and a major port for China’s navy.”

Chen also runs an online community that sports more than 10,000 registered users, providing hacking articles, tools, news, and flash tutorials. He claims the website has been in operation for more than three years.

“There is a saying,” says Chen, “’Know about both yourself and the enemy, and you will be invincible.'”

Many now look to China as the biggest source of the world’s cybercrime, with a December 2007 report from McAffee calling the internet a front for “the next Cold War” as a new black market emerges for hacking tools and information. When the Chinese military was suspected to be hacking into Pentagon computers around June of last year, Beijing called the accusations “groundless” and accused U.S. officials of having a “Cold War mentality.”

Chen claims that he and his associates have hacked into some of the most prolific and secretive web sites in the world, including internal sites for the Pentagon. While he could not provide proof to back up these claims, he did admit that his associates were paid after-the-fact by the Chinese government for information gleaned from the Pentagon attack.

“I am telling you honestly, the Chinese government does not do such a thing,” said Chinese official Gang Qin, responding to Chen’s allegations.

James Mulvenon, who works for the Center for Intelligence Research and Analysis, called Chen and his ilk “useful idiots for the Beijing regime,” noting that they are tolerated provided they “do not conduct attacks inside of China.”

Government entities aren't the only targets of hackers these days. 2007 was a banner year for cyber hackers with regards to personal information. According to the Identity Theft Resource Center (ITRC) and non-profit groups, there were over 79 million reports of compromised personal data records for 2007 according to the ITRC -- this compares to roughly 20 million reports during all of 2006.

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Chinese economy power
By Ananke on 3/8/2008 2:45:40 PM , Rating: 2
Chinese economy is overwhelmingly dependant on exports - over 40%. If a decline in USA and EU consumption happens, and it happens now, it is a matter of time lag the Chinese economy to plunge, so do the Chinese stock market values. Since the most of the world implemented free market principles, the economic correlation between the countries is well greater than a decade ago. And similar crash happened to a smaller scale with the Asian crysis in 2000.
So, please follow economic logic and don't exagerate Chines or somebody's else power, since inevitable economic and thus social cycles exists.
Also, chinese hackers are tought and developed by government agencies there; yes there is large underground society, but the best are employed/slaved by the government and not presented in this article. I assume the same for the USA. Mostly they are involved in industrial and technology enspionage. I think the article is a joke, greatly overstating the reality.
Yee, I am born and worked in the Soviet block, if somebody knowledgable is even able to contact a media, believe me, he would not survive to meet a journalist, neither his 10 000 registered users.

RE: Chinese economy power
By spluurfg on 3/8/2008 3:23:48 PM , Rating: 4
Often when a chief importer of your goods falls away, another replaces them. In this case, the EU could easily become China's largest export market, if you feel American consumption will fall off a cliff. Also, there is a significant amount of consumption growth taking place within China, which of course is a significant market by sheer population.

“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
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