Michael Maloof, a former senior security policy analyst in the Office of the Secretary of Defense of US, said that the Chinese government has pervasive access to about 80 percent of the world’s communications. This access gives the Chinese government the ability to undertake remote industrial espionage. The expert fears that the Chinese government and China’s People’s Liberation Army (PLA) is capable of intercepting communications in countries like USA even though the Chinese vendors haven’t built any commercial telecom infrastructure in there. The report also said that China is looking currently to nail down the remaining 20 percent of the world’s telecommunication infrastructure.
Chinese government and its People’s Liberation Army are achieving the access through two Chinese telecom companies – Huawei Technologies Co. Ltd and ZTE Corporation. Huawei and ZTE power commercial telecom infrastructures in more than 145 countries around the globe. Between the two, Huawei is now the world’s number 2 telecom vendor after the Swedes vendor Ericsson.
The Chinese telecom vendors are known for their highly subsidized commercial offers to telecom operators. Both the companies are believed to be heavily backed the Chinese governments in terms of finance. Contracts with Huawei and ZTE let the operators take loans and pay them years later.
However, some governments including that of USA and India were not very friendly about Huawei and ZTE. Some projects in both the countries were thwarted recently on grounds of security and cyber espionage. Both the governments believe that the companies provide remote access of network infrastructure to Chinese governments using backdoor implanted in the telecom systems.
A recent presentation of Huawei’s Deep Packet Inspection (DPI) in Dubai raised the concerns even more. With DPI technology Huawei and it’s customers can inspect every packet passing through the network, and can filter out packet by packet at a throughput of 10 Gbps. The technology is touted to increase the security of the infrastructure and improve Quality of Service offered to the end users. However, experts believe the technology can also be used for industrial espionage.
Security analysts pointed out that the industrial espionage can happen in certain countries even if the two Chinese vendors don’t have any telecom infrastructure in those countries. Because of the multinational nature of today’s businesses official communications often take place over multiple geographic regions transmitted through commercial networks. Most of the companies, however, use Virtual Private Network (VPN) technology to encrypt the communication over public networks. The encryption is believed to be very low by experts. And, technologies like Huawei’s DPI can effectively intercept those. That means, if a US company is sending a file over VPN to its UK office (where Huawei has strong presence), there is a high probability that the communication will be intercepted.
This could give the Chinese government the power to apply cyber espionage and cause substantial damages if it wants to.