Cyber attacks and telecom equipment

Reading this article published by Timeonline along with the news of the recent 'ban' of Huawei in India,  what I find most surprising is not that Huawei plants  'special' devices in its equipment (it is known for years), but that the Indian media is campaigning hard to defend the Chinese giant Telecom Co.
Some newspapers are even warning that if India does not allow Huawei to penetrate the Indian market, it may become a 'diplomatic issue'. 
For the Indian bureaucrats in South Block, it is is  the supreme threat, "if you don't do what we want, it will become a diplomatic issue." 
When China is awake, Delhi is trembling, to paraphrase Napoleon.
I believe that India has her own interests to defend and should defend them, 'diplomatic issue or not.'
A lot has recently been written  about 'paid articles', I am wondering if the current 'information' campaign in favour of Huewei is not part of this pattern. Why should the Indian press not give the Indian (security) side of the coin?


Spy chiefs fear Chinese cyber attack
Timeonline
Michael Smith
INTELLIGENCE chiefs have warned that China may have gained the capability to shut down Britain by crippling its telecoms and utilities.
They have told ministers of their fears that equipment installed by Huawei, the Chinese telecoms giant, in BT’s new communications network could be used to halt critical services such as power, food and water supplies.
The warnings coincide with growing cyberwarfare attacks on Britain by foreign governments, particularly Russia and China.
A confidential document circulating in Whitehall says that while BT has taken steps to reduce the risk of attacks by hackers or organised crime, “we believe that the mitigating measures are not effective against deliberate attack by China”.
It is understood that Alex Allan, chairman of the Joint Intelligence Committee (JIC), briefed members of the ministerial committee on national security about the threat from China at a top-secret Whitehall meeting in January.
According to Whitehall sources, the meeting, led by Jacqui Smith, the home secretary, heard that ministers had “not paid sufficient attention to the threat in the past”, despite repeated warnings from the intelligence services. These included warnings from the security arm of GCHQ, which expressed concern because government departments, the intelligence services and the military will all use the new BT network.
A Whitehall report is understood to warn that, although there is at present a “low” risk of China exploiting its capability, “the impact would be very high”.
Huawei was allegedly founded with significant funding from the Chinese state. Its head is Ren Zhengfei, a former director of the telecoms research arm of the 3m-strong People’s Liberation Army.
The company is providing key components for BT’s new £10 billion network, which will update the UK’s telecoms with the use of internet technology. The report says the potential threat from Huawei “has been demonstrated elsewhere in the world”.
The multi-million-pound deal, signed in 2005, has led to a string of risk warnings from the intelligence and security services, with officials complaining of the failure of ministers to take them seriously.
It is unclear whether Patricia Hewitt, then trade and industry secretary, was warned of the problems when the deal was agreed in April 2005. However, the British company Marconi, which failed to win the contract in the face of a far cheaper offer from Huawei, did ask her to intervene to protect British jobs.
Hewitt, now a nonexecutive director of BT, declined to intervene, saying it was “a competitive tender between two commercial companies”. The most recent warnings about the cyberthreat to Britain’s security came in the JIC report on UK cybersecurity circulated in January and a Cabinet Office briefing paper that is understood to have emphasised Huawei’s links to the Chinese military.
Despite Allan’s warnings, and repeated warnings in the past, ministers remain reluctant to fund any move to remove the threat, officials say.
Yvette Cooper, chief secretary to the Treasury, is understood to have cautioned that it would be difficult to find the necessary funds in the current downturn. Ministers expressed concern that replacing the Chinese components with British parts would clash with government policy on competition.
According to the sources, the ministerial committee on national security was told at theJanuary meeting that Huawei components that form key parts of BT’s new network might already contain malicious elements waiting to be activated by China.
Working through Huawei, China was already equipped to make “covert modifications” or to “compromise equipment in ways that are very hard to detect” and that might later “remotely disrupt or even permanently disable the network”, the meeting was told.
This would be likely to have a “significant impact on critical services” such as power and water supplies, food distribution, the financial system and transport, which were dependent on computers to operate.
While technical modifications suggested to BT reduced the threat from hackers, organised criminals and most “hostile adversaries”, they were “not effective against deliberate attack from China”. The current friendly relations between Britain and China meant there was no immediate threat of this happening but there was still a very real threat that “covert functionality” within the components was already being used to gather intelligence.
Intelligence chiefs are believed to have warned that it was impossible to say if such information-gathering had already been introduced, since they had “only limited understanding of our adversaries’ attack capability”.
Whitehall departments were reportedly targeted by the Chinese in 2007, and a few months later Jonathan Evans, the MI5 director-general, wrote to 300 chief executives warning them that the Chinese were hacking into their systems and stealing confidential information.
An attempt by Huawei to merge with the US company 3Com, which provides computer security systems for thePentagon, was blocked last year after US intelligence warned that it would not be in US national security interests. In a new-year e-mail, Sun Yafang, Huawei’s chairwoman, told the company’s 85,000 employees that the global economic situation offered “both challenges and opportunities”. Four weeks later she was inside Downing Street as Gordon Brown welcomed Wen Jiabao, the Chinese premier.
Both Wen and Sun were keen to promote Huawei, which in little more than 20 years has grown into one of the world’s most powerful companies, with projected sales this year of £21 billion. Last year its sales jumped 46%. Its tentacles have reached most of the world’s telecoms companies.
Four days before Brown met Sun, intelligence chiefs had warned ministers of fears that Huawei’s role in the new system might have given China the ability to shut down Britain. Nor was it the first warning. Members of the ministerial committee on national security were told that “ministers had not paid sufficient attention to the threat from Huawei”.
John Tindle, professor in telecommunications engineering at Sunderland University, said software or hardware could sit hidden in a network, waiting to be activated. “If an unauthorised person were able to gain control of the equipment, its mode of operation could be changed,” he said. “The ability to move traffic across the network could be switched off. Traffic could be re-routed to another node controlled by the attacker.”
Huawei was selected to provide key components for the BT network in April 2005 despite allegations that it was bank-rolled by the Chinese government. The firm has previously shown itself to be opportunistic. The US company Cisco, one of Huawei’s main rivals, sued the Chinese company for alleged theft of its intellectual property rights in 2003. The case was settled out of court.
It is Huawei’s links to the Chinese military that cause most concern. Ren set up the company in 1988 after an edict from Deng Xiaoping, then China’s leader, that the country’s defence industry turn itself into profitable companies able to acquire modern technology.
A Pentagon report last week cited Huawei as a key part of the cyberthreat from China, noting that it retained “close ties” with the People’s Liberation Army (PLA). Huawei denies any continuing links to the PLA. A spokeswoman at the company’s UK headquarters dismissed the alleged links as “rumour and speculation”.

Cyberspace targets

Chinese hackers have repeatedly targeted western networks
-Computers at the Foreign Office and other Whitehall departments were attacked from China in 2007. In the same year, Jonathan Evans, the MI5 director-general, warned 300 British businesses that they were under Chinese cyber-attack
-The People’s Liberation Army is reputed to hold an annual competition to recruit the country’s best hackers
-Two years ago, Chinese Trojan horse spyware was found in the offices of Angela Merkel, the German chancellor