I. The Big Story: PLA, Equifax and Espionage
The US’s Department of Justice announced the indictment of four Chinese PLA service members in connection with the 2017 Equifax breach on February 10. The indictment alleged individuals of hacking data such as names, date of birth and social security numbers of nearly 150 million Americans, and driver’s license number of at least 10 million Americans. “This was one of the largest data breaches in history. It came to light in the summer of 2017, when Equifax announced the theft. The scale of the theft was staggering,” remarks the release.
The release states that the hackers broke into the Equifax network through a vulnerability in the company’s dispute resolution website. “Once in the network, hackers spent weeks conducting reconnaissance, uploading malicious software, and stealing login credentials, all to set the stage to steal vast amounts of data from Equifax’s systems. While doing this, the hackers also stole Equifax’s trade secrets, embodied by the compiled data and complex database designs used to store the personal information,” remarks the release.
The announcement comes after two years of investigation. Four members of the PLA- Wang Qian, Wu Zhiyong, Xu Ke, and Liu Lei are accused in the theft and economic espionage. Besides theft, the release also highlights a pattern of the Chinese state-sponsored computer intrusions and thefts targeting trade secrets and confidential business information. The release explicitly names the Chinese Ministry of State Security (MSS) and the PLA in the recent hacks. “Indeed, about 80 per cent of our economic espionage prosecutions have implicated the Chinese government, and about 60 per cent of all trade secret theft cases in recent years involved some connection to China,” states the release.
The recent indictments underscored the increasing irrelevance of a 2015 agreement between the two countries to refrain from hacking and cyber-attacks targeting intellectual property for commercial gain. Background for this deal: The Chinese hackers were named and shamed, and their pictures were broadcasted to the world in 2014. The US’s pressure tactics included an executive order putting sanctions on the table involving malicious cyber-enabled activities. The pressure tactic resulted in the Chinese to sign an agreement in 2015 to not engage in economic espionage for a commercial edge.
The Chinese government flatly denied accusations that its operatives are involved in conducting cyber-attacks or espionage. “The Chinese military has never engaged in any form of cyber theft. The US accusation is groundless and totally hegemonic,” said Senior Colonel Wu Qian, spokesperson for China's Ministry of National Defense, in a written statement published on Thursday.
Do read interesting related articles: An article in WIRED titled, China's Hacking Spree Will Have a Decades-Long Fallout.
An article in Money Morning titled, China’s Equifax Hack Is Part of a Trend That Could Quadruple One Stock.
While reading on this case, I came across an interesting paper by Garrett Hinck and Tim Maurer titled, “Persistent Enforcement: Criminal Charges as a Response to Nation-State Malicious Cyber Activity.” The fourth section of this paper has multiple case studies - one of them is on the PLA.
Book recommendation (Must read): After surfacing of this indictment, I started reading Peter Mattis and Matthew Brazil’s book, Chinese Communist Espionage: An Intelligence Primer. This book helps us to understand the chronology of the development of the Chinese party-state espionage machinery since 1927. It highlights the functioning of the red army’s assassination squad, the role of the Special Service Section (SSS) with an anecdotal story on the three heroes of the Dragon’s Liar, the role of the Political Protection Bureau (PPB) and the second bureau of the Central Revolutionary Military Commission (CRCM), the role of JSD in today’s CMC and the PLA SSF. One interesting take away for me was the role of Premier Zhou Enlai, the first director of the SSS and his involvement in the domestic and foreign affairs till 1976. Read the book to know more about this and much more.
II. Developing Stories
Taiwan-China Jet Scramble
Taiwan air force scrambled to intercept jets from mainland China that flew around the Island on Sunday. Beijing deployed the Shenyang J-11 fighter jets, at least four Xian H-6 bombers and Shaanxi KJ-500 airborne early warning and reconnaissance aircraft. The planes flew through the Bashi Channel and Miyako Strait — off the east coast of Taiwan — before returning to their bases in the eastern theatre command. Taiwan replied by releasing a photo of one of its F-16 jets armed with a missile. Beijing has been flying what it calls “island encirclement” drills on and off since 2016 when Taiwanese President Tsai Ing-wen first took office. The Senior Colonel Zhang Chunhui, a spokesman for PLA Eastern Theatre Command, said that the patrol also involved an unspecified number of destroyers and early warning and control aircraft.
A similar incident happened the next day, when mainland warplanes, including the H-6 bombers, crossed the median line. This time, Taiwan sent two warplanes to intercept the Chinese mainland jets. The US military also flew its three air force plane including the two B-52 bombers near Taiwan. The ministry said in a statement on its website that a U.S. MC-130J special mission aircraft flew across the Taiwan Strait from north to south, while two B-52 bombers flew along Taiwan’s east coast, also from north to south. The ministry said it was aware of the flights and had monitored them throughout. It appeared to be a response to the Chinese drills earlier in the week.
The US Admiral Philip Davidson, commander of the US Indo-Pacific Command, said “the United States was all in to counter China in the Pacific, citing its “excessive territorial claims, debt-trap diplomacy, violations of international agreements, and theft of international property, military intimidation and outright corruption.” He threatened China of creating instability in the Pacific Ocean and accused it of military intimidation in the region.
PLA’s Fight with the Novel Coronavirus
Last week’s newsletter covered the chronology of events involving PLA’s fight with the virus till February 7, 2020. Post that, the CMC sent-out additional 2600 medical staff to Wuhan with 11 large and medium transport aircraft. It included six Yun-20, three IL-76 and two Yun-9 which took-off from seven airports across China. These planes were carrying 74 tons of medical supply. This is the first time the Y-20 conducted a large-scale military operation in a situation other than war, and also the first time the PLA AF conducted a large-scale emergency aerial delivery mission systematically featuring large and mid-sized cargo planes, the PLA AF said in a statement on Thursday.
The 2,600 PLA medical personnel are being transferred from several medical institutes from the navy, air force, rocket force, strategic support force, joint logistics support force and armed police force. This reflects the joint operation capabilities of the PLA, which it is trying to develop since the early 2000s. At the request of the Hubei Provincial Epidemic Prevention and Control Headquarters, the Central theatre also dispatched two transport helicopters to deliver urgently needed medicines and scarce supplies from Wuhan to Xiangyang and Yichang.
III. India and China
Indian Army’s Lt Gen Abhay Krishna writes on China’s military modernisation and its impact on India in the Times of India. He implies that China’s military modernisation, and force and bureaucratic restructuring creates a threat for India. Its Western Theatre Command enables synergising the capabilities of the forces, which enables jointness in command operations and enhances capabilities. Its emphasis on shifting from manpower to high tech, model, muscular force, and development of asymmetric capabilities in India’s neighbourhood. This has raised concerns in India’s diplomatic and military circles. However, he does highlight the vulnerabilities and challenges for the PLA in the future.
Abhijeet Singh, senior fellow and the head of maritime policy at the Observer Research Foundation, argues in SCMP that in countering India’s efforts to dominate South Asian waters, China may be seeking a grand bargain: allow each side control over their respective littorals – the Bay of Bengal and the South China Sea – and the maintenance of respective constabulary presences. The article focuses on the recent activities of the Chinese research vessel the Shinyan-1 in India’s EEZ and New Delhi’s response.
“It seems plausible that what Indian observers see as provocative Chinese deployments in the Andaman Sea are a subtle caution from Beijing that Indian efforts to dominate littoral South Asia are unacceptable; a gentle reminder that the Indian Ocean is not Indian, and that the Chinese constabulary presence is entirely legitimate,” writes Singh.
Interesting point: Far from a classical sea denial strategy - the Chinese game plan seems to be one of counter-denial, using non-military platforms to prevent India from executing its denial strategy against China’s navy in South Asia.
If China wants is a “grand bargain” that would allow itself and India to exert some control over their regional littorals – the Bay of Bengal and the South China Sea – with neither side attempting to impede the other’s maritime trade and economic activity.
Also, read this article from 2019 in China Military Online claiming Indian military industry suffocated by troubles.
IV. Research Papers and Articles
China’s Military Diplomatic Relations
ChinaPower published a research article on China’s increasing military-diplomatic activities since 2014. It divides the military-diplomatic activities into five parts: joint military exercises, port calls (ETF AND Non-ETF), senior-level meetings and military dialogues, non-traditional security operations and functional exchange. The paper claims that from 2004-14, China participated in 130 military exercises. In 2016 alone, it participated in 124 military exercises. It also claims that the number of port calls, senior-level meetings and military dialogues has increased over the past one and half decades.
China’s Nuclear Force Modernisation
ChinaPower published a research article on China’s nuclear force modernisation, arguing that its nuclear strategy is defensive and differs from the US and Russia, which possess 87 per cent of the world’s nuclear stockpile. China’s nuclear strategy centres on deterrence through “assured retaliation,” which is the ability to survive an initial attack and retaliate with nuclear strikes that inflict unacceptable damage on the attacker. In accordance with this strategy, a key feature of China’s nuclear posture is that it maintains a low alert level. The PLA keeps its warheads separate from missiles until they are paired in preparation for a retaliatory strike.
The article has a table on China’s Land-Based Missile, the year of missile’s entry in the service, its maximum range and the number of launchers. It also highlights China’s efforts to complete the nuclear triad status. Most importantly, it focuses on the change in the anticipated situation post the PLA’s commissioning of DF-41 and JL-3.
Arms Sales of Chinese Companies
SIPRI published a paper claiming four out of top 20 arms exporting companies in the world are Chinese. They build on Béraud-Sudreau and Nouwens estimate of the Chinese arms sale. The paper claims that Aviation Industry Corporation of China (AVIC), China Aerospace Science and Industry Corporation (CASIC), China Technology Group Corporation and North Industry Group Corporation are the four major players in the Chinese arms exports. It has left out China Ship Building Industry Corporation (CSIC) and China’s State Shipbuilding Corporation (CSSC) due to lack of available data. Click here for data, methodology and nuances of the paper.
Social Credit System and PLA
Meia Nouwens argues that the social credit system might be applied to the PLA, particularly when Xi and CCP are increasingly concerned about the military’s loyalty to the party. She argues that the PLA version of a social credit system seems to be a new tool for punishing betrayal, dissuading dissent and rewarding allegiance to the military.
“The Sixth Tone article reports that 17 military personnel were ‘blacklisted’ in China’s social credit system in Jilin City and restricted from travelling by air and rail and from seeking civil service employment. Their names and addresses were posted in Chinese news articles and on the WeChat account of the Jilin City military recruitment office. They were prohibited from taking out loans and insurance policies and banned from enrolling in educational institutions for two years,” writes Nouwens. Similar examples were observed in other Chinese provinces. More recently, in March 2019, Weihai City prefecture in Shandong published its own ‘Implementation Plan for the Evaluation of Personal Credit Scores in the Field of National Defense Mobilization’, which outlined how a social credit record could be used as both a carrot and a stick in domestic military matters. Punishments were listed for those deemed to be acting against national defence interests.
Also, read China’s military modernisation backgrounder by CFR.
V. Jiefangjun Bao (解放军报) Liberation Army News
After CMC’s approval, the Political Works Department, the Logistical Support Department and Disciplinary Inspection Commission jointly issued a notice on strict disciplinary provisions on Military to Mural Exchanges. The notice clarifies 13 strictly forbidden exchanges. This includes money, vehicles, gifts, souvenirs, housing and public service, other guarantees and more for local leaders. The notice was issued to curb corruption which is plaguing the PLA since the past two decades.
President Xi also recently signed an order to issue the military flags trail which will take effect from May 1, 2020. The Regulations aim at giving full play to the role of military flags as an inspiration to the troops and establishing the military flags management system for the new era. It contains eight chapters and 30 articles, which specify the basic composition, design and classification of military flags, and standardize the management process and duties for the awarding, requisition, production, distribution, replacement, use and storage of military flags.
VI. Drills, Training and Exercises
The PLA AF August 1st aerobatic team performed at the Singapore Airshow on Feb 11, showcasing China’s aeronautic equipment and military’s confidence despite the virus scare. “Every performance was great. It was a great opportunity for me to perform with pilots from other countries,” said Jing Fei, a pilot in the August 1st aerobatic team, adding that he was honoured and proud to witness the profound friendship between the Chinese and Singaporean peoples.
After the performance, members of the August 1st aerobatic team paid tribute to comrades and medical workers on the frontline of the battle against the coronavirus epidemic and sent well-wishes to Wuhan and China.
A day before the air show, Washington warned China not to use the platform to strong-arm US partners or steal intelligence and military technologies. In a bid to counter Beijing’s growing footprint in the Indo-Pacific region, Washington is bringing its largest-ever delegation to the air show this week as it steps up “global power competition” with China, said R. Clarke Cooper, assistant secretary of state for political-military affairs.
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