Indian Strategic Studies: 12/26/20

26 December 2020

Intelligence lessons from Ladakh stand-off

by Ameya Pratap Singh

Chinese intrusions in Eastern Ladakh earlier this year have provoked a review of India’s intelligence apparatus. After all, how could the PLA mobilise and deploy a significant number of troops from its interior for an ingress across a heavily militarised border without a timely Indian counter-response? All signs point to an intelligence failure. Understandably, a number of analysts have reiterated the need for reforming India’s intelligence apparatus that can plug loopholes and avoid a similar ill-fate in the future. But, all these policy suggestions — while valuable in some sense — rest on an erroneous assumption: Intelligence can be made full-proof if certain operational and organisational infirmities are overcome. I argue, it cannot.

M K Narayanan, former National Security Adviser, argues that it is “axiomatic that leaders make better decisions when they have better information”. The Chinese made no effort to conceal PLA troop mobilisations in Pangong Tso and Hotsprings-Gogra and so there was no question of them having evaded India’s high-quality imagery intelligence (IMINT) and signals intelligence (SIGINT) capabilities. He concludes, therefore, that the intelligence failure occurred at the “interpretation” or “analysis” stage. Indian intelligence analysts failed to “decipher China’s intentions in time”. On this front, he criticises the decision of the National Security Council Secretariat (NSCS) to dismantle the Joint Intelligence Committee (JIC), and laments the lack of China experts in India’s premier foreign intelligence agency, R&AW.

Will Pakistan’s Military Lose Its Grip on Power?

By Aqil Shah

Pakistan’s military has long used its rivalry with India to legitimize its political and economic power and to place itself above reproach. Although it has never prevailed in a military conflict, the army has waged a successful war against democracy, ruling Pakistan directly for roughly half the country’s post-independence history and wielding undue political influence over elected civilian governments for much of the other half. The generals helped the current prime minister, Imran Khan, rise to power through a grossly manipulated parliamentary election in 2018. And now they run the country from behind the thinnest façade of civilian rule Pakistan has ever seen.

But in recent months, the military has faced a mounting political challenge. The Pakistan Democratic Movement (PDM)—an unprecedented coalition of once fractious opposition parties—has staged large rallies against Khan’s government, demanding the prime minister’s resignation. Buoyed by backing from the generals, Khan and his Pakistan Tehrik-e-Insaf party (PTI) seem unlikely to bend, but the protests have another, even bigger target: the military itself. Many Pakistanis see the army as the real power behind Khan and the cause of the country’s political and economic woes. Their anger has occasioned a remarkable shift as major political figures speak out for the first time against the military’s dominance of Pakistan—a shift that could eventually threaten the military’s chokehold on political power.

THE POWER BEHIND THE THRONE

Will China Turn Off Asia’s Tap?

BRAHMA CHELLANEY

NEW DELHI – Even after Asia’s economies climb out of the COVID-19 recession, China’s strategy of frenetically building dams and reservoirs on transnational rivers will confront them with a more permanent barrier to long-term economic prosperity: water scarcity. China’s recently unveiled plan to construct a mega-dam on the Yarlung Zangbo river, better known as the Brahmaputra, may be the biggest threat yet.

China dominates Asia’s water map, owing to its annexation of ethnic-minority homelands, such as the water-rich Tibetan Plateau and Xinjiang. China’s territorial aggrandizement in the South China Sea and the Himalayas, where it has targeted even tiny Bhutan, has been accompanied by stealthier efforts to appropriate water resources in transnational river basins – a strategy that hasn’t spared even friendly or pliant neighbors, such as Thailand, Laos, Cambodia, Nepal, Kazakhstan, and North Korea. Indeed, China has not hesitated to use its hydro-hegemony against its 18 downstream neighbors.

China’s Influence on Conflict Dynamics in South Asia

China has embarked on a grand journey west. Officials in Beijing are driven by aspirations of leadership across their home continent of Asia, feelings of being hemmed in on their eastern flank by U.S. alliances, and their perception that opportunities await across Eurasia and the Indian Ocean. Along the way, their first stop is South Asia, which this report defines as comprising eight countries—Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka—along with the Indian Ocean (particularly the eastern portions but with implications for its entirety). China’s ties to the region are long-standing and date back well before the founding of the People’s Republic in 1949. A cargo ship navigates one of the world’s busiest shipping lanes, near Hambantota, Sri Lanka, on May 2, 2018. (Adam Dean/New York Times)

However, around the beginning of this century, Beijing’s relations with South Asia began to expand and deepen rapidly in line with its broader efforts to “go global.” General Secretary Xi Jinping’s ascendance to China’s top leader in 2012 and the subsequent expansion of Chinese activities beyond its borders—including through Xi’s signature Belt and Road Initiative (BRI)—have accelerated the building of links to South Asia in new and ambitious ways.

In South Asia, China has encountered a dynamic region marked by as many endemic problems as enticing opportunities. It is a region struggling with violent conflict, nuclear-armed brinksmanship, extensive human development challenges, and potentially crippling exposure to the ravages of climate change. But it is also one whose economic growth prior to the COVID-19 pandemic was robust, that has a demographic dividend, and whose vibrant independent states are grappling with the challenges of democratic governance—including the world’s largest democracy in India. China’s expanding presence in the region is already reshaping South Asia, which is simultaneously emerging as an area where U.S.-China and regional competition plays out from the Himalayan heights to the depths of the Indian Ocean.

TECH GIANTS ARE GIVING CHINA A VITAL EDGE IN ESPIONAGE

BY ZACH DORFMAN

In 2017, as U.S. President Donald Trump began his trade war with China, another battle raged behind the scenes. The simmering, decadelong conflict over data between Chinese and U.S. intelligence agencies was heating up, driven both by the ambitions of an increasingly confident Beijing and by the conviction of key players in the new administration in Washington that China was presenting an economic, political, and national security challenge on a scale the United States had not faced for decades—if ever.

This series, based on interviews with over three dozen current and former U.S. intelligence and national security officials, tells the story of China’s assault on U.S. personal data over the last decade—and its consequences.

Part 1: China Used Stolen Data to Expose CIA Operatives in Africa and Europe

After China discovered extensive U.S. networks inside its own government, it struck back with a series of hacks that allowed it to expose CIA operatives in Africa and Europe—while upping domestic security at home to protect against further U.S. infiltration.

A Quantum Leap Forward: Chinese Influence Grows in Iraq’s Oil Market

By Sophie Zinser

Chinese ZhenHua Oil Company is finalizing a rare multibillion-dollar deal with Iraq’s state-run oil marketing company (SOMO), in which ZhenHua would agree to a monthly purchase of 4 million oil barrels over five years. ZhenHua plans to pay SOMO $2 billion up front, enough to significantly boost Iraq’s depressed and crude-oil reliant economy. The deal is still being debated in the Iraqi parliament, and newly appointed Iraqi Prime Minister Mustafa al-Kadhimi will have the final approval. But regardless of whether or not ZhenHua gets the deal, all the other major contenders are state-owned Chinese companies, as all have the liquid cash on-hand that the deal’s terms require. A multibillion dollar agreement at such a low point in Iraq’s economy would mark a quantum leap forward for Sino-Iraqi relations.

The COVID-19 pandemic and March’s subsequent oil price crash has led to Iraq’s economy contracting by 12 percent — more than any other OPEC country — this year. In Iraq, crude oil exports account for most of the government’s annual income. And despite China’s checkered attempts at “greening” its Belt and Road Initiative — including touting an ambitious carbon-neutral 2060 plan while bankrolling much of the developing world’s coal production — China still remains the largest crude oil importer globally, importing $238.7 billion, or 22.6 percent of overall crude oil imports as of 2019. Elected after months of political instability, Prime Minister Mustafa al-Kadhimi optimistically frames China as a robust partner for economic growth in Iraq, reaffirming the nation’s prominent role in the Middle East’s oil markets.

This is not the first time that ZhenHua and SOMO have embarked on large-scale collaboration. In 2018, Iraq aimed to supply China with more crude oil in another deal that nearly passed but was struck down at the eleventh hour. But on December 17, the Iraqi Cabinet agreed to renew a contract with ZhenHua, drilling three new directional oil wells in the oil field of East Baghdad, located about 10 kilometers to the east of Baghdad city. The field has approximately 8 billion barrels worth of oil. If the multi-billion dollar deal is approved, this recent contract could serve the first step towards ZhenHua’s investments’ broader impact on Iraq’s economy.

Assessing China's Digital Silk Road Initiative

As part of China’s massive Belt and Road Initiative (BRI), the biggest infrastructure undertaking in the world, Beijing has launched the Digital Silk Road (DSR). Announced in 2015 with a loose mandate, the DSR has become a significant part of Beijing’s overall BRI strategy, under which China provides aid, political support, and other assistance to recipient states. DSR also provides support to Chinese exporters, including many well-known Chinese technology companies, such as Huawei. The DSR assistance goes toward improving recipients’ telecommunications networks, artificial intelligence capabilities, cloud computing, e-commerce and mobile payment systems, surveillance technology, smart cities, and other high-tech areas.

China has already signed agreements on DSR cooperation with, or provided DSR-related investment to, at least sixteen countries [PDF]. But the true number of agreements and investments is likely much larger, because many of these go unreported: memoranda of understanding (MOUs) do not necessarily show whether China and another country have embarked upon close cooperation in the digital sphere. Some estimates suggest that one-third of the countries participating in BRI—138 at this point—are cooperating on DSR projects. In Africa, for instance, China already provides more financing for information and communications technology than all multilateral agencies and leading democracies combined do across the continent.

Hackers leak documents revealing China's coronavirus censorship

By ABIGAIL ADLER

China's efforts to influence online opinion during the coronavirus pandemic have been brought to light through secret government directives and other documents that have been discovered and reviewed by The New York Times and ProPublica.

It is no secret that China rigidly controls Internet content. However, the discovered documents, which were shared with the Times and ProPublica by a hacker group known as CCP (Chinese Communist Party) Unmasked, reveal just how much back-stage effort is involved in maintaining government control on the Internet. The two media outlets verified the legitimacy of many of the documents, some of which had been acquired independently by China Digital Times, a website that follows Chinese Internet controls.

The Times reported that the documents include more than 3,200 directives and 1,800 other files from the Cyberspace Administration of China (CAC), the country's Internet regulator located in the eastern city of Hangzhou. Also included were files and code from Urun Big Data Services, a Chinese company that produces software used by the government to track online discussions and oversee troops of online commenters.

The documents reveal that China's censorship of information about the outbreak began in early January, before coronavirus had even been decisively identified, according to The Times. A few weeks later, government authorities doubled down on anything that suggested that China responded to the virus poorly, including the February 7 death of Chinese doctor Li Wenliang, who originally alerted authorities about the new viral outbreak.

CHINA USED STOLEN DATA TO EXPOSE CIA OPERATIVES IN AFRICA AND EUROPE

BY ZACH DORFMAN

Around 2013, U.S. intelligence began noticing an alarming pattern: Undercover CIA personnel, flying into countries in Africa and Europe for sensitive work, were being rapidly and successfully identified by Chinese intelligence, according to three former U.S. officials. The surveillance by Chinese operatives began in some cases as soon as the CIA officers had cleared passport control. Sometimes, the surveillance was so overt that U.S. intelligence officials speculated that the Chinese wanted the U.S. side to know they had identified the CIA operatives, disrupting their missions; other times, however, it was much more subtle and only detected through U.S. spy agencies’ own sophisticated technical countersurveillance capabilities.

The CIA had been taking advantage of China’s own growing presence overseas to meet or recruit sources, according to one of these former officials. “We can’t get to them in Beijing, but can in Djibouti. Heat map Belt and Road”—China’s trillion-dollar infrastructure and influence initiative—“and you’d see our activity happening. It’s where the targets are.” The CIA recruits “Russians and Chinese hard in Africa,” said a former agency official. “And they know that.” China’s new aggressive moves to track U.S. operatives were likely a response to these U.S. efforts.

This series, based on interviews with over three dozen current and former U.S. intelligence and national security officials, tells the story of China’s assault on U.S. personal data over the last decade—and its consequences.

BEIJING RANSACKED DATA AS U.S. SOURCES WENT DARK IN CHINA

BY ZACH DORFMAN

In early 2013, as Communist Party General Secretary Xi Jinping prepared to assume the Chinese presidency, very few people in the West had any idea what kind of leader he was. In January of that year, the New York Times’ Nick Kristof, an experienced China correspondent, wrote that Xi “will spearhead a resurgence of economic reform, and probably some political easing as well.”

This series, based on interviews with over three dozen current and former U.S. intelligence and national security officials, tells the story of China’s assault on U.S. personal data over the last decade—and its consequences.

After China discovered extensive U.S. networks inside its own government, it struck back with a series of hacks that allowed it to expose CIA operatives in Africa and Europe—while upping domestic security at home to protect against further U.S. infiltration.

Part 3: As Trump’s Trade War Raged, Chinese Spy Agencies Enlisted Private Firms

Coming Wednesday, Dec. 23

It was a radically mistaken assessment. But even inside the U.S. government, knowledge of China—and its intensions—was at a low point. During the 2000s, U.S. intelligence had operated with relative confidence against Beijing. But during China’s biggest political transition in decades, American officials were looking through an increasingly opaque glass.

Five Cheers for 2021

MARK LEONARD

LONDON – A lot of chickens came home to roost this year. The COVID-19 pandemic was not some random thunderbolt from out of the blue, but rather a man-made “natural” disaster, holding up a mirror to so many of our bad habits and dangerous – indeed, lethal – practices.

After all, the coronavirus’s transmission from bats to humans was a product of mass urbanization and destructive encroachment on natural habitats, and its rapid spread was a result of over-industrialization, frenetic trade, and contemporary travel habits. Likewise, the world’s inability to come together to contain the crisis reflects the extent to which governance capacity lags behind hyper-globalization.

Many of these failings were evident before the virus hit, with people in many countries embracing nationalist and populist leaders who promised decisive action in a world that seemed out of control. But though this has been a difficult year, there are at least five reasons to be cheerful about 2021.

The first and most obvious reason is US President Donald Trump’s defeat. It is a relief to be able to wake up in the morning without worrying about what the world’s most powerful person said on Twitter while you were sleeping. The United States will soon be back in capable hands. In addition to making America more predictable and responsible, President-elect Joe Biden’s victory holds important implications for democracies around the world.

Russia’s Naval Base in Sudan Opens a Long-Sought Gateway to the Red Sea

Samuel Ramani

Following Russian Prime Minister Mikhail Mishustin’s approval last month of a new naval base to be built on Sudan’s Red Sea coast, official Kremlin statements have billed the facility as a logistics center that will be defensive in nature—for principal use as a resupply station for Russian warships. In spite of these assurances, Russian media outlets have touted the base as Moscow’s gateway to the Red Sea and Indian Ocean, widening the reach of its naval forces. The basing agreement’s terms, which were released on Dec. 8, appear to support this latter view: In exchange for military aid, Sudan will allow Russia to maintain its facility in Port Sudan for at least 25 years, allowing it to bolster its influence in key maritime theaters.

The new naval base is the culmination of decades of close relations between Moscow and Khartoum. The former dictator Omar al-Bashir, who ruled Sudan for almost three decades after ousting Prime Minister Sadiq al-Mahdi in a 1989 coup, gradually cultivated deeper ties with Russia. Even though Russia supported the 2005 United Nations embargo on arms exports to the parties in the brutal civil war in Darfur, Moscow shipped T-72 battle tanks, grenade launchers and small arms to Sudan in 2008. At a November 2017 meeting with Russian President Vladimir Putin, Bashir accused the United States of supporting rebel forces in Darfur and urged Russia to protect Sudan from supposed American aggression, claiming Sudan could be Russia’s “key to Africa.” This meeting resulted in preliminary negotiations on the construction of a Russian naval base in Sudan.

The Big Hack Is Damaging. That Doesn’t Make Russia 10 Feet Tall.

BY DANIEL DEPETRIS

There’s little dispute that the recent wide-scale cyberattack is a damaging, not to mention embarrassing, setback for U.S. cyberdefenses. A senior intelligence official said that it could take months or even years to fully understand the damage done by the Russia-linked hackers who breached networks at over 40 private companies, think tanks, and the departments of State, Defense, Homeland Security, and even the National Nuclear Security Administration. But the last thing the United States should be doing as its seeks to plug holes and harden its overall defenses is inflating Russia’s overall power or giving Vladimir Putin more credit than he deserves.

The U.S. foreign-policy establishment may choose to believe otherwise, but the reality is that Russia is not some geopolitical giant that is close to establishing a bigger and better Soviet Union. Instead, it’s a declining power with huge internal weaknesses and vulnerabilities. Putin may put up a public front as a no-nonsense, master grand strategist with an impeccable background in intelligence and subversion. But back on Planet Earth, he is a manager of a country with an anemic economy, an overrated military, and sub-par socioeconomic metrics.

Let’s start with Russia’s economic outlook, which can at best be categorized as a mess. The World Bank clocks Russia’s GDP at $1.7 trillion, a figure that seems impressive at first blush. But taken in context, the number is actually quite underwhelming. Russia’s current GDP has barely improved since 2010, when crude oil prices were relatively high and Moscow was not yet hobbled by U.S. and European sanctions imposed in the wake of its 2014 annexation of Crimea. Russia’s economy is roughly the same size as Canada’s, a country with one-quarter as many people. The macroeconomics are quite clear, and they aren’t trending in Moscow’s direction.

Why German Troops Won’t Get Armed Drones

BY ELISABETH BRAW

Last week, the SPD – Germany’s Social Democrats, who govern the country as the junior partner in Angela Merkel’s coalition government – announced they won’t support the acquisition of armed drones. That means the Bundeswehr won’t get any. It will continue to be a not-quite-up-to-par partner to the United States, France, and the UK. Perhaps more damagingly, the decision puts Bundeswehr soldiers’ lives at risk.

Until the Social Democrats’ decision – which violated a coalition agreement, but which they justified with the need for a proper debate on the issue, even though the issue has been energetically discussed for the past several years – it seemed certain that the Bundeswehr would get the armed drones it says it needs and which Defense Minister Annegret Kramp-Karrenbauer wants to acquire. But in a coalition government, major policy decisions require consensus, and even though some Social Democrats support armed drones, the party as a whole couldn’t bring itself to do so.

The reason the issue has been allowed to fester begins with Merkel herself. Even though she’s an exceptionally skilled politician, masterful at governing, more agile and tenacious than most of the German and international politicians who have come and gone during her long tenure as chancellor, she has never really warmed to the issue of national and international security.

Two Years In, US Quantum-Science Coordinator Lays Out Next Steps

BY BRANDI VINCENT

Monday marked two years since the passage of the National Quantum Initiative, or NQI Act—and in that time, federal agencies followed through on its early calls and helped lay the groundwork for new breakthroughs across the U.S. quantum realm.

Now, the sights of those helping implement the law are set on the future.

“I would say in five years, something we'd love to see is...a better idea of, ‘What are the applications for a quantum computer that’s buildable in the next five to 10 years, that would be beneficial to society?’” Charles Tahan — the Office of Science and Technology Policy Assistant Director for Quantum Information Science — told Nextgov in an interview Friday. He also serves as the director of the National Quantum Coordination Office, a cooperation-pushing hub established by the legislation.

Tahan reflected on some foundational moves made over the last 24 months and offered a glimpse into his team’s big-ticket priorities for 2021.

Quantum devices and technologies are among an ever-evolving field that hones in on phenomena at the atomic scale. Potential applications are coming to light, and are expected to radically reshape science, engineering, computing, networking, sensing, communication and more. They offer promises like unhackable internet or navigation support in places disconnected from GPS.

Federal agencies have a long history of exploring physical sciences and quantum-related pursuits—but previous efforts were often siloed. Signed by President Donald Trump in 2018, the NQI Act sought to “provide for a coordinated federal program to accelerate quantum research and development for the economic and national security” of America. It assigned specific jobs for the National Institute of Standards and Technology, Energy Department and National Science Foundation, among others, and mandated new collaborations to boost the nation’s quantum workforce talent pipeline and strengthen society’s grasp of this relatively fresh area of investment. The functions of the National Quantum Coordination Office, or NQCO, were also set forth in the bill, and it was officially instituted in early 2019. Since then, the group has helped connect an array of relevant stakeholders and facilitate new initiatives proposed by the law.

Water wars: How conflicts over resources are set to rise amid climate change

From erratic rainfall to severe droughts, global warming is increasing competition for water around the world, with water-related conflicts on the rise.

According to the WRI, more than two billion people live in countries experiencing "high" water stress.

Conserving forests, wetlands and watersheds, including those around cities, can help absorb rainfall, helping stem crop losses from flooding and drought.

From Yemen to India, and parts of Central America to the African Sahel, about a quarter of the world's people face extreme water shortages that are fueling conflict, social unrest and migration, water experts said on Wednesday.

With the world's population rising and climate change bringing more erratic rainfall, including severe droughts, competition for scarcer water is growing, they said, with serious consequences.

"If there is no water, people will start to move. If there is no water, politicians are going to try and get their hands on it and they might start to fight over it," warned Kitty van der Heijden, head of international cooperation at the Netherlands' foreign ministry.

"It's threats like these that keep me up at night," the diplomat told a webinar hosted by the World Resources Institute (WRI), a U.S.-based research group.

Biden is 'considering cyber attacks' on Russian infrastructure in retaliation for 'Pearl Harbor of hacks' that breached 200 US federal agencies and firms - as fired DHS Cybersecurity chief Chris Krebs admits his 'failure' to stop it

Joe Biden is said to be considering cyber attacks on Russian infrastructure in retaliation for the hacks that breached 200 US federal agencies and firms.

The president-elect's team will consider several options over the country's suspected role in the unprecedented hacking of US government agencies and companies, sources have told Reuters.

The massive data breach enabled hackers believed to be from Russia's SVR foreign intelligence service to explore the networks of government agencies, private companies and think-tanks for months. Moscow has denied involvement.

Fired DHS Cybersecurity chief Chris Krebs on Sunday admitted his 'failure' to stop the hack, telling CNN: 'It happened on my watch. We missed it. A bunch of other folks missed it. But there is work to do now going forward to make sure A: we get past this, that we get the Russians out of the networks, but, B: that it never happens again.'

He warned: 'I'd be very careful with escalating this.'

Biden is reported to be looking at new financial sanctions and cyber attacks on Russian infrastructure, people familiar with the matter say.

How Should the U.S. Respond to Russia’s Cyberattack?

By MARY HARRIS

The problem with trying to understand the massive data breach the United States is dealing with at the moment is that the list of agencies and industries that have been affected just keeps growing. There are Fortune 500 companies, places like Microsoft and Cisco. Then there are state and federal governments: the city of Austin, Texas, the U.S. nuclear weapons agency, the Department of Homeland Security.

And Slate’s Fred Kaplan says that right now, all of these places have a bunch of workers scouring their back-end systems, looking for clues. They are looking for signs of a perniciously quiet kind of infiltration. Infiltration made possible by malware that rode in as part of a software update pushed through months ago, to nearly 18,000 clients of a firm called SolarWinds. “We’ve never really seen anything like this,” said Kaplan, the author of Dark Territories, a book about the history of cyberwarfare.

This kind of hack is called a “supply chain” attack. It works like this: A hacker plants malware in code used by a software company to build its products. It’s called “Trojanizing,” because the malware then gets popped into the software company’s own code, and when they send out a software update, it gives the hackers access to all those private networks. Instead of hacking the government, you hack someone who already has access to the government. As digital security has gotten tighter, complicated hacks like this one have become more popular, especially because supply chain attacks are difficult to detect.

Everything about this hack is shrouded in unknowables. Who was the target? What information have the hackers taken? The only thing cybersecurity experts do seem sure of is who was behind the plot: Russia “Not many other countries could have done this,” said Kaplan.

Top Expert Backgrounder: Russia’s SolarWinds Operation and International Law

by Michael Schmitt

I. The Facts: What We Know So Far

On December 7th the National Security Agency issued a warning that “Russian State-sponsored actors” were exploiting a vulnerability in digital workspace software using compromised credentials.

The next day, cyber security firm FireEye announced the theft of “Red Team” tools that it uses to identify vulnerabilities in customer systems. Reports of an ongoing software supply-chain attack against SolarWinds, a company whose products are used by over 300,000 corporate and government customers – including most Fortune 500 companies, Los Alamos National Laboratory (which has nuclear weapons responsibilities), and Boeing – quickly followed. As a supply-chain attack, the SUNBURST malware infected SolarWind’s customers’ systems when they updated the company’s Orion software.

Agencies throughout the government were affected, including the Treasury, Commerce, Homeland Security, and Defense Departments. In response, the Cybersecurity and Infrastructure Security Agency (CISA) issued Emergency Directive 21-01, “Mitigate SolarWinds Orion Code Compromise,” on December 13. Three days later, (CISA), together with the FBI and Office of the Director of National Intelligence announced the formation of a Cyber Unified Coordination Group to coordinate a whole-of-government response.

The scope of the operation is daunting. According to Microsoft, the update was likely installed by over 17,000 customers, 80% of whom are located in the United States. The affected systems were diverse: 44% in the information technology sector; 18% belonged to thinktanks and non-governmental organizations; 18% were government systems; and 9% were those of government contractors, most of whom support defense and national security organizations. This access allowed the attackers to plant “‘back doors’ into the networks of some 40 companies, government agencies and think tanks…that allowed them to come and go, steal data and — though it apparently has not happened yet — alter data or conduct destructive attacks.”

Combatting Terrorist Financing in the Age of Crypto: Opportunities for the Biden Administration

By Saeed A. Khan

The website looked like any other selling PPE equipment during the pandemic – except it wasn’t. Instead, the site "Face Mask Center" was a subtle attempt to sell faulty PPE equipment to spread the Coronavirus and to raise money for terrorist organizations according, to a Justice Department investigation revealed this summer.

The ruse captured headlines, and also underscores the very real challenge of combating terrorist financing. This episode highlights actors' innovative efforts astute enough to exploit even a global pandemic for their still active ambitions.

As further evidence of the current, sophisticated nature of terrorist financing efforts during the pandemic, the U.S. government has seized more than $2 million worth of cryptocurrency that was headed to terrorist groups in the Middle East. And yet, this scheme is neither new nor confined to a single geographic region. Despite an Indonesian jihadist's dismissive attitude in 2016 toward using Bitcoin to fund terrorism as “ too complicated," the cryptocurrency is gaining utility in Southeast Asia as a financing mechanism for terrorist groups there. Indeed, even in August 2016, criminals stole approximately $60 million in Bitcoins from Hong Kong to exploit the g-based Bitfinex Exchange; that crime to date remains unsolved.

Cryptocurrencies are a growing global problem in their role of financing terrorism. In keeping with its ongoing commitment to combatting terrorism, the United States must work with a new set of global partners to match the new sources of the threat. While traditional allies in Europe and NATO should be consulted for collaborative measures, new potential partners exist in the form of intergovernmental organizations that can engage more directly with the challenge in the new centers of gravity for terrorist financing. One such entity is the Islamic Military Counter-Terrorism Coalition (IMCTC).

What Is Driving Asia’s Technological Rise?

JONATHAN WOETZEL, JEONGMIN SEONG

SHANGHAI – Asia is a technological force to be reckoned with. Over the last decade, the region has accounted for 52% of global growth in tech-company revenues, 43% of startup funding, 51% of spending on research and development, and 87% of patents filed, according to new research by the McKinsey Global Institute (MGI). How did Asia get here, and what lessons does its success hold for the rest of the world?

Of course, Asia is not a monolith, and technology gaps within the region remain significant. India, for example, has fewer large tech companies than other major economies. Still, four of the world’s top ten technology companies by market capitalization are Asian.

China, home to 26% of the world’s unicorns (startups valued at $1 billion or more), leads the way in tech entrepreneurship in Asia, though it still relies on foreign inputs in core technologies. By contrast, advanced Asian economies like Japan and South Korea have large tech firms and a significant knowledge base, but relatively few unicorns. Asia’s emerging economies still invest relatively little in innovation, but they do provide growing markets for the goods and services produced by Asia’s tech leaders.

Against this background, Asian countries have had to make a virtue out of collaborating to overcome fragmentation and close technology gaps. And they have made considerable progress in recent years. Notably, they have invested heavily in regional tech startups – about 70% of such investment comes from within Asia – and robust regional technology supply chains.

6 Best External Hard Drives To Keep All Your Data Safe

Jon Martindale

Using one of the best external hard drives is just part of the process in protecting your most important data, but it's an important part. While online backups require a constant internet connection and are restricted to your internet speed when backing up and restoring, a local backup on an external drive is fast and readily accessible.

The best external hard drives also let you take your data on the go without fear of your data being damaged or lost. They're compact, attractive and offer protection against the digital (and sometimes physical) world, making sure that the digital information that you hold most dear is always safe and secure.

Prepare to Fight Upcoming Cyber-Threat Innovations

Derek Manky

The pandemic and the ensuing increase in remote work has given rise to new attack vectors and schemes. One thing 2020 underscored is the opportunistic nature of bad actors. They will grab onto anything they think can help them pull off a cyberattack, even things like phishing campaigns using emails purporting to be from the Centers for Disease Control and Prevention (CDC) — and, more recently, preying on election fears. And what we know is this will continue to evolve moving forward. Bad actors will look for new opportunities, including using many of the innovations in computing performance.

For instance, connected smart devices using 5G at the network edge contain incredible intelligence and power. If cybercriminals used that intelligence and power for attacks, they could create a new wave of attacks that could severely drain the compute resources of legacy security systems. Unfortunately, other types of attacks are cresting the horizon that will target developments in computing performance and innovation in telecommunications, specifically for cybercriminal gain. These new attack types will enable adversaries to cover new territory and present defenders with the difficult job of getting ahead of the cybercriminal curve well in advance. Three such areas where we expect to see increasing attacks include cryptomining, space, and quantum computing.

Advanced Cryptomining Will Gain Traction

For the past few years, cryptomining has steadily become a strategy for cybercriminals looking for a safe and reliable way to earn ill-gotten gain. It's a rather complicated process by which someone uses a computer's processing resources to verify blockchain transactions.

Three Articles Signal New Cold War

By Francis P. Sempa

Three recent articles in important American journals reveal that Sino-U.S. relations—that have since the end of the U.S.-Soviet global struggle shifted between engagement and competition—have reached the stage of Cold War. The three articles may signal—like Winston Churchill’s famous “iron curtain” speech on March 5, 1946, or George Kennan's "X" article in 1947—that another “long twilight struggle” (to use President John F. Kennedy’s description of U.S.-Soviet relations) has begun. This will have consequences for the defense postures of the United States and its allies.

The first article, entitled “The Party That Failed,” appears in the current issue of Foreign Affairs. It is written by Cai Xia, a former Professor at the Central Party School of the Chinese Communist Party (CCP). The author broke with the CCP because she gradually learned that "the highly centralized, oppressive version of Marxism promoted by the CCP owed more to Stalin than to Marx." She had hoped that China, under Jiang Zemin's leadership in the early 2000s, would evolve into a constitutional democracy, but Jiang's successor Hu Jintao moved "in the opposite direction." China, under Hu, the author writes, "entered a period of political stagnation, a decline similar to what the Soviet Union experienced under Leonid Brezhnev."

When the current CCP leader Xi Jinping took power in 2012, Cai Xia and her fellow advocates of reform hoped that Xi would emulate his father, whom she describes as a former CCP leader "with liberal inclinations." Instead, Xi has promoted a Mao-like "cult of personality" and imposed "neo-Stalinist" rule on China. The atmosphere in China, she writes, is “growing darker.” It is a repressive “totalitarian” state. Cai Xia managed to travel to the United States on a tourist visa. She has since been accused of “anti-China” activities and is subject to arrest if she returns.

More Hacking Attacks Found as Officials Warn of ‘Grave Risk’ to U.S. Government

By David E. Sanger and Nicole Perlroth

WASHINGTON — Federal officials issued an urgent warning on Thursday that hackers who American intelligence agencies believed were working for the Kremlin used a far wider variety of tools than previously known to penetrate government systems, and said that the cyberoffensive was “a grave risk to the federal government.”

The discovery suggests that the scope of the hacking, which appears to extend beyond nuclear laboratories and Pentagon, Treasury and Commerce Department systems, complicates the challenge for federal investigators as they try to assess the damage and understand what had been stolen.

Minutes after the statement from the cybersecurity arm of the Department of Homeland Security, President-elect Joseph R. Biden Jr. warned that his administration would impose “substantial costs” on those responsible.

“A good defense isn’t enough; we need to disrupt and deter our adversaries from undertaking significant cyberattacks in the first place,” Mr. Biden said, adding, “I will not stand idly by in the face of cyberassaults on our nation.”

President Trump has yet to say anything about the attack.

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