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China cyber capability puts US forces at risk-report
* US supply chain could be penetrated by China - report
* Risk of "catastrophic failure" of US networks cited
* Congress weighing cybersecurity bills
By Jim Wolf
WASHINGTON, March 8 (Reuters) - Chinese cyberwarfare would pose a "genuine risk" to the U.S. military in a conflict, for instance over Taiwan or disputes in the South China Sea, according to a report prepared for the U.S. Congress.
Operations against computer networks have become fundamental to Beijing's military and national development strategies over the past decade, said the 136-page analysis by Northrop Grumman Corp released on Thursday by the U.S.-China Economic and Security Review Commission.
Chinese commercial firms, bolstered by foreign partners, are giving the military access to cutting-edge research and technology, the analysis said.
The Chinese military's close ties to large Chinese telecommunications firms create a path for state-sponsored penetrations of supply networks for electronics used by the U.S. military, government and private industry, it added.
That has the potential to cause a "catastrophic failure of systems and networks supporting critical infrastructure for national security or public safety," according to the report.
On the military side, "Chinese capabilities in computer network operations have advanced sufficiently to pose genuine risk to U.S. military operations in the event of a conflict," the report said.
A senior U.S. defense official took issue with that characterization.
"No one should think that Chinese cyber capabilities can seriously impede U.S. military operations, said the official, who asked not to be named pending the Pentagon's formulation of its official response.
"We're cognizant of those capabilities, of course, and are working on ways to add to the tools we already have to respond to them if necessary," he said.
A spokesman for the Chinese embassy in Washington did not immediately respond to a request for comment.
Beijing in the past has complained about what it called unfair vilification by the 12-member bipartisan commission, which was set up by Congress in 2000 to investigate national-security implications of U.S. trade with China, the world's second-largest economy.
Computer network operations, as defined by the report, include attack and defense as well as network "exploitation," for instance for intelligence collection.
China is "fully engaged in leveraging all available resources to create a diverse, technically advanced ability to operate in cyberspace," and computer network operations are being broadly applied to assist with long-term national development, the report said.
It did not delve into reciprocal U.S. military efforts to gain an edge in cyberspace, which the Pentagon now defines as a potential battle zone like air, sea, space and land.
The keyboard-launched tools that China could use in a crisis over Taiwan or in the South China Sea could delay or degrade a potential U.S. military response, partly because of "the vagaries of international law and policy surrounding nation-state responses to apparent network attack," the report said.
Northrop Grumman's report is a follow-up to one it did for the commission in 2009. That analysis said Beijing appeared to be conducting "a long-term, sophisticated, computer network exploitation campaign" against the U.S. government and its military contractors.
Since then, official U.S. concern has grown over alleged Chinese espionage via computer penetrations. In October, the Office of the National Counterintelligence Executive, a U.S. intelligence arm, said in a declassified report to Congress that "Chinese actors are the world's most active and persistent perpetrators of economic espionage."
Commission Chairman Dennis Shea voiced hope in a statement that the new report would help the Congress in its current deliberations over cybersecurity legislation to protect U.S. networks.
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