The new Chinese cyber security law will allow the Government to analyze the source code and any intellectual property of foreign tech companies working in the country.
The Chinese cyber security law was focused on the protection of Chinese users’ data, but reading with further attention the bill it is easy to imagine the devastating effects on foreign companies and their technologies.
According to the threat intelligence firm Recorded Future, the analysis will be assigned to the China Information Technology Evaluation Center (CNITSEC) that operates under the office in the Ministry of State Security (MSS).
The fear of Recorded Future experts is that the information obtained by the analysis conducted by the CNITSEC could be used to discover vulnerabilities in the code used by tech firms and exploit them in intelligence operations.
“According to academic research published in China and Cybersecurity: Espionage, Strategy, and Politics in the Digital Domain, CNITSEC is run by the MSS and houses much of the intelligence service’s technical cyber expertise.” reads a blog post published by Recorded Future. “CNITSEC is used by the MSS to “conduct vulnerability testing and software reliability assessments.” Per a 2009 U.S. State Department cable, it is believed China may also use vulnerabilities derived from CNITSEC’s activities in intelligence operations. CNITSEC’s Director, Wu Shizhong, even self-identifies as MSS, including for his work as a deputy head of China’s National Information Security Standards Committee as recently as January 2016.”
CNITSEC also runs the China National Vulnerability Database of Information Security (CNNVD), which is the nation’s information security assessment center.
The CNNVD is similar to the US National Institute of Standards and Technology (NIST) NVD, it is tasked with the construction, operation, and maintenance of the national information security vulnerability data management platform.
Researchers believe that the structure will not operate to publicly identify, report, and create security patches for software vulnerabilities.
“This means that the MSS is using the broad language and new authorities in China’s cybersecurity law to possibly gain access to vulnerabilities in foreign technologies that they could then exploit in their own intelligence operations.” states Recorded Future.”The MSS has a voice in which vulnerabilities are reported via the CNNVD, because they run it; they could also easily identify and hide from the public a critical weakness in software or hardware, then turn around and use it in their own operations.”
The tech companies are blackmailed by the Chinese government, they will have to share information on their proprietary technology and IP to offer their services and solutions in one of the most important markets.
Recorded Future has published an interesting paper that is focused on the impact of the Chinese cyber security law on firms that intend to do business in the country, the analysis also provides practical advice to the firms.
“Recorded Future’s research has focused on the broad powers the cybersecurity law gives to the China Information Technology Evaluation Center (CNITSEC), an office in China’s premier foreign intelligence service, the Ministry of State Security (MSS). The law gives “network information departments,” including CNITSEC, the power to conduct “national security reviews” (see Article 35) of technology that foreign companies want to use or sell in the Chinese market.” states the paper published by RecordedFuture.
“The MSS’s integration into the information security architecture of China via CNITSEC will (1) possibly allow it to identify vulnerabilities in foreign technologies that China could then exploit in their own intelligence operations, and (2) create an impossible choice for foreign companies between giving their proprietary technology or intellectual property to the MSS and being cut out of the mainland Chinese information technology market, which is projected to reach $242 billion in 2018.”
Recorded Future defined Chinese Cyber security Law as broad and language is vague.
“It is important for companies to note the imprecision and breadth of the CSL as well as the 2015 National Security Law, because both contain vague language that can be invoked by Chinese authorities to compel national security reviews, data sharing with government authorities, and even inspections into proprietary technology or intellectual property.” continues the analysis.
The experts believe that the poorest-defined sections of the law was “Chapter Three: Network Operations Security.” The chapter includes 18 articles which define the “network security protection” responsibilities of “network operators” and additional legal responsibilities for companies that operate “critical information infrastructure.”
The impact on foreign businesses is already severe considering the measure adopted by tech giants like IBM and Apple.
IBM has agreed to build servers for Larkspur to offer services to the Chinese banking industry, meanwhile, Apple removed iOS VPN apps from Chinese App Store in compliance with censorship law.
Back to the discussion about the MSS powers, the fact that it could discover and operationalize vulnerabilities in proprietary products or services, implies the following risks for companies that must be carefully condidered.
(Security Affairs – Chinese Cyber security law, intelligence)