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U.S. Pursues Chinese Malware Hidden in Critical Infrastructure Systems Worldwide

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U.S. officials have uncovered malware planted by Chinese operatives in critical infrastructure facilities such as the energy grid, communications systems and water stores that supply the nation’s defenses domestically and abroad, the New York Times reported.

The catalyst for the malware plot may be a looming conflict with China over Taiwan, in which the U.S. has pledged to defend the self-ruled island state. One concern among many is that the Chinese operatives who planted the malware are working for the People’s Liberation Army. the report said.

The U.S. just announced $345 million in military aid for Taiwan, as China ramped up armed forces activity in the Taiwan Strait.

Military, intelligence and national security officials are scrambling to find more malware perhaps stowed away in other facilities globally whose purpose might be to disrupt military operations should the country come to cyber blows with China at some point, top brass said. If accurate, it’s a departure from previous Chinese hacking initiatives which have been focused on surveillance.

At this point, it’s unclear what China’s goal is with the malware code--to disrupt, distract or spy--all of which could give it an advantage in an attack on Taiwan, officials have acknowledged.

In May, Microsoft found some malicious code in a telecom system in Guam, where the Anderson Air Force base is located. Should the U.S. engage with China over Taiwan, the Anderson base likely would serve as the hub of military operations. Investigations into Chinese malware sneaked into networks at U.S. military facilities began about a year before the Guam discovery, officials told the NYT.

An unidentified “Congressional official” described the situation to the newspaper as a “ticking time bomb” should a disruption in U.S. critical infrastructure sweep to the nation’s citizens who rely on those systems for energy, water, transportation, telecommunications and other necessities of daily life.

According to the NYT report, officials have found the extent of the Chinese infiltration to reach beyond what was initially believed both in the U.S. and overseas. However, those officials concede that the full extent of the infiltration is hard to track because it is well disguised in networks worldwide. However, of particular curiosity is that the malware has not been found in classified U.S. systems.

The situation has caught the attention of the Biden Administration, particularly high ranking officials from the National Security Council, the Pentagon, the Homeland Security Department and the nation’s intelligence agencies, who have engaged in high level talks on the issue. It has prompted the White House to brief members of Congress and has led to an official statement, the NYT report said.

Adam Hodge, the acting spokesman for the National Security Council stressed the U.S. efforts to protect critical infrastructure.

“The Biden administration is working relentlessly to defend the United States from any disruptions to our critical infrastructure, including by coordinating interagency efforts to protect water systems, pipelines, rail and aviation systems, among others,”

Following the publication of the NYT report, Chinese officials released the following statement from Haoming Ouyang, an embassy spokesman.

“We have always firmly opposed and cracked down on all forms of cyberattacking in accordance with the law. The Chinese government agencies face numerous cyberattacks every day, most of which come from sources in the U.S. We hope relevant parties will stop smearing China with groundless accusations.”

D. Howard Kass

D. Howard Kass is a contributing editor to MSSP Alert. He brings a career in journalism and market research to the role. He has served as CRN News Editor, Dataquest Channel Analyst, and West Coast Senior Contributing Editor at Channelnomics. As the CEO of The Viewpoint Group, he led groundbreaking market research.