Chinese Hackers Threaten British Economy: MoD

Hacking by foreign governments and corporations is regularly putting companies out of business, costing the British economy £27 billion a year, the country’s head of cyber security has warned.

Major General Jonathan Shaw, the head of the Ministry of Defence’s cyber security programme, said in an interview with The Daily Telegraph, that Britain may lose its position as one of the world’s leading hi-tech manufacturers unless companies improve their cyber security.

“The biggest threat to this country by cyber is not military, it is economic,” said Shaw, a veteran of the Falklands War and Iraq. “The cyber threat could affect anyone, and we all need to take measures to protect ourselves against the threat it poses.”

Shaw used the example of a company in Warrington, Cheshire that designs a blade for wind turbines. The firm went out of business after hackers stole the blueprint and produced a cheaper version.

China poses greatest threat

The Chinese pose the biggest threat, said Shaw, and regularly target British companies and government institutions to steal sensitive information. China has previously been linked with hacks of Western organisations, including some military and security outfits.

The French finance ministry was also recently targeted by hackers using Internet addresses in China, in a cyber attack aimed at stealing files on the G20 summit held in Paris in February.

“If the moment you come up with a brilliant new idea, it gets nicked by the Chinese then you can end up with your company going bust,” said Shaw.

He also pointed to the Stuxnet virus and its more recent variant Duqu as examples of how malware can cripple national infrastructure.

Government to launch new cyber strategy

The news comes as Francis Maude, minister for the Cabinet Office, prepares to launch the government’s new Cyber Security Strategy.

“State-sponsored internet attacks get most media time, as do governments’ moves to combat them. But this isn’t just James Bond territory,” said Maude in a speech in June.

“Here in Britain the large majority of financial losses attributable to cyber-crime – an estimated £21billion out of £27 billion – are borne not by government, but by industry. How to get those numbers down should be on the agenda not just of politicians, but of CEOs; it’s a subject for the boardroom, not just the Cabinet Room.”

The Foreign Office is also gearing up to host The London Conference on Cyberspace, starting on 1 November, which will discuss the need to establish an international framework for policing the Internet.

Poor hygiene can be costly

Both the Cabinet Office and the MoD say that all internet users can protect themselves by simply implementing good cyber security practices, like changing passwords regularly, conducting software scans, and just being savvier about the emails they chose to open.

“About 80 percent of our cyber problems are caused by what I call poor cyber hygiene,” Shaw said. “Many of them would go away if our cyber hygiene was better.”

Meanwhile, the government last year upgraded cyber security to a tier 1 national security priority, and committed £650 million over the next four years to build stronger cyber defences, in acknowledgement of the fact that the threat from cyber attacks is real and growing.

“Closer collaboration between the government and the private sector is crucial to protecting our interests in cyberspace, including critical national infrastructure,” a Cabinet Office spokesperson told eWEEK Europe in a statement.