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US China cooperation key to cyber deterrence- directly affects economic stability
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US China cooperation key to cyber deterrence- directly affects economic stabilitySIPA 14 (School of International and Public Affairs, Columbia University, June 2014, “U.S.-China Cybersecurity Cooperation “Capstone Report, pg16-20, HY) Cybersecurity is a global challenge within the international political economy. In August 2012, the business and administrative systems of the Saudi Arabian Oil Company (Saudi Aramco) and Qatar’s RasGas, were hit by the Shamoon computer virus. Saudi Aramco is the world’s largest energy company in the world, holding nearly 10% of the world’s oil supply, meanwhile, RasGas is the world’s second largest producer of liquefied natural gas.35 Shamoon demonstrates that the targeted attack of one entity has the potential to shake the underpinnings of the world economy. Fortunately, Shammon did not penetrate systems governing operations. Had that been the case, any disruption of production would have immediately impact on oil supply and prices, leading to far reaching effects on multiple levels and sectors of the global economy. China and the U.S. are the top oil consumers in the world. Since Shamoon, Saudi Arabian telecommunications companies and Western technology companies have increased efforts to secure Saudi data and systems. China is now recognizing the importance of international cybersecurity cooperation. Rapid international response enabled the Estonian government to combat the attacks. The government’s CERT relied on assistance from its Finnish, German, Israeli and Slovenian CERT counterparts to restore normal network operations. NATO CERTs and the EU’s European Network and Information Security Agency (ENISA) also supported Estonia in providing technical assessments and other assistance during the attacks.36 International cooperation, along with cooperation with private sector banks and Internet providers, was essential to strengthening Estonia’s cyber infrastructure, for example to incrementally increase its throughput capacity.37 Notably, the international responses to aid Estonia happened within established security communities and strong transnational relationships. China refrained from involvement, viewing the incidents as an internal matter of Estonia and also did not take part in the international cybersecurity discussions that followed.38 However, China’s stance is changing as evidenced by a recent high-level discourse and policy approaches calling for renewed cooperation with the entities such as the U.S. and European Union.39 Analysts stated that this new direction is intended to boost Chinese capabilities and hamper notions of a “China threat.”40 International cooperation and preparedness are now on the Chinese cyber agenda to move its strategic interests in technology development, global reputation, and economic growth. Proposed Infrastructure Sectors for Cooperation. The previous sections provided background information, tools, and themes for negotiating with China’s cybersecurity counterparts. The second area of focus drills down into tangible areas for information sharing and coordination. The following section details three infrastructure areas where cybersecurity cooperation is most promising and beneficial to U.S.-China shared interests: Financial Services, Commercial Port Security, and Civilian Nuclear Energy. Each sector examines five categories of research: Sector Priorities, Past and Potential Attack Examples, Shared Vulnerabilities, Chinese Partners and Key Actors, and Recommendations. Cooperation in Financial Systems Sector Priorities The soundness, efficiency and stability of securities markets rely on the quality of information provided and the robustness of the supporting technological infrastructure. In recent years, cybersecurity in relation to financial markets, both domestically and internationally, has become a top priority. The cornerstone of financial services is the maintenance of trust. The industry is built upon trust with clients, trust between firms, and trust to ensure the proper function of markets, executions of transactions and protection of information. Any loss or integrity failure in financial infrastructure could impact a national economy in significant ways, including the loss of credit and liquidity to the marketplace, and the loss of confidence in the operational effectiveness of the marketplace, which would impact other critical infrastructures. Examples of Past or Potential Attacks In recent years, cyber attacks on the financial services sector have been increasingly prevalent. In 2012, some of the largest banks in the United States came under cyber attack.41 In 2012 alone, 53% of securities exchanges around the world experienced a cyber attack.42 In 2013, cyber attacks brought down systems and some of South Korea’s major banks, paralyzing bank machines across the country.43 Operation High Roller, discovered in 2012, siphoned up to $2.5 billion from bank accounts in Europe, the U.S. and Latin America.44 Numerous stock exchanges around the world have faced DDoS cyber attacks, which in some cases have forced trading to halt for brief periods. It is estimated that 60% of cyber crime occurring in China is financerelated. Some Chinese banks are subject to extortion by cyber criminals, including third party actors from Eastern Europe.45 The economic and financial interdependence between China and the U.S. is remarkable. China owns nearly 1.3 trillion dollars of U.S. treasury bonds. The U.S. is also one of China’s largest trading partners, with trading between the two nations reaching over half a trillion dollars each year. Furthermore, financial market operations centered in the United States are increasingly electronically connected around the world. The SWIFT interbank system and the U.S. CHIPS system process trillions of dollars of payments daily. With China’s increasingly globalized economy, China has strong incentives to ensure the stability of these systems. Equally importantly, impacts of financial events sometimes cannot be contained regionally (for example, the Global Financial Crisis in 2008 and the Southeast Asian Crisis in 1998). Cyber attacks on the complex and interdependent global financial system could damage the orderly functioning of the global economy and undermine investor confidence. Given this interdependence, both countries have a significant stake in ensuring the stability and safety of the other’s financial cybersecurity and have important incentives to share information regarding threats from third-party malicious actors such as rogue states, terrorist groups, and the like. The majority of interviewees agreed that the financial sector serves as the platform with one of the greatest opportunities for cybersecurity cooperation between the U.S. and China. However, these interviewees also believed that the most effective and sustainable mechanism for encouraging such cooperation has yet to be identified. The remainder of this section identifies several approaches designed to spur cooperation. Download 357.18 Kb. Share with your friends:
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