Sino cyber spying tracked to Rolls Royce and Shell

Britain's MI5 intelligence agency is warning that cybercrime perpetrated by China is on the rise following hacking attacks against Rolls-Royce and Royal Dutch Shell.

The Times, quoting an unnamed source, reported that Rolls-Royce's network was infected with a Trojan horse program by Chinese hackers that sent information back to a remote server. Dutch Shell uncovered a Chinese spying ring in Houston, aimed at pilfering confidential pricing information for the oil giant's operations in Africa, the paper said, citing "security sources."

Representatives for both companies contacted in London on Monday did not return calls for comment.

M15 recently sent letters to some 300 banks, accounting and legal firms warning that "state organisations" of China were plying their networks for information, according to the Times of London on Monday.

The UK government refused to confirm that the letters had been sent. However, the reported correspondence comes just a month after the UK's top domestic intelligence officer warned of "high levels" of covert activity by at least 20 foreign intelligence agencies, with Russia and China as the most active.

"A number of countries continue to devote considerable time and energy trying to steal our sensitive technology on civilian and military projects, and trying to obtain political and economic intelligence at our expense," said Jonathan Evans, director general of MI5, in Manchester on Nov. 5.

"They do not only use traditional methods to collect intelligence but increasingly deploy sophisticated technical attacks, using the Internet to penetrate computer networks," he said.

Spying to gain an advantage over a commercial competitor is nothing new, and it's hard to definitively blame China for it, said Peter Sommer, who teaches information systems security at the London School of Economics and also wrote "The Industrial Espionage Handbook."

The job of an industrial spy has also become a lot easier with the advent of the Internet, Sommer said. About 90 of intelligence collected by agents is "open source," or already public information.

"You no longer have to get into buildings and try and meet people," Sommer said.

Public Web sites of companies are rife with e-mail addresses of employees who can be "spear-phished," or sent e-mail with a malicious software such as a keystroke logger. The hacker uses social-engineering tricks in order to get the worker to open the attachment, opening up access to a company's network.

Hackers are also tough to trace since they often control botnet, networks of computers, which can be used to carry out commands and attacks.

Botnet investigations are time-intensive and difficult for law enforcement since the computers are often in different countries, requiring international legal cooperation.

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