Huge cyber campaign has U.S. in cross hairs

WASHINGTON - A new intelligence assessment has concluded that the United States is the target of a massive, sustained cyber-espionage campaign that is threatening the country's economic competitiveness, according to people familiar with the report.

The National Intelligence Estimate (NIE) identifies China as the country most aggressively seeking to penetrate the computer systems of U.S. businesses and institutions to gain access to data that could be used for economic gain.

The report, which represents the consensus of the U.S. intelligence community, describes a wide range of sectors that have been the focus of hacking in the past five years, including energy, finance, information technology, aerospace and automobiles, according to the individuals familiar with the report, who spoke on the condition of anonymity. The assessment does not quantify the financial impact of the espionage, but outside experts have estimated it in the tens of billions of dollars.

Threat to economic interests

Cyber-espionage, once viewed as a concern mainly by U.S. intelligence and the military, is increasingly seen as a direct threat to the nation's economic interests.

In a sign of such concerns, the Obama administration is seeking ways to counter the online theft of trade secrets, according to officials. Analysts have said the administration's options include formal protests, the expulsion of diplomatic personnel, the imposition of travel and visa restrictions and complaints to the World Trade Organization.

White House officials say President Obama plans to issue a long-anticipated presidential directive on combating cyberattacks aimed at U.S. companies, financial institutions and critical infrastructure such as the electric grid.

The NIE names three other countries -- Russia, Israel and France -- as having engaged in hacking for economic intelligence but makes clear that cyber-espionage by those countries pales in comparison with China's effort.

China has staunchly rejected such allegations, saying the Beijing government neither condones nor carries out computer hacking.

At least as far back as the early 1980s, China has made the acquisition of Western technology -- through means licit and illicit -- a centerpiece of its economic development planning. The explosion in computer use has greatly aided that transfer of technology.

Exploit citizens, family ties abroad

China's intelligence services, as well as private companies, frequently seek to exploit Chinese citizens or people with family ties to China who can use their insider access to U.S. corporate networks to steal trade secrets using thumb drives or e-mail, according to a report by the Office of the National Counterintelligence Executive.

Much of China's cyber-espionage is thought to be directed at commercial targets linked to military technology. In 2011, when Chinese hackers attacked the network security company RSA Security, the technology stolen was used to penetrate military-industrial targets. Shortly after, the networks of defense contracting giant Lockheed Martin, which used RSA security tokens, were penetrated by Chinese hackers. The company said no data were taken.

Companies in other sectors also have been targeted, though the reasons for the espionage are not always related to economic interests. The New York Times, the Wall Street Journal and the Washington Post recently disclosed that they believe their networks were compromised in intrusions that originated in China.

Despite those disclosures and the growing prevalence of cyber-espionage, companies remain reluctant to report incidents.

The conundrum, said the administration official, is that some companies are uncertain whether it is in their interest to work with other companies and the government to alleviate problem.