China is the victim of an Internet smear campaign, alleges its government

In its latest and broadest-ranging official statement since a major policy conference last week at the US State Department, aligning American foreign policy with "Internet freedom" and directing skepticism against China, the Chinese government said this morning it had absolutely nothing to do with any cyber-attack on anyone's Internet assets. China was careful not to mention Google by name, which might have been interpreted as an acknowledgment that such an attack happened.
"Accusation that the Chinese government participated in cyber attack, either in an explicit or inexplicit way, is groundless and aims to denigrate China," reads an official China government statement issued through the Xinhua news agency. "We firmly opposed to that [sic]. China's policy on Internet safety is transparent and consistent... China is the biggest victim country of hacking as its Internet has long been facing severe threats of hacker and online virus attacks."

A security researcher told The New York Times last week that an algorithm used to encrypt stealth connections used by the Hydraq exploit -- pegged as the weapon used in the Google attack -- was somehow Chinese in origin. But until a further explanation can be offered as to how math can have a nationality, that's actually as close as publicly available evidence actually gets to pinning the attack on China, the country. A Google spokesperson told Betanews last week that more damning evidence does exist, and it shared that evidence with the State Dept., but neither the company nor State was not in a position to make that evidence public yet

In his regular press briefing last Friday, State Dept. spokesperson P. J. Crowley confirmed to reporters that US diplomats had indeed raised the specific subject of the Google attack with their Chinese counterparts on Thursday. These discussions followed Sec. of State Hillary Clinton's speech before the Internet Freedom conference last week, as well as China's first counter-volley of denials -- indicating that the talks may not have been especially successful. "We've had conversations over the past 24 hours with the [Chinese] ambassador here in Washington regarding the speech, regarding the issue of the Google situation, and broader aspects of a relationship. And I would anticipate that we will have ongoing meetings both here in Washington and in Beijing on all of these subjects," said Crowley.
But the spokesperson then deferred several repeated questions about the possibility of a demarche -- a formal diplomatic statement countering China's accusation that the US was using Google's allegations as leverage to advance its own agenda, which it said was merely a smokescreen to advance private interests such as Google itself. That first statement read, in part, "The US has criticized China's policies to administer the internet and insinuated that China restricts internet freedom. This runs contrary to the facts and is harmful to China/US relations."
Crowley's initial response to that included the following: "We have a wide-ranging and deep relationship with China. And the number-one and number-two economies in the world are going to need to consult on a regular basis."
That didn't sound like much of a scolding was in the works; and as Crowley was later forced to admit, no demarche will be coming from the US anytime soon. But that's because, he later said, the State Dept. had been in briefings in Washington not just once but three times, with a fourth meeting scheduled perhaps for as soon as today, between the Chinese Ambassador in Washington and US Assistant Sec. of State for Asia/Pacific Kurt Campbell.
"I think we seek an explanation from China," Crowley told reporters. "We are, in fact, trying to ascertain facts. The Chinese have denied that anything has happened. I think the Google statement speaks for itself, that seems to point to the fact that something significant has happened. That is why we have raised the questions that we have and why we seek an explanation from China about what, in fact, did happen. We are trying to ascertain the facts in this case. A blanket denial that nothing happened we don't think is particularly helpful."
In a statement yesterday, China's State Council Information Office held to the state line that it was fully justified in taking whatever steps were necessary to "deal with" illegal and pornographic content appearing on China's Internet domain. The implication of that statement is that China asserts its rights to delete content that appears on servers in the state-run .cn domain. As the Chinese government admitted last January 12, the same day Google announced it had been attacked, it perceives the .cn domain as Chinese territory, and asserts the right to delete material from servers directly, even though 90% of servers in the .cn domain, by the government's own estimate, reside in the US.
China did not go into any detail about how it goes about deleting material on US servers. But one theoretical mechanism for doing so could be an encrypted communication system implanted on those servers by way of a Trojan -- something that clearly fits Hydraq's profile.
In an unsigned op-ed issued through Xinhua yesterday, the country's state run press service said, "Necessary regulation of the Internet is a consensus of the entire international community for the sake of healthy development of the Internet. No responsible country takes a laissez-faire attitude towards the use of the Internet." The statement went on to site Microsoft CEO Steve Ballmer's recent comments that his company, among others that do business with China, are bound by China's laws and customs. "The US move to make Internet freedom an issue just indicates its continued application of double standards," the Sunday op-ed concluded. "People just wish that the United States will respect facts and treat others equally. It is not acceptable for someone to assume for themselves the high moral ground and arbitrarily make baseless charges against others."
The following day, China's latest statement cited its country's own counterpart to the Internet Society as saying cyber attacks on that country from abroad increased some 148% from 2008 to 2009, including from the Conficker worm, which it suggested was a foreign agent.

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