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China Defense Ministry Blasts Mandiant Hacking Report

China Defense Ministry Blasts Mandiant Hacking Report

Today in international tech news: China denies and decries a recent report about government-sanctioned hacking; Apple supplier Foxconn says its hiring cutbacks are due to a higher retention rate, not lower iPhone sales; and The Pirate Bay -- get this -- sues over copyright violations.

By David Vranicar
02/21/13 1:31 PM PT

China's defense ministry staged a news conference Wednesday to deny and decry a report that the People's Liberation Army was engaged in cyberwarfare against U.S. corporations, organizations and government agencies.

The denial specifically addressed the bombshell Mandiant hacking study, reported The New York Times. The study declared that the PLA's Unit 61398, located near Shanghai, was one of the world's "most aggressive computer hacking operations."

China itself had been the victim of cyberattacks, said a ministry official, and Mandiant mischaracterized China's activities. Chinese military forces have never supported hacking, added the spokesperson.

If accurate, the Mandiant report would seem to leave little doubt that the hacking activities of Unit 61398 were officially sanctioned.

In a related story, in 2004 China's army offered scholarships to new hackers to join Unit 61398, GBTimes.com reported. The advertisement was reportedly posted on the Zhejiang University School of Computer Science and Technology website, and while it is certainly no smoking gun, it is nonetheless more fodder as the tech and geopolitical worlds digest this story.

Apple Supplier Foxconn Freezes Hiring

Foxconn Technology Group, the Apple manufacturing partner notorious for worker riots and numerous employee suicides, has stopped hiring at a plant in Shenzhen which makes popular devices such as the iPhone 5.

Foxconn has also stopped recruiting for other factories across China, according to The Guardian.

The slowdown, however, is not linked to slow Apple sales, according to Foxconn, but to "an unprecedented rate of return of employees following the Chinese New Year."

Foxconn, like other Chinese manufacturers, relies on migrant labor. Migrant workers often travel to be with family for the Chinese New Year, which is China's biggest holiday (so big, in fact, that it has given rise to a market for apps that can cut train ticket lines on the Web.)

The New Year did indeed just take place, so Foxconn's explanation may hold water in that regard.

Hinting that the slowdown in hiring may be caused by lack of demand, however, the Guardian points out that Apple sold fewer iPhones than expected in the fourth quarter, and that Samsung and other manufacturers are slowly but surely gaining market share.

Lack of demand is not the culprit, said Foxconn, also a supplier for HP and Dell. Up to 97 percent of employees returned from the holidays, according to a Foxconn spokesperson. The past average is closer to 70-80 percent.

To its credit, the much-maligned Foxconn has reportedly improved working conditions and may have even given raises to some employees. It is perhaps more plausible now than in years past that Foxconn employees did come back after the holiday.

Pirate Bay Makes Copyright Claim

In one of the biggest cases of pot-calling-kettle-black since China sued Apple for copyright infringement, file sharing site The Pirate Bay has asked Finland's Economic Crime unit to investigate anti-piracy group CIAPC for copyright violations, according to Torrent Freak.

The crux of The Pirate Bay's complaint, according to Torrent Freak, is that CIAPC copied The Pirate Bay homepage and CSS file. The Pirate Bay reportedly has a usage policy prohibiting anyone from using its material without permission.

The CIAPC site was launched to disseminate information about legal alternatives to file sharing.


David Vranicar is a freelance journalist and author of The Lost Graduation: Stepping off campus and into a crisis. You can check out his ECT News archive here, and you can email him at david[dot]vranicar[at]newsroom[dot]ectnews[dot]com.


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