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Pentagon sees China as ‘growing risk’ to US defence industry

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According to a new Pentagon-led report that seeks to mend weaknesses in core US industries of importance to national security, China represents a “significant and growing risk” to the supply of materials vital to the US military.

The 150-page report concluded there are around 300 vulnerabilities that could affect critical materials and components essential to its military.

Relations with China are already shaky, with a trade war between the world’s two largest economies adding to tensions over cyber spying, self-ruled Taiwan and freedom of navigation in the South China Sea.

“A key finding of this report is that China represents a significant and growing risk to the supply of materials and technologies deemed strategic and critical to US national security,” the report said.

US intelligence officials this year have also warned about the possibility of China using Chinese-made mobile phones and network equipment to spy on Americans.

Pentagon officials have stated the national risks of Beijing’s growing military and economic might on the defence industry and wants to ensure China is unable to interfere with America’s military by cutting off supplies of materials or by sabotaging the technology it exports.

In related news, Apple and Amazon both denied a Bloomberg Businessweek report this week, which claimed that their systems had been infiltrated by malicious computer chips inserted by Chinese intelligence agents.

Bloomberg cited 17 unidentified sources from intelligence agencies and businesses supporting claims that Chinese spies had placed computer chips inside equipment used by around 30 companies and multiple US government agencies, which would give Beijing secret access to internal networks.

In the past, Beijing has denied allegations of orchestrating cyber attacks against Western countries, with China’s Ministry of Foreign Affairs currently not speaking out about the claim.

Bloomberg reported that in 2015 Apple found malicious chips in servers it purchased from the hardware maker, citing three unidentified company insiders. However, Apple responded with “there is no truth” to the accusation.

“Seventeen individual sources, including government officials and insiders at the companies, confirmed the manipulation of hardware and other elements of the attacks,” Bloomberg said in a statement. “We stand by our story and are confident in our reporting and sources.”

While the companies disputed the facts in the story, security experts noted that there is growing concern that hackers could launch cyber-attacks by inserting malicious chips into hardware sold to government agencies and businesses.

“Extended, complex, global supply chains create a risk for malicious cyber activity that companies must take into account,” said Michael Daniel, chief executive of the non-profit Cyber Threat Alliance.

Britain’s own National Cyber Security Centre (NCSC) backed the denials by Apple and Amazon over the Chinese spy-hack allegations.

“We are aware of the media reports, but at this stage have no reason to doubt the detailed assessments made by AWS and Apple," said a spokesman for the NCSC, a dedicated cyber unit based within Britain’s Government Communications Headquarters, more widely known as GCHQ.

“The NCSC engages confidentially with security researchers and urges anybody with credible intelligence about these reports to contact us,” the spokesman said.

On Thursday, Britain accused Russian military intelligence of being behind four high-profile cyber-attacks. In response to the allegations, the Russian embassy in London said in a statement that such accusations lacked proof and were part of a crude disinformation campaign.

The day before, amid concerns about Russian cyber aggression and the digital interference highlighted in Britain’s accusations, the US pledged cyber-warfare assistance to Nato allies.

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