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What the Google Attack Means for China's Economy


Will this be the turning point skeptics are waiting for?

There's no doubt that a slew of powerful American companies representing a very broad range of industries suffered a potentially damaging cyber attack, which was well executed and surgical in its strike.

The question remains about who carried out the assault.

Today, the New York Times reports that, when Google (GOOG) engineers first started to suspect that Chinese intruders were hacking into private Gmail accounts last month, they initiated a secret counteroffensive.

The engineers, after gaining access to a computer in Taiwan they deduced as the source of the attacks, determined that at least 33 other companies -- including Adobe Systems (ADBE), Northrop Grumman (NOC), and Juniper Networks (JNPR) -- were also victims. Bloomberg reported that Yahoo (YHOO) was similarly targeted.

Working alongside American intelligence and law enforcement officials, the Google team figured out that the masterminds of the attacks were actually on the Chinese mainland.

However, as the New York Times emphasizes, while the sophistication of the attacks suggests the involvement of Chinese government agencies -- or at least, their approval -- Google's team couldn't definitely close the case.

According to Ars Technica, researchers at VeriSign (VRSN) released a report that "unambiguously declares that the Chinese government was, in fact, behind the effort." However, Adobe denies the claims made by the security software firm, so the mystery remains unsolved.

For his perspective on this headline-grabbing cyber attack and its implications, we thought it would be useful to check in with Gordon Chang.

A specialist on China, Chang offers a uniquely contrarian outlook on the country: He's a member of that small group of dedicated skeptics who believe the miracle of China is a mirage, a view he outlines and defends in his book The Coming Collapse of China.

First, Chang believes there's no doubt that the Chinese government is responsible for this latest cyber attack. Accountability for the offensive rests squarely in Beijing with the Communist dictators who control that country.

"You cannot maintain this kind of firewall, and have such tight control over the Internet, and simply not know of cyber attacks going out of China," Chang tells us. "We are talking about large-scale, concerted attacks here."
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