Taiwan Espionage Scandals Spell Trouble for Air Defense

Defense News

03/26/2012

By Wendell Minnick

Taiwan Espionage Scandals Spell Trouble for Air Defense

TAIPEI — A recent spate of arrests of Taiwan military officials accused of working for China has raised concerns over the vulnerability of Taiwan’s air defense and early warning capabilities, and calls into question whether Taiwan can safeguard sensitive U.S. military technology.

A recently retired Taiwan military intelligence official said the arrests indicate China

is focusing on Taiwan’s new Po Sheng C4ISR modernization effort, the Anyu-4 air

defense system and surveillance radar program (SRP).

“It’s consistently Po Sheng and air defense stuff,” he said. “Sounds like China thinks

these are Taiwan’s most potent defense, not Army tanks and Navy ships and Air Force

fighters.”

In February, military investigators arrested a Taiwan Air Force captain surnamed Chiang, an information control officer (IOC) assigned to an air defense base in northern Taiwan. The “most interesting thing” about the incident, the retired military intelligence officer said, is that China targeted an IOC who had access to the computer systems linking all of the air defense systems.

“Po Sheng and PAC [Patriot Advanced Capability missile system] and other air defense

assets are probably the most-linked system, and the PLA [People’s Liberation Army] has pretty powerful hackers,” he said.

An IOC could have given them the keys to break into the network using cyber intrusion

software.

“They can’t hack tanks and ships, but they can try to hack the air defense system, and

getting information about the inside networks of the air defense system is the best

way to do it,” the retired officer said.

To make matters worse, in January 2011, Maj. Gen. Lo Hsien-che was arrested and later sentenced to life for spying for China. Lo ran the communications, electronics and information division of Army Command Headquarters.

He was accused of providing China with information on Po Sheng, data on a fiber-optic communications cable network and procedures for sharing information with U.S. Pacific Command. Lo was the highest ranking military official to be arrested since the Cold War.

In August 2011, a Taiwan High Court found a civilian, Lai Kun-chieh, guilty of spying

for China after attempting to recruit a Taiwan Army officer, surnamed Tsao, who

had access to the PAC system. After the attempted recruitment, Tsao went to his superiors and worked with investigators until Lai’s arrest in May 2011.

According to court documents, Li Xu, deputy department chief of the Taiwan Affairs

Office under China’s State Council, recruited Lai.

Further confirmation China is focusing on Taiwan’s Po Sheng and air defense networks

came in 2008 when U.S. authorities arrested Gregg Bergersen, a senior official for the U.S. Defense Security Cooperation Agency, for allegedly spying for China. Bergersen managed Taiwan’s Po Sheng program under the Foreign Military Sales program and managed negotiations with Taiwan on the Communications and Information Security Memorandum of Agreement, which allows the U.S. to release Type 1 cryptography techniques for U.S.-Taiwan communications during a war.

Over the past 10 years, Taiwan has been upgrading a variety of air defense and early warning systems. In 2004, the U.S. released an $800 million long-range ultra-high-frequency early warning SRP to detect ballistic and air-breathing threats. The radar was scheduled to go online in 2009, but mudslides and technical problems have caused delays.

Once the SRP sounds the initial warning, the new Anyu-4 air defense system would task the proper air defense missile units to respond. Taiwan has a choice of I-Hawk, PAC-3, and Tien Kung (Sky Bow) air defense missile batteries for medium- to long-range requirements. 

Anyu-4 replaced four older air defense control and reporting centers with new Regional Operations Control Centers (ROCCs). In 2001, the U.S. released the sale of ROCCs and mobile and fixed radar systems for an undisclosed amount. Additional items, including the Program Automated Air Defense System, were released in 2005.

Some officials have linked the recent series of arrests to growing cross-strait economic and political ties, suggesting the Taiwan military views reunification as inevitable and therefore has lowered expectations of a stable military career and pension.

“A potential spy in Taiwan’s military may think: If the retired two-, three-, four-star generals can go to China and receive VIP treatment, banquets, golf, [then] is China really the enemy?” the retired military official said.

“The Taiwan military is really confused,” he said. “They’ve practiced against one enemy for the past 60 years; now that enemy appears to be gone, and political leaders seem to bet everything on China becoming our friend.”

Can Taiwan Keep a Secret?

The increase in arrests since cross-strait ties began improving after Ma Ying-jeou was elected as Taiwan’s president in 2008 have also raised concerns Taiwan is losing its ability to protect secrets.

Taiwan has increased efforts to monitor espionage activities as ties become stronger, said Liu Fu-kuo, a cross-strait specialist at Taiwan’s National Chengchi University. 

“I certainly know that the new situation across the [Strait of Taiwan] has made it easier to spot. ... I guess that Beijing will surely continue [espionage] activities and our side is making the extra effort to clean up the mess,” Liu said.

Another fear in some defense circles in Taipei is that Washington will stop selling Taiwan sensitive military technology if the equipment cannot be safeguarded.

“Perhaps Taiwan’s political leadership doesn’t mind where this trend is going, but

the military guys should know that soon they won’t be able to buy anything from anywhere, maybe except from China,” said a Taiwan defense analyst based in Taipei.

China’s Navy Set To Launch First Carrier This Year

Defense News

03/19/2012

China’s Navy Set To Launch First Carrier This Year

TAIPEI — China is set to launch its first aircraft carrier this year, according to the state-controlled newspaper People’s Daily.

Xu Hongmeng, deputy commander of the People’s Liberation Army Navy (PLAN), told the Daily the Navy plans to launch the former Soviet-built Varyag aircraft carrier this year. Since the ex-Varyag’s first sea trial Aug. 10, the PLAN has conducted four sea trials in the Pacific.

China’s aircraft carrier program has been a long tale of incessant duplicity. This includes how China acquired Varyag, how it intends to use it and how it is stealing data for the aircraft it plans to fly from it.

The Chinese have been busy retrofitting the carrier with new engines and equipment since procuring it from Ukraine in 1998.

The $20 million acquisition was made by the Hong Kong-based Chong Lot Travel Agency on the false claim it would be converted into a casino in Macao. Instead, the carrier was towed to Dalian Port, in northeastern China’s Liaoning province, where the PLAN began retrofitting the unfinished Russian carrier.

Chinese officials insist the ex-Varyag will not be deployed but will be used mainly as an experimental training and research vessel for the future development of more advanced carriers. Not all Western analysts agree, instead believing the vessel will eventually be used for carrier-based combat.

Bud Cole, author of the book “The Great Wall at Sea,” said “while continuing to advertise the ex-Varyag as a test/training platform, they will make it operational as soon as they can.”

Cole speculated Chinese officials are becoming “impatient” after working out all the problems on the “former wreck for 10 years.”

The former Varyag has been outfitted with weapons and phased array radars. It has also been equipped with static aircraft to test flight deck equipment.

“I think they can easily get to the point of operating aircraft from the ship by the end of 2012,” Cole said. “That will be relatively straightforward for helos and aircraft ... [but I’m] not sure if they’ve succeeded in finding a source for arresting gear.”

China is also developing a carrier-based fighter for the ex-Varyag. The Shenyang Aircraft Corp. (SAC) is building the J-15 Flying Shark, based on an illegal copy of the Russian Sukhoi Su-33 carrier-based fighter.

In 2009, Sukhoi officials expressed alarm when reports filtered out of China that SAC was building an Su-33 copy. It was later learned SAC had obtained a prototype from the Ukrainian Research Test and Flying Training Center at Nitka in 2001 without Sukhoi’s permission.

There are also unconfirmed Chinese media reports that the Chinese aviation industry is working on a J-18 Red Eagle short-takeoff-and-vertical-landing fighter for possible duty on the ex-Varyag or future carriers.

Russia canceled an assembly program in China for 200 Su-27SK (J-11A) fighters in 2006 after only 95 fighters had been built. Sukhoi officials discovered that SAC violated the intellectual property (IP) agreement by manufacturing a clone dubbed the J-11B with Chinese engines and avionics. There are also suspicions the Chinese have copied the Su-34 fighter-bomber.

On top of that, unconfirmed Russian media reports emerged last week indicating China wants to procure 48 Sukhoi Su-35 super-maneuverable multirole fighters from Russia.

A defense industry source in Ukraine said the Russian government is extremely hesitant to sell the aircraft to China after IP violations with the Su-27/J- 11 and that the deal was reminiscent of a 2006 Chinese request to procure 48 Su-33s. China later reduced the Su-33 deal to 12 aircraft, but Russian officials reportedly ended negotiations fearing continued IP thefts, which were later confirmed when the Chinese-built J-15 (Su-33) made its first test flight in mid-2009.

However, despite IP issues, “China remains a potentially lucrative market for Russian aerospace companies, though less so than in the 1990s, given the changes and developments in Beijing’s indigenous industrial base,” said Doug Barrie, senior fellow for military aerospace for the International Institute of Strategic Studies, London.

China’s approach to developing the Su-27 and Su-30MK2, along with illegally copying the Su-33, has “understandably caused irritation in Russia, but as the fighter market tightens, then a potential order for 48 Su-35s is unlikely to be ignored,” he said. Moscow is likely to try to better protect its intellectual property this time around if the deal goes forward, Barrie said.

There is also interest by Russian air-launched guided weapons manufacturers hoping for a piece of the Su-35 deal.

“In terms of Chinese interest in the Su-35, this could reflect a continuing interest in taking a dual-track approach in acquiring combat aircraft” from Russia, Barrie said.

China’s request for the Su-35 suggests China has hit a bump in its technological development of fighter aircraft and needs the Su-35 to bridge the gap, said the Ukrainian defense industry source.

Singapore Expands Into Cyber Defense Business

Defense News 

03/12/2012 

Singapore Expands Into Cyber Defense Business 

By Wendell Minnick 

TAIPEI, Taiwan — ST Electronics, one of four principal subsidiaries of Singapore Technologies (ST) Engineering Ltd., is expanding into the cyber defense market. The new product line is designed as part of ST Electronics’ comprehensive cyber defense framework, which is built on protection, detection, response and recovery. 

ST Electronics took the knowledge and experience it garnered from providing encryption solutions to the Singapore government, military and security industries to create a wide range of new products and solutions now available for the international market. 

ST Electronics created a new subsidiary, ST Electronics Info-Security Pte. Ltd. (STEE-InfoSec), to provide hardware products to defend against cyber attacks and protect networks under the DigiSAFE name brand. STEE-InfoSec, previously known as DigiSAFE Pte. Ltd., specializes in the design, development and manufacturing of information assurance products for the protection of data in motion, data at rest and digital authentication. 

“Our protective approach to cyber defense emphasizes the discovery of vulnerabilities and weaknesses in the systems before hackers do,” said Goh Eng Choon, general manager of STEE-InfoSec. 

Goh said the company provides a wide range of cyber defense solutions and services that can be adopted in phases or in parallel to help customers enhance their cyber defense posture. 

The company’s key technology focus includes communication security, network security, PC security and secure applications. These include disk encryptors and network encryptors for both Ethernet and Internet connections. Crypt products include KeyCrypt (USB Authentication Token), NetProtect Mobile, DiskCrypt Mobile, PhoneCrypt and FaxCrypt. 

DiskCrypt Mobile and DiskCrypt both won the International Consumer Electronics Show (CES) Innovations Design and Engineering Award in 2010 and 2012, respectively, at the CES convention in Las Vegas. 

However, since it is almost impossible to have “zero vulnerability or a foolproof system,” the capability has to go beyond protection and detection and cover response and recovery of compromised systems, Goh said. 

The company provides security operation centers for around-the-clock security monitoring and advisory services, security incident and event correlation tools, and threat and incident management. 

“Through our team of skilled cybersecurity architects, consultants and engineers, we can help organizations build large cyber defense systems such as secure government and enterprise networks, public key infrastructures, cyber test ranges and cyber security operations centers,” Goh said. 

In addition, the company provides customized training and simulation solutions that allow customers to simulate cyber networks and conduct training and exercises for cyber defenders, Goh said. “Our consultants also provide professional penetration testing to actively probe systems and incident handling and forensics to investigate any security breaches.”

Goh believes in a holistic approach that includes trained people, good processes and the right technologies to ensure that the best security technologies are well-deployed and operated to keep attackers out.

ST Electronics also created a subsidiary under STEE-InfoSec, DataMark Technologies Pte. Ltd., as a technology provider of patented digital watermarking technologies and solutions for imaging. Using a suite of StegMark imaging solutions, DataMark provides protection to address copyright and fingerprint issues. The watermarks are imperceptible to the human eye and can only be detected through the use of certain algorithms.

Digital watermarking technology has many applications in media security and image forensics that have been used to watermark documents, photos and videos used for law enforcement, insurance, media and news, Goh said.