Chinese Military: Hacking and Transparancy

Two stories on the state of the Chinese military. The "Pentagon hacking" story is a good gauge of how quickly China is converging on the technological frontier. What begins with the military will spread, via knowledge spillovers, to industry.

The speed of Chinese technological development should not be underestimated.

China to Report Military Spending to UN

China said Sunday it will provide the United Nations with information on its military spending and arms deals for the first time in more than a decade, taking a step to address international concerns about the secrecy surrounding its defense spending and operations.

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China says spending for its People's Liberation Army, the world's largest standing army with 2.3 million members, grew 17.8 percent this year to about nearly $45 billion. It was the largest annual increase in more than a decade.

The Pentagon estimates China's actual defense spending may be much higher, because the official budget does not include money for high-priced weapons systems and some other items.

Although China does not currently provide information about its arms deals, several overseas organizations monitor the transactions.

The Stockholm International Peace Research Institute, which tracks the volume of arms transfers but not their financial value, said the three largest importers of Chinese arms in 2006 were Bangladesh, Pakistan and Iran, which accounted for nearly 75 percent of China's arms exports.

China is also a major arms exporter to Sudan, and has faced criticism from human rights activists who say Chinese weapons have been used in attacks in Darfur.

Chinese military hacked into Pentagon[FT]

The Chinese military hacked into a Pentagon computer network in June in the most successful cyber attack on the US defence department, say American ­officials.

The Pentagon acknowledged shutting down part of a computer system serving the office of Robert Gates, defence secretary, but declined to say who it believed was behind the attack.

Current and former officials have told the Financial Times an internal investigation has revealed that the incursion came from the People’s Liberation Army.

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“The PLA has demonstrated the ability to conduct attacks that disable our system...and the ability in a conflict situation to re-enter and disrupt on a very large scale,” said a former official, who said the PLA had penetrated the networks of US defence companies and think-tanks.