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By: Rex M. Lee, Privacy Advisor and Tech Journalist for My Smart Privacy
I attended the SXSW 2024 session “The Tech Industry and Cold War Two” hosted by Jason Schenker, Chairman of the Futurist Institute. Cold War Two refers to geopolitical tensions between the United States, its allies, as well as China, and Russia, plus all their allies/proxies.
The session centered on the fact that China is in the business of stealing intellectual property (IP) from multinational tech companies that are doing business in China, and/or are considering doing business in China. I found this session the most educational session regarding the Chinese Communist Party’s (CCP) efforts to disrupt global markets around the world using technology, while China decouples its use of U.S. technology for critical infrastructure.
According to Mr. Schenker, China has adopted a delete America (delete “A”) program that eliminates American-made products and services when similar Chinese-made products and services can be manufactured to scale by Chinese-owned companies. For example, China is decoupling from its dependency on U.S. original equipment manufacturers (OEM) such as Apple while replacing Apple products like iPhones with smartphones manufactured by Huawei, a Chinese-owned OEM.
The existence of a “Delete America” program was also verified by the Wall Street Journal earlier this year regarding their article, “China Intensifies Push to ‘Delete America’ From Its Technology” published on March 7th, 2024. Apple sales are down 24% in China, prompting the CEO of Apple, Tim Cook, to visit China earlier this year to open a new Apple store and attend a China Development Forum in Beijing, where business leaders interact with Chinese policymakers, according to Business Insider.
China's decoupling from the use of American technology is a subject matter close to my heart since I am an advisor for BlackOps Partners, in Washington, D.C. BlackOps Partners is a global risk aversion firm specializing in threats posed by hybrid warfare where everyone is a target, including teens, and children. Furthermore, every company is a target, including board members, C-suite executives, management, and front-line employees, according to Casey Flemming, CEO of BlackOps Partners.
China has a history of enabling multinational corporations to market their products and services in China for a short-term period. Nevertheless, China manufactures like products and services to scale, which enables Chinese-owned OEMs to catch up to these multinational OEMs.
Once every product and service can be manufactured to scale by Chinese-owned companies, China decouples its dependency on foreign-made products and services. At the same time, China competes against the OEMs of those products and services worldwide, such as the case regarding Huawei and Apple. There are big profits for foreign OEMs competing in China. However, those profits may be short-lived as Chinese OEMs ramp up to compete while China’s government, beholding to the CCP, decouples its dependency on foreign-made products and services.
Apple’s decline in sales in China is not by accident but is the result of the delete "A" strategy, linked to China’s hybrid warfare strategy. The hybrid warfare strategy in China is partially based on 5th century BC Chinese military strategist and general Sun Tzu’s “Supreme Art of War,” which is to subdue the enemy without fighting.
We are seeing this strategy play out today as China’s weapon of mass destruction is not a nuclear bomb but rather is the U.S. dollar, which China is using to compete against American and Western OEMs, plus AI, app, and social media developers that include Alphabet (Google), Meta (Facebook), Apple, and Microsoft.
China’s hybrid warfare strategy is relevant to its development and manufacturing efforts in artificial intelligence (AI) and quantum computers. According to reports, Chinese researchers claim they can break Rivest-Shamir-Adleman (RSA) encryption standards in hours using a quantum computer. While their claims have been largely debunked, the paper demonstrates that the CCP, and likely their state-backed hackers, are actively exploring ways to break RSA encryption using quantum technology. MIT claims that RSA encryption standards can be broken in hours by a quantum computer, however, that fact is frightening since RSA encryption standards developed at MIT in the 1970s have been adopted by organizations, institutions, and governments, around the world.
Today, it is widely known that bad actors are harvesting sensitive financial, personal, and intellectual property data for future decryption. This idea is called a “Harvest Now, Decrypt Later” attack (“Harvest attack”) and employees working from airports, cafes, and hotels are routinely targeted. Deloitte has published that about half of organizations are worried about these attacks, and Moody’s has published that 86 percent of organizations are unprepared to address them.
Claims such as these have prompted the National Institute of Standards and Technology (NIST), and the National Security Agency (NSA) to encourage organizations, institutions, businesses, and government agencies to adopt a “Quantum Readiness Roadmap (QRR)." Adopting a QRR is crucial to address risks posed by global threat actors already recording your sensitive data. There is the risk that global threat actors will soon have access to quantum computers, such as nation-state/military hackers, criminal organizations and cartels.
Like an incident response team (IRT) that is responsible for gathering threat intelligence to protect against cyber-attacks and/or immediately responding to a cyber-attack, having a QRR can augment a Top/Down security strategy managed by an IRT. The NSA is encouraging the integration of Commercial National Security Algorithm Suite (CNSA) 2.0 standards centered on post-quantum cryptographic algorithms to protect against future cyber-attacks from AI-integrated quantum computers.
The only way to stop the clock on Harvest attacks and prevent your recorded data from being decrypted is by protecting your data with CNSA 2.0-compliant solutions. Some companies in the United States, such as American Binary, have developed a suite of CNSA 2.0 compliant post-quantum cryptographic (PQC) security solutions such as their PQC-VPN protecting endpoint devices, including PCs, laptops, smartphones, tablets, and servers supported by the Android OS, Apple iOS, and Microsoft Windows operating systems.
Your organization, institution, or government agency must create a Quantum Readiness Roadmap while adopting post-quantum security solutions such as American Binary’s PQC-VPN today. Adopting a Top/Down security strategy that includes prevention and threat intelligence is the best solution to stop or mitigate cyberattacks rather than being in reactive mode after a cyber-attack.
Today, cyber-attacks can result in the loss of billions of dollars, loss of reputation and freedom as senior executives can be held liable for negligence and/or misleading authorities regarding details of a material cyberattack. IBM’s 2023 “Cost of a Data Breach” report highlights the average cost of a data breach is 4.5 million dollars and can be as high as 10 million dollars or more depending on the industry. These costs are strictly associated with investigating the breach and do not include loss of revenue, legal fees associated with defending against lawsuits, or potential harm, including death, which may occur from a cyberattack.
Ask anyone who works for Colonial Pipelines, Solar Winds, or Change Healthcare how the public views their companies after their high-profile cyber-attacks cost them collectively billions, along with indeterminate damages incurred by their customers.
AT&T was recently a victim of cyberattacks, impacting approximately 7.6 million current and 65.4 million former AT&T customers. I know this because I just got the letter in the mail, and frankly, I am considering migrating my service to another carrier due to repeated cyberattacks involving AT&T. The reputation of brands like these and others that have experienced significant data breaches has been tarnished forever. Additionally, some companies may end up in bankruptcy, rebrand, or have to sell, resulting in a high-profile cyberattack.
The board and C-suite can no longer view cybersecurity as just an OPEX cost regarding ROI or depend on insurance to bail them out if a cyberattack happens because insurance companies are raising premiums in response. Do you think the cost of cybersecurity is too high compared to the price of a data breach, plus the loss of a company’s reputation? Do you think appropriate cybersecurity measures are too costly in comparison to the cost of a data breach and subsequent loss of your company’s reputation?
For information on Jason Schenker, visit: Jason Schenker | Top-ranked Economist, Futurist & Best-selling Author For Information on Casey Flemming, visit: The Firm - BlackOps Partners For more information on American Binary, visit American Binary. (ambit. inc).
For more information on the SXSW Conference and the Need for a Quantum Readiness Roadmap, reach out to Rex M. Lee at rlee@mysmartprivacy.com.
About the Author: Rex M. Lee is a Privacy and Cybersecurity Advisor, Tech Journalist, and Senior Tech/Telecom Industry Analyst for BlackOps Partners, Washington, DC. Find more information at CyberTalkTV.com.
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