A recent report by Epoch Times reporter Joshua Philipp told of a chilling story: that the state-backed hackers of China has been infiltrating and Troyan-horsing global banking systems, by profiting from the security loopholes of the banks and covering up their trails while revealing those secrets to cyber criminals. The report says that some of the cyber perpetrators have invaded, successfully, the global banking systems, and stole from Bangladesh central bank alone, 80 million dollars.
The more disturbing news is that the Chinese hackers sold those secrets on the darknet, an overlay network that can only be accessed with specific software, configurations, or authorization. Apparently, Chinese cyber attackers are a blend of many roles, that of a career soldier, government employee, white collar felon, and computer hacker. Even more troublesome to people of the world is that the Chinese attack is not geared towards other sovereign governments, but ordinary citizens of the world. The third largest bank in Mexico, Banorte, and its affiliated internet money transfer arm UniTeller is said to be the first victim. Yet the real goal of Chinese Communist government is obviously not Mexico, but its norther neighbor United States and ultimately the banking system of the West.
This hideous strategy of the CCP is, if proven true and really carried out, simply too crazy and too stupid. A mass attack on banks could inevitably result in massive crises of American and Western financial institutions, and further, lead to the collapse of the global financial system. The crucial point here is, while the US and West will suffer from this mayhem, the Chinese cannot stay out of this disaster either, and the only party that may not be affected, or even benefit from this chaos, is Russia.
First of all, it is not at all impossible to infiltrate the banking systems of the West, as long as an entity has enough determination and resources, including monetary and technological, to persistently pursue that goal. Transfer or stealing money is not even the most detrimental, as destroying confidence of people in the system that leads to bank runs, or causing enough banks to go bankrupt at the same time so FDIC or the like cannot afford to bail out all of them at the same time, that will be enough to destroy the world financial system centered around the dollar. In fact, this kind of attack is one of the “Unrestricted Warfare” military strategies promoted in 1999 by two colonels in the People’s Liberation Army, Qiao Liang and Wang Xiangsui. And, as a bona fide type of Chinese attack of “unrestricted warfare”, the consequence of such an attack is no less severe than an attack on a U.S. naval carrier, that PLA eagerly wishing to accomplish, or even a nuclear attack. In addition to hacking, the CCP regime may use tools other than hacking, such as buying out high level bank executives, or even mid-level employees that have access rights, to achieve their goals.
The Western world has already entered the 4th industrial revolution, or Industries 4.0, with the first industrial revolution being the mechanization of production using water and steam power, second industrial revolution being mass production with electric power, and the third, digital revolution with the use of electronics and IT. In the context of Industries 4.0, the internet, the artificial intelligence, the clean energy, and quantum information technologies are all centered around the financial system as its lubricants. If the Western banking system is ever destroyed, the next industrial revolution of human beings will most likely be Industries 1.0 again!
If the Chinese Communist regime is ever held responsible for destroying the Western financial system, its doomsday will come much sooner. It’s like a bull rushing into a fine china store, the consequences of that are completely unknown to the cowboy. To say such an attack is as severe as an attack on a U.S. carrier is an understatement.
I met a retired U.S. Naval officer earlier this month, and we chatted about the growth of Chinese naval forces and the conflicts in the South China Sea. He told me that among naval officers, they were talking about the DF 21-D ballistic missile that China intends to use as a weapon of choice for attacking U.S. carrier battle groups. U.S. Navy officers basically shrugged this idea off as a joke, given the current Chinese tracking, guiding, and targeting capabilities. But the key issue is, according to him, not technical or tactical, or if a DF 21-D is truly capable of hitting a U.S. carrier, but what happens when it does hit the carrier? What will be the U.S. reaction to such an attack?
If a U.S. carrier is ever sunk by the PLA navy or the U.S. banking system destroyed by the Chinese regime, and if the black hand behind is proven to be the CCP, the strike back of the empire will no doubt more swift and severe than what Uncle Sam did after Pearl Harbor. Remember the 3 trillion USD worth of Chinese foreign exchange reserve? Beijing can forget about that. The hard labor of Chinese migrant workers of the past 30 years will be gone overnight. And that would be just the beginning of retaliations that Beijing will never be able to bear.
The Chinese economy is much more intertwined with the West than, say, the Russian economy. Ever since the reform of openness of China, the middle kingdom benefited greatly from the trade , investment, and introduction of management systems from the West. Chinese import and export are settled with U.S. dollars, and China depends on the West for its export of goods, import of key technology, and trillions of investment. If the banking system of the West collapses, what the Chinese economy relies on is also destroyed. The Chinese economy is already in a state of stagnation, and it can’t stand another blow to its foundation. It is Russia that may not be affected much by such a collapse, as it is already suffering from Western sanctions.
From any angle, a large scale Chinese attack on the Western banking system is simply too risky, too dangerous, and too senseless. The Chinese regime is better off quietly mending relations with the U.S., and stopping the bad practice. On the other hand, given the cordial relationship between the Obama administration and Xi Jinping, such an risky play with fire is quite odd and very strange. Outside observers cannot rule out the possibility that it is the Jiang Zemin faction that is behind this and served as a secret spoiler. But, no matter who causes them, Zhongnanhai is better off holding its horses and mending its fences immediately.
Dr. Frank Tian Xie is John M. Olin Palmetto Professor of Business and Associate Professor of Marketing at the University of South Carolina Aiken, in Aiken, SC, USA.
