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Chinese Report Reveals US Intelligence Cyberattacks on Chinese Defense Contractors

China’s National Computer Network Emergency Response Technical Team (CNCERT) has reported a significant escalation in cyberattacks by US intelligence agencies targeting Chinese defense and high-tech sectors. According to the China Cybersecurity Association, these attacks specifically aim to steal sensitive military research data and core production information from universities, research institutes, and defense contractors.

The attacks intensified after the 2022 exposure of NSA cyberattacks on Northwestern Polytechnical University. Since then, US intelligence agencies have conducted increasingly sophisticated operations against China’s defense industrial base.

The first case occurred from July 2022 to July 2023, where attackers exploited a Microsoft Exchange zero-day vulnerability to control a major military contractor’s email servers for nearly a year. The attackers compromised the company’s domain controller, gained access to over 50 critical devices, and established persistent backdoors. Using proxy servers in Germany, Finland, South Korea, and Singapore, they launched more than 40 attacks and stole emails from 11 executives, including sensitive military product designs and system parameters.

The second case ran from July to November 2024, targeting a communications and satellite internet defense company. Attackers used proxy IPs from Romania and the Netherlands to exploit unauthorized access and SQL injection vulnerabilities. They planted memory backdoors, infected over 300 devices, and specifically searched for keywords like “military network” and “core network” to steal classified data.

The report indicates that in 2024 alone, foreign state-sponsored Advanced Persistent Threat (APT) groups launched over 600 cyberattacks against Chinese critical infrastructure, with defense contractors being the primary target. US intelligence-backed groups demonstrate particular sophistication through organized attack teams, extensive support systems, and advanced vulnerability exploitation capabilities, posing serious threats to China’s national cybersecurity.

Source: Sputnik News, August 1, 2025
https://sputniknews.cn/20250801/1066658052.html

Briefings | | |   US-China Relations

CNA: Beijing Assessing Cybersecurity Risks of Using Nvidia H20 Chips

Primary Taiwanese news agency Central News Agency (CNA) recently reported that the Chinese authorities questioned Nvidia regarding potential security breaches affecting its H20 chips. Nvidia said its H20 products do not contain backdoors that could allow for remote access or control.

China’s Cyberspace Administration (CAC), the cybersecurity regulator, has expressed concern about a U.S. proposal requiring advanced chips exported overseas to have tracking and location capabilities. While the U.S. had just allowed Nvidia to resume exports of its H20 chips to China, the CAC summoned Nvidia to clarify the risks, casting uncertainty over Nvidia’s continued shipments to China. The CAC asked Nvidia to explain whether the H20 chip poses any backdoor security risks, citing concerns about the data and privacy of users in China.

A spokesperson for Nvidia said in a statement: “Cybersecurity is of paramount importance to us. Nvidia chips do not contain any backdoors that could allow anyone to remotely access or control them.”

The U.S. banned Nvidia from selling its H20 chips to China in April, only to allow them to be sold in July. Nvidia developed the H20 chip earlier specifically for the Chinese market.

Source: CNA, August 1, 2025
https://www.cna.com.tw/news/aopl/202508010006.aspx

Briefings | | |   Information/Technology US-China Relations

China’s Defense Ministry Responds to Largest-Ever U.S. Air Force Exercise: China is “Confident in Handling all Risks and Challenges”

At a regular press briefing on July 30, China’s Ministry of National Defense was asked to comment on the U.S. Air Force’s recent launch of “Mobility Guardian,” its largest-ever exercise in the Western Pacific. The operation aims to test combat concepts such as Agile Combat Employment and marks a significant intensification of the U.S. “Indo-Pacific strategy.”

Ministry spokesperson Zhang Xiaogang responded by saying, “The Pacific should remain a region of peace – not a theater for those who seek to stir up trouble.” He criticized the U.S. for clinging to Cold War-era thinking, showcasing military strength in the Asia-Pacific, using exercises as a pretext to build alliances, and exerting pressure on other nations – actions he said undermine regional peace and stability.

“No matter how fierce the storm, we remain steady at the helm,” Zhang added. He emphasized that China’s military is fully confident and capable of handling all risks and challenges, and will resolutely defend national sovereignty, security, and development interests. He also claimed China’s role as a steadfast force for regional and global peace.

Source: Huanqiu Times, July 30, 2025
https://mil.huanqiu.com/article/4NhooICt6sW

Briefings | | |   @CS Defense/Military US-China Relations

UDN: China’s Imports of 3 Major Energy Resources from the U.S. Zeroed in June

United Daily News (UDN), one of Taiwan’s leading media outlets, recently reported that, according to China Customs statistics, China’s imports of the three major energy sources from the United States – coal, crude oil, and liquefied natural gas (LNG) – were nearly zero in June.

Since the launch of the U.S.-China trade war by President Trump, Chinese buyers have gradually reduced their purchases of American energy and diversified their supply sources. As the world’s largest crude oil importer, China did not buy any U.S. crude oil in June – the first time this has happened in nearly three years. For comparison, in June of last year, China imported almost $800 million worth of American crude oil.

U.S. LNG exports to China remained at zero for the fourth consecutive month in June. Coal exports from the U.S. to China also dropped for the second straight month, amounting to only a few hundred dollars – a stark contrast to the $90 million worth of U.S. coal imported by China in June last year. Currently, China relies heavily on Saudi Arabia and Russia for its crude oil supplies.

In addition to energy, China’s imports of U.S. agricultural products – including corn – have also declined in recent months. According to the U.S. Department of Agriculture, China has made no forward purchases of U.S. soybeans or corn for the 2025–26 season. At the same time, China is ramping up domestic natural gas production in a bid to enhance its energy security.

Source: UDN, July 25, 2025
https://udn.com/news/story/7331/8895383

Briefings | | |   Economy/Resources US-China Relations

Lianhe Zaobao: Amazon Closes Its Shanghai AI Research Institute

Singapore’s primary Chinese language newspaper Lianhe Zaobao recently reported that U.S. e-commerce giant Amazon has closed its artificial intelligence (AI) research institute in Shanghai, becoming the latest in a wave of U.S. companies to lay off employees in China.

An Amazon spokesperson said that after an in-depth assessment of the company’s organization, development priorities and future strategic direction, Amazon decided to streamline some teams at Amazon Cloud Technology. He did not confirm the reports that the Shanghai AI Research Institute has been disbanded. However, scientists at the Amazon Web Services (AWS) Shanghai AI Research Institute posted on WeChat that they received the notice of the close-down of the institute due to the “strategic adjustment between China and the United States.”

Amazon Web Services (AWS) established the Shanghai AI Research Institute in September 2018. At its peak, it had more than 1,000 Chinese employees. As US-China relations continue to be tense, many U.S. companies have reduced their R&D teams in China in recent years. In August last year, IBM completely closed its R&D department in China, and thousands of employees were laid off. In June this year, Citigroup announced the streamlining of its global technology solution centers in Shanghai and Dalian (Liaoning Province), laying off about 3,500 technical personnel.

Source: Lianhe Zaobao, July 23, 2025
https://www.zaobao.com.sg/news/china/story20250723-7201947

Briefings | | |   Information/Technology US-China Relations

Nikkei Asia Review: Can China Built Its Own ASML?

Huanqiu Times reported that Nikkei Asia Review published an article “Can China Build Its Own ASML?” ASML is the Dutch maker of advanced lithography machines critical for chip production. The U.S. has imposed strict export controls on China, restricting exports of advanced semiconductor chips as well as design software and manufacturing equipment.

The U.S. export controls have inadvertently fostered a “golden age” for Chinese chip equipment makers to develop their own alternatives. While Chinese firms like SMIC and others have made progress replacing foreign tools in several chipmaking processes, lithography remains a major challenge due to its complexity and high cost. Only ASML, Canon, and Nikon have historically produced such machines.

However, with strong government support, there are Chinese companies working on that front. Companies like Shanghai Micro Electronics Equipment (SMEE) have created machines to make 90nm chips, while Huawei supports local R&D and talent recruitment. Smaller firms like Shanghai Yuliangsheng, backed by top research institutes, also aim to develop China’s own EUV lithography machines and build an independent ecosystem free from U.S. restrictions.

A U.S. semiconductor expert warned that Chinese toolmakers could someday become competitive both domestically and globally, and once that happens, they will be hard to stop.

Source: Huanqiu Times, July 16, 2025
https://oversea.huanqiu.com/article/4NWVNXq6viC

Briefings | | |   Economy/Resources Information/Technology US-China Relations

Beijing: Fentanyl Crisis Is America’s Problem, Not China’s

News media reported on July 16 that U.S. President Trump stated he believes China will soon impose the death penalty on individuals involved in the production and distribution of the drug fentanyl. He expressed optimism about reaching an agreement with Beijing on the issue of illegal drugs.

In response, Chinese Foreign Ministry spokesperson Lin Jian addressed the matter at a regular press briefing on July 17, stating that China has repeatedly made it clear that fentanyl is an issue for the United States, not China, and that the responsibility lies with the U.S. itself. Lin criticized the U.S. for ignoring China’s goodwill and unilaterally imposing tariffs on fentanyl-related products from China, calling it a move that severely undermines bilateral dialogue and cooperation on drug control and seriously harms China’s interests.

“If the United States truly wants to cooperate with China,” Lin said, “it should face the facts and engage in dialogue with China on the basis of equality, mutual respect, and reciprocity.”

Source: Huanqiu Times, July 17, 2025
https://world.huanqiu.com/article/4NWzoplHsxp

Briefings | | |   @CS US-China Relations