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Chinese Hacking Defense 'Hard to Believe': Security Expert

Tuesday, 19 Feb 2013 | 12:48 PM ET
A building in a Shanghai suburb that is reportedly a center of cyberespionage.
Peter Parks | AFP | Getty Images
A building in a Shanghai suburb that is reportedly a center of cyberespionage.

It's highly unlikely that the Chinese government was not at least aware of the cyberattacks that targeted U.S. companies, organizations and government entities, said Kevin Mandia, CEO and founder of the security firm Mandiant, on CNBC "Squawk on the Street" Tuesday.

According to a New York Times report Tuesday, research from Mandia's security experts indicates that the cyberattacks were coming from a location on the outskirts of Shanghai in a building that housed the People's Liberation Army Unit 61398 and is the base for its cyberwarriors.

(Read More: Chinese Army Unit Is Seen as Tied to Hacking Against US)

Report: China's Army Behind US Hacking Attacks
Kevin Mandia, Mandiant CEO, discusses a controversial report that alleges a unit of China's army is behind a huge proportion of hacking attacks on U.S. websites.

A Chinese ministry spokesperson said claims are "unfounded accusations based on preliminary results," and that "China resolutely opposes hacking actions and has established relevant laws and regulations, and taken strict law enforcement measures to defend against online hacking activities.''

But China's denial of not knowing about the attacks is weak, Mandia said.

(Read More: Security Firm Discovers Cyber-Spy Campaign )

"China has a controlled Internet access, everything people do on the Internet is monitored there. We have seen thousands of attacks just in the last two years alone," Mandia said. So it's hard to believe ... that the Chinese government does not notice thousands of attacks coming from a neighborhood that happens to be co-located with units 61398, it's hard to believe they don't notice."

The cyberattacks, though not destructive, targeted valuable intellectual property.

(Read More: Is Your Business Ready for Cyber Warfare? )

"One of the things we've learned, is it's the theft of intellectual property they are after. It's not credit card data. ... It appears to be copying sensitive documents," he said.

If the U.S. wants to prevent future attacks, like the string of recent attacks on U.S. companies and government organizations, it's going to have to intervene somehow, Mandia said.

"The response can't just be technical. That's just a fact. You're not going to be able to prevent all these intrusions, there's going to have to be technical and diplomatic-based counter measures to these attacks," he said. "It's time to say that the attacks attacks weren't just coming out of China, but in fact, there are ties to the Chinese government in these attacks. But there is no clear single answer, there's a lot of complexities here. We'll be trying to solve this problem for a long time."

By CNBC's Cadie Thompson

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  • Matt Hunter is the senior technology editor at CNBC.com.

  • Cadie Thompson is a tech reporter for the Enterprise Team for CNBC.com.

  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.

  • Jon Fortt is an on-air editor. He covers the companies, start-ups, and trends that are driving innovation in the industry.

  • Lipton is CNBC's technology correspondent, working from CNBC's Silicon Valley bureau.

  • Mark is CNBC's Silicon Valley/San Francisco Bureau Chief covering technology and digital media.