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Profit vs. National Security: The United States in the Grip of Chinese Influence

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How did American companies become an apple of discord between the two powers and what does Elon Musk have to do with it?

US Senator Richard Blumenthal said that the activities of American technology companies in China threaten US national security. The senators' statement came at a Senate subcommittee hearing that discussed cyber threats from China.

Blumenthal noted that close economic ties between the United States and China pose a serious risk to the country. The senator paid special attention to the influence of Elon Musk and the Pentagon's dependence on SpaceX services. The senator stressed that a significant part of Tesla's production and sales comes from China. Blumenthal noted that Musk publicly supports China's policies, including the position on Taiwan, in order to preserve his interests in the country. According to Blumenthal, the Chinese authorities are trying to use Musk to influence the US government.

Apple was also criticized. Blumenthal stressed that the company complies with China's censorship and surveillance requirements, since a significant part of its suppliers and sales are associated with this country. The senator expressed doubt that SpaceX, Tesla and Apple would put U.S. security ahead of their revenues.

The hearings also discussed China's cyber espionage activities. Experts from CrowdStrike have reported on a new hacker group called Liminal Panda. The group has been penetrating telecommunications networks in South Asia and Africa since 2020. Hackers use malware, as well as public tools and proxies, to access networks, steal data, and spy on users. LIMINAL PANDA uses its own programs and tools, TinyShell and ProxyChains, to hide its activities and manage compromised systems.

Liminal Panda specializes in the operation of outdated communication protocols that are poorly protected. In one recent incident, Liminal Panda established multiple access channels to target networks, emulated GSM protocols to control attacks, and stole mobile user data, call metadata, and text messages. These activities have made it possible to spy on individual users by collecting data about their devices.

According to CrowdStrike, Chinese hackers have become more precise and targeted. They focus on obtaining political, military, and scientific information that is important to China's interests. Instead of quick attacks, they now create long-term access to networks to collect data and use it for future purposes.

Particular attention was paid to the Vanguard Panda (Volt Typhoon) group, which, according to experts, has already penetrated critical US systems. This may be a preparation for possible attacks in the event of an escalation of the conflict around Taiwan. Experts believe that such actions could interfere with logistics and military operations, which would slow down the US response to the crisis.

Earlier, China said that the Volt Typhoon hacker group is a fictional threat created by the United States and its allies. According to the Chinese authorities, the special services of the United States and the countries of the Five Eyes alliance are engaged in cyber espionage against China, France, Germany, Japan and other states, and also spy on Internet users around the world. In July, Chinese experts already published a report where Volt Typhoon was called a disinformation campaign by American intelligence agencies.

Volt Typhoon is the conventional name of a Chinese cyberespionage group that, according to Western researchers, has been infiltrating critical infrastructures since 2019. The group uses routers, firewalls, and VPNs to hide their activities. In August 2024, Volt Typhoon was linked to zero-day exploitation on the Versa Director system, which allowed the installation of data-stealing malware.

On May 24, 2023, the countries of the Five Eyes alliance issued a joint statement on the activities of Volt Typhoon, pointing to its connection with China. The basis for such conclusions was the discovery of the group by Microsoft, but Chinese experts conducted their own investigation and concluded that the group's activities are more consistent with ordinary cybercrimes that do not have state support.

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