May 12, 2009, 9:46 AM — A year ago, when a Time Magazine reporter told Tan Dailin that he'd been identified as someone who may have hacked the Pentagon, he gasped and asked, "Will the FBI send special agents out to arrest me?"
The answer, it turns out, was, "No, the Chinese government will."
Dailin, better known in Chinese hacker circles as Withered Rose, was reportedly picked up last month in Chengdu, China, by local authorities. He is now facing seven years in prison under a new Chinese cybercrime law that was passed in late February.
Although the Western media has been awash with stories of Chinese hacking for years, cybercrime was until recently governed by three articles added to China's criminal code in 1997. The laws were out-of-date and "failed to correlate proportionately with the tremendous social harm" caused by cybercrime, according to a recent paper on Chinese cyber-law published in the International Journal of Electronic Security and Digital Forensics.
"China has made significant progress in cybercrime legislation and is putting in great efforts to strengthen it," said Man Qi, one of the paper's co-authors, in an e-mail interview.
However, the paper concludes that the country's laws are still in the early stages of development. "Gaps and inadequacies exist in traditional offense provisions," said Qi, a senior lecturer in the Department of Computing at Canterbury Christ Church University in the U.K.
Until the new law was passed in February, computer crimes carried a maximum of three years' jail time. That has now been extended to seven years, and the definition of computer crime has also been broadened.
"These changes to the criminal code are important to crack down [on] cybercrime and also help to strengthen the protection of privacy and personal property," Qi said.
However, the laws are still not as tough as those in the U.S., where perpetrators of computer fraud routinely face 20-year sentences. And many security experts accuse China of sponsoring politically motivated cyber-attacks and turning a blind eye to cybercrime.
Still, China has expressed some willingness to work internationally on crime, Qi said. While preparing for the 2008 Beijing Olympics, "China was praised by Interpol for their 'highest possible standard' work," she noted.
The new law comes as cybercrime is starting to hit home in China, according to Scott Henderson, the author of a blog that covers Chinese hackers.
In the past few years, criminals posing as security experts have begun calling small-business owners, offering their services, Henderson said. If they're not hired, they simply attack the business, typically with distributed denial of service (DDOS) attacks, unless they are paid. "We're starting to see Chinese hackers hacking internally now, too," he said.
Dailin reportedly was arrested after he trained a DDOS attack on rival hacker groups. His victims went to authorities with evidence.
With China's economy struggling, some IT professionals have begun turning to crime in the past two years, Beijing-based security expert Wei Zhao said recently. "They cannot easily find jobs, maybe the security market is too small for them," he said in an interview.
Zhao, the CEO of security consultancy Knownsec, called China "the world's malware factory," saying that the country has become a major source of online attacks and so-called zero-day attacks, which target previously undisclosed software flaws.
In recent months, Chinese hackers have gained fame for launching widespread attacks against programs such as Internet Explorer and Adobe Flash, but they have also targeted popular local programs such as Xunlei, QQ and UUSee.
