Are these state-independent actors capable of orchestrating intrusions of such sophistication?

Judge for yourself.

They operate from a bare apartment on a Chinese island.
They are intelligent 20-somethings who seem harmless.
But they are hard-core hackers who claim to have gained
access to the world's most sensitive sites, including
the Pentagon.

In fact, they say they are sometimes paid secretly by the
Chinese government -- a claim the Beijing government
denies.

"No Web site is one hundred percent safe. There are Web
sites with high-level security, but there is always a
weakness," says Xiao Chen, the leader of this group.

"Xiao Chen" is his online name. Along with his two
colleagues, he does not want to reveal his true identity.
The three belong to what some Western experts say is a
civilian cyber militia in China, launching attacks on
government and private Web sites around the world.

If there is a profile of a cyber hacker, these three are
straight from central casting -- young and thin, with skin
pale from spending too many long nights in front of a
computer.

One hacker says he is a former computer operator in the
People's Liberation Army; another is a marketing graduate;
and Xiao Chen says he is a self-taught programmer.

"First, you must know about the Web site you want to
attack. You must know what program it is written with,"
says Xiao Chen. "There is a saying, 'Know about both
yourself and the enemy, and you will be invincible.'"

CNN decided to withhold the address of these hackers' Web
site, but Xiao Chen says it has been operating for more
than three years, with 10,000 registered users. The site
offers tools, articles, news and flash tutorials about
hacking.

Private computer experts in the United States from
iDefense Security Intelligence, which provides
cybersecurity advice to governments and Fortune 500
companies, say the group's site "appears to be an
important site in the broader Chinese hacking community."

Arranging a meeting with the hackers took weeks of on-
again, off-again e-mail exchanges. When they finally
agreed, CNN was told to meet them on the island of
Zhoushan, just south of Shanghai and a major port for
China's navy.

The apartment has cement floors and almost no furniture.
What they do have are three of the latest computers. They
are cautious when it comes to naming the Web sites they
have hacked.

On camera, Xiao Chen denies knowing anyone who has
targetted U.S. government Web sites. But off-camera, in
conversations over three days, he claims two of his
colleagues -- not the ones with him in the room -- hacked
into the Pentagon and downloaded information, although he
wouldn't specify what was gleaned. CNN has no way to
confirm if his claim is true.

"They would not publicize this," he says of someone who
hacks the U.S. Defense Department. "It is very sensitive."

This week, the Pentagon said computer networks in the
United States, Germany, Britain and France were hit last
year by what they call "multiple intrusions," many of them
originating from China.

At a congressional hearing in Washington last week,
administration officials testified that the government's
cyber initiative has fallen far short of what is required.
Most alarming, the officials said, there has never been a
full damage assessment of federal agency networks.

"We are here today because we must do more," said Robert
Jamison, a top official in the U.S. Department of Homeland
Security. "Defending the federal system in its current
configuration is a significant challenge."

U.S. officials have been cautious not to directly accuse
the Chinese military or its government of hacking into its
network.

But David Sedney, the deputy assistant secretary of
defense for East Asia, says, "The way these intrusions are
conducted are certainly consistent with what you would
need if you were going to actually carry out cyber
warfare."

Beijing hit back at that, denying such an allegation and
calling on the United States to provide proof. "If they
have any evidence, I hope they would provide it. Then, we
can cooperate on this issue," Qin Gang, a spokesman for
the Chinese Foreign Ministry, said during a regular press
briefing this week.

But again off-camera, Xiao Chen says after the alleged
Pentagon attack, his colleagues were paid by the Chinese
government. CNN has no way to independently confirm if
that is true.

His allegations brought strenuous denials from Beijing. "I
am telling you honestly, the Chinese government does not
do such a thing," Qin said.

But if Xiao Chen is telling the truth, it appears his
colleagues launched a freelance attack -- not initiated by
Beijing, but paid for after the fact. "These hacker groups
in my opinion are not agents of the Chinese state," says
James Mulvenon from the Center for Intelligence Research
and Analysis, which works with the U.S. intelligence
community.

"They are sort of useful idiots for the Beijing regime."

He adds, "These young hackers are tolerated by the regime
provided that they do not conduct attacks inside of
China."

One of the biggest problems experts say is trying to prove
where a cyber attack originates from, and that they say
allows hackers like Xiao Chen to operate in a virtual
world of deniability.

And across China, there could be thousands just like him,
all trying to prove themselves against some of the most
secure Web sites in the world.

Source(s):

http://www.cnn.com/2008/TECH/03/07/china.hackers/

http://www.youtube.com/watch?v=ovNVhk1rVVE