China Security Threats

Data and information about security threats from China’s black market. Intelligence and security data collected from government agencies, news articles and other public information sources.

In a translated account published in Tech in Asia, the operations and financial earnings of a hacking group in China that targets online games was broken down.

The group targets online games in China due to its low levels of security. Due to the costs to harden its servers, game developers in China choose not to invest in this area. The companies are believed to have made a decision that the security of its servers and database is not an area where a gamer will make his decision on whether to play the game or not. In addition, many of the Internet users in China has not developed the habit of using security tools. For example, even if two-step authentication is available, many game players choose not to use them.

Hackers in China have noticed these security vulnerabilities and have thus started targeting these websites. Due to the high number of users and popularity of games, the hackers have been able to create a profitable enterprise by hacking the game servers.

The group is organized on three levels, according to the report. The first level consists of the elite hackers. These are the most technically skilled hackers who are responsible for penetrating into the databases in order to obtain usernames and passwords. The second level consists of hackers who are responsible for collecting valuable information from the databases by scanning the sites. The third tier is responsible for selling the goods that were found. This can include game-play items such as armor, weapons and in-game currency.

On average, hackers involved in this group can make as much as $16,000 (100,000 RMB) a month.

(More earnings from illegal jobs.)

In another incident, a hacker reportedly got access to an online game’s entire database. The hacker then sold it to a third party for $820,000 (5 Million RMB). The third party uses this access in order to place itself between the gamer and the game server when gamers are attempting to add money to its account. By placing itself in the middle, all funds that gamers submit would be intercepted by the third party. Although the breach would be quickly noticed, a popular game with many payments could easily recoup the initial investment.

(Prices of hacking services and other online fraud.)

Source:  C. Custer, “Hacking China’s online games for profit: an interview with a Chinese hacker,” Tech in Asia, May 2, 2014.

Security officers broke up an organ trafficking ring that was bringing people from Vietnam to China in order to conduct kidney transplant surgeries.

Police in Vietnam found that 8 people sold their kidneys for money, with 2 of them being taken to China in order to obtain the surgery. 5 of the people were siblings.

According to news reports, the amount that the people received for selling their kidney ranged from $2,585 (55 Million Vietnamese Dong) to $5,170.

(More organs and kidneys for sale on the black market.)

Source:  “Vietnam police probe paid kidney ‘donors’ for hint of trafficking ,” Thanh Nien Daily, April 29, 2014.

According to the director of the Saudi Center for Organ Transplants, over 400 people from Saudi Arabia are believed to have bought organs from organ trafficking markets between 2012 and 2013.

There were 190 incidents of organs bought by Saudis in 2012, and 220 cases of organs being bough from black markets in China, Egypt and Pakistan, according to health officials.

Out of the total number of buyers, roughly 40 percent needed to get additional medical treatment due to side effects from the illegal organ transplant.

(Prices of organs for sale on the black market.)

Source:  “Over 400 needy Saudi patients turn to organs black market in Asia,” Saudi Gazette, April 21, 2014.

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A report released by China’s Public Security Bureau for Forests and the University of Oxford found that the average price for a kilogram of pangolin scales is available for sale for $600. The price of a kilo of pangolin scales for sale in 2013 was twice the amount that a kilogram of scales were sold for in 2008.

According to the report, 2.59 tonnes of scales were seized in China between 2010 and 2013. The scales represented approximately 4,870 pangolins that were killed in order to produce those scales. In addition to the scales, 259 intact pangolin were seized during the time period.

One method of pangolin smuggling highlighted by the report was through the use of China’s postal system. In one case discovered in November 2013, security services discovered 5 packages of pangolin scales weighing 70 kilos each were being sent through the postal system. It was later discovered that up to one tonne of scales, representing 1,660 pangolins, were shipped through China’s postal system by wildlife smugglers.

The pangolin is in high demand across Asia due to its use as a traditional medicine. According to the BBC, consumers roast the pangolin scales and then eat the scales with the belief that its helps detoxify the body and stimulate lactation.

Across Asia, a full pangolin for sale is available on the black market for $1,000.

(See more prices of exotic animals for sale.)

Source:  Ella Davies, “‘Shocking’ scale of pangolin smuggling revealed,” BBC Nature News, March 14, 2014.

Security services in Mexico state that the organized crime group Knights Templar have made millions of dollars in the state of Michoacan by extorting local mines.

The group, which primarily makes its money from drug trafficking, forces local mine operators to pay between $4 to $7 per tonne of minerals that is extracted in the area. In 2013, the shipment of iron ore totaled 4 million tonnes, compared to the 1.5 million tonnes extracted in 2012.

Intelligence officials also report that the Knights Templar is trading iron ore with China in return for chemical precursors that are used to make synthetic drugs such as methamphetamine.

(How much does crystal meth cost?)

Source:  ” Why Mexican drug-traffickers started smuggling iron ore to China,” Economist, March 9 2014.

A report in the New York Times highlighted the sex industry of Dongguan, China. The red light distict in Dongguan is considered to be one of the most developed sex trade areas in all of China. However, in February and March 2014, Chinese security services have begun to crack down on the sex trade in the city.

Prior to the crackdown, the NY Times reported that the cost to hire a woman for two hours in an upscale brothel would cost about $160 (1,000 renminbi.)

Brothel owners also advertised job openings to women in the area. One help-wanted sign in the city stated that a prostitute could make between $1,640 to $4,900 a month. If a woman only wanted to be a karaoke bar hostess, then the woman could make up to $1,300 a month plus tips.

The scale of the sex trade on the local economy was being felt as business dried up due to the government crackdown. One club manager stated that two out of five people in the area would lose their jobs if the sex industry continued to be shut down. Another club owner stated that he was losing $10,000 per day in expenses and lost revenue. One taxi driver stated that he could make up to $120 per night from commissions paid out by brothel owners when he would bring customers to their location.

(More prostitute rates worldwide.)

Source:  Edward Wong, “Red Lights Dim in China’s Sin City,” New York Times, March 6, 2014.

In 2013, criminal justice agencies at Narita International Airport in Japan seized 270 kilograms of illegal drugs. The amount of drugs seized was the highest amount recorded since the airport opened in 1978.

The illegal drugs were seized in 82 cases of drug smuggling. In 12 of the cases, the drugs were being smuggled into Japan from flights originating from India. Following India, the next country of origin was China, where 9 people were arrested with narcotics, followed by Hong Kong with 5 people being arrested.

The amount of illegal drugs seized at Narita Airport in 2013 had a street value of $184 Million (18.8 Billion Japanese Yen).

(How much does cocaine cost?)

Source:  Julian Ryall, “Japanese drug smugglers use online shoppers as mules,” South China Morning Post, March 1, 2014.

China Central Television (CCTV) conducted a hidden camera investigation into prostitutes operating out of high class hotels and karaoke bars in the city of Dongguan.

The news program had hotel staff workers bring prospective customers into ballrooms where prostitutes available for sale would be displayed. In some hotels, the news reporters were brought to rooms where a one-way mirror displayed the prostitutes.

According to a report by the Los Angeles Times, the price to have sex with the prostitutes in Dongguan started at $100.

(More prices for sex with prostitutes worldwide.)

Source:  Julie Makinen, “China TV expose on sex workers sparks angry backlash,” Los Angeles Times, February 10, 2014.

A report by the Mobile Manufacturers Forum reported that 125 million substandard and counterfeit mobile phones were sold around the world in 2011. In 2012, the number of counterfeit phones sold increased to 148 million units.

The estimated amount for 2013 was projected to be 1.86 million units. Thus, up to 8 percent of all mobile devices sold worldwide in 2013 were substandard or counterfeits.

Over 20 percent of mobile phones sold in India is estimated to be counterfeits, according to the report.Many of the counterfeit phones sold in the India that were made in China were found to have high levels of lead. This is similar to a study conducted by researchers in Brazil who found that the five counterfeit phones that they tested all had lead and cadmium levels that were higher than EU regulations.

In Libya, up to 80 percent of the mobile phones for sale in the country were smuggled into the country and sold on the black market.

Source:  Rachel Feltman, “That fake iPhone is probably full of lead,” Quartz, February 6, 2014.

There are around 5 million prostitutes in China.

According to surveys of the sex workers, 50 percent take protection and use a condom with every customer.

In the northern city of Tianjian, 17 percent of the prostitutes are infected with syphilis and 50 percent use a condom with every client.

With only half of the country’s sex workers using condom, health workers are concerned that HIV/AIDS spreading quickly through customers and infected prostitutes. According to the United Nations, heterosexual sex is the leading cause of AIDS transmission in China. 46.5 percent of new infections in 2011 were from heterosexual sex.

Heterosexual sex is the leading cause of AIDS transmission in China, according to the United Nations. 28 percent of all people living with HIV and AIDS in China are women.

Source:  “Prostitution and AIDS: In need of more protection,” The Economist, January 30, 2014.