Washington, Beijing in cyber-war standoff

Reports of a series of cyber-attacks on United States businesses and institutions have prompted fears of a looming "cyber cold war".

The Chinese government has been blamed for a string of attacks over the past four months on major American media outlets, including the New York Times, the Washington Post and Bloomberg.

It's a charge Beijing denies, but a new US intelligence report, leaked to the Washington Post, claims Beijing is engaging in a sustained cyber-espionage campaign.

Robert Hillard, from global professional services firm Deloitte Consulting, says the growing digital economy is making businesses, and governments, pay attention.

"Every single country around the world is thinking about what happens when more and more of my economy is happening through digital channels, and hence becomes a richer target, and I can be more disrupted," he said.

Globally the cost of cyber-attacks to business is thought to be about $US380 billion a year, but it's the potential theft of intelligence and economic and military secrets that has forced governments and organisations world-wide to make cyber security a top priority.

In a speech to the New York business community late last year, outgoing US Defence Secretary Leon Panetta warned "attackers are plotting" - an apparent reference to the growing capabilities of Russia, China and Iran.

He predicted a cyber version of Pearl Harbor might soon take the United States by surprise.

"The greater danger facing us in cyberspace goes beyond crime and harassment," he said.

"A cyber attack perpetrated by nation-states or violent extremist groups could be as destructive as 9/11.

"Such an attack could virtually paralyse the nation." China's Ambassador to Australia, Chen Yuming, says rather than being the perpetrator, his country is also facing an increasing threat of cyber attacks.

"China is also a big victim of cyber attacks in the world," he said.

"There are hundreds of thousands of computers in Chinese Government agencies which have been attacked by cyber attackers from overseas sources." National security analyst Tobias Feakin says the standoff in cyberspace is being described by the US as a 'cyber cold war'.

"We're reaching this point of standoff, we have accusations and counter-accusations and various countries claiming to be victims of offensive attacks be it Australia, China, the United States or whoever," he said.

"We're getting to this point where there is an international standoff." Mr Feakin says the threat of cyber-crime and cyber-war has seen governments scrambling to boost digital security.

"If you look at the way the US is turning right now, there's a great focus on cyber security, be it in the defence sector or the intelligence sector," he said.

"Also in the UK right now cyber security is being prioritised quite heavily - I think it's part of a global trend that you're seeing." The White House is preparing to unveil a new cyber-security strategy, which will reportedly authorise the president to order a pre-emptive strike against future cyber-attacks.

Mr Feakin says the exact nature of the 'rules of engagement' are classified.

"It gives guidelines to when the military should be appropriated as the lead agency to respond," he said.

"[It] also gives guidelines to the intelligence agencies as to when, how, and in what circumstances they can investigate foreign networks to appropriate sourcing of some kind of attack." America's defence chief Leon Panetta says nations have no choice but to act aggressively to defend themselves against what is already a global cyber-war.

"Potential aggressors are exploiting vulnerabilities in our security," he said.

"But the good news is this, we are aware of this potential, our eyes are wide open." Australian Prime Minister Julia Gillard says her country is also taking cyber-warfare seriously.

"Australia is an attractive target for a range of malicious cyber actors, from politically motivated hackers and criminal networks, to nation-states," she said.

National security analyst, Tobias Feakin, warns Canberra needs to do a lot more, and quickly.

"Gillard is becoming more aware of the threat of cyber attack internally, and...

the lack of sensible policy to shape a whole-of-government approach to cyber security," he said.

Governments around the world are also rushing to firm up partnerships with those countries they do trust.

Last month Britain and New Zealand signed an agreement boosting their intelligence sharing in a bid to fight cyber crime.

At the same time, the European Union opened a new cybercrime centre in the headquarters of the pan-European police force -- Europol -- in the Netherlands.

Deloitte says it's crucial for governments and businesses to make cyber security the highest priority.

But technology lead partner Robert Hillard warns the threat shouldn't be overstated.

He says terms like "cold cyber-warfare" are exaggerated.

"Cyber security is real," he said.

"We absolutely need to be taking steps to put up the right defences, but we must not allow ourselves to be scared into not taking advantage of the digital economy." Mr Hillard says the best way to lower the risk of being hacked is to simplify our computer systems.

"If you have a house that has twenty doors, you're far more likely to forget to lock one of those doors," he said.

"If you've got a house with a front door and a back door, you've got a better chance of being able to remember to lock both doors.

"Now what's happened is that as governments and businesses have built up their systems they've had a need to go inside and outside and rather than use a door that's already in existence they've built a new door.

"They've built a new website, they've built a new system...

which makes the system as a whole more exposed."

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