The Price of Globalization?

One of the issues that dogs proponents of global free trade is the question of security. When many nations have a hand in the production of something, especially something critical, then many nations may also have the opportunity to sabotage the product if that suits their needs.

It's all been the stuff of a Tom Clancey novel but that might be changing. According to the Taipei Times, a Chinese subcontractor loaded a Trojan Horse virus on Maxtor portable hard disc drives destined for Taiwan. The corrupted drives are said to upload data stored on the user's computer directly to web sites in Beijing:

Following findings by the Investigation Bureau that portable hard discs produced by US disk-drive manufacturer Seagate Technology that were sold in Taiwan contained Trojan horse viruses, further investigations suggested that "contamination" took place when the products were in the hands of Chinese subcontractors during the manufacturing process.

On Saturday, Seagate Technology LLC, the manufacturer of the Maxtor portable hard drive, said on its Web site (www.seagate.com) that Maxtor Basics Personal Storage 3200 hard drives sold after August could be infected with the virus.

The Investigation Bureau said the tainted portable hard drives automatically upload any information saved on the computer to Beijing Web sites without the user's knowledge .

Ouch! Apparently the problem has been limited to hard drives built for the Taiwan market.

Meanwhile, the Washington Post reports that America is now feeling the sting of Chinese espionage:

China's extensive spying inside the United States is the greatest threat to the security of American technology secrets.

And the Defense Department may be inadvertently outsourcing the manufacturing of key weapons and military equipment to factories in China.

These are among the key findings released today by a bipartisan panel commissioned by Congress to study the economic and security relationship between the United States and China. The U.S.-China Economic and Security Review Commission, created by Congress in 2001, has been criticized in the past for taking a hawkish stance on China in its annual reports.
The book-length report, the fifth produced by the panel, said China appears to be reversing its move toward free markets by setting up state-owned enterprises to maintain control over 12 key industries, including oil, telecommunications, shipping, automobiles, steel and information technology.

"As weaponry gets more and more sophisticated . . . I think we'll find ourselves more vulnerable for parts that are being manufactured by an adversary. It's really something the Pentagon needs to look at seriously," said commission member Bill Reinsch, who is also president of the National Foreign Trade Council, which promotes free trade on behalf of businesses.