Tag Archives: Chinese Internet

News, Politics, Government

Six enforcers held over China fruit vendor death: media

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Six Chinese local government employees involved in a dispute that saw a roadside watermelon seller die have been detained, state media reported Friday as outrage over power abuses mounted.

Deng Zhengjia, 56, was beaten to death Wednesday by local regulation enforcers known as ‘chengguan’ for selling watermelons at a street stall without a licence, Chinese media reported previously.

The officials in Linwu county, in the central province of Hunan, kicked and punched Deng and one used a metal measuring weight to smash his head, the reports said, citing his wife.

He had recently moved his stall in accordance with instructions from chengguan and paid 100 yuan ($16) in fines, she said.

The county government held a press conference Thursday, said the Beijing News, after the news sparked an outpouring of online anger.

Six chengguan “involved in the matter” had been taken into police custody, county officials said, according to the report.

They said preliminary investigations showed the enforcers did not smash Deng’s head with the weight and a postmortem was being conducted.

A news portal linked to the county government said he suddenly fell to the ground and died during a row.

Authorities denied reports police forcibly removed the body from the scene, saying it was taken away following a request by his relatives and out of “respect for the death”.

Chengguan, who are tasked with enforcing non-criminal regulations in towns and cities, have long been accused of abusing their powers, with street vendors a common target of violence.

They “have earned a reputation for brutality and impunity… They are now synonymous for many Chinese citizens with physical violence, illegal detention, and theft,” a spokeswoman for advocacy group Human Rights Watch said last year.

Chinese Internet users poured scorn on the officials’ accounts, with one describing them as “shameless liars”, and the county government’s website was hacked on Friday.

“To the county chief who (ordered) the snatch of the body: the wages of sin are death,” read a message on the site, according to a screen grab by the semi-official China News Service.

The website was inaccessible Friday afternoon.

…read more

Source: FULL ARTICLE at Fox World News

Business, Finance, Occupation & Industry

Is Baidu in Trouble?

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By Steve Heller, The Motley Fool

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When investors hear that about 44% of the Chinese population is connected to the Internet, a company like Baidu immediately sounds promising. However, the rate that Chinese Internet users are coming online may begin to stall, which could threaten Baidu’s growth prospects. Couple this with increased competition from companies like Qihoo 360 , and all a sudden the Baidu growth story doesn’t sound as exciting. In this video, Motley Fool contributor Steve Heller discusses the long-term headwinds Baidu is up against and what it may do in response to slowing Internet user growth.

Regardless of your short-term view on the Chinese economy, there may be opportunity in Baidu (aka the “Chinese Google“). Our brand-new premium report breaks down the dominant Chinese search provider’s strengths and weaknesses. Just click here to access it now.

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Source: FULL ARTICLE at DailyFinance

Computers

US censorship lawsuit against China's Baidu dismissed

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A U.S. judge has dismissed a lawsuit that sought to punish Chinese Internet company Baidu for blocking pro-democracy works on its search engine, with one legal expert stating that the case was more of a publicity stunt than an actual legal challenge to China’s online censorship.

It is well known that China regularly censors anti-government content on the Internet, with local companies such as Baidu required to comply. But the U.S. lawsuit, filed two years ago by eight pro-democracy activists, claimed that both the company and the Chinese government had violated New York’s free speech laws. This was because Baidu’s censorship extended to users accessing the site from New York, the lawsuit argued.

On Monday, however, Baidu won dismissal of the case after Judge Jesse Furman of U.S. District Court for the Southern District of New York said that the company had not been properly served the court document papers. China, invoking an international treaty, refused to comply with serving the court papers, stating that it would “infringe its sovereignty or security.”

The lawsuit’s plaintiffs have 30 days to propose another way to serve the court papers to Baidu. Attorneys for the plaintiffs could not immediately be reached for comment. The lawsuit had originally demanded Baidu pay US$16 million in damages for censoring pro-democracy works from the eight activists.

To read this article in full or to leave a comment, please click here

…read more
Source: FULL ARTICLE at PCWorld

Business, Finance, Occupation & Industry

25 Scintillating Facts About the Internet in China

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By Kevin Chen, The Motley Fool

(Source: We Are Social’s Guide to Social, Digital and Mobile in China)

7. The top searches in 2012 on Baidu — China‘s leading provider of

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One of the biggest economic stories in recent years has been the breathtaking growth of China. Currently, its Internet sector is one of the fastest-growing sectors in the overall economy. Clearly, this is a promising hunting ground for opportunistic investors.

To help our readers better understand the Chinese Internet landscape, I have compiled 25 facts that should highlight some investing ideas for further research. In compiling the list, I found the social media agency We Are Social’s Guide to Social, Digital and Mobile in China to be extremely valuable.

1. China‘s Internet penetration is currently at 42%. In other words, the country has roughly 570 million Internet users. For comparison, the population of the entire United States is 315 million people.

2. 80% of Chinese Internet users are between the ages of 10 and 40. (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

3. There are 420 million mobile Internet users in China. 62% of China‘s mobile Internet users are younger than 30. (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

4. The average monthly value of mobile transactions is $800 million — that’s $300 every second. (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

5. China now requires all Internet users to register their names with Internet service providers.

6. Currently, China‘s fastest-growing online activities (year-over-year) are:

(Source: We Are Social’s Guide to Social, Digital and Mobile in China)

7. The top searches in 2012 on Baidu — China‘s leading provider of Internet search services — were:

(Source: We Are Social’s Guide to Social, Digital and Mobile in China)

8. China‘s online games market is expected to exceed $8 billion in 2014. (Source: Pearl Research)

Social Networks

9. There are more than 600 million users of social networks in China.

10. 91% of China‘s netizens use social media compared with just 67% of their U.S. counterparts.

11. Of all of China‘s social networks, Tencent‘s QZone is the country’s favorite with 44% market share. Sina and Renren are second and third with about 19% each. Tencent’s Weibo is fourth with 8%. (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

12. As of November 2012, 784 million people were active on Tencent’s QQ (messaging platform) each month. That means 58% of China‘s total population uses QQ! (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

13. There are more than 70 million users of social networks for professionals in China. In 2012 the number of people using professional social networks increased by 250%. (Source: We Are Social’s Guide to Social, Digital and Mobile in China)

14. Tianji is China‘s No. 1 professional network with 12.3 million registered users. Meanwhile, LinkedIn is No. 7 with 2.8 million registered users — China is LinkedIn’s 7th most populous country. (Source: We Are Social’s Guide …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

5 Stocks That May Be Bottoming Out

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By Rick Munarriz, Munarriz, The Motley Fool

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The market may have hit all-time highs last week, but there are still too many companies staring at the floor instead of the ceiling these days.

There were 93 stocks on the New York Stock Exchange that hit fresh 52-week lows last week. Another 52 Nasdaq-listed companies hit new lows.

Bucking the bullish trend over the past year is well earned in most — but not all — cases.

Let me go over five names that clocked in with new lows last week that I think may be ready to turn the corner.

 Company

Last Week’s Low

52-Week High

Intuitive Surgical

$455.18

$594.89

Millennial Media

$7.89

$27.90

Baidu

$84.88

$154.15

Boingo Wireless

$5.35

$13.25

EZchip Semiconductor

$21.80

$46.79

Source: Yahoo! Finance.

Tennis balls bounce back, even though eggs don’t
Let’s start at the top with Intuitive Surgical.

The company behind the da Vinci robotic arm was trading within 2% of its all-time high just last month, and now it’s smacking a 52-week low.

The turning point came late last month, when the FDA launched a safety probe by surveying surgeons at some hospitals using da Vinci machines. There were an unusually high number of adverse incident reports at key hospitals and the regulatory agency wanted to take a closer look.

The investigation is ongoing, but investors don’t like uncertainty.

Intuitive Surgical has been a market darling, and the platform using a surgeon-guided robotic arm for surgical incisions on certain procedures has historically been seen as a win-win-win scenario. Surgeons don’t suffer as much fatigue. Patient recovery times are quicker. Hospitals can perform more surgeries in any given day. The only thing holding Intuitive Surgical from being in more hospitals was the high cost of the machines, but now there are real concerns about the platform itself until this cloud passes.

The dark cloud will pass.

Millennial Media has fallen ever harder.

The mobile advertising speedster went public at $13 last March, traded as high as $27.90 on its first day, and now has fallen all the way down to the single digits.

Millennial Media is still growing, serving up display advertising in many of the most popular apps. Millennial is the largest player in mobile advertising that isn’t tethered to a single mobile operating system, and those platform-agnostic ways are compelling to developers.

Revenue climbed 71% last year, and Millennial Media‘s guidance calls for a still impressive 52% to 58% top-line pop this year. Red ink used to be a problem, but the company is coming off of back-to-back profitable quarters.

Baidu is China‘s leading search engine, commanding roughly two thirds of the search queries in China.

Investors have been hesitant to pile into Chinese Internet stocks, but that’s a big mistake when it comes to Baidu. The stock has never been this cheap. The dot-com speedster is trading for less than 13 times next year’s projected earnings, but it’s growing a lot faster than that.

There is one upstart challenging its market share, and China‘s not …read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Getting Away From Crappy, Small Content: LongTail Video

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By Rebecca Fannin, Contributor

  Continuing on my journey of exploration outside China (a brief detour),  I recently met with Dave Otten, the CEO of a New York-based startup with the intriguing name of LongTail Video. We met in a trendy café on W. 18th Street in the Flatiron district of Manhattan. Over coffee,  David described what LongTail Video does and how it has ramped up since 2007 into a profitable, 30-person shop that was recently lead financed with $5 million from Greycroft Partners. Interviewing Dave and hearing his startup story reminded me of reporting on the first generation of Chinese Internet startups, Joe Chen of Renren, Peggy YuYu of Dangdang, and Jack Ma of Alibaba — back before they became well-known entrepreneurs.  Having followed the venture capital trail from Silicon Valley to China and on to India and other startup hubs such as London, what I’m observing today among the entrepreneurs, VCs and angel investors in New York is an energy and buzz similar to what put these other places on the tech map. It’s little wonder that Dave McClure is opening a new co-working space for his 500 startups in the Flatiron district! What follows is a few highlights of my conversation with Dave, who with an MBA from Harvard, entrepreneurial experience, ample finance, and career stripes at Nielsen and About.com, seems destined to become a player. LongTail Video is one of the startups we’ll be featuring at our digital media innovators forum March 21 in New York. Q. How did come up with the idea for LongTail Video? A. I began working nights with my partner on developing an online video site and our idea was that it was all about the advertising side, how to help publishers make money from video. YouTube had just been acquired by Google, and we focused on how to make it easier to deliver ads into the beginning and end of a video stream. Q. What was the first breakthrough? A. We had no money at the time and we were developing this as a side project. It was technically complicated to integrate the video player with the portal site. We saw that many publishers were using the same software, JW Player. When we saw this, we went to the founder and said, ‘can we buy you?’ We bought the player for stock. Buying the player was the iceberg. There was a whole lot more going on under the water level to support how publishers can integrate the player with their content management system and support all file formats. So today we have this massive video player, used by 2 million domains. Q. How do you make money? A. It took some time for the video ad market to take off. We make money from an annual fee to license the video player software, sales to publishers, and we’ve built in a customized content management system that we offer and we can provide analytics for publishers on their video ads so they can better monetize them.  We expect revenues to reach $10 million to $15 million this year and we’ve been profitable since 2010. Q. Why did you raise venture capital at this …read more
Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

My Two Top Stocks: Panera Bread and Baidu

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By Kevin Chen, The Motley Fool

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Let’s get straight to it.

Well, they’re the only two stocks I own at the moment, and I couldn’t feel more at ease holding them.

Why Panera Bread?
After buying Panera Bread  for around $129 — more or less its high in the summer of 2011 — you can understand my surprise when the company shed 20% or so of its value. I had inklings of selling the stock early, but I held on because of three things I knew at the time:

1. The company was among the healthiest — if not the healthiest — food options.

2. Ronald Shaich was fanatical about growing Panera.

3. Panera Bread had become a “fourth place.”

On the first point, I’m not sure if I have to explain. Googling for a few minutes, you’ll find plenty of reviews touting Panera as the “Healthiest Fast Food Restaurant.” In fact, in 2008, Health.com rated it America’s No. 1 Healthiest Fast Food Restaurant.

Second, Panera Bread has Ronald Shaich, its talented founder, chairman, and co-CEO. For those who don’t know, before founding Panera Bread in 1993, Shaich co-founded another bakery-cafe chain, Au Bon Pain, in 1981. Now, the history is a bit detailed, but the main takeaway is that Shaich has been in the fast-casual restaurant business for decades. He knows what works and what doesn’t.

Finally and most important, Panera Bread is the only other place I consider workable. You know how Starbucks is famed for creating a “third place” between work and home, a place where you can study, talk with friends, relax? Well, sometimes I need a little more than coffee, and sometimes I’m just deathly tired of going to the same old Starbucks everyday. Panera Bread is the “fourth place.”

So should you buy Panera today? Well, maybe. For me, I wouldn’t.

I still think the company has a great management team as Shaich still holds the same positions. However, the company’s product value has declined, in my opinion. Not only do the portion sizes at Panera Bread seem smaller (or they’ve always been that size and I’ve grown larger), but the food doesn’t have the same finesses or hearty feel it used to.

I am holding onto my Panera shares, though. The company trades at a premium 28 P/E and the company continues to push its stock price higher. Though this may be a risky time to hold, I don’t think there’s any other restaurant that comes close to being a “fourth place.”

Panera Bread makes up $986 of my portfolio.

Why Baidu?
I bought Baidu in February at about $96. Since then, the company has shed more than 8%. However, I’m more bullish than ever.

I bought into Baidu because it commanded more than 70% of China‘s search market even as competition spiked in 2012. Moreover, Baidu has been around for more than a decade; the company just knows so much about Chinese Internet users. And similar to Google search, Baidu search gets smarter and smarter as people use it. …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Did My Stock Just Die?

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By Rich Duprey, The Motley Fool

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It was only a 42-point gain yesterday, but the Dow Jones Industrial Average rose to yet another new record high, hitting 14,296 and making this the eighth longest bull market since 1928. With Fed Chairman Ben Bernanke greasing the skids with his QE-infinity, Warren Buffett agreed in a CNBC interview that “cheap money makes things happen.” Of course, what happens when the spigot gets turned off, as it eventually must, is left unsaid.

The three stocks below, however, were in no mood to celebrate, with several incurring double-digit losses on the day. But don’t go running over the cliff with them like a bunch of lemmings: This could just be a temporary situation. Let’s first see whether they had good reason to fall as panic-fueled routs can sometimes lead to excellent buying opportunities.

Company

% Change

Acura Pharmaceuticals

(12.2%)

Sohu.com

(11.1%)

AeroVironment

(9.8%)

Accurately depicted
Two steps forward, one step back. That describes what you’re seeing at Acura Pharmaceuticals after the stock pulled back following its 48% gain the day before after announcing the Kerr Drug chain would carry its Nexafed decongestant throughout its stores in North Carolina.

As part of the FDA‘s push to make it difficult to abuse certain drugs, Nexafed is designed so it is difficult to make into methamphetamine. Its composition is such that should a drug abuser try to extract the active ingredient, pseudoephedrine, the whole thing would turn into an unusable thick gel.

Acura began selling Nexafed in December and has been anticipating independent drug stores rather than chains picking up the decongestant, and when it reported its fourth quarter results on Monday, it said it had entered distribution agreements at the end of February with most national and regional drug wholesalers.

Although the stock is down another 9% in early morning trading, it remains up 10% so far this year.

Privately speaking
Sohu.com also gave back the gains it made the day before after the Chinese Internet portal denied rumors it was actively seeking a go-private deal. On Tuesday, Sohu’s stock jumped 12% after the South China Morning Post reported that the company was in talks with investment banks and private equity funds about a possible buyout, but yesterday the CFO shot them down saying the reports were inaccurate as not only were they not involved in any such discussions, but the idea wasn’t even being considered.

Sohu’s stock ended the day at $43.44, some $0.20 lower than where they had been before the rumor was published, making it down 16% for the past year.

It wouldn’t have been a surprise, though, had Sohu actually confirmed the rumor. After numerous reports of fraud and financial shenanigans occurred at small, Chinese companies over the past few years, investors lost their appetite for them, and many company insiders began mulling whether to take their companies private. The Chinese government jumped into the fray by actively …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

SOHU Denies It's Going Private. Shares Plunge

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By Rich Smith, The Motley Fool

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Responding to rumors it said were apparently sparked by an article in the South China Morning Post, to the effect that it is in contact with investment bankers and private equity buyers over a planned “going private” transaction, Chinese online media company Sohu.com today said the whole thing is just nonsense.

In a press release issued in the wee hours of the morning (our time) Wednesday, Sohu bluntly said it “is not talking to investment banks and private equity funds about a possible plan to take the company private and/or delist its common stock from the NASDAQ Global Select Market. No such discussions are in progress or currently contemplated.”

Sohu shareholders, however, have seen the value of their shares plunge 8.6% at the time of this writing (to $44.65 in recent trading), as hopes for a big going-private premium evaporate. Shares of other Chinese Internet companies, which may have been buoyed by hopes they would follow Sohu down a path it now denies treading, are suffering similarly. Qihoo 360 Technology down 7.5%. Changeyou.com down 7.1%. SINA Corp. down 4%. NetEase down 1.4%. 

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The article SOHU Denies It’s Going Private. Shares Plunge originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends NetEase.com, SINA , and Sohu.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Business, Finance, Occupation & Industry

Baidu Feeds the Bad News Bears

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By Rick Aristotle Munarriz, The Motley Fool

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The bears are piling up on Baidu .

A whopping 10.6 million shares were sold short as of mid-February according to Nasdaq’s latest bi-monthly update. This is nearly twice the number of bearish wagers that were placed on China‘s leading search engine a year ago. Baidu’s short interest hadn’t topped 9 million over the past year until now.

The worrywarts appear to be right — for now.

February wasn’t a good month for Baidu. The shares surrendered 16% of their value last month. A poorly received quarterly report early in the month didn’t help, and concerns about Qihoo 360 gaining ground since rolling out its own search platform last summer continue to linger.

Qihoo 360 reports tomorrow, and it could ding Baidu if it has some encouraging metrics to offer up on its nascent search initiatives.

This doesn’t mean that there aren’t a lot of things working in Baidu’s favor here.

  • Baidu’s claims of Qihoo infringement — alleging that Qihoo is crawling and copying Baidu’s content — is gaining legal steam in a Beijing court.
  • The dot-com speedster now claims to be serving up 5 billion search queries a day across search, community, and partner sites.
  • Groupon‘s recent failures have soured companies on daily deals sites, but that didn’t stop Baidu from rolling out a second group-buying portal last month. Groupon may be shocking the market with its red ink, but at least Baidu’s profitability has remained intact as it diversifies its model.

Then we get to Baidu’s valuation.

Baidu’s stock may be trading 44% below its all-time peak two summers ago, but the Chinese Internet bellwether is still growing at a healthy clip. The end result is that Baidu is now fetching just 17 times this year’s projected profitability and less than 14 times next year’s target.

Google — which is not only the company that Qihoo replaced in launching its own search engine, but is also growing at a much slower pace than Baidu — is trading at higher profit multiples.

This doesn’t mean that the bears are wrong. If Qihoo 360 continues to gain market share or if Baidu’s growth gets tripped up as a result of company- or country-specific pitfalls, it wouldn’t be a surprise to see the bears win again. However, given the growing record number of speculators betting against Baidu, it also wouldn’t be a surprise to see the stock rally as the result of a short squeeze the next time that the fallen dot-com darling has something good to say.

Buying into Baidu
Regardless of your short-term view on the Chinese economy, there may be opportunity in Baidu (aka the “Chinese Google”). Our brand new premium report breaks down the dominant Chinese search provider’s strengths and weaknesses. Just click here to access it now.

…read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Qihoo Earnings: An Early Look

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By Dan Caplinger, The Motley Fool

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Earnings season is winding down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Qihoo 360 is about to release its quarterly earnings. The key to making smart investment decisions with stocks releasing their quarterly reports is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Chinese tech company Qihoo is best known for its anti-virus software. But recently, it has taken on a giant in the Chinese Internet space, going head-to-head with its own new search engine. Let’s take an early look at what’s been happening with Qihoo over the past quarter and what we’re likely to see in its quarterly report on Tuesday.

Stats on Qihoo

Analyst EPS Estimate

$0.17

Change From Year-Ago EPS

(15%)

Revenue Estimate

$93.7 million

Change From Year-Ago Revenue

50%

Earnings Beats in Past 4 Quarters

3

Source: Yahoo! Finance.

Will Qihoo find what investors are looking for this quarter?
Analysts haven’t budged on their calls for Qihoo’s earnings, keeping estimates unchanged both for the just-finished quarter as well as full-year 2013. But the stock has risen sharply, up 16% since early December, in the wake of promising news for the young, fast-growing business.

Until very recently, Qihoo did well in its security niche, with software to protect computers against virus attacks. But when Qihoo added a self-created search engine to be the default search option for its Internet browser last summer, it took on the biggest player in Chinese search, Baidu . Qihoo saw its search market share vault to between 10% and 15%, a huge gain in such a short time.

But in January, the Chinese government came down hard on Qihoo, alleging acts of unfair competition that included making its security software hard to uninstall, issuing warnings that non-Qihoo browsers are unsafe, and tricking users into downloading its browser while masquerading as an official software update. Given that Qihoo is attacking Baidu, Sohu.com, and other Chinese companies, the government has a vested interest in stopping the infighting. Moreover, Baidu is now considering going after Qihoo on its home turf by buying an online-security company.

In Qihoo’s quarterly report, look for signs of what the company’s next step will be in its ongoing fight. If the company backs down in the face of government pressure, then the negative impact on sales could be devastating for investors.

Qihoo has helped contribute to Baidu’s share-price plunge, but will the search giant bounce back? Find out in our premium report on Baidu, which highlights whether Baidu is a must-buy after its big drop. Just click here to access it now.

…read more
Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Accused China cyberspy unit appears to be highly specialized

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Unit 61398 of the People’s Liberation Army has been recruiting computer experts for at least a decade. It has made no secret of details of community life such as badminton matches and kindergarten, but its apparent purpose became clear only when a U.S. Internet security firm accused it of conducting a massive hacking campaign against North American targets.

Hackers with the Chinese unit have been active for years, using online handles such as “UglyGorilla,” Virginia-based firm Mandiant said in a report released Tuesday as the U.S. prepared to crack down on countries responsible for cyberespionage. The Mandiant report plus details collected by The Associated Press depict a highly specialized community of Internet warriors working from a blocky white building in Shanghai:

–RECRUITING THE SPIES: Unit 61398, alleged to be one of several hacking operations run by China‘s military, recruits directly from universities. It favors high computer expertise and English language skills. A notice dated 2003 on the Chinese Internet said the unit was seeking master’s degree students from Zhejiang University’s College of Computer Science and Technology. It offered a scholarship, conditional on the student reporting for work at Unit 61398 after graduation.

–CYBERSPY WORKPLACE: Mandiant says it traced scores of cyberattacks on U.S. defense and infrastructure companies to a neighborhood in Shanghai’s Pudong district that includes the 12-story building where Unit 61398 is known to be housed. The building has office space for up to 2,000 people. Mandiant estimates the number of personnel in the unit to be anywhere from hundreds to a couple of thousand. The surrounding neighborhood is filled with apartment buildings, tea houses, shops and karaoke bars.

–THE UNIT 61398 COMMUNITY: While the building’s activities may be top secret, Unit 61398’s status in the community as a military division is not. It turns up in numerous Chinese Internet references to community events, including a 2010 accord with the local government to set up a joint outreach center on family planning. Other articles describe mass weddings for officers, badminton matches and even discussion of the merits of the “Unit 61398 Kindergarten.” Other support facilities include a clinic, car pool, and guesthouse — all standard for the military’s often self-contained communities across China.

–THE PIPELINE: The Mandiant report describes a special arrangement made with China Telecom for a fiber optic communication infrastructure in the Unit 61398 neighborhood, pointing to its need for bandwidth and its elite status. The contract between the two refers to Unit 61398 as belonging to the General Staff Department 3rd Department, 2nd Bureau, and says China Telecom agreed to the military’s suggested price due to “national defense construction” concerns.

–MODUS OPERANDUS: The cyberspies typically enter targeted computer networks through “spearfishing” attacks, in which a company official receives a creatively disguised email and is tricked into clicking on a link or attachment that then opens a secret door for the hackers, Mandiant says. The cyberspies would steal and retransmit data for an average of just under a year, but in some cases more than four years. Information technology companies were their favorite …read more
Source: FULL ARTICLE at Fox World News