I have always wondered whether Chinese hackers were employed in a government agency, or alternatively how they coordinated. Wikileaks sheds some light on this:

Precisely how these hacking attacks are coordinated is not clear. Many appear to rely on Chinese freelancers and an irregular army of “patriotic hackers” who operate with the support of civilian or military authorities, but not directly under their day-to-day control, the cables and interviews suggest.

U.S. government hackers, I’d venture, operate under a more command and control structure: they work for the NSA, or some similar agency, and operate only under instructions from higher ups. How can China operate in a less command and control style than the U.S. here? This is pure speculation, but here is my guess:

In the U.S. the internet is not controlled and monitoring abilities are relatively low, so freelancers and an army for hire of hackers couldn’t be trusted. They would be too powerful, and uncontrollable. In China I’m sure they can monitor every move their army of hackers makes online, which means they can grant them more freedom and autonomy.

To put it in economic terms, China has a better hand on the principal agent problem because informational problems are less severe. The principal (the government) grants the agent (the hacker) power. But the operating without constraints, the agents profit maximizing behavior would not be optimal for the government. They’d hack domestic companies and government agencies trying to extract profit. The more complete the principal’s information about the agent’s behavior the more power and autonomy they can trust them with. Since they are more invested in monitoring and controlling internet activity, China has more complete information, and so can trust their hackers with more power and autonomy.

Like I said, this is almost pure speculation, so I’d be interested if anyone who knows something about this can tell me whether this description is plausible.

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