China, Taiwan, Misinformation, and Cybersecurity

On 2 August 2022, US House Speaker Nancy Pelosi led a delegation of five Democratic Party members of the House on a visit to Taiwan. The event received much global coverage due, primarily, to its controversy. In addition to the outrage expressed by the Chinese media, the Chinese government responded by conducting the biggest ever military exercise in the region.

The political coverage of the event has been extensive and, as it turned out, came not only from legitimate news organizations. Mandiant, a cybersecurity firm, reported on 4 August 2022 that it identified “an ongoing information operations (IO) campaign leveraging a network of at least 72 suspected inauthentic news sites and a number of suspected inauthentic social media assets to disseminate content strategically aligned with the political interests of the People’s Republic of China (PRC)”

This brings to the surface the larger issue of state actors weaponizing misinformation and social media platforms in an attempt to change or shape narratives, both on a local and global scale.

Today, we will discuss in further detail the misinformation campaign launched by China, why it matters, and the cybersecurity ramifications for the US and its allies if China manages to gain control over Taiwan.

The pro-PRC misinformation campaign

The infrastructure of the 72 suspected inauthentic news sites was linked to Haixun, a Chinese public relations firm. These publications present themselves as independent news sites from around the world and publish articles in 11 languages. Their articles criticize the US and its allies, attempt to discredit critics of the Chinese government, highlight the negative impact of Pelosi’s visit to Taiwan, proclaim support for Hong Kong’s reform of the electoral system in 2021 that increased the power of PRC, and more.

Additionally, this pro-PRC campaign is leveraging social media platforms and accounts of author personas to further promote and disseminate the content.

Why misinformation campaigns matter

Putting aside potential political ramifications of fake news on policy making as well as the all-time high level of concern (76%) over fake news or false information being used as a weapon, misinformation presents real cybersecurity risks that organizations and individuals alike must be aware of.

Fake news, disinformation, and fake news – the “three horsemen of cyber risk”, as Elsevier puts it – present both direct and indirect risks to organizations’ cybersecurity.

Threat actors can use misleading information in the form of social media posts, emails, instant messaging threads, etc. to manipulate individuals into allowing them access into IT systems. Closely interlinked with social engineering types of cyberattacks, misinformation campaigns highlight the need for organizations – be it an educational institution, a local government’s administrative office, or a large private business – to allocate resources towards educating and training employees on identifying untrustworthy sites and activities and reporting them according to relevant cybersecurity protocols.

Misinformation is not always the end goal. Rather, it’s a mode of delivering larger attacks. For example, at the height of the COVID-19 pandemic, cyberattackers launched a wave of campaigns that tried to trick users into downloading malware by masquerading as legitimate services. In fact, Avast tracked more than 600 malicious apps, including mobile banking trojans and spyware, posing as apps that offered some sort of a Covid-19-related service.

China’s vested interest in Taiwan

China sees Taiwan as an inseparable part of its territory despite Taiwan having its own government, currency, passports, constitution, and armed forces. 

There are many geopolitical and economic reasons for China’s determination to return Taiwan “to the embrace of the motherland,” as Chinese Foreign Minister Wang Yi put it during the 13th National People’s Congress on 7 March 2021. One economic reason stands out the most – Taiwan’s prominent role in the electronics sector.

Taiwan’s semiconductor industry

The world depends on Taiwan’s production of semiconductors – a material that’s used as a foundation for computers and various electronic devices as well as in the auto industry. Taiwan’s foundries have a 65% share of the global market, with Taiwan Semiconductor Manufacturing Company (TSMC) accounting for the largest chunk of it.

TSMC produces some of the most advanced chips in the world – 5-nanometer chips – and is gearing up to start production of 3-nanometer chips in 2023.

The world’s dependency on Taiwan’s semiconductors and the crucial role the country plays in this industry was highlighted during the pandemic. The increased demand for electronics and problems in global supply chains created shortages of semiconductors, forcing American, European and Japanese automakers to lobby their governments for help.

This type of market dominance gives Taiwan political and economic leverage on the global stage. The technological rivalry between the US and China makes Taiwan all-the-more vital to the interests of China. Despite the country’s attempts to bolster its semiconductor industry, China is nowhere near to becoming self-sufficient. However, neither is the US. This puts Taiwan in a dangerous position: if China were to succeed in capturing control over the territory and its foundries, the US would find itself in a highly disadvantageous position.

Of course, even if China were to gain control over Taiwan, it’s not guaranteed that they’d be able to capture control over TSMC. As Mark Liu, TSMC’s chairman said in a recent interview, “Nobody can control TSMC by force. If you take a military force or invasion, you will render TSMC factory non-operable, because this is such a sophisticated manufacturing facility [that] it depends on the real-time connection with the outside world — with Europe, with Japan, with the US.”

The US, too, is taking actions to become less reliant on exports – and Taiwan to be precise – of semiconductors. For example, President Joe Biden signed a $280 billion bipartisan bill to boost domestic high-tech manufacturing. $52 billion of the budget is allocated specifically towards the computer chip sector.

The reliance of the world on electronics – be it computers, smart phones, or other devices – makes the US-China tech race not just a purely economic issue. Whichever country manages to capture a significant global share of the market will have exponentially larger political power on the world arena. As the war in Ukraine has shown, suddenly breaking resource dependency, in this case the dependency of EU countries on imports of Russian gas, can have devastating economic and political consequences, which may take more than a few years to recover from.