http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3C70QSN5C&live=true&tagid=ZZZC19QUA0C&subheading=asia%20pacific

China suffers first big hack attack
By James Kynge in Beijing - 10 Mar 2000 13:42GMT

A computer hacker has inflicted China's first serious attack on a domestic website, in a development that is expected to fuel the debate on internet security and regulation.

Chen Yongjian, chief executive officer of IT163.com, a large e-commerce website that sells goods from 50 of China's top stores, said his website had been inoperable since Thursday morning.

"It is just like the recent hack attack that shut down Amazon.com and the other US sites. He bombarded the site with so many messages, the system could not cope," said Mr Chen.

"The police have launched an investigation. They have found his IP (internet protocol) address but he seems to have been using some public computers and so it may not be easy to catch him," he added.

Three successive days of hacker attacks on leading internet companies in the US in February shut down sites such as Yahoo!, eBay, CNN.com, Amazon, Buy.com and E-Trade, causing heavy commercial losses and adding urgency to a debate on internet security.

The attack on IT163.com is expected to have a similar effect in China, complicating government discussions on how to best safeguard internet security and which of several competing authorities should be given authority to regulate cyberspace.

Foreign internet consultants in Beijing said the attack on IT163.com may provide ammunition for those branches of the government, such as the People's Liberation Army, the Ministry of Information Industry and the Propaganda Department of the Communist party, that favour stringent rules on internet use and content.

Other government departments such as the ministry of foreign trade and economic co-operation, the ministry of foreign affairs and other commercially-orientated branches of the government are believed to favour relatively lax restrictions on the internet because of concerns that over-regulation could smother the development of information technology in China.

The attack comes at a critical time. New rules on online news content, internet content providers, internet service providers, online broadcasting and online advertising are all in various stages of preparation.

Hundreds of millions of US dollars in foreign venture capital has flooded into Chinese internet start-ups over the past few months, but industry analysts are now concerned that the weight of restrictions on the internet business could complicate strategies to reap profits from these investments.

-- Jim McAteer (jim_mcateer@hotmail.com), March 10, 2000