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    China Business
     Jul 4, 2006
The Chinese spam wars
By Fred Stakelbeck

If current trends continue, China will easily overtake the United States in the next few years as the spam (unsolicited commercial e-mail) capital of the world. This development could have serious consequences for Chinese businesses and consumers by inhibiting the continued growth of China's vibrant economy.

In short, the proliferation of spam is one of the greatest threats to the effectiveness and efficiency of legitimate electronic communications and e-commerce in China.

In general, spam includes both unsolicited commercial e-mail, or a message that has not been granted verifiable permission by the recipient, and unsolicited bulk e-mail, where a message is sent as part of a much larger collection of messages. A majority of

spam is sent through hijacked personal computers - better known as zombie computers - that send bulk e-mail messages to users.

The inconvenience and intrusiveness of spam are made worse by the fact that in many cases, the content of the unwanted e-mail is deliberately disguised to conceal criminal intent. At first, the messages appear legitimate to the recipient, advertising products, get-rich schemes and legal services. But the actual intent of the unassuming e-mails is to penetrate, infect and steal, releasing destructive spyware, worms and viruses into a user's computer that are designed to steal personal information or other relevant data.

According to the Radicati Group, a California-based research marketing firm specializing in emerging information technologies, about 71% of daily e-mails worldwide will be spam by the end of this year, jumping to 79% by 2010. Such growth trends are alarming for both mature and developing economies, since massive amounts of unwanted commercial and bulk e-mails can clog computer networks, slow Internet service and increase service costs for consumers.

Businesses are faced with lost productivity, unexpected network maintenance upgrades and increased personnel expenses. Spam also increases the total number of consumer complaints, boosts system downtime, and wastes system storage space.

According to an April report issued by Sophos, a global Web security company, Asia was the worst spam-relaying continent during the first three months of 2006, sending 42.8% of worldwide spam. Moreover, China is now second only to the US in relaying spam, sending nearly 22% of the world's total.

Soon after the Sophos report appeared, the first anti-spam e-mail survey of 2006 conducted by the Anti-Spam Center of the Internet Society of China (ISC) was released. The report found that spam is increasing steadily throughout China, with Internet users receiving 2.4% more e-mail spam this March than they did in November.

Recognizing the overwhelming impact of harmful spam on the country's growing economy, Beijing has taken the offensive. A new anti-spam law, the Draft Introduction of the ISC Common E-mail Service Rules, went into effect on March 30.

First drafted in 2004, the rules are similar in many ways to the US CAN-SPAM (Controlling the Assault of Non-Solicited Pornography and Marketing) Act of 2003 in that it regulates e-mail advertisements, imposes civil fines for spam offenders, and requires marketers, spammers and database warehousing companies to display in the subject line of an e-mail the word guanggao (advertisement), so that users and Web administrators can better identify and filter unwanted e-mail advertisements. The law creates a new center to handle reports regarding spam and requires e-mail service providers to be licensed and to retain copies of user e-mails for two months.

The Public Security Bureau, the Ministry of Information Industry, and the ISC continue to work with international groups to identify possible ways to mitigate spam in China. Last July, Beijing announced its intention to join the US/UK-led London Action Plan on Spam Enforcement Collaboration, a group of 29 governmental agencies and 17 private-sector groups promoting the exchange of information among affected countries.

Critics of the new Chinese spam law say that it, just like the US measure that inspired it, will do very little in practice to stop spam. Richard Cox, senior investigator for Spamhaus, a leading Internet research firm, noted this year that the country's small group of hardcore spammers will not be deterred by the new legislation. Cox also noted that the Chinese government and Internet service providers (ISPs), companies that provide access to the Internet for businesses and consumers, must do more in the area of international cooperation to protect Chinese citizens.

Moving beyond legislative remedies, some businesses are taking their own measures to stop spam, saying the e-mails threaten the "security and safety" of business communications, transactions and ultimately profitability. Many of today's businesses are employing anti-spam programs that detect unwanted e-mails and prevent them from reaching users' inboxes. These software programs block e-mail originating from addresses that appear on a "blacklist". By checking the authenticity of a domain name or Web address, conducting keyword or phrase searches and searching for patterns that suggest the e-mail sender is a fake, businesses can stop spam before it causes harm.

The market for anti-spam products is expected to increase in the immediate future. A study released by the Radicati Group last month, "E-mail Security Market 2006-2010", found that the market for security products and services will experience strong growth through 2010, driven by the need by businesses to protect e-mail networks from a wide spectrum of external e-mail threats. The report noted that many organizations have found the need to insert multi-layered solutions for protection which include better encryption, archiving, compliance and support for instant messaging. According to the study, worldwide revenue in the e-mail security market is expected to grow to US$6 billion by 2010, up from $3.5 billion this year.

In addition to the use of preventive software, the implementation of robust best-practices policies by businesses that use a filtering solution at the e-mail gateway is the most effective way to protect businesses from outside threats. Additionally, businesses should ask the following questions: Does an existing proxy allow connections from untrusted networks such as the Internet? Are the most current software and hardware being used? Have the latest patches or upgrades been applied? Are proper server access controls in place? Is the proxy server checked regularly for unauthorized access? Finally, is a database of known abusive e-mails kept?

But despite the best efforts of businesses to stop spam, new ways to bypass filtering solutions are being introduced every day. A recent study funded by the Natural Sciences and Engineering Research Council of Canada discovered a way to create spam that could bypass filters and deceive computer users. "Our experiments have told us that this isn't as difficult to do as we might have thought to begin with, which is kind of depressing," said Professor John Aycock, a computer scientist at the University of Calgary.

In addition to technological hurdles, businesses and ISPs are increasingly faced by consumers who say that some anti-spam efforts have gone too far - blocking legitimate e-mails and therefore harming longstanding personal and business relationships. In May, millions of America On-Line (AOL) customers were temporarily unable to receive e-mail from Google's Gmail users after concerns were raised over some e-mail messages sent from Gmail servers. Recently, software updates installed by US-based Verizon Communications resulted in the stoppage of many legitimate e-mail messages that allegedly included suspicious Internet addresses.

E-mail has become an integral part of our everyday lives. Going forward, a combination of technology, legal action, user education, and international cooperation will be necessary to address the growing threat of spam in China.

Fred Stakelbeck is an expert on bilateral and trilateral alliances as they relate to China foreign policy. His writings address the implications of China's emerging regional and global strategic influence and relationships on US national security. Comments can be forwarded to frederick.stakelbeck@verizon.net.

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Cyber-threats to China's e-commerce (Jan 12, '06)

Spammers hide behind the Great Wall (Dec 14, '04)

Asia hits the spam alarm (Jun 12, '04)


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