China’s cyber crime problem is growing
Since the Cyber Security Law took effect in 2017, China has promulgated a growing body of legislation to combat digital crime. But cases of cyber crime increased rapidly from 2017 to 2021, and cyber criminals prosecuted by China’s courts are becoming younger.
On Friday, an official from the Ministry of Industry and Information Technology (MIIT) held a press conference on the state of cyber security in China. As cyber crime has grown, so has an industry to stop it: According to the official, the scale of the cyber security industry in China exceeded 200 billion yuan ($29.23 billion) in 2021, and grew at an annual average of 15% from 2016 to 2020.
The government has also created a large body of cyber security legislation to deal with digital crime, including three main sets of laws:
- The Cyber Security Law, effective from June 1, 2017, defined the concept of cyberspace sovereignty, and included specific provisions for network operators, and for data localization related to foreign companies operating in China.
- The Data Security Law (DSL), effective from September 1, 2021, classified data in terms of its relevance to national security, with implications on how data can be stored and transferred.
- The Personal Information Protection Law, effective from November 1, 2021, includes provisions to regulate and promote the protection of personal information.
A fourth piece of legislation, focused on internet telecommunications fraud, is currently being reviewed for a third time, and is expected to be promulgated soon.
The government departments responsible for cyber security include the MIIT, which (along with the People’s Bank of China) at certain times directs China’s state-owned banks and telecommunications operators to crack down on illegal bank and credit card activities, the Cyberspace Administration of China, a ministerial body for regulating and censoring the internet, and the Ministry of Public Security, for monitoring and investigating online criminal activity. In March 2021, this ministry established a National Anti-Fraud Center and app, which acts as a hotline for reporting criminal activity, sends out warnings, and can be installed on phones and computers.
The criminals
Despite this array of laws and enforcement, cyber crime in China seems to be getting worse, and cyber criminals are becoming younger. On August 1, a research institute affiliated with China’s Supreme Court released a report on cyber crime in China, based on data from China’s criminal courts. The report noted that the number of cyber crime cases has increased from 2017, and over 40% of the cases involved online fraud.
- From 2017 to 2021, China’s courts handled more than 282,000 cyber crime cases involving a total of 282 different crimes, of which fraud accounted for the highest proportion (36.53%). Online fraud cases mostly focused on fake loans, impersonation, and false recruitment.
- Over the same period, more than 660,000 defendants were involved in cyber crime cases across the country, with an average of about 2.4 defendants per case.
- Most of the defendants were aged between 18 and 40, and the proportion aged between 18 and 28 has increased since 2019, while the proportion of those aged above 29 has decreased.
- According to the report, there were 72,000 cases involving 143,700 defendants (90% of whom were born after 1980) related to the crime of assisting online criminal activity, such as by providing technical support, including internet access, server hosting, network storage, or by providing advertising, payment, and settlement. This criminal activity took off from 2020 with a year-on-year increase of 34 times, and increased by a further 17 times in 2021.
An official from the Ministry of Public Security has recently claimed some success in dealing with cyber crime. According to the official, the number of cyber crime cases filed by the ministry decreased year-on-year for nine consecutive months from June 2021, and 42,000 bank card gangs as well as 440,000 criminal suspects have been investigated. The official also revealed that many of the ministry’s cyber crime investigations have focused on Chinese nationals operating from neighboring countries. The ministry has dispatched working groups to countries such as Cambodia, the United Arab Emirates, and Myanmar to carry out cross-border cyber crime investigations, and has repatriated around 36,000 suspects from abroad.
The official conceded, however, that online fraud remains a serious problem.
- The ministry has identified at least 50 types of online fraud, mostly related to fake investment opportunities, loans, and wealth management products, and impersonation of official and business services.
- In 2020, public security organs across the country handled a total of 322,000 cases of telecommunications and network fraud, and arrested 361,000 suspects. In the period April 2021 to April 2022, these figures had increased to 394,000 cases and 634,000 arrests.
Minors are particularly vulnerable to cyber crime. Since the beginning of this year, the Cyberspace Administration of China (CAC) has reportedly handled more than 12,000 cases of telecommunications and internet fraud involving minors. Earlier this month, the CAC published a list of seven typical cases of minors being swindled into (usually) buying online game accessories.
