The week we called out China for cyber-hacking

By Peter Wilson

Analysis - The government risks retaliation as it accuses China of cyber hacking, 370,000 doses of vaccine arrive and it's time for the much-promised "ramp up" to start but there's scepticism about the effectiveness of the rollout. Opposition parties launch law and order policies - National wants police armed response teams reinstated and ACT gets tough with gangs.

This week, standing apart from party politics and the quibbling over the pace of the vaccination rollout, was one event with the potential for serious consequences.

The government accused China of malicious cyber hacking, the response was aggressive and now there's an anxious wait to discover whether there will be trade retaliation.

Andrew Little, the minister responsible for the security agencies, issued the statement. He wasn't alone - The US, UK, EU, Britain, Australia, Japan and Canada did the same, at the same time.

They accused China of the cyber attack on Microsoft Exchange servers earlier this year, which affected at least 30,000 organisations globally.

Little said the GCSB had established links between Chinese state-sponsored actors and malicious cyber activity in New Zealand. It had "worked through a robust technical process" to establish that conclusion.

"Separately, the GCSB has also confirmed Chinese state-sponsored actors were responsible for the exploitation of Microsoft Exchange vulnerabilities in New Zealand early in 2021," he said.

"We call for an end to this type of malicious activity, which undermines global stability and security, and we urge China to take appropriate action in relation to such activity emanating from its territory."

Coming from a government which treads softly when it deals with China, this was strong stuff. There's a very big difference between quiet diplomacy and public criticism.

The Chinese Embassy reacted. Little's accusations were "totally groundless and irresponsible". Such accusations should be backed by clear evidence, and without that they were "a malicious smear".

"We urge the New Zealand side to abandon the Cold War mentality... and work with others to jointly tackle the challenge through dialogue and cooperation," it said.

The embassy called in MFAT officials for a meeting - a diplomatic step indicating the seriousness of a situation. Foreign Minister Nanaia Mahuta confirmed it took place but said little about it. "Areas of difference need not define our relationship but we will continue to promote the things that we believe in and support the international rules-based system," she said.

Whether the officials confronted Chinese diplomats with details of the "robust technical process" used by the GCSB to identify the source of the attack isn't known.

National Party leader Judith Collins told Morning Report retaliation was likely and New Zealand was vulnerable.

"China is our major trading partner, it sets the world prices effectively for our dairy products and our horticultural products - it is incredibly important to us," she said.

"But we can't just lie down and let cyber attacks occur against our health organisations, government agencies and businesses, and sit there and say nothing."

Intelligence analyst Paul Buchanan said China had previously been accused of involvementhttps://www.rnz.co.nz/news/national/437849/microsoft-email-users-in-nz-told-to-act-quickly-after-mass-hack in the Microsoft hack] but the confrontation had escalated.

He said Chinese state-sponsored hackers had previously attacked military, diplomatic and economic targets, but this was different.

"This was what has been characterised as a ram raid attack, a smash and grab attack where state-sponsored hackers shared the vulnerability of Microsoft Exchange with criminal organisations," he said.

"This has been the trend that the Russians have exploited, where criminals and state agents overlap and one shares information with the other for their mutual benefit."

Buchanan said all the partners in the public announcement were less vulnerable than New Zealand to Chinese economic retaliation.

"New Zealand has stuck its neck out here, but I think at some point the actions of states in this domain becomes intolerable. Clearly the limits of toleration have been reached, even for a small state like New Zealand," he said.

Sir Don McKinnon, former foreign minister and chair of the New Zealand-China Council, said publicly criticising China raised the stakes to a new level. "You've got to be prepared for the consequences of that."

Charles Finny, a lead negotiator of the China-New Zealand Free Trade Agreement, said he would be surprised if there were serious ramifications. "If we were the only country criticising China in this space I could see a vulnerability, but why would China want to retaliate against New Zealand when others are saying exactly the same thing… I think the fact that we are in such big company gives me some comfort."

Catherine Beard, executive director of Export NZ, said the government's decision to condemn China was a necessary but difficult step. Trade repercussions were a big concern. "We would hope that we are able to voice concerns over issues without it impacting on trade."

The government announced 370,000 doses of Pfizer vaccine had arrived, by far the biggest to date, and again promised the rollout ramp-up would begin.

But it came amid scepticism over the effectiveness of the programme and doubts about what the government was telling the public.

"When are they going to admit that New Zealand's Covid-19 vaccine rollout is not going to plan?" asked Stuff's Andrea Vance.

"Listening to Covid-19 Response Minister Chris Hipkins and Prime Minister Jacinda Ardern it feels like we slipped down the rabbit hole into an alternate vaccine Wonderland where graphs make no sense, up is down and left is right."

Vance said New Zealand was at the bottom of the OECD for vaccination rates, only half a million people were fully immunised and a third of border workers had not had both jabs.

And she might have put her finger on the cause of the problems when she said: "The reality is the Ministry of Health is not particularly competent at operational things. It is a policy ministry in the main."

ACT leader David Seymour said his party had asked the government many times to share the information on which it based its decisions and had asked it to treat New Zealanders like adults.

"We now know that they don't want to reveal a framework so they can be guided by focus groups," he said, revealing the government had spent $252,945 on research including opinion polling and focus groups relating to the campaign.

Hipkins said the polling wasn't related to decision-making.

National's Covid-19 Response spokesman Chris Bishop said he had been unable to obtain information and people were confused about what was going on.

Bishop has repeatedly expressed concern about the impact a single case of the Delta variant in the community would have on an unvaccinated population.

There's clear evidence of big differences in the way the rollout is being handled. The vaccination clinic in the Wellington suburb of Karori has been up and running since May, and many Group 3 residents have had both their jabs.

An hour's drive up SH1, in Raumati, older people have just been told they can call and book appointments. Messages say vaccinations will take place "over several months".

During the week National and ACT launched law and order campaigns. The unusual thing about those moves was that getting tough on crime is usually reserved for an election year.

Collins called for the police armed response teams to be reinstated, saying gun violence was rising. They were trialled after the Christchurch terror attack but were discontinued last year when Police Commissioner Andrew Coster said they did not "align with the style of policing New Zealanders expect".

Stuff quoted Collins saying the commissioner was wrong. "He's a very nice, pleasant person but, unfortunately, he's a hell of a long way from the front line."

She suggested Coster's problem was too much obedience to the government. "He tries his best, but you can't serve the community as well as the government."

Police Minister Poto Williams told Newstalk ZB she supported police being armed when they needed to be but that shouldn't extend to armed response teams. Collins said she should be sacked.

ACT launched a policy under the title Smash the Gangs. It said it would introduce gang injunction orders which the police could apply for through the courts. The orders would stop gang members being in particular locations or associating with particular people.

Another proposed measure was electronic management of benefits paid to gang members, limiting how much they could spend on alcohol, gambling and tobacco.

The number of gang members in New Zealand was also an issue this week. National's police spokesman Simeon Brown said he asked for the figures two weeks ago but hadn't received a response from Williams' office.

"This deliberate attempt by the Police Minister to withhold the data shows that she and Labour do not want those figures out in the public domain," he said.

The minister's office said the delay had not been intentional, Newshub reported. There had been an administrative error and the figures would be released in a matter of days.

"A very convenient response," Brown said. "I contacted her office on July 15 about responses to 19 questions which were overdue. She has responded to all the others."

The latest figures from May showed the number of gang members had passed 8000 for the first time, an increase of 2435 since Labour came to power at the end of 2017.

*Peter Wilson is a life member of Parliament's press gallery, 22 years as NZPA's political editor and seven as parliamentary bureau chief for New Newswire