China is undergoing a rapid urbanization as it builds new cities to feed a manufacturing explosion, and as villagers migrate to take advantage of technical and factory jobs in urban areas. To support this sea-change, the country is focusing in on smart-grid construction, which will result in a more efficient power distribution system across the vastness of the country. But it also means that the security dynamics have changed – utilities are now much more dependent on communications networks, including for smart meters and automation.
This means that utilities will have to catch up on security, modernizing at a fairly rapid pace. “They are now connected to networks that need to be secured,” explained Ali Mesdaq, security researcher for FireEye.
Energy and utilities, he said, have actually seen a 60% increase over the last six months and maintained the highest amount of growth. These industries experienced 300% growth in attacks in one year, primarily via malware.
“This is one of the scarier industries that is being targeted because it affects all of our lives,” Mesdaq said. “There’s the potential to take down the grid.”
In China, thanks to the geographic distribution, the cost of protecting all available access points will be "huge," GlobalData noted. The smart grid building phase is expected to be complete by 2015, at which point tens of thousands of homes will need to be securely connected, at an approximate cost of $1,000 per household.
GlobalData says that China’s scale of expenditure is out of whack when compared with that of other regions – Europe and North America combined are predicted to spend a comparatively modest $16 billion during the same period, but given the unique drivers, that’s to be expected.
The State Council in China earlier in the year issued cybersecurity guidelines designed to improve network defenses against hackers and tighten controls over classified information. Government agencies as well as companies in the energy and finance sectors, nuclear facilities, the space program and large infrastructure projects are required to institute the information security measures contained in the guidelines.
Cybersecurity in China is top-of-mind in more than one way: GlobalData noted that the Asian giant has a strained relationship with a number of nations in relation to cybersecurity, with the US in particular often accusing Chinese hackers of attempting to breach their power systems, although this has never been confirmed by Chinese government.