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China's Internet security faces new challenge
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By Ma Huateng

Board Chairman and CEO of Tencent, Inc.

Ladies and Gentlemen,

As China's economic reform presses on and people's livelihoods continue to improve, the infrastructure of the Internet is also strengthening, leading to the birth of the world's largest online market in China. During 2008, the May 12 earthquake in Wenchuan and the Beijing Olympics not only demonstrated the convenience, speed and interaction offered by the Internet, but also showed the important role played by the Internet industry in undertaking social responsibility and signaled the emergence of the Internet as a mainstream form of media in China. Today, the Internet penetrates into every aspect of social life, and demonstrates its unique value in supporting economic growth, facilitating communication and enriching people's lives.

Nevertheless, the Internet has also brought information security issues. As the new economy prospers and applications become more sophisticated, a shadow economy has been born parasitic to the real value chain. Password-stealing Trojans, fraud, private servers and bot programs are the most common malpractices that endanger the healthy development of the Internet industry, hinder the growth of Internet companies and create inconvenience and even losses for Internet users.

Password-stealing Trojans – the malignant tumor of Internet applications

With the rapid development of China's Internet usage, various kinds of Internet accounts, such as online bank accounts and game accounts, have become more valuable and more susceptible to account theft. Trojans these days often do not show symptoms of infection. They have undergone mutations which allow them to autorenew and auto-update themselves and even develop immunity to anti-Trojan programs. They target online bank accounts, game accounts, instant messaging accounts and e-commerce accounts, all of which represent high monetary value for hackers. According to statistics from Kingsan, one of the biggest anti-Trojan and anti-virus software developers in China, 283,000 new viruses and Trojans were reported in 2007, representing a 17.88-percent increase over 2006. There were 119,000 password-stealing Trojans found, representing 42 percent of new Trojans in 2007 and the biggest online tumor.

Internet fraud – a new criminal heaven

Since 2007, many Internet fraud cases have occurred involving the abuse of names such as Tencent, Taobao, Sina, or even the Beijing Olympic Organizing Committee and Shenzhen Notary Bureau. They use Tencent QQ, Taobao WangWang, Sina UC or search engines to disseminate messages that users have won a lucky draw and then refer them to fake websites to register for their prizes and pay an administration fee. Lots of gullible Internet users have fallen prey to these types of scams. Internet fraud has greatly damaged trust in the network among users, impeding the long-term development of the Internet industry.

Private servers and bot programs – the vermin of online games

As the online game business heats up, private servers and bot programs are becoming more rampant. The continuing growth of these illegal operations is parasitic and interferes greatly with the internal operations of particular games, upsets the normal operation of technical platforms, and undermines the rightful benefits due to the IP owner, the publisher and consumers. These illegal operations will not only bring big losses to the country, Internet companies and consumers, but also create a series of severe social problems, which will adversely affect the normal operation of online game companies and the growth of the entire online game industry in China.

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