Five Chinese indicted in US for cyber spying on six US companies

Wednesday, 21 May 2014 01:20 - - {{hitsCtrl.values.hits}}

REUTERS: The United States on Monday charged five Chinese military officers and accused them of hacking into American nuclear, metal and solar companies to steal trade secrets, ratcheting up tensions between the two world powers over cyber espionage. China immediately denied the charges, saying in a strongly worded Foreign Ministry statement the US grand jury indictment was ‘made up’ and would damage trust between the two nations.

Officials in Washington have argued for years that cyber espionage is a top national security concern. The indictment was the first criminal hacking charge that the United States has filed against specific foreign officials, and follows a steady increase in public criticism and private confrontation, including at a summit last year between US President Barack Obama and Chinese President Xi Jinping. “When a foreign nation uses military or intelligence resources and tools against an American executive or corporation to obtain trade secrets or sensitive business information for the benefit of its state-owned companies, we must say, ‘Enough is enough’,” US Attorney General Eric Holder said at a news conference. Federal prosecutors said the suspects targeted companies including Alcoa Inc, Allegheny Technologies Inc, United States Steel Corp X.N, Toshiba Corp unit Westinghouse Electric Co, the US subsidiaries of SolarWorld AG, and a steel workers’ union. Officials declined to estimate the size of the losses to the companies, but said they were ‘significant’. The victims had all filed unfair trade claims against their Chinese rivals, helping Washington draw a link between the alleged hacking activity and its impact on international business. According to the indictment, Chinese state-owned companies ‘hired’ Unit 61398 of the People’s Liberation Army ‘to provide information technology services’ including assembling a database of corporate intelligence. The Chinese companies were not named. The Shanghai-based Unit 61398 was identified last year by cybersecurity firm Mandiant as the source of a large number of espionage operations. All five defendants worked with 61398, according to the indictment. “The administration is trying to make this clear it’s a trade issue, not a cold war with China,” said Jim Lewis of the Center for Strategic and International Studies, who has served as a US representative in hacking negotiations with China. The Chinese Foreign Ministry statement said it would suspend the activities of a Sino-US working group on cyber issues, which American officials believe refers to a joint effort established in April 2013 involving State Department expert Chris Painter and China Foreign Ministry official Dai Bing. That was set up as a spinoff from the US-China Strategic and International Dialogue, but produced little tangible progress even before leaks by former National Security Administration contractor Edward Snowden leaks gave China grounds for accusing the NSA of infiltrating Chinese companies as well as government offices. US officials have maintained that they do not steal secrets to give an advantage to US companies, but in China, Lewis said, the line between military and business prowess is unclear. Unit 61398 has hundreds of active spies and is just one of dozens of such bodies in China, said Jen Weedon, an analyst at Mandiant, now owned by global network security company FireEye Inc. She said the group is not among the most sophisticated. The specific accusation is less important than the demonstration that the United States is committed to stepping up its fight in multiple ways, Weedon said. “There’s a paradigm shift with regards to other ways countries try to hold each other accountable,” she said.

China confronts US envoy over cyber-spying accusations

Reuters: China summoned the US ambassador after the United States accused five Chinese military officers of hacking into American companies to steal trade secrets, warning Washington it could take further action, the foreign ministry said on Tuesday. The US Ambassador to China, Max Baucus, met with Zheng Zeguang, Assistant Foreign Minister, on Monday shortly after the United States charged the five Chinese, accusing them of hacking into American nuclear, metal and solar companies to steal trade secrets. Zheng “protested” the actions by the United States, saying the indictment had seriously harmed relations between both countries, the Foreign Ministry said in a statement on its website. Zheng told Baucus that depending on the development of the situation, China “will take further action on the so-called charges by the United States”. “The Chinese government and military and its associated personnel have never conducted or participated in the theft of trade secrets over the Internet,” the Foreign Ministry quoted Zheng as telling Baucus. Zheng told Baucus that the US attitude to Internet security was “overbearing and hypocritical” and urged the United States to give China a clear explanation on reports that Washington has long spied on the Chinese government, businesses, universities and individuals. The US Embassy to China spokesman, Nolan Barkhouse, confirmed the meeting but declined to provide more details. China’s Ambassador to the United States, Cui Tiankai, also “made solemn representations” to the State Department on Monday. “The accusations that the United States have made against these Chinese officials are purely fictitious and extremely absurd,” Cui was quoted as saying by the state-run China News Service said.