US Indicts Five Chinese Military Officials For Cyberspying

In its most aggressive action taken against China thus far, the U.S. Justice Department on Monday charged five Chinese military officials for economic cyber-espionage, issuing a formal indictment and even “wanted” posters against the accused.

“This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market,” said U.S. Attorney General Eric H. Holder Jr. at a news conference in Washington.

In its most aggressive action taken against China thus far, the U.S. Justice Department on Monday charged five Chinese military officials for economic cyber-espionage, issuing a formal indictment and even “wanted” posters against the accused.

“This administration will not tolerate actions by any nation that seeks to illegally sabotage American companies and undermine the integrity of fair competition in the operation of the free market,” said U.S. Attorney General Eric H. Holder Jr. at a news conference in Washington.

Holder named members of Unit 61398, which was publicly identified last year as the Shanghai-based cyberunit of the People’s Liberation Army, as having hacked into the networks of Westinghouse Electric, US Steel, Alcoa Inc, Allegheny Technologies, SolarWorld and the US Steelworkers Union.

“The alleged hacking appears to have been conducted for no reason other than to advantage state-owned companies and other interests in China, at the expense of businesses here in the United States,” Holder said.

FBI officials added that the hackings, which occurred between 2006-14, caused “significant losses” at the companies and that there were likely many more victims.

In response, China immediately warned that it would retaliate if the U.S. presses on with charges against the five officers.

This 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 U.S. President Barack Obama and Chinese President Xi Jinping.

“The U.S. side makes up facts, uses so-called Internet secret stealing to indict five Chinese military officers. This move seriously violates the basic norms of international relations and damages Sino-U.S. cooperation and mutual trust,” Foreign Ministry spokesman Qin Gang said in a statement.

“China is a staunch defender of network security, and the Chinese government, military and associated personnel have never engaged in online theft of trade secrets,” he said, calling the U.S. charges “extremely absurd.”

China has since decided to suspend activities of the “China-US Cyber Working Group” — the high-level diplomatic initiative both countries agreed to in April to stop their war of words over allegations of government-sponsored hacking.

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Jen Psaki, a spokeswoman for the State Department, said the U.S. was disappointed by China’s announcement, saying Secretary of State John Kerry hoped a U.S.-China strategic and economic conference would go on as scheduled in July.

“We regret, of course, the decision about the suspension of activities related to this Cyber Working Group, but we continue to believe that dialogue on these important issues is the best way forward,” Psaki said Monday.

“We expect the Chinese government to understand that today’s announcement relates to law enforcement,” she said, calling the charges “consistent with the concerns we’ve candidly raised with the Chinese government on these issues.”