US charges China officials in biz hacking case

The United States has announced unprecedented cyber espionage charges against five Chinese military officials accused of hacking into US companies to gain trade secrets. The hackers targeted big-name makers of nuclear and solar technology, stealing confidential business information, sensitive trade secrets and internal communications for competitive advantage, according to a grand jury indictment.

"Success in the international marketplace should be based solely on a company's ability to innovate and compete, not on a sponsor government's ability to spy and steal business secrets," Attorney General Eric Holder said at a news conference. The alleged targets are Alcoa World Alumina, Westinghouse Electric, Allegheny Technologies, US Steel, the United Steelworkers Union and SolarWorld.

The indictment, which includes charges of trade-secret theft and economic espionage, was issued in Pittsburgh, where most of the companies are based.The charges dramatise a longtime Obama administration goal to prosecute state-sponsored cyber threats, which US officials say they have grappled with for years.

A recent government report said that more than 40 Pentagon weapons programs and nearly 30 other defence technologies have been compromised by cyber intrusions from China. The cybersecurity firm Mandiant also has linked a secret Chinese military unit to years of cyberattacks against US companies.

The prosecution was announced on the heels of a separate worldwide operation over the weekend that resulted in the arrests of 97 people in 16 countries who are suspected of developing, distributing or using malicious software called BlackShades. The software allows criminals to gain surreptitious control of personal computers.

"This is the new normal. This is what you're going to see on a recurring basis," Bob Anderson Jr., executive assistant director of the FBI's Criminal, Cyber Response and Services Division, said of the cyber espionage case. In a statement, China's Foreign Ministry said the US charges were based on "fabricated facts" and jeopardise China-US cooperation and mutual trust."

"China is steadfast in upholding cybersecurity," said the statement. "The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cybertheft of trade secrets. The US accusation against Chinese personnel is purely ungrounded and absurd."

The indictment says that five hackers- members of the People's Liberation Army - worked from a building in Shanghai to steal proprietary information from the companies and the labour union, including communications that could have helped Chinese firms learn strategies and weaknesses of American companies involved in litigation with the Chinese government or Chinese firms.

The defendants are all believed to be in China and it was unclear whether they would ever be turned over to the US for prosecution. But the Justice Department, publicising the charges, identified all five by name and issued "wanted" posters.

"For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses," said John Carlin, the head of the Justice Department's National Security Division.US officials have previously asserted that China's army and China-based hackers have launched attacks on American industrial and military targets, often to steal secrets or intellectual property.

Attorney General Eric Holder, accompanied by, from left, U.S. Attorney for Western District of Pennsylvania David Hickton, Assistant Attorney General for National Security John Carlin, and FBI Executive Associate Director Robert Anderson, speaks at a news conference at the Justice Department. Photo / AP
Attorney General Eric Holder, accompanied by, from left, U.S. Attorney for Western District of Pennsylvania David Hickton, Assistant Attorney General for National Security John Carlin, and FBI Executive Associate Director Robert Anderson, speaks at a news conference at the Justice Department. Photo / AP

China has said that it is the nation that faces a major threat from hackers, and the country's military is believed to be among the biggest targets of the NSA and US Cyber Command.The indictment will put a greater strain on the U.S- China relationship and could provoke retaliatory acts in China or elsewhere.

"What we can expect to happen is for the Chinese government to indict individuals in the United States who they will accuse of hacking into computers there," said Mark Rasch, a former US cybercrimes prosecutor.

"Everybody now is going to jump into the act, using their own criminal laws to go after what other countries are doing."

Rasch said the indictments attempt to distinguish spying for national security purposes - which the US admits doing - from economic espionage intended to gain commercial advantage for private companies or industries, which the US denies it does.

Classified documents disclosed by former National Security Agency analyst Edward Snowden described aggressive US efforts to eavesdrop on foreign communications that would be illegal in those countries.

"These five people were just doing their jobs. It's just that we object to what their jobs are," Rasch said. "We have tens of thousands of dedicated, hard-working Americans who are just doing their jobs."

Unlike in some countries, there are no nationalised US industries. American officials have flatly denied that the government spies on foreign companies and then hands over commercially valuable information to American companies.

Read the Mandiant report "Exposing One of China's Cyber Espionage Units" here:

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