US Attorney General Eric Holder announced on late on Monday that the federal government was formally charging
five military officials in the Chinese government's People's Army with cyber-spying and espionage, claiming that the perpetrators hacked into US tech companies in search of nuclear and solar techonology, business and trade secrets and other internal communications for competitive advantage.
The indictment was delivered by a grand jury in Pittsburgh, called to examine intrusions that allegedly victimized US companies including Alcoa, Allegheny Technologies, Solarworld, US Steel, the United Steelworkers Union and Westinghouse, the latter of which is also a military contractor.
The Chinese government issued an angry denial, saying that the facts presented to the grand jury were "fabricated" and that the US was endangering relations between the two countries. It promptly suspended its partnership with the US in a joint cyber-security working group, and warned of further retaliation "as the situation evolves." Ironically, the working group had been set up a year ago following initial allegations of spying by the Chinese military.
"China is steadfast in upholding cybersecurity. The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber-theft of trade secrets," the government of China said in a statement. "The US accusation against Chinese personnel is purely ungrounded and absurd." The Justice Department said that the indictment would serve as a "wake-up call" to both the US government and businesses about cyber-security.
A company's success in the international marketplace should not be based "on a sponsor government's ability to spy and steal business secrets," said Attorney General Holder. Wanted posters for the five military officials, all alleged to be members of a secret Chinese military unit, allege that they were responsible for years of cyber-attacks against US interests.
"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. In conjunction with the announcement, the US government also disclosed the results of a worldwide law enforcement operation that arrested 97 people in 16 countries accused of developing malware known as BlackShades.
The Chinese government protested that the US was the party that was engaged in illegal surveillance, wiretapping and cyber theft against Chinese companies. The US has suspected the Chinese government of sponsoring cyber-attacks for years, with one report alleging that more than 40 Pentagon weapons programs and nearly 30 other defense technologies have been compromised by the Chinese, reports the Associated Press.
China's charge that the US also engages in cyber intrusions is likely to be true, as documents disclosed by former NSA analyst Edward Snowden have revealed. However, the US denies any "economic espionage" designed to gain competitive or commercial advantage, saying it only engages in spying for national security purposes. Nonetheless, all such actions are illegal in China. The relationship between the government and business is more complex in China; in addition to state-controlled industries and media, the country is desperate to leverage western technology and is alleged to frequently share sensitive information gained through spying with businesses.