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.

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China immediately denied the charges, saying in a strongly worded foreign ministry statement that the US grand jury indictment was “made up” and would damage trust between the two nations.

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

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.

A company’s success in the international marketplace should not be based “on a sponsor government’s ability to spy and steal business secrets,” he said.

The alleged targets were Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, US Steel Corp., the United Steelworkers Union and SolarWorld.

‘Wanted’

The charges underscore a long-time Obama administration goal to prosecute state-sponsored cyber threats, which US officials say they have grappled with for years. One government report said that more than 40 Pentagon weapons programmes and nearly 30 other defence technologies have been compromised by cyber intrusions from China. The cyber security firm Mandiant issued a report last year alleging links between a secret Chinese military unit and years of cyber attacks against US companies.

Monday’s 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 new indictment attempts 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 (NSA) analyst Edward Snowden have described aggressive US efforts to eavesdrop on foreign communications that would be illegal in those countries. 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 US companies. In China, though, many companies are state owned, particularly those that supply the military.

“These five people were just doing their jobs. It’s just that we object to what their jobs are,” Mark Rasch, a former US cyber crimes prosecutor, told AP. “We have tens of thousands of dedicated, hard-working Americans who are just doing their jobs, too.”

The indictment says that hackers, officers with the China’s People’s Liberation Army, gained access to computer networks by sending emails to company employees that looked authentic but that actually contained a link to malicious code.

The defendants are all believed to be in China and it was unclear whether any might 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.

Greater US-China strain



US officials have previously asserted that China’s army and other China-based hackers have launched computer attacks on American industrial and military targets, often to steal secrets or intellectual property. The Chinese say that actually they are the ones who face 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 new indictment will put a greater strain on the US-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 Rausch, the cyber security expert. “Everybody now is going to jump into the act, using their own criminal laws to go after what other countries are doing.”

In recent months, Washington has been increasingly critical of what it describes as provocative Chinese actions in pursuit of territorial claims in disputed seas in East Asia. Beijing complains that the Obama administration’s attempt to redirect its foreign policy toward Asia after a decade of war in the Middle East is emboldening China’s neighbours and causing tension.

“If we were trying to make things smoother in this region, this isn’t going to help,” said Richard Bejtlich, chief security strategist at FireEye, a network security company.

Despite the ominous-sounding allegations, at least one of the firms minimised the hacking. Monica Orbe, Alcoa’s director of corporate affairs, said the company believed no sensitive data had been compromised. A spokesperson for SolarWorld, which has long accused China of unfair trade practices, said the company was troubled by the allegations but that no customer information was breached.

Last September, President Barack Obama discussed cyber security issues on the side-lines of a summit in St. Petersburg, Russia, with Chinese President Xi Jinping.

“China not only does not support hacking but also opposes it,” Premier Li Keqiang said last year in a news conference when asked if China would stop hacking US websites. “Let’s not point fingers at each other without evidence, but do more to safeguard cyber security.”

(FRANCE 24 with AP, REUTERS)

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