US slams China for state-sponsored cyber-espionage

Alex HamiltonNEWS

19 May, 2014

US prosecutors accuse Chinese hackers of stealing trade secrets and documents

The US Justice Department has charged five Chinese army officers with hacking into private American companies in order to gain an advantage in the market.

The breaches, labelled “significant” by attorney general Eric Holder, warrant “an aggressive response” from the US. The Chinese officers, according to the American allegations, stole trade secrets and internal documents from five companies and one labour union.

According to Holder, the charges are the first against known perpetrators of state-sponsored cybercrime. The companies targeted included Westinghouse Electric, US Steel, Alcoa, Allegheny Technologies, SolarWorld and the US Steelworkers Union. All were attacked and had crucial data and secrets stolen between 2006-2010.

SolarWorld, a manufacturer of solar panels and accessories, has been rapidly losing market share to cheaply priced Chinese alternatives in recent years. This was due to Chinese hackers stealing the US company’s pricing strategies, the Justice Department said.

The five hackers all form part of Unit 61398, a branch of the Chinese People’s Liberation Army. The hacking  team embedded in it, says US security firm Mandiant, has infiltrated into 141 computers across 20 industries.

The Chinese government has condemned the charges  as “made up” and warned the US that pressing the case would do harm to relations between the two superpowers.

"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," warned foreign ministry spokesman Qin Gang.

The charge will be seen as purely symbolic, since China is unlikely to allow nationals to be extradited in order to face charges in a US court.

"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, head of the justice department’s national security division.”

“While the men and women of our American businesses spent their business days innovating ... these members of unit 61398 spent their days in Shanghai stealing the fruits of our labour.”