U.S. announces first criminal charges against foreign country for cyberspying
Industries targeted by the alleged cyberspying ranged from nuclear to steel to solar energy, officials said. The hacking by a military unit in Shanghai, they said, was conducted for no other reason than to give a competitive advantage to Chinese companies, including state-owned enterprises.
In a statement he read at a news conference, Attorney General Eric H. Holder Jr. said: "The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response. ... 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."
Holder said the Obama 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."
Foreign Ministry spokesman Qin Gang denied in a statement that Chinese government, military, and "associated personnel" have ever engaged in "the theft of trade secrets through cyber means." Qin called the U.S. accusations "purely fictitious, extremely absurd."
Contrary to U.S. claims, "China is the victim of U.S. theft and cyber-surveillance," Qin said.
In retaliation, the statement said, "China has decided to suspend the activities of Sino-U.S. Cyber Working Group." It left open the prospect of "further reaction" in the case.
The indictment against members of the People's Liberation Army follows vows by senior administration officials to hold other nations to account for computer theft of intellectual property from American industry.
China is widely seen as the nation that has been most aggressive in waging cyber-espionage against the United States.
Holder said a federal grand jury in Pittsburgh returned an indictment against five members of a Chinese military unit in a Shanghai building, accusing them of conspiring together and with others to hack into the computers of six U.S. entities. Named in the case as defendants were Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, all officers of Unit 61398 of the Third Department of the People's Liberation Army. Wang is also known as UglyGorilla, his hacker handle. Gu used the alias KandyGoo and Sun was also known as Jack Sun, prosecutors said.
Victimized by the cyberspying were Westinghouse Electric Co., Alcoa, Allegheny Technologies Inc., United States Steel, the United Steel Workers Union, and SolarWorld, officials said. Alcoa is the largest aluminum company in the United States, and U.S. Steel is the nation's largest steel company.
The indictment alleges that in some cases the hackers stole trade secrets that would have been particularly beneficial to Chinese companies. For example, it alleges that an Oregon producer of solar panel technology, SolarWorld, was rapidly losing market share to Chinese competitors who were systematically pricing exports well below production costs. At the same time, defendant Wen stole thousands of files containing cost and pricing information from the company, the indictment says.
It also alleges that while Westinghouse Electric, a Pennsylvania nuclear power plant manufacturer, was negotiating with a Chinese company over the construction of four power plants in China, defendant Sun stole confidential design specifications for pipes, pipe supports and pipe routing for those plants - information that would enable any competitor looking to build a similar plant to save on research and development costs.