19 May 2014
Last updated at 16:42
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Attorney General Eric Holder: "This case should serve as a wake-up call to the seriousness of the ongoing cyber threat"
The US has charged five Chinese army officers with hacking into private-sector American companies in a bid for competitive advantage, in the first cyber-espionage case of its kind.
Attorney General Eric Holder said the alleged breaches were "significant" and demanded "an aggressive response".
US prosecutors say the officers stole trade secrets and internal documents from five companies and a labour union.
China denied the charges and warned the case would harm US-China relations.
Potentially more victims Continue reading the main story
Analysis
China has always denied American claims, saying hacking is illegal and that it is a victim not a perpetrator. The US had been building pressure last year on China over the issue.
But its campaign was derailed after former US intelligence contractor Edward Snowden appeared in Hong Kong with evidence of the US hacking into Chinese networks. Since then, the US has been on the back foot amid revelations of its spying on other countries.
But the US has always maintained that while it does engage in traditional espionage it does not spy on foreign companies for American firms for their commercial gain, something it has now accused the Chinese state of doing.
In Washington on Monday, Mr Holder said the hacking charges laid against the Chinese nationals were the first against "known state actors for infiltrating US commercial targets by cyber means".
He identified the alleged victims as Westinghouse Electric, US Steel, Alcoa Inc, Allegheny Technologies, SolarWorld and the US Steelworkers Union.
"The alleged hacking appears to have been conducted for no reason other than to advantage state-owned companies and other interests in China, at the expense of businesses here in the United States," Mr Holder said.
In response, the Chinese government said its "stance on the issue of internet security is consistent and clear".
Foreign ministry spokesman Qin Gang said the allegations were "made up" and would "damage Sino-American cooperation and mutual trust".
"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," he said.
In an indictment in the western district of Pennsylvania, the heart of the US steel industry, the US named Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui, all officers in Unit 61398 of the Chinese People's Liberation Army (PLA), as the alleged conspirators.
'Categorical' denunciation Continue reading the main story
What is Unit 61398?
- A unit of China's People's Liberation Army, to whose Shanghai address US cyber security firm Mandiant says it traced a prolific hacking team
- The team was said to have hacked into 141 computers across 20 industries, stealing hundreds of terabytes of data
- Mandiant says the team would have been staffed by hundreds, possibly thousands of proficient English speakers
- China said Mandiant's report was flawed and lacked proof
FBI officials said the hacking in the years 2006-14 caused "significant losses" at the companies and that there were likely many more victims.
And Mr Holder said the US government "categorically denounces" economic espionage as a trade tactic.
"As President Obama has said on numerous occasions, we do not collect intelligence to provide a competitive advantage to US companies, or US commercial sectors," Mr Holder said.
The move is seen as largely symbolic, as five men accused are unlikely to be extradited to the US to faces the charges in court.
John Carlin, head of the justice department's national security division, said, "For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses."
"While the men and women of our American businesses spent their business days innovating, creating, and developing strategies to compete in the global marketplace, these members of unit 61398 spent their business days in Shanghai stealing the fruits of our labour," Mr Carlin said.
For example, Mr Carlin said that as SolarWorld, a maker of solar panels and accessories, was rapidly losing market share to cheaply priced Chinese competitors, the hackers were stealing documents on pricing strategy from them.
'Real threat' While Westinghouse was negotiating a deal with a Chinese state-owned firm to build nuclear power plants, Unit 61398 stole secret designs for plant components, he said.
"In the past, when we brought concerns such as these to Chinese government officials, they responded by publicly challenging us to provide hard evidence of their hacking that could stand up in court," Mr Carlin said.
"Well today, we are."
Last year, cyber-defence company Mandiant published a report on a Chinese military unit the firm said was behind the vast majority of significant attacks on American federal agencies and companies.
In March, Defence Secretary Chuck Hagel said the Pentagon planned to more than triple its cyber-security capabilities in the next few years to defend against such internet attacks.
US President Barack Obama has called cyber attacks a "real threat" to US security and its economy.
