China denies economic espionage charges from US, allies

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US prosecutors charged two Chinese nationals with computer hacking attacks on American government agencies and corporations, including the Navy and Nasa.
China related national security law enforcement action is announced at a news conference on Dec 20, 2018, at The Justice Department in Washington, DC. PHOTO: AFP

BEIJING (REUTERS) - China's Foreign Ministry said on Friday (Dec 21) it resolutely opposed "slanderous" accusations from the United States and other allies criticising China for economic espionage, urging Washington to withdraw its accusations.

The US should also withdraw charges against two Chinese citizens, the ministry said, adding that China had never participated in or supported any stealing of commercial secrets.

"We urge the US side to immediately correct its erroneous actions and cease its slanderous smears relating to Internet security," it said, adding that it would take necessary measures to safeguard its own cyber security and interests.

US prosecutors on Thursday indicted two Chinese nationals linked to a spy agency on charges of stealing confidential data from American government agencies and businesses around the world.

Prosecutors charged Zhu Hua and Zhang Jianguo in hacking attacks against the US Navy, the space agency Nasa and the Energy Department and dozens of companies. The operation targeted intellectual property and corporate secrets to give Chinese companies an unfair competitive advantage, they said.

The pair were members of a hacking group known within the cyber security community as APT 10 and also worked for a Tianjin company Huaying Haitai Science and Technology Development Co, prosecutors said.

Reuters was unable to locate immediately contact details for Zhu or Zhang.

Britain, Australia and New Zealand joined the US in slamming China over what they called a global campaign of cyber-enabled commercial intellectual property theft, signalling growing global coordination against the practice.

China's Foreign Ministry said Britain and other countries had also made "slanderous comments" stemming from "ulterior motives".

Five sources familiar with the attacks told Reuters the hackers breached the networks of Hewlett Packard Enterprise (HPE) and IBM, then used the access to hack into their clients' computers. IBM said it had no evidence that sensitive data had been compromised. HPE said it could not comment.

"No country poses a broader, more severe long-term threat to our nation's economy and cyber infrastructure than China," FBI director Chris Wray said at a news conference. "China's goal, simply put, is to replace the US as the world's leading superpower, and they're using illegal methods to get there."

US Secretary of State Mike Pompeo and other officials in President Donald Trump's administration said China's hacking effort, which US officials said began in 2006 and ran through 2018, violated a 2015 agreement intended to crack down on cyber espionage for commercial purposes.

Britain agreed. The campaign is "one of the most serious, strategically significant, persistent and potentially damaging set of cyber intrusions against the UK and our allies that we have seen", a British security official said.

Australian officials issued a statement expressing "serious concern" about Chinese commercial intellectual property theft.

An official in New Zealand said in a statement the country "joins like-minded partners in expressing that such cyber campaigns are unacceptable".

Victims included Nasa's Goddard Space Centre and Jet Propulsion Laboratory, the Energy Department's Lawrence Berkeley National Laboratory, and companies involved in aviation, space and satellite technology, finance, electronics, healthcare, oil and gas exploration, according to court documents.

"The list of victim companies reads like a 'Who's Who' of the global economy," Mr Wray said. He did not name the businesses.

Tensions between Washington and Beijing are high over tit-for-tat trade tariffs and after Ms Meng Wanzhou, chief financial officer of Chinese telecommunications giant Huawei Technologies, was arrested in Canada at the request of the United States. Ms Meng was arrested on Dec 1, the same day the US and China agreed to talks to resolve the trade dispute.


Prosecutors charged the defendants, who they said worked with China's Ministry of State Security intelligence agency, with conspiracy to commit computer intrusions, conspiracy to commit wire fraud and aggravated identity theft.

Zhu and Zhang were members of a hacking group known within the cyber security community as APT 10 and also worked for a Tianjin company, Huaying Haitai Science and Technology Development Co, prosecutors said.

Nasa said it did not believe agency missions were jeopardised by the hacking and took immediate action to secure affected servers.

APT 10 also stole personal data including Social Security numbers from more than 100,000 US Navy personnel, they said.

A Navy spokesman said that sailors are notified immediately when there is a data breach, but declined further comment due to an ongoing investigation.

The hacking targets also include technology firms that provide outsourced e-mail, storage and other computing tasks, according to court documents.

This is the latest in a series of hacking cases brought by the US against Chinese nationals.

In October, the US government charged Chinese intelligence officers with stealing information on a turbo fan engine used in commercial jetliners. The same month, the Justice Department arrested an alleged spy for China's Ministry of State Security on charges of economic espionage and attempting to steal US aviation trade secrets.

In September, a Chinese national who had enlisted in the US Army Reserve was arrested in Chicago for allegedly working for Chinese intelligence to recruit engineers and scientists, including some who worked for US defence contractors.

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