The United States has charged five Chinese government officials with stealing American trade secrets through cyber espionage, marking the first time that Washington has leveled such criminal charges against specific members of a foreign government.
The hacking by a secretive military unit in Shanghai targeted the US nuclear power, metals and solar products industries and was conducted for no other reason than to give a competitive advantage to Chinese companies, including state-owned enterprises, American officials said on Monday.
The five Chinese charged—Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui—allegedly work for the People’s Liberation Army, and are now on the FBI’s Most Wanted list.
If caught and convicted, each defendant could face a maximum sentence of 227 years in prison.
At a news conference, US Attorney General Eric Holder 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.”
China’s cyber spies in recent years have repeatedly been called the biggest threat to America’s economic security, with some experts saying their work amounts to the largest transfer of wealth ever seen—draining America of its competitive advantage and its economic edge, said CNBC. Some reports have put US economic losses as high as US$300 billion so far.
Each defendant is charged with a total of 31 counts of conspiring to commit computer fraud and abuse; accessing a protected computer without authorization to obtain information for the purpose of commercial advantage and private financial gain; transmitting a program, information, code or command with the intent to cause damage; aggravated identity theft; economic espionage; and trade secret theft.
Holder said the companies targeted were Alcoa World Alumina, Westinghouse Electric Co., Allegheny Technologies, US Steel Corp., United Steelworkers Union, and SolarWorld.
“In some cases, they stole trade secrets that would have been particularly beneficial to Chinese companies at the time they were stolen,” Holder said, according to Time. “In others, they stole sensitive, internal communications that would provide a competitor, or adversary in litigation, with insight into the strategy and vulnerabilities of the American entity. In sum, 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.”
China vigorously denied the US charges. The Washington Post quoted Chinese Foreign Ministry spokesman Qin Gang as saying: “China is a staunch defender of cyber security” and that no Chinese government, military and “associated personnel” have ever “engaged or participated in the theft of trade secrets through cyber means.” He called the US accusations “purely fictitious, extremely absurd.”
Reacting to an indictment, the Chinese Foreign Ministry announced that Beijing is suspending participation in the Sino-US Cyber Working Group, a body established in April 2013 to follow up allegations of Chinese hacking attacks on US entities, the Post said.
All that said, the indictment alleging the theft of trade secrets and economic espionage is largely symbolic. It’s unlikely that the five military officials will ever end up in a US courtroom because the US doesn’t have an extradition treaty with China.
Alleged hackers in other countries without extradition treaties, such as Russia, have sat on the most-wanted list maintained by the cyber division of the Federal Bureau of Investigation for years, the Wall Street Journal noted.
Attorney General Holder declined to give specifics about how the US might apprehend the alleged Chinese hackers without Chinese cooperation.
“There are a range of things that we can do and we will employ all of them,” he said, according to WSJ.
Whether or not the five PLA officers are ever brought to justice, the indictment appeared to be intended to send a message to Chinese leaders, who have denied that the People’s Liberation Army is engaged in economic espionage and have challenged the US to provide proof, said the Los Angeles Times.
“Well today, we are” providing proof, John Carlin, assistant attorney general for national security, told the Times. “For the first time, we are exposing the faces and names behind the keyboards in Shanghai used to steal from American businesses.”
“This indictment describes, with particularity, specific actions on specific days by specific actors to use their computers to steal information from across our economy,” Carlin said.
Ray Kwong is a China commentator. He writes on China for Forbes. He is also a China business development strategist and marketing consultant.
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