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Beijing denounces U.S. hacking charges against Chinese army officers

By Ashley Fantz and Paul Armstrong, CNN
updated 8:01 AM EDT, Tue May 20, 2014
STORY HIGHLIGHTS
  • China Foreign Ministry spokesman calls on U.S. to withdraw charges
  • Indictment alleges five People's Liberation Army officers hacked computers
  • United Steel Workers Union, Westinghouse, Alcoa among victims, Eric Holder says
  • China suspends participation in the joint China-U.S. Cyber Working Group

(CNN) -- China has accused the United States of "hypocrisy" and "double standards" following its decision to charge five Chinese army officers with cybertheft against major American businesses.

The Foreign Ministry in Beijing even took the step of summoning U.S. Ambassador Max Baucus late Monday, the state-run Xinhua news agency reported, as tensions between the two countries threatened to escalate into a full-scale diplomatic incident.

Earlier Monday, U.S. Attorney General Eric Holder announced that the men, all members of the People's Liberation Army (PLA), "maintained unauthorized access to victim computers to steal information from these entities that would be useful" to the victims' competitors in China.

Holder said some of the "victims" included U.S. Steel Corp., Westinghouse, Alcoa, Allegheny Technologies, the United Steel Workers Union and SolarWorld.

READ: What were China's hacker spies after?

Eric Holder: Chinese military hacked us
What are Chinese hackers looking for?
Snowden: U.S. hacked targets in China

In an unusual move, the men were named in the indictment document as Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui. These are the first charges against Chinese state officials for what the U.S. says is a widespread problem, U.S. officials told CNN before Holder's remarks.

But in a written statement Tuesday, China's Foreign Ministry said "it is widely known that the U.S. has for a long time been using its advanced technology and infrastructure to perpetrate large scale theft of secrets and eavesdropping against foreign political leaders, enterprises and individuals.

"From WikiLeaks to the (Edward) Snowden incident, the U.S. hypocrisy and double standards have been abundantly clear. The Chinese PLA has been a serious victim of this kind of behavior from the U.S. Statistics show that in recent years the PLA's international internet terminals have suffered a large number of attacks. IP addresses show that a large number of those attacks come from the U.S.

"China demands that the U.S. give a clear explanation of its internet theft of secrets and eavesdropping on China and immediately cease such activities."

On Monday, Chinese Foreign Ministry spokesperson, Qin Gang, said the charges against its army officers were based on "intentionally-fabricated facts" that "grossly violate the basic norms governing international relations," and urged Washington to "immediately correct its mistakes and withdraw the indictments."

Qin also revealed China would be suspending its involvement in the joint China-U.S. Cyber Working Group, set up in April last year to work on measures to address cybersecurity -- an issue that has driven a wedge between the two governments in the past.

What we know about the Chinese army's alleged cyber spying unit

President's concern

At a regular news briefing at the White House, press secretary Jay Carney was asked about Monday's developments.

"This is an issue that has been brought up by President Obama with (Chinese) President Xi (Jinping) in their meetings as recently as in March as a general problem that we have seen and reflects the president's overall concern about cybersecurity," Carney said. "We have consistently and candidly raised these concerns with the Chinese government, and today's announcement reflects our growing concern that this Chinese behavior has continued."

We remain deeply concerned about Chinese government-sponsored, cyber-enabled theft of trade secrets and other sensitive business information for commercial gain.
Jen Psaki, U.S. State Department

He was adamant that the U.S. "intelligence programs serve a specific national security mission, and that does not include providing a competitive advantage to U.S. companies or U.S. economic interests," Carney said. "In other words, we do not do what those Chinese nationals were indicted for earlier today. Period."

A spokeswoman for the State Department told reporters that Washington wants to have more dialogue with Beijing about the issue.

"We remain deeply concerned about Chinese government-sponsored, cyber-enabled theft of trade secrets and other sensitive business information for commercial gain," Jen Psaki said. "And, again, this was specific to the actions of ... of just a few individuals. And we hope that the Chinese government can understand that."

Impacts real people

This was a law enforcement case, she added, not a diplomatic one.

"We continue to believe -- and this is relevant to us, our role here at the State Department -- that we can have a constructive and productive relationship with China," she said. "We're ready to work with China to prevent these types of activities from continuing."

Joining Holder, David Hickton, U.S. Attorney for the Western District of Pennsylvania, said the alleged hacking has caused the victimized U.S. companies to lose capital investments in research and technology.

He added that the "important message" is that cyberespionage "impacts real people in real and painful ways," he said.

"The lifeblood of any organization is the people who work, strive and sweat for it. When these cyberintrusions occur, production slows, plants close, workers get laid off and lose their homes," Hickton said.

"Hacking, spying and cybertheft for commercial advantage can and will be prosecuted criminally even when the defendants are state actors," he said.

READ: More than 100 people nabbed in global hacker crackdown

CNN's David McKenzie, Tim Schwarz, Pamela Brown, Evan Perez, Kevin Wang and Larry Register contributed to this report.

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