cybercrime china
May 19, 2014

DOJ Charges Five Chinese Officials With Cyber-Spying

Peter Suciu for - Your Universe Online

On Monday the United States Department of Justice (DOJ) announced that cyber-spying charges had been filed against five officers of the Chinese military. The DOJ accused them of stealing trade secrets from six US companies. This is the first such case where an indictment for economic espionage has been brought against foreign government officials.

The officers were identified as Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu, and Gu Chunhui; and they were reportedly officers in Unit 61398 of the Third Department of the Chinese People's Liberation Army (PLA).

The efforts by the individuals were reportedly directed at six American firms in the nuclear power, metals and solar products industries and include, Westinghouse Electric, US subsidiaries of SolarWorld AG, US Steel, Allegheny Technologies and Alcoa. The United Steel Workers union was also reportedly a target.

"This is a case alleging economic espionage by members of the Chinese military and represents the first-ever charges against a state actor for this type of hacking," Attorney General Eric Holder said at Monday's press conference as reported by NBC News. "Enough is enough."

Monday's indictment will likely put a greater strain on US-Chinese relationships. The Associated Press reported that in recent months Washington has been increasingly critical of what it has described as provocative Chinese actions in pursuit of territorial claims in a disputed part of the seas in East Asia; while Beijing has complained that the Obama administration has been attempting to redirect foreign policy towards Asia.

Last September President Barack Obama addressed the issue of cyber security with Chinese President Xi Jinping when the two attended an economic summit in St. Petersburg, Russia.

That discussion followed several high profile cyber-attacks against companies in the United States and other American interested. The latest occurred last May, and these attacks were believed to have been launched from the special brand of the PLA known as Unit 61398, which was reportedly located in a single 12-story building on the edge of Shanghai.

American authorities have compared these cyber-attacks to "21st century burglary," and noted that it has benefited the Chinese competitors of the US-based victims, including state-run enterprises. This has led to the loss of American jobs in some cases.

NBC News cited an example where hackers stole cost, pricing and strategy information from SolarWorld just as the company was losing crucial market share to Chinese rivals.

The Los Angeles Times reported that security firm Mandiant noted that in 2013 the PLA had been linked to cyber-intrusions of 141 US and foreign companies and entities. Most of these attacks took place in English-speaking countries.

"These victims are tired of being raided," Assistant Attorney General John Carlin told NBC News. He added that "China's stance has been for the United States to provide hard evidence of their hacking that could stand up in court. Well, today we are."

It remains unclear exactly how the United States could bring the six indicted officers to trial. It is unlikely that the six would be sent to America for trial, so it is a largely symbolic gesture. However, the individuals who were indicted would be prevented from traveling to the United States or any other countries that have extradition agreements in place with the United States.

While symbolic it would still show that the United States is serious about addressing hacking concerns.

"It sends a strong message to the Chinese," a senior fellow at the Center for Strategic and International studies James Lewis told Reuters.

However, others remained more skeptical that these measures would actually stop future cyber-attacks.

"It won't slow China down," Eric Johnson, an information technology expert at Vanderbilt University and dean of its School of Management, told Reuters.