Attorney General Eric Holder speaks at a news conference at the Justice Department in Washington, May 19, 2014.
Attorney General Eric Holder speaks at a news conference at the Justice Department in Washington, May 19, 2014.
Attorney General Eric Holder speaks at a news conference at the Justice Department in Washington, May 19, 2014.

A U.S. grand jury has indicted five members of the Chinese military for allegedly cyber spying on American companies in the nuclear power, metals and solar products industries, the Department of Justice said on Monday.

The military hackers — members of Chinese People’s Liberation Army, Department 61398 in Shaghai — conspired to steal information that would be useful to competitors of those companies in China, including state-owned companies there, the agency said.

In the first return salvo after the U.S. announcement, the Chinese Foreign Ministry said it is suspending activities of the Sino-U.S. Internet Working Group.

Six American companies, including United States Steel , Alcoa, Allegheny Technologies, Westinghouse Electric, SolarWorld, United Steel Workers Union were victims of Chinese hacking attacks, U.S. officials said. Also targeted were Paper and Forestry, Rubber, Manufacturing, Energy, Allied-Industrial and Service Workers International Union.

The charges, announced by Attorney General Eric Holder represent the first time that the U.S. Justice Department is publicly accusing China with such cyber spying.

Underscoring that this was “a real threat to our economy and security,” Holder said the Chinese hackers stole information that provides China’s competitors with insight into the “strategy and vulnerabilities” of American companies in key industries.

“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,” said Holder. “Our economic security and our ability to compete fairly in the global marketplace are directly linked to our national security.”

Unfair advantage

Stolen trade secrets could be a short-cut to developing products that unfairly compete with U.S. products. That is because it is far cheaper to steal plans than to do the research and take the time needed to develop an original product. That cost savings can give the thief a major advantage in pricing products.

The hackers also are accused of spying on companies involved in trade disputes and business negotiations with China, to give Chinese state-owned firms an unfair advantage against their American rivals.

Much of this activity targeted offices in the Pittsburgh, Pennsylvania, area. The chief prosecutor in western Pennsylvania, David Hickton, said hacking has forced some plants to close, throwing people out of work.

“The important message is that cyber theft impacts real people, in real and painful ways. The lifeblood of any organization is the people who work, strive, and sweat for it,” said Hickton. “When these cyber intrusions occur, production slows, plants close, workers get laid off and lose their homes.”

American officials have long been concerned about hacking from abroad, especially China. An FBI official told Reuters last week to expect multiple cyber security-related cases, including indictments and arrests, in the coming weeks.

Long-standing concern

While such charges may be largely symbolic, the move would prevent the individuals indicted from traveling to the United States or other countries that have an extradition agreement with the U.S.

Several cyber security experts say Monday’s action show the U.S. is serious about dealing with hacking.

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

Others some remained skeptical the move would deter online invasions.

“It won’t slow China down,” said Eric Johnson, an information technology expert at Vanderbilt University and dean of its School of Management.

The United States has an overall economic output that is twice the size of China’s, about $16 trillion to $8 trillion annually. Some analysts say that by other measures, however, China could surpass the United States within the year as the world’s biggest economy.

On Sunday, a top Chinese Internet official called for Beijing to tighten its own cyber security, citing “overseas hostile forces.”

VOA’s Jim RandIe in Washington contributed information for this report, along with Reuters.

Comments

comments

SHARE
Previous articleHonolulu Weekly Gas Price Update and Outlook – May 19, 2014
Next articleLocal Entertainer faces life-threatening illness
The Voice of America, which first went on the air in 1942, is an international multimedia broadcasting service funded by the U.S. government through the Broadcasting Board of Governors. VOA broadcasts approximately 1,500 hours of news, information, educational, and cultural programming every week to an estimated worldwide audience of 125 million people. See http://www.VOANews.com