China Refutes Fresh US Accusations Of Hacking Into Private Companies

By Mark Hanrahan 

October 16 2014

A magnifying glass is held in front of a computer screen in this picture illustration taken in Berlin on May 21, 2013. Reuters/Pawel Kopczynski 

The FBI issued a warning Wednesday that hackers backed the Chinese government were targeting U.S. companies. Getty 

China has branded as “unfounded” U.S. accusations that hackers backed by the country's government are launching cyberattacks against American businesses. China and the U.S. have been waging a quiet cyberwar for years, vying for both commercial and military advantage.

A "flash" warning issued by the FBI on Wednesday had described tools and techniques used by the hackers. According to a Reuters report, the agency also said that it had recently obtained information regarding "a group of Chinese Government-affiliated cyber actors who routinely steal high-value information from U.S. commercial and government networks through cyber espionage."

The Chinese embassy in Washington urged “the U.S. side to stop this kind of unfounded accusation.” Geng Shuang, a spokesperson for the embassy, quoted by the South China Morning Post, added: “I’m not aware of the investigation by the U.S. FBI... Judging from past experience, conclusions of this kind of investigations are usually lacking in provable facts and hard evidence.”

The latest incident is not the first time within the last month that the Chinese government has publicly denied U.S. allegations of hacking. In an Oct. 5 interview with CBS, FBI Director James Comey said that Chinese hackers targeted the intellectual property of U.S. companies on a daily basis, costing the U.S. economy billions of dollars each year.

"They're just prolific. Their strategy seems to be: 'We'll just be everywhere all the time. And there's no way they can stop us,'” Comey reportedly said.

Chinese Foreign Ministry spokesperson Hong Lei responded: "We express strong dissatisfaction with the United States' unjustified fabrication of facts in an attempt to smear China's name and demand that the US-side cease this type of action," according to India's Economic Times. 

In addition, a report from the Senate Armed Services Committee published on Sept. 18 claimed that hackers backed by the Chinese government had repeatedly hacked into the computer systems of U.S. military contractors, according to the Wall Street Journal. 

The same Chinese foreign ministry spokesperson described the accusations as “groundless and ill-founded,” according to a report from the Xinhua news agency. He added that “China forbids any actions that may sabotage cyber security including hacking, and deals with such crime severely.”

In May of this year, Attorney General Eric Holder embarked on the U.S.'s most direct confrontation with China over its alleged cyberspying, when the Justice Department unsealed indictments against five members of China's People's Liberation Army, or PLA, for computer hacking crimes.

A New York Times report states that the indictments named members of the PLA's Unit 61398, which was publicly identified last year as the Shanghai-based unit of the PLA, including its best-known hackers known online by the noms de guerre, “UglyGorilla” and “KandyGoo.”

An in-depth investigation into Chinese cybercrime focused on the U.S. byForeign Policy magazine cited U.S. solar panel manufacturer SolarWorld as an example of a company targeted by China.

The U.S. subsidiary of the German solar panel manufacturer knew that its Chinese competitors, backed by generous government subsidies, were flooding the American market with steeply discounted solar panels and equipment, making it practically impossible for U.S. firms to compete. What SolarWorld didn't know, however, was that at the same time it was pleading its case with U.S. trade officials, Chinese military hackers were breaking into the company's computers and stealing private information that would give Chinese solar firms an even bigger unfair advantage, including the company's pricing and marketing strategies. SolarWorld learned about the hacking not from some sophisticated security software or an outside consultant, but from FBI agents.

The hacking traffic, however, is allegedly not entirely one-way. In June, former U.S. intelligence contractor Edward Snowden accused the U.S. of hacking into Chinese cell phone companies, and accessing millions of private text messages, according to a report from The Guardian.