It was a startling and unprecedented event on Monday morning when Atty. Gen. Eric H. Holder Jr. held a press conference to reveal the charges against five Chinese military officers accused of economic espionage and other offenses related to computer hacking into U.S. companies, released by the Wall Street Journal.
Holder stated in the press conference that the U.S. companies involved with the cyber-attacks included U.S. Steel Corp., Westinghouse, Alcoa, Allegheny Technologies, the United Steel Workers Union and U.S. subsidiaries of Solar World, a German company. The types of information stolen were “trade secrets” and sensitive information intrinsic to the competitive success of the companies involved in the attacks.
Holder explained to the media that cyber-attacks and theft of economic information for commercial advantage related to company competition in the market was commercial spying. Kathleen Walsh, an associate professor at the Naval War College, explained to the WSJ that in China, the strategy of technology espionage and cyber-spying is embraced as a part of the business culture.
Holder, stated to the press that, "Success in the global 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 immediately rebuked the announcement from the U.S. Atty. Gen. and declared it unfounded and stated that they would suspend the activities of the China-U.S. Cyber Working Group, which was created last year to address such types of allegations.
Walsh considers that the loss of face globally will strain U.S.-Chinese relations. The actual cost will be in strategy change by the Chinese government and future business relations. China countered that they in fact are the victim of the U.S. false accusations and demanded a retraction of the charges.
China’s Foreign Ministry in its anger and insult over the indictment, not only called the allegations groundless, but accused the U.S. of spying. Through a Chinese spokesperson China demanded that the indictments be immediately withdrawn. Qin Gang, spokesman for the Chinese Foreign Ministry, stated that release of NSA documents last year cited U.S. cyber-attacks against Chinese government departments, institutions, companies, universities and individuals.
Holder responded to the NSA complaint by the Chinese in that the U.S. only employs activities to protect the U.S. national interests and defense of the nation and not to help private companies achieve competitive marketing advantage or technology advantage.
Mr. Qin said on the website for the Chinese Foreign Ministry that, "The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets. The U.S. accusation against Chinese personnel is purely ungrounded and absurd."
The indictment was very specific in naming names and attaching the faces, “Well today, we are” providing proof, said John Carlin, assistant attorney general for national security. “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. A new normal has occurred in which companies are willing to come forward, name the infiltrators and specifics of the cyber-attacks in order to work with the Attorney General’s office of the U.S. and cease this activity.