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US Slaps Cyberespionage Charges on 2 Chinese Intelligence Officers

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US Slaps Cyberespionage Charges on 2 Chinese Intelligence Officers

The move signals that, trade war truce aside, serious tensions remain in the economic relationship.

US Slaps Cyberespionage Charges on 2 Chinese Intelligence Officers
Credit: Unsplash

In a move sure to further enrage China, the United States has indicted two more Chinese citizens for cyberespionage.

U.S. officials say two Chinese citizens — identified as Zhu Hua and Zhang Shillong — acting on behalf of the Ministry of State Security (MSS), China’s main intelligence agency, carried out an extensive hacking campaign to steal data from government agencies and companies in the United States and nearly a dozen other nations.

The two are accused of breaching computer networks in a broad swath of industries, including aviation and space and pharmaceutical technology. All told, prosecutors say, the alleged hackers stole “hundreds of gigabytes” of data, breaching computers of more than 45 entities in 12 states from 2006 to 2018. According to the U.S. Justice Department, both men were “members of a hacking group operating in China known within the cyber security community as Advanced Persistent Threat 10 (the APT10 Group)” and were working “in association with the Chinese Ministry of State Security’s Tianjin State Security Bureau.”

It’s very likely that Zhu and Zhang will never face jail time, however; they are not in custody and the United States does not have an extradition treaty with China. Instead, the indictment is meant to send a message to China about how seriously the United States takes such hacking cases.

U.S. law enforcement officials described the case as part of a trend of state-sponsored hackers breaking into American networks and stealing trade secrets and confidential and valuable information.

“China’s state-sponsored actors are the most active perpetrators of economic espionage,” FBI Director Chris Wray said Thursday in announcing the case. “While we welcome fair competition, we cannot and will not tolerate illegal hacking, stealing or cheating.”

Last week, officials from the Justice Department, the FBI, and the Department of Homeland Security testified to the Senate Judiciary Committee that China is working to steal trade secrets and intellectual property from U.S. companies in order to harm America’s economy and further its own development.

Chinese espionage efforts have become “the most severe counterintelligence threat facing our country today,” Bill Priestap, the assistant director of the FBI’s counterintelligence division, told the committee.

Thursday’s announcement was the latest in a series of Justice Department indictments targeting cyberespionage from Beijing. The first such indictment for state-backed hacking, targeting five officers in the Chinese military, came under the Obama administration in May 2014. Then-Attorney General Eric Holder noted at the time that the charges were “the first ever” to be filed “against known state actors for infiltrating U.S. commercial targets by cyber means.”

Such cases, however, have since become a more standard part of the U.S. response to its cyber concerns. In the last several months, the Justice Department has filed charges against several Chinese intelligence officials and hackers. A case filed in October marked the first time that a Chinese MSS officer was extradited to the United States to stand trial.

U.S. complaints of cyberespionage and other means of IP theft (including forced technology transfers as a condition to enter the Chinese market) are at the core of the ongoing trade dispute with China. “Now we have a Trade Deficit of $500 Billion a year, with Intellectual Property Theft of another $300 Billion. We cannot let this continue!” U.S. President Donald Trump tweeted back in April.

While Trump and Chinese President Xi Jinping agreed to a 90-day trade war truce during their meeting in Argentina on December 1, experts are skeptical that China is serious about changing its approach.

Former President Barack Obama had secured an agreement from China not to engage in economic espionage (which the United States has carefully distinguished from “legitimate” espionage against security targets). However, the Trump administration accused China earlier this year of having violated that agreement. With that background in mind, U.S. officials are unlikely to put much stock in future Chinese promises. Deputy Attorney General Rod Rosenstein indicated just that in his statement on Thursday: “We want China to cease illegal cyber activities and honor its commitment to the international community, but the evidence suggests that China may not intend to live up to its promises.”

China, meanwhile, has consistently denied that it conducts any sort of state-backed cyberespionage, and often counters that the country is a frequent victim of cyberattacks. In response to the first such indictments back in 2014, for example, China’s Foreign Ministry issued a fiery statement calling the charges “purely ungrounded and absurd.”

“The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets,” the statement insisted.

The indictment is sure to further turn up the temperature on U.S.-China relations, even as both sides prepare for upcoming trade talks in January.

Michael Balsamo and Eric Tucker from the Associated Press contributed reporting.