The United States government filed criminal charges against five Chinese military hackers on allegations that they committed economic espionage and other violations by hacking the computers and stealing the trade secrets of American companies in the nuclear power, metals and solar products industries.

Chinese Military hackers

The United States Department of Justice (DOJ) alleged that the five Chinese military hackers conspired to hack American entities and maintained unauthorized access to their computers to steal information that would be useful to competitors in China including state-owned enterprises (SOEs).

According to the agency, the accused military hackers stole trade secrets and sensitive, internal communications that provide competitors and/or adversaries in litigation with insights regarding the strategy and vulnerabilities of the American company.

First ever case of economic espionage against a state

In a statement, U.S. Attorney General Eric Holder said the economic espionage case against the Chinese military hackers is the “first ever charges against a state actor” for such a type of hacking. He emphasized that the U.S. government will not tolerate actions by any country that aims to sabotage American companies and undermine the integrity of fair competition in the operation of the free market.

The Attorney General added, “The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response.  Success in the global market place 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.”

Targeted American entities

The Department of Justice said the victims of the accused Chinese military hackers’ cyber espionage activities include Westinghouse Electric Company, U.S. subsidiaries of SolarWorld AG (ETR:SWVK) (FRA:SWVK), United States Steel Corporation (NYSE:X), Allegheny Technologies Incorporated (NYSE:ATI), and Alcoa Inc (NYSE:AA). The hackers also targeted the Allied Industrial and Service Workers International Union (USW).

The Federal Bureau of Investigation (FBI) investigated the activities of the accused, which led to the filing of criminal charges against them. The DOJ’s National Security Division Counter-espionage Section and the U.S. Attorney’s Office for the Western District of Pennsylvania are prosecuting the case.

FBI Director James B. Comey said, “For too long, the Chinese government has blatantly sought to use cyber espionage to obtain economic advantage for its state-owned industries. The indictment announced today is an important step. But there are many more victims, and there is much more to be done. With our unique criminal and national security authorities, we will continue to use all legal tools at our disposal to counter cyber espionage from all sources.”

China’s reaction

The Foreign Ministry of China stated that the United States “made up” the allegations and that the charges would “damage Sino-American cooperation and mutual trust.”

“China is a staunch defender of network security, and the Chinese government, military and associated personnel have never engaged in online theft of trade secrets,” according to the statement of the Chinese Foreign Ministry.

The Chinese military hackers facing criminal charges include Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui. The accused were officers in the Unit 61398 of the Third Department of the Chinese People’s Liberation Army (PLA).