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U.S. Joining Allies in Rebuke of Chinese Cyberespionage U.S. Accuses Chinese Nationals of Infiltrating Corporate and Government Technology
(35 minutes later)
WASHINGTON — The United States is joining with several allies and trading partners in a collective rebuke of China’s attempts to obtain trade secrets and intellectual property through a state-coordinated cyberespionage campaign, according to people with knowledge of the plan. WASHINGTON — The Justice Department on Thursday accused two Chinese nationals with ties to China’s security apparatus of infiltrating commercial and government computer systems, including a Department of Energy lab, in an ongoing effort to advance Beijing’s economic and geopolitical interests.
The move comes as the Justice Department announced criminal charges on Thursday against hackers it said were linked to China’s security services who have infiltrated commercial and government websites in an effort to advance Beijing’s economic and geopolitical interests. The indictment comes as the United States is preparing to join with several allies and trading partners in a collective rebuke of China’s attempts to obtain trade secrets and intellectual property through a state-coordinated cyberespionage campaign, according to people with knowledge of the plan.
The Justice Department said it had charged two Chinese nationals, Zhu Hua and Zhang Shilong, with conspiracy to hack into computer systems and commit wire fraud and identity theft. The allegations highlight the ongoing tension between the United States and China over what the White House says is a brazen effort by the Chinese to gather technology and other proprietary information using cyberattacks and espionage. The Trump administration is pushing on several fronts to stop Beijing’s practice of pressuring, coercing or stealing intellectual property, including pursuing criminal charges and restricting Chinese students and investment in the United States.
The indictment by the Justice Department lays out the broad outlines of what it calls a yearslong campaign by China to steal American technological secrets in a range of industries to allow Beijing’s companies to undercut international competitors and help its military erode the United States’ defensive edge. It is also trying to get Beijing to agree to change its practices through trade talks, an effort that is expected to get even more complicated as the administration continues leveling charges against Chinese nationals and as it engages in tough rhetoric toward Beijing.
The Justice Department said the hackers worked for a Chinese company called Huaying Haitai Science and Technology Development Company, but were in fact acting on behalf of the Chinese Ministry of State Security’s Tianjin State Security Bureau — the same arm of the security ministry that has been responsible for several cyberhacking and espionage cases this year. The hackers were part of a group known as Advanced Persistent Threat 10, or APT10, whose hacking operations evolved over time, becoming more adept at overcoming network defenses and improving its tradecraft. In a wide-ranging indictment unsealed on Thursday, the Justice Department describes the broad outlines of what it calls a yearslong campaign by China to steal American technological secrets in a range of industries to allow Beijing’s companies to undercut international competitors and help its military erode the United States’ defensive edge.
APT10 is a well-known hacking group that American cyberprotection companies have repeatedly singled out for sending phishing emails aimed at installing malicious software on the computers of its victims. Hackers working for the Chinese government were revealed to be behind the cyberattack on the Marriott Hotel chain that collected personal details of about 500 million guests. And a Chinese intelligence official who groomed the employees of American companies to steal trade secrets was arrested in Belgium and extradited to the United States in October to face espionage charges.
“The indictment alleges that the defendants were part of a group that hacked computers in at least a dozen countries and gave China’s intelligence service access to sensitive business information,” Rod J. Rosenstein, the deputy attorney general, said at a news conference. “This is outright cheating and theft, and it gives China an unfair advantage at the expensive of law-abiding businesses and countries that follow the international rules in return for the privilege of participating in the global economic system.” The government said it had charged two Chinese nationals, Zhu Hua and Zhang Shilong, with conspiracy to hack into computer systems and commit wire fraud and identity theft and accused them of targeting unnamed aviation, telecommunications, pharmaceutical and satellite companies along with government agencies, including NASA’s Goddard Space Center and Jet Propulsion Laboratory.
Between 2006 and 2018, according to the indictment, the APT10 group broke into defense technology companies and the American government to steal information and data on various technologies. The indictment does not describe any specific technology stolen by the group but said they “successfully obtained unauthorized access” to a range of entities, including the Lawrence Berkeley National Laboratory, a government lab in California.
The group stole technology from a range of industries, including aviation, pharmaceuticals, oil and gas exploration, and computer processors. The Justice Department said the hackers acted on behalf of the Chinese Ministry of State Security’s Tianjin State Security Bureau — the same arm of the security ministry that has been responsible for several cyberhacking and espionage cases this year.
The indictment also says that beginning in 2014, APT10 began a campaign of targeting managed service providers, companies that provide computer services like cloud computing and networking support. The campaign allowed APT10 to penetrate the networks and steal confidential business data from companies around the world, the indictment says. The hackers were part of a group known as Advanced Persistent Threat 10, or APT10, a well-known hacking group that is adept at overcoming network defenses and has been repeatedly singled out by American cyberprotection companies sending phishing emails aimed at installing malicious software on the computers of its victims.
“This is outright cheating and theft, and it gives China an unfair advantage at the expense of law-abiding businesses and countries that follow the international rules in return for the privilege of participating in the global economic system,” Rod J. Rosenstein, the deputy attorney general, said at a news conference.
APT10 Group has rapidly changed its approaches and technology after private cyber security firms discovered their attacks. It constantly shifted its IP addresses to avoid detection and bypass security filters, allowing them to remain on their victims’ systems far longer.
Between 2006 and 2018, according to the indictment, the APT10 group hacked computers in at least a dozen countries and broke into companies and the American government to steal information and data on various technologies.
Beginning in 2014, APT10 began to target companies that provide computer services like cloud computing and networking support. It penetrated those networks and stole confidential business data from companies around the world, the indictment says.
In doing so, Beijing violated its agreement not to steal American technological secrets. Not only did it use the stolen information to give its companies a competitive advantage, it used the intelligence to rapidly advance the capabilities of the People’s Liberation Army as it worked to increase its influence in the Pacific region.
In addition to its corporate espionage, the group compromised Department of the Navy computer systems, downloading the private information of more than 100,000 Navy personnel, the Justice Department said.In addition to its corporate espionage, the group compromised Department of the Navy computer systems, downloading the private information of more than 100,000 Navy personnel, the Justice Department said.
Since 2006, the APT10 group has attacked American corporations, and since 2014, the group, including Mr. Zhu and Mr. Zhang, worked to hack into computer networks of businesses and governments around the world in order to steal intellectual property and confidential business data, the indictment alleges.
The defendants gained access to the computers of a company with offices in New York, and stole data about its clients in banking and finance, telecommunications, manufacturing, health care and other industries.
The two defendants also broke into the computer networks of more than 45 technology companies and American government agencies to steal aviation, space, satellite and manufacturing technology, the Justice Department said.
“China stands accused of engaging in criminal activity that victimizes individuals and companies in the United States, violates our laws and departs from international norms of state behavior,” Mr. Rosenstein said.“China stands accused of engaging in criminal activity that victimizes individuals and companies in the United States, violates our laws and departs from international norms of state behavior,” Mr. Rosenstein said.
He accused China of attempting to “dominate” other countries through economic espionage, and said the response “requires a strategic, whole-of-government approach to the threats that China poses.”He accused China of attempting to “dominate” other countries through economic espionage, and said the response “requires a strategic, whole-of-government approach to the threats that China poses.”
The indictment comes as the United States and other nations are prepared to release a joint statement condemning China for the type of action the Justice Department is alleging. The statement is expected to be signed by officials from Britain, Japan, Canada, Germany and Australia and comes as negotiators from China and the United States prepare for a series of high-stakes trade meetings ahead of a March 2 deadline. Cyber defense experts say the long campaign from Chinese hackers has drummed some American and European companies out of various sectors by giving China the ability to undercut the prices of Western companies.
The major enforcement announcement also comes as the United States is seeking to extradite a top Chinese businesswoman, accusing her of helping the technology giant Huawei violate American sanctions against Iran. The indictment further clouds the administration’s approach to China, which is trying to strike a trade deal with Beijing while accusing it of engaging in illicit acts, such as cyberespionage.
Both Thursday’s actions and the Huawei case also clash with President Trump’s desire to use the legal system as a pawn in his trade negotiations with China. The United States and other nations are prepared to release a joint statement condemning China for the type of action the Justice Department is alleging as early as Thursday. The statement is expected to be signed by officials from Britain, Japan, Canada, Germany and Australia.
At the same time, the United States is trying to extradite a top Chinese businesswoman, accusing her of helping the technology giant Huawei violate American sanctions against Iran.
But the Trump administration is also trying to reach a trade agreement with China ahead of a March 2 deadline and is trying to get Beijing to agree to end what the White House insists is a pattern of China routinely stealing American technology and intellectual property. While Mr. Trump’s advisers insist the trade talks are separate from any law enforcement action, the president himself has readily conflated the two.
Mr. Trump has suggested that he could intervene in the Huawei case if it would help secure a trade agreement with China. And he previously intervened in another sanctions case involving a Chinese telecom firm, ZTE, which had been barred from buying American components after China’s president, Xi Jinping, personally appealed to the president.
Steven Mnuchin, the Treasury secretary, said that he was “cautiously optimistic” that the criminal charges against Chinese hackers would not derail the ongoing trade negotiations. He said that while cybersecurity has been discussed in the talks, this specific situation has not been raised.
“The D.O.J. action is separate from the trade discussions, just as the Huawei action is separate, but as an administration, we are clearly very focused on making sure that we protect American technology,” Mr. Mnuchin said on the Fox Business Network. “This will be a separate dialogue, but something that is important to resolve.”
Tensions over trade and China’s business practices spilled into view at a meeting of the World Trade Organization this week, when the United States used the gathering of world leaders to accuse China of breaking the law to advance its economic interests.Tensions over trade and China’s business practices spilled into view at a meeting of the World Trade Organization this week, when the United States used the gathering of world leaders to accuse China of breaking the law to advance its economic interests.
“China will force technology transfer, and outright steal it when it sees fit,” Dennis Shea, the American emissary, said during the meeting on Wednesday. “China will subsidize and maintain excess capacity in multiple industries, forcing producers in other economies to shut down. China will dump its products on our markets, claiming that all is O.K. because our consumers pay a bit less.”“China will force technology transfer, and outright steal it when it sees fit,” Dennis Shea, the American emissary, said during the meeting on Wednesday. “China will subsidize and maintain excess capacity in multiple industries, forcing producers in other economies to shut down. China will dump its products on our markets, claiming that all is O.K. because our consumers pay a bit less.”
But law enforcement officials are wary of entwining Mr. Trump’s trade and tariff agenda with their work to hold Beijing accountable for violating the law. But law enforcement officials are wary of entwining Mr. Trump’s trade and tariff agenda with their work to hold Beijing accountable for violating the law. During the news conference, Justice Department officials said that the government brings cases when they are ready, regardless of political situations unfolding on the ground.
For more than a decade, the Justice Department has been building criminal cases against Chinese companies, government agencies and hackers, alleging that those entities have worked in tandem to steal trade secrets and military information in an effort to vault the Chinese economy into the 21st century and make the nation a global superpower.For more than a decade, the Justice Department has been building criminal cases against Chinese companies, government agencies and hackers, alleging that those entities have worked in tandem to steal trade secrets and military information in an effort to vault the Chinese economy into the 21st century and make the nation a global superpower.
Those efforts accelerated this year with a spate of indictments accusing the Ministry of State Security, China’s largest intelligence-gathering agency, of using espionage to steal information from American defense contractors that would help China’s own aerospace industry. Cyber experts like Ben Johnson, the co-founder of Obsidian Security, predict that the recent spate of indictments against Chinese hackers and spies will make China more cautious.
“Often things get a little quieter and more covert, but they don’t stop,” Mr. Johnson said.