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U.S. Accuses Chinese Nationals of Infiltrating Corporate and Government Technology U.S. Accuses Chinese Nationals of Infiltrating Corporate and Government Technology
(about 1 hour later)
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. WASHINGTON — The Trump administration ramped up its pressure campaign on Beijing on Thursday, as the Justice Department accused two Chinese nationals with ties to the country’s Ministry of State Security of infiltrating the biggest providers of internet services and boring into government computer systems, including a major Department of Energy laboratory.
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 indictment of the two men came just months after the Justice Department lured one of the Chinese intelligence agency’s officers to Belgium, where he was arrested and extradited to the United States. Both cases focus on an intelligence effort based in Tianjin to advance Beijing’s economic and geopolitical interests with an extraordinarily broad attack on Western companies and governments.
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. Just as the indictment was unsealed, Britain identified the same intelligence operation, often named APT 10 by cybersecurity firms, as responsible for separate attacks in that country and beyond. The statement from Britain’s Foreign Office was part of a new, collective effort by Western allies to call out China’s attempts to obtain trade secrets and intellectual property through a state-coordinated cyberespionage campaign, according to people involved in the planning.
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 allegations highlight the tension between the United States and China over what the White House says is a brazen effort by the Chinese to obtain Western technology and other proprietary information. The United States formally accused the Chinese of violating a 2015 agreement — brokered by President Barack Obama and President Xi Jinping — to cease economic espionage, saying Chinese hackers have come roaring back after two years of comity.
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. The Justice Department action also comes amid other Trump administration pressure on the Chinese. The United States helped coordinate the arrest of a top executive of Huawei, the Chinese telecom giant, on suspicion of committing fraud related to sanctions against Iran. Her arrest, while she was changing planes in Canada, has set off a geopolitical standoff, with China arresting three Canadians on its own soil.
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. Last week, American investigators said that a long-running hack of Starwood Hotels, now part of Marriott International, was a Chinese intelligence-gathering operation. And the United States has taken steps to block Chinese investment and student enrollments in the United States.
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. It is not clear how, if at all, the latest indictment will affect Mr. Trump’s effort to reach a trade agreement with Mr. Xi that would end an escalating tariff war between the world’s two largest economies. The United States has set a March 2 deadline to reach agreement with Beijing on a range of issues, including what the White House says is a pattern in which China has pressured American companies to hand over valuable technology and trade secrets as a condition of doing business there.
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. Shortly after Thursday’s indictment, The People’s Daily, the Communist Party’s official newspaper, responded by accusing the United States National Security Agency of being the driving force behind cyberattacks on “important targets of the global internet.” It was a reminder of how cyberspace has become a primary battleground between the two nations.
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 unsealed on Thursday 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. That echoes a previous indictment against officers of the People’s Liberation Army in 2014, who were charged with stealing a variety of industrial secrets. Safely ensconced in China, none of them have ever been arrested or brought to trial.
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. In the new case, 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. The government accused them of targeting unnamed aviation, telecommunications, pharmaceutical and satellite companies, and said several government entities were attacked, including the Navy and NASA’s Goddard Space Flight Center and Jet Propulsion Laboratory.
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, an Energy Department lab in California.
Security firms have been tracking the Chinese hackers, Mr. Zhu, also called “Godkiller,” and Mr. Zhang, also called “Baobeilong,” for 13 years, under various names including APT10 and Stone Panda. At the National Security Agency, intelligence analysts tracked the two, along with a third Chinese hacker, whom they called “Legion Opal.” All targeted an exhaustive list of individuals and companies in aerospace and defense, naval, energy, natural resources, automotive, electronic and government sectors, as well as the occasional Chinese dissident.
But as recently as 2013, intelligence officials were not sure what to make of the hackers’ relationship to Chinese state officials. All three were based in Tianjin, and that year, a classified intelligence assessment was vague in describing any tie to Beijing. The “exact affiliation with Chinese government entities is not known, but their activities indicate a probable intelligence requirement feed,” one N.S.A. document obtained by The New York Times reported.
The hackers worked for private tech companies, but their targets — particularly in aerospace and defense — were of value to China’s civilian spy agency. Other targets in the energy, automotive, electronic and national resources industries closely aligned with China’s economic priorities.
“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.“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. APT10 has rapidly changed its approaches and technology after private cybersecurity firms discovered its attacks. It constantly shifted its internet protocol, or IP, addresses to avoid detection and bypass security filters, the indictment alleged, allowing it to remain on its 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.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.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 doing so, the administration said, Beijing violated its 2015 agreement not to steal American technological secrets. Not only did it use the stolen information to give its companies a competitive advantage, but it also 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 the Navy’s computer systems, downloading the private information of more than 100,000 Navy personnel, 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 trying to “dominate” other countries through economic espionage, and said the response “requires a strategic, whole-of-government approach to the threats that China poses.”
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 legal assault on China comes as Mr. Trump tries to end a trade war with Beijing that has begun inflicting economic harm on both sides of the Pacific. But while the administration has tried to divorce trade talks from law enforcement actions, Mr. Trump has eagerly conflated the two, potentially complicating an already complex negotiation.
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. 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, Mr. Xi, personally appealed to the president.
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. Steven Mnuchin, the Treasury secretary, said on Thursday that he was “cautiously optimistic” that the criminal charges against Chinese hackers would not derail the trade negotiations. He said that while cybersecurity had been discussed in the talks, this specific situation had not been raised.
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.”“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.
“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. 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.
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.