China warns US of retaliation after accusations of cyberspying

China warns US of retaliation after accusations of cyberspying
US Attorney General Eric Holder, US Attorney for Western District of Pennsylvania David Hickton, and Assistant Attorney General for National Security John Carlin take questions from members of the media on May 19, 2014.

BEIJING - China has warned the United States that it would retaliate if Washington presses on with charges against five Chinese military officers accused of hacking into American companies to steal trade secrets, state media said on Tuesday.

The warning from an unnamed State Internet Information Office spokesman came hours after the US charged the five Chinese, accusing them of hacking into American nuclear, metal and solar companies to steal trade secrets.

It was the first criminal hacking charge that the US has filed against specific foreign officials, and follows a steady increase in public criticism and private confrontation, including at a summit last year between US President Barack Obama and Chinese President Xi Jinping.

The indictment is likely to further roil relations between China and the US. Besides cyber hacking, Washington and Beijing have grappled over a range of issues, including human rights, trade disputes and China's growing military assertiveness over seas contested with its neighbours.

"If the United States continues to insist on going its own way, China will take measures to resolutely fight back," the spokesman told state news agency Xinhua and the People's Daily, the official newspaper of the ruling Chinese Communist Party.

He did not elaborate on the measures that China will take. It is unclear if China could use its financial clout to retaliate against the US. China is the US's biggest foreign creditor. As of February, China held US$1.27 trillion (S$1.59 trillion) in US Treasury bonds, according to Treasury Department data.

China's Foreign Ministry immediately denied the charges on Monday, saying in a strongly worded statement the US indictment was "made up" and would damage trust between the two nations.

The ministry said it would suspend the activities of a Sino-US working group on cyber issues, which American officials believe refers to a joint effort established in April 2013 involving State Department expert Chris Painter and China Foreign Ministry official Dai Bing.

The spokesman from the State Internet Information Office was quoted by Xinhua as saying that the US "attacks, infiltrates and taps Chinese networks belonging to governments, institutions, enterprises, universities and major communication backbone networks".

"Those activities target Chinese leaders, ordinary citizens and anyone with a mobile phone," Xinhua quoted the spokesman as saying. "China has repeatedly asked the US to stop, but it never makes any statement on its wiretaps, nor does it desist, not to mention apologise to the Chinese people."

Xinhua cited data from China's top Internet security agency, the National Computer network Emergency Response technical Team Coordination Centre (CNCERT), which said a total of 2,077 Trojan horse networks or botnet servers in the US directly controlled 1.18 million host computers in China during the period from March 19 to May 18.

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