US authorities name Chinese firms involved in hacks

U.S. authorities have identified three Chinese companies that benefited from trade secrets stolen from U.S. firms by Chinese military hackers, the Financial Times reports.

Unidentified sources familiar with the indictments of five People’s Liberation Army (PLA) officers told FT that the beneficiaries of the hacked data are China’s largest aluminum company, Chinalco; the large steelmaker, Baosteel; and the nuclear power firm SNPTC.

{mosads} The U.S. Department of Justice accused the Chinese officers of computer hacking and economic espionage directed at six American targets in the energy and manufacturing industries in 2014.

Both Chinalco and Baosteel rejected the accusations of commercial espionage.

“Chinalco is a very responsible firm in these matters,” a spokesman for the company said.

“As a company running based on market rules, Baosteel has all along paid great attention to intellectual property work and protection of intellectual property in its daily operation,” Baosteel said.

The Obama administration has threatened to slap sanctions on Chinese firms that benefit from commercial hacking, but many observers expect that the administration will wait to see if a newly inked agreement with Chinese President Xi Jinping will bear fruit.

In the first significant dialogue on cybersecurity between the two countries since the indictments, President Obama and Xi agreed that neither country would conduct or support hacks on private companies. Those indictments had earlier prompted Beijing to pull out of a working group with the U.S.

The U.S. and China agreed to “step up crime cases, investigation assistance and information sharing,” Xi said. “Both governments will not engage in or support online theft of intellectual property.”

Obama made clear following the agreement that economic penalties were still on the table if Beijing did not stem the onslaught of cyberattacks on U.S. firms.

“This is progress, but I have to insist that our work is not yet done,” Obama said. “I believe we can expand our cooperation in this area even as the United States will continue to use all the tools at our disposal to protect American companies, citizens and interests.”

Lawmakers have expressed doubt that China will uphold its end of the bargain and growing frustration with what some see as a soft approach by the Obama administration.

“In light of its many long-running cyber-theft enterprises, there is little reason to believe China will live up to its commitments,” said House Intelligence Committee Chairman Devin Nunes (R-Calif.). “These cyberattacks will almost certainly continue until the Obama administration puts forward a credible deterrence policy.”

The PLA indictment names the victims as Westinghouse Electric, U.S. subsidiaries of SolarWorld, U.S. Steel, Allegheny Technologies and Alcoa, a steel and manufacturing giant.