Angry China retaliates against USA over cyberspying

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by Calum MacLeod, USA TODAY

WHAS11.com

Posted on May 20, 2014 at 12:33 PM

Updated Tuesday, May 20 at 1:01 PM

BEIJING (USA TODAY) – Chinese officials summoned the U.S. ambassador to its foreign ministry and suspended a joint working group on cyber-security with the U.S. on Tuesday, a day after the U.S. Department of Justice indicted five Chinese military officers on charges of cyberspying on U.S. companies.

The charges are false and should be withdrawn, foreign ministry spokesman Hong Lei told a news briefing in Beijing, while China's Ministry of Defense warned that the U.S. was damaging military-to-military relations. Qin Gang, another foreign ministry spokesman, said Monday that China "will react further to the U.S. 'indictment' as the situation evolves."

Additional steps by authorities may involve punishing U.S. companies in China, including the six firms listed in the indictment as suffering huge losses from China's cyber attacks, two seasoned foreign observers of the U.S.-China rivalry said Tuesday.

"There may be specific actions against U.S. companies, we may see U.S. faces in the equivalent of 'Wanted' posters," that the FBI released Monday with pictures of the alleged Chinese hackers, said Duncan Clark, an expert on China's Internet and chairman of advisory firm BDA China. "The companies named that did cooperate with the FBI, will they be singled out?"

The suspension of cybersecurity cooperation is no big deal, "as those talks were not headed anywhere," said James McGregor, Greater China chairman of U.S. advisory firm APCO China, and an expert on foreign business in China. But Beijing could take retaliatory measures, he warned.

"China is feeling very muscular and put upon at the same time, so American companies need to be concerned," said McGregor.

China announced Tuesday that government offices cannot install Microsoft's Windows 8 operating system in new government computers, following the end of support for the 13-year-old Windows XP system, reported the Xinhua news agency. While the decision likely involves cost, the news sparked online speculation that China aims at beefing up cybersecurity against U.S. agents.

China's state-run media covered the indictment Tuesday, but mostly with a brief summary, highlighting the foreign ministry statements, and avoiding mention of the five soldiers' names, their pictures, their Shanghai-based cyber espionage Unit 61398, and even the names of the American companies involved – Westinghouse Electric, U.S. Steel, SolarWorld, United Steel Workers Union, Allegheny Technologies Inc. and Alcoa.

Most comments online criticized America, with frequent use of the phrase "a thief crying 'stop thief,' " as Edward Snowden's revelations about U.S. cyberspying, including against multiple Chinese targets, have been well publicized in China. "There is no right or wrong, there are only the strong and the weak," wrote Xie Zhijun, a construction company manager in eastern Dalian, on the micro-blogging service Sina Weibo, equivalent to Twitter.

The U.S. indictment "is a sign of frustration by the United States, whose purpose is to highlight the issue," said McGregor. "The U.S. has pushed for many years and says China is an outlier, with state actors hacking to provide information to Chinese companies," unlike conventional state spying for political and military intelligence, he said.

Just don't expect change soon, said McGregor. "The Chinese system is one continuous organization, one continuum. The military, the state-owned enterprises, the regulatory bodies, the [Communist Party] politburo, are all focused on making China somebody in the world, and making China wealthy and strong with any tools at their disposal," he said.

"The centralizing ability of the party, cutting across state and military to coordinate things, is the envy of other security services," said Clark. China is in a "leapfrogging phase, and wants to catch up" on technology and innovation with more developed economies, he said. China's history of "humiliation at the hands of foreign powers is part of the psychological make-up of China's citizens, that's what they've always learned," said Clark. "If the ultimate goal is national strength, then all means are good."

 

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