China Hits Back Over Hacking Charges

U.S. accused of relying on "deliberately fabricated facts."

Chinese people wave flags of the Communist Party of China as they take part in the celebrations to mark the 90th anniversary of the ruling party's founding, in southwest China's Chongqing municipality June 29, 2011.  Chinese President Hu Jintao warned on the 90th birthday of the ruling Communist Party that it still faced "growing pains" and that rampant corruption could lead to a loss in public confidence.  CHINA OUT   AFP PHOTO (Photo credit should read STR/AFP/Getty Images) (National Journal)

The Obama administration's decision to bring criminal charges against members of the Chinese military is already showing signs of straining the U.S. relationship with China.

Shortly after the Justice Department accused five Chinese officers of hacking U.S. companies, China announced that it is withdrawing from a joint cybersecurity working group. The U.S. and China launched the working group last year to try to reach agreements over the use of cyber espionage.

Qin Gang, a spokesman for the Chinese government, said China will announce more retaliations "as the situation evolves."

According to the indictments, the five men were members of a hacking group that stole trade secrets from major U.S. companies including Westinghouse, United States Steel, and Alcoa.

But the Chinese spokesman claimed the charges were "based on deliberately fabricated facts." He also pointed to the Edward Snowden leaks as evidence that the U.S. is hypocritical when it condemns others for spying.

"China is a victim of severe U.S. cybertheft, wiretapping, and surveillance activities," he claimed.

When Attorney General Eric Holder announced the indictments Monday, he emphasized that China's behavior is fundamentally different than spying by the National Security Agency. The U.S. may spy on other countries, but it does not steal secrets to give its own companies an economic edge, he argued.

Adam Segal, a senior fellow with the Council on Foreign Relations, said it's not likely that China will try to bring criminal charges against NSA officials or other members of the U.S. government. But he said he expects China to take other steps against the U.S. in the coming days.

Segal explained that China doesn't see an important distinction between spying to protect national security and spying to help domestic companies.

"There's not such a clear line between the public and private sector in China," he said. "Their conception of economic power and national power doesn't really see this distinction."