NPR Story
4:09 am
Tue May 20, 2014

U.S. Files Charges Against Chinese Officials Over Cyberspying

Originally published on Tue May 20, 2014 10:43 am

Transcript

RENEE MONTAGNE, HOST:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

It was an extraordinary moment yesterday when the U.S. indicted members of China's military, charging them with stealing commercial secrets from American companies. The Department of Justice even displayed classic wanted posters with their photos, posters now displayed prominently on the FBI website.

To find out how this is playing out in China, we turned to NPR's Shanghai correspondent, Frank Langfitt. Good morning.

FRANK LANGFITT, BYLINE: Good morning, Renee.

MONTAGNE: Now, five members of the People's Liberation Army charged with cyber spying on American companies. What is the reaction there in China?

LANGFITT: Well, varied, but one place I think that everybody agrees on is most people here are just surprised. Both, I talked to Chinese foreign-policy analysts and people in the U.S. business community. They didn't expect the U.S. would be so bold and direct and actually try to embarrass the Chinese publicly. Now, the Foreign Ministry has made sort of an angry, pro forma denial of all this - saying they haven't done anything wrong.

They've summoned the U.S. ambassador, Max Baucus, to complain about it. And they've accused the U.S. of hacking China, which they've done in the past. And they say that just in the last couple of months alone, attacks from the U.S. have seized control of more than a million Chinese computers. And more importantly, though, China is arguing that these charges are hypocritical following some of the revelations about spying by the National Security Agency.

MONTAGNE: And how do NSA leaks connect to U.S. spying charges against China?

LANGFITT: Well, you know, the Chinese spying story kind of took off last year and it shifted a lot. Allegations surfaced, saying that the People's Liberation Army had a unit here in Shanghai. It's in a working-class neighborhood, fortified compound, and there are satellite dishes on the top. And it was said to be a place where a People's Liberation Army unit was spying on U.S. companies.

And at that time initially the U.S. seemed to kind of have the high moral ground on this issue. But since the leaks by Edwards Snowden about the NSA, you know, U.S. government has lost a lot of credibility on this issue in particular. Back in March there were leaked documents that showed the NSA had actually hacked Huawei. It's a Chinese telecom giant.

Now, the U.S. was said to be looking for evidence of connections between the company and China's military. But Chinese look at this and they say, you know, you're doing what you're accusing us of doing. And so today, on social media here in China, there was lots of criticism of the U.S. One user called the United States, quote, the most shameless Internet thief.

MONTAGNE: But the U.S., of course, is saying that these alleged hackers were stealing from American companies and giving commercial information to Chinese competitors. There are a lot of U.S. businesses in Shanghai, what do they think of these charges?

LANGFITT: Well, major U.S. multi-nationals here, they feel cyber theft is a real problem. They're frustrated. They're concerned. But they're not so sure that publicly shaming is a really effective way to go about it. What happened yesterday they saw largely as symbolic and political. With these military guys - unless they were to travel abroad and certainly they're going to be really careful about traveling now - they're never going to be arrested.

And one guy in the business community here said, you know, stability is the most important thing to business and this kind of - what happened yesterday just sort of grade retention without doing a lot to solve the problem. He also thought that these guys with the pics on the wanted posters could become folk heroes here.

MONTAGNE: And Frank, if people there in China don't seem to think that charging these guys is going to be effective, what do they think the U.S. is trying to achieve?

LANGFITT: People think they want to get China's attention and get China to back off some of this alleged cyber theft. One cyber analyst I was talking to pointed out that the U.S. in the indictment didn't name the Chinese companies that have benefited from the hacking. And the idea was they might be holding those names back, and if there's no progress they'd release them.

Naming companies could be damaging and a lot of Chinese companies are trying to enter new markets, build global brands, and that could be very embarrassing if they're connected to cyber espionage.

MONTAGNE: So Frank, what about the overall relationship between the U.S. and China?

LANGFITT: Well, I think in the short-term certainly this is going to have a negative effect. I was talking to a Chinese analyst who said we might look for retaliation against some U.S. firms here, maybe a corruption probe as payback. It also just comes at a tense time between the two countries. You know, earlier this month China put an oil rig in Vietnam's exclusive economic zone. And that was seen as sort of a long-term power play in the South China Sea which, of course, the U.S. Navy has dominated for decades.

Big picture though here is the relationship right now between the two countries is pretty tense, and this is not going to help at all.

MONTAGNE: NPR's Shanghai correspondent Frank Langfitt, thanks very much.

LANGFITT: Happy to do it, Renee. Transcript provided by NPR, Copyright NPR.

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