The United States, in an indictment unsealed in Spokane, Wash., on Tuesday, accused the Chinese government of sponsoring criminal hackers who are targeting biotech firms around the world working on covid-19 vaccines and treatments.
The Justice Department has charged two former engineering students with hacking companies engaged in high-tech manufacturing, pharmaceuticals and gaming software development, and with targeting dissidents, clergy and human rights activists in the United States, China and Hong Kong.
The defendants hacked for their own profit but also for the Chinese Ministry of State Security (MSS), a civilian spy agency responsible for counterintelligence, foreign intelligence and domestic political security. They were aided in that effort by an MSS officer, authorities charge.
The 11-count indictment charges Li Xiaoyu and Dong Jiazhi with a wide-ranging conspiracy to hack computers and steal terabytes of trade secrets and other data beginning more than a decade ago and continuing to the present. The indictment charges the two men recently “researched vulnerabilities in the networks of biotech and other firms publicly known for work on covid-19 vaccines, treatments, and testing technology.”
The victims are not named, but include firms in California, Maryland, Washington state, Texas, Virginia and Massachusetts.
This year the hackers compromised a British artificial intelligence firm, a Spanish defense contractor and an Australian solar energy engineering company, the indictment stated.
“China has now taken its place, alongside Russia, Iran and North Korea, in that shameful club of nations that provide a safe haven for cyber criminals in exchange for those criminals being ‘on call’ to work for the benefit of the state, here to feed the Chinese Communist party’s insatiable hunger for American and other non-Chinese companies’ hard-earned intellectual property, including covid-19 research,” said Assistant Attorney General for National Security John Demers.
Demers called the hackers “a prolific threat to U.S. and foreign networks.”
The indictment is the latest salvo by the Trump administration, which has taken an increasingly aggressive stance against Chinese economic espionage and Beijing’s push to replace the United States as the global leader in the high tech economy.
News of the indictment comes as Secretary of State Mike Pompeo is in London meeting with Prime Minister Boris Johnson to discuss the two allies’ rising tensions with China. Just last week Britain delivered a significant win to Washington by announcing it was barring the Chinese technology giant Huawei from its nascent 5G wireless networks.
The indictment is part of the Justice Department’s China initiative, launched in 2018, prioritizing countering Chinese national security threats in line with the administration’s national security strategy.
About 80% of all federal economic espionage prosecutions allege conduct that would benefit the Chinese state, and there is at least some nexus to China in around 60% of all federal trade secret theft cases.
Analysts said the indictment underlines that the issue is not cyber technology, which is a means to an end, but the government or actor sanctioning the hacking campaign.
“We don’t have a cyber problem – we have a China, Russia, Iran and North Korea problem,” said Dmitri Alperovitch, chairman of Silverado Policy Accelerator, a public policy think tank, and cofounder of the cybersecurity firm CrowdStrike. “That’s because even when we are not dealing with nation-state activity, we are dealing with these four states that are protecting or even paying cyber criminals operating within their borders.”