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China Threatens Further Action Against U.S. Over Hacking Dispute

China said it will take further action against the U.S. for prosecuting five of its military officers for alleged hacking, saying it has evidence its companies have also been hacked.

Online attacks from a “specific country” have targeted Chinese companies, its military and important websites, Ministry of National Defense spokesman Geng Yansheng said. Geng didn’t specify the country in remarks posted on the ministry’s website today in response to a question about the indictment.

China will take further action depending on what happens with the U.S. prosecution of the five, who are accused of stealing commercial secrets, he said. The U.S. has still not given a clear explanation of its own cyber spying on foreign companies and governments revealed by former government contractor Edward Snowden, Geng said.

Geng’s remarks come after China’s government was said to be reviewing its reliance on servers from International Business Machines Corp. (IBM), in an early sign of specific retaliation. Relations between the two countries are tense over a number of issues, including China’s pressing of territorial claims against U.S. allies in the region.

“China has an old phrase, if you want to correct others you need to correct yourself first,” Geng said, according to the transcript on the ministry’s website. “The U.S.’s own behavior is not correct, and it has done a lot of bad things, so how is it qualified to make irresponsible remarks about others over the Internet issue?”

China has consistently opposed and cracked down on hacking, including any theft of commercial secrets, Geng said.

‘Ulterior Motives’

In an indictment unsealed on May 19, the U.S. Justice Department charged Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui with economic espionage linked to computer hacking of American nuclear power, metals and solar companies.

Asked about reports the U.S. wants increase its cyber defense force to 6,000 staff by 2016, Geng said the U.S. hypes the Internet threat from other countries as an excuse to expand its offensive cyber capabilities, according to the statement.

“Last year’s report by U.S. company Mandiant about China is like this, and this year the U.S. Justice Department’s indictment against Chinese soldiers is like this,” he said, referring to a report by cybersecurity provider Mandiant Corp. about a Chinese military unit. “We can see such U.S. behavior was planned for long and has ulterior motives.”

The U.S. National Security Agency collects phone records from Verizon Communications Inc. (VZ) and other carriers and operates a program known as Prism under which it compels Google Inc. (GOOG), Facebook Inc. and other Internet companies to hand over data about users suspected of being foreign terrorists, according to documents exposed since June by Snowden.

To contact Bloomberg News staff for this story: Henry Sanderson in Beijing at hsanderson@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Neil Western

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