A US grand jury has indicted five Chinese military officers on charges of hacking American companies and stealing trade secrets, the toughest action taken by Washington so far to address cyber spying by China.
China denied the charges, saying they were "made up" and would damage trust between the two nations. The Chinese foreign ministry said it would suspend the activities of the Sino-US Internet working group.
The indictments mark the first time the United States has filed charges against specific officials of foreign governments, accusing them of corporate cyber spying. "When a foreign nation uses military or intelligence resources and tools against an American executive or corporation to obtain trade secrets or sensitive business information for the benefit of its state-owned companies, we must say, 'enough is enough,'" US Attorney General Eric Holder said at a press conference.
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In a statement, China's Foreign Ministry said the US charges were based on "fabricated facts" and jeopardise China-US "co-operation and mutual trust".
It added: "China is steadfast in upholding cyber-security.
"The Chinese government, the Chinese military and their relevant personnel have never engaged or participated in cyber theft of trade secrets. The US accusation against Chinese personnel is purely ungrounded and absurd."
The suspects targeted companies in the Pittsburg area in the nuclear power, metal and solar product industries. The companies included Alcoa Inc, Allegheny Technologies Inc, United States Steel Corp, Westinghouse Electric Co, US subsidiaries of SolarWorld AG and a steel workers' union, the Department of Justice officials said.
The move "indicates that DOJ has 'smoking keyboards' and (is) willing to bring the evidence to a court of law and be more transparent," said Frank Cilluffo, head of the Homeland Security Policy Institute at the George Washington University.
American businesses have long urged the government to take action about cyber espionage from abroad, particularly by China.
Secret US State Department cables obtained by WikiLeaks traced major systems breaches to China, Reuters reported in 2011. One 2009 cable pinpointed attacks to a specific unit of China's People's Liberation Army.
Sceptics noted that US authorities wouldn't be able to arrest those indicted as Beijing would not hand them over. Still, the move would prevent the individuals from travelling to the United States or other countries that have an extradition agreement with the United States.
"It won't slow China down," said Eric Johnson, dean of the business school at Vanderbilt University and an expert on cyber security issues.
Experts said the indictments would have some impact on those accused of hacking US companies.
Stewart Baker, a former NSA attorney, said the hackers named in the indictments might have trouble getting jobs in China's private sector when they move on from employment with the People's Liberation Army.
"In the long run, it could even hurt your employability in China, because US government is going to look askance at Chinese firms that hire former cyber spies," said Baker, a partner with Steptoe & Johnson LLP.