China may have the capability to remotely shutdown the computer systems of US power utilities, aviation networks and financial companies, the head of the NSA has told politicians.
"Probably one or two" other countries were believed to have the same capabilities, NSA director Admiral Mike Rogers told the House of Representatives Intelligence Committee, adding that hackers have been able to penetrate such systems and perform "reconnaissance" missions to determine how the networks are put together.
"What concerns us is that access, that capability, can be used by nation-states, groups or individuals to take down that capability," he said.
Chinese Foreign Ministry spokesman Hong Lei said the Chinese government "forbids" hacking and that it is often a victim of such attacks that originate from the USA at a regular press briefing today, adding: "The Chinese government resolutely cracks down on these activities. This reality is irrefutable.”
Earlier this week the US indicted five Chinese military officers and accused them of hacking into American nuclear, metal and solar companies to steal trade secrets, ratcheting up tensions between the two world powers over cyber espionage.
The indictment was the first criminal hacking charge that the USA has filed against specific foreign officials, and follows a steady increase in public criticism and private confrontation, including at a summit last year between US President Barack Obama and Chinese President Xi Jinping.
China immediately denied the charges, saying in a strongly worded Foreign Ministry statement the US grand jury indictment was "made up" and would damage trust between the two nations.
Federal prosecutors said the suspects targeted companies including Alcoa, Allegheny Technologies, United States Steel, Toshiba unit Westinghouse Electric, the US subsidiaries of SolarWorld, and a steel workers' union.
Officials declined to estimate the size of the losses to the companies, but said they were "significant." Some of the victims had filed unfair trade claims against their Chinese rivals, helping Washington draw a link between the alleged hacking activity and its impact on international business.
"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 news conference on Wednesday.
According to the indictment, Chinese state-owned companies "hired" Unit 61398 of the People's Liberation Army "to provide information technology services" including assembling a database of corporate intelligence. The Chinese companies were not named.
The Shanghai-based Unit 61398 was identified last year by cyber-security firm Mandiant as the source of a large number of espionage operations. All five defendants worked with 61398, according to the indictment.
In the indictment prosecutors said the officers hacked into computers starting in 2006, often by infecting machines with tainted "spear phishing" emails to employees that purport to be from colleagues.
The Chinese Foreign Ministry statement said it would suspend the activities of a Sino-US working group on cyber issues, which American officials believe refers to a joint effort established in April 2013 involving State Department expert Chris Painter and China Foreign Ministry official Dai Bing.