- - Thursday, September 25, 2014

Chinese officials held closed-door talks in Washington last week with U.S. cybersecurity counterparts despite Beijing’s formal cutoff of talks on the subject after the federal indictments of Chinese military hackers.

“We exchanged views with Chinese counterparts on cyber issues in Washington last week,” a State Department official confirmed. “We do not read out the contents of our private diplomatic exchanges.”

The cybersecurity talks were held as the Senate Armed Services Committee revealed in a declassified report that Chinese military hackers conducted cyberattacks against at least 20 U.S. Transportation Command contractors as part of plans to disrupt U.S. military operations in a future conflict. “Cyber intrusions into operationally critical contractors pose a threat to defense operations,” the report concluded.

The committee report, once labeled “Secret/Noforn,” said foreign hackers conducted 50 attacks on Transcom contractor networks from June 2012 to May 2013, including 20 traced to China.

Chinese military hackers obtained emails, documents, user accounts, passwords and computer source codes from the contractors. The Chinese military also hacked a commercial ship used for military transport.

A third case involved a Chinese military “spear-phishing” email campaign against a Transcom contractor airline.

Some 90 percent of U.S. military transport, both air and sea, travels through Transcom contractors.

The Senate report quoted an earlier Defense Science Board warning of the impact of cyberattacks against logistics networks: “U.S. guns, missiles, and bombs may not fire, or may be directed against our own troops,” and “resupply, including food, water, ammunition, and fuel may not arrive when or where needed.”

The State Department official said the cybersecurity talks were held despite China’s suspension of formal meetings under a joint U.S.-China Cyber Working Group. “We regularly take opportunities to discuss our concerns and exchange views with Chinese officials about cyber issues in a variety of channels,” the official said.

“We remain committed to expanding our cooperation with the Chinese government on cyber matters where we have common ground and to candidly and constructively address differences,” the officials said.

The official did not disclose the participants in the talks, but they included officials of the State Department and National Security Council staff. No Pentagon cybersecurity officials took part, a defense official said.

The talks also took place amid preparations for President Obama’s scheduled meeting with Chinese President Xi Jinping in Beijing during the Asia-Pacific Economic Cooperation summit scheduled for Nov. 10 and 11.

White House National Security Adviser Susan E. Rice traveled to Beijing this month as part of preparations for the talks. Chinese leaders demanded that the U.S. military halt all surveillance flights off Chinese coasts.

Relations between Washington and Beijing have been strained over the recent aerial intercept of a U.S. Navy P-8 anti-submarine warfare aircraft by a Chinese Su-27 jet. The Pentagon described the intercept as dangerous and unprofessional.

The Chinese jet flew within 20 feet of the P-8 and conducted several aggressive maneuvers in front of and over the aircraft in an apparent effort to drive the jet out of the South China Sea region.

China denied its pilot acted unprofessionally. The Pentagon, however, said if dangerous aerial intercepts in international airspace continue, it will prompt a re-evaluation of military exchanges with China.

The cybersecurity talks included discussion of the federal grand jury indictment issued May 1 against five People’s Liberation Army hackers who were charged with cyberattacks against U.S. companies and a labor union.

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