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Press materials are displayed on a table of the Justice Department in Washington, Monday, May 19, 2014, before Attorney General Eric Holder was to speak at a news conference. Holder was announcing that a U.S. grand jury has charged five Chinese hackers with economic espionage and trade secret theft, the first-of-its-kind criminal charges against Chinese military officials in an international cyber-espionage case. (AP Photo/Charles Dharapak)

Setting aside for a moment the near comical irony of the United States crying foul about nations cyberspying on other nations, the Justice Department charges filed against members of the Chinese military for conducting economic cyber-espionage against American companies seriously escalates a long-bubbling dispute.

The Justice Department announced Monday that a western Pennsylvania federal grand jury had returned indictments against five members of a Chinese military unit headquartered in Shanghai. The indictment claims that the suspects conspired to hack into the computers of six U.S. companies to steal trade secrets in an effort to offer competitive aid to Chinese companies.

The companies hacked were Westinghouse Electric, Alcoa, Allegheny Technologies Inc., United States Steel, the United Steel Workers Union and Solar World, officials said. Alcoa is the nation's largest aluminum company and U.S. Steel is the nation's largest steel company.

All of the operations hacked have headquarters in western Pennsylvania except for Solar World, which is based in Camarillo.

It is certainly no secret that China has been most aggressive in waging cyber-espionage against the United States. It has been the source of substantial friction when President Barack Obama and Chinese President Xi Jinping have talked.


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While the United States and China agreed last year to begin holding regular, high-level talks on cybersecurity, administration officials say the Chinese are not receptive to discussions on economic espionage.

As one might expect, the U.S. draws a clear distinction between foreign intelligence gathering and spying to steal intellectual property, but the Chinese claim it is a distinction without a difference.

That all of those indicted by the grand jury were part of a military unit would argue that the Chinese sees little difference in military and economic objectives.

The Justice Department created a special branch in 2012 -- called the National Security Division -- to train hundreds of prosecutors to combat and prosecute cyber-espionage that poses a threat to national security.

Officials with the program argue that job losses in the United States can be directly traced to economic cyber-espionage, which poses a threat to national security. Some estimates have placed the cost of cyber-espionage as high as $120 billion annually.

Obviously, the revelations beginning last June from former National Security Agency contractor Edward Snowden have considerably weakened the United States' moral high ground on such issues. In fact, it allows the Chinese to claim the U.S. is more aggressive in this arena. One of the most damaging revelations was that the NSA infiltrated Chinese telecommunications giant Huawei Technologies to see whether it was spying for Beijing.

But, make no mistake, these federal indictments are going to create serious diplomatic waves between two countries that are already having a tough time seeing eye-to-eye.