The State Department is warning American firms to be on guard for a new type of malware that it says a Chinese state-sponsored hacking group has been trying to insert into the computer systems of critical infrastructure across the United States, including Guam.
The presence of the suspicious computer code was announced Wednesday by Microsoft in a warning it issued to private sector users of its software. The U.S. territory of Guam is the location of a critical Marine base that would respond to China if it attacked Taiwan.
The National Security Agency also issued an alert to electrical utilities, nuclear power stations, water systems, railways and other key sectors that could be vulnerable.
“The U.S. intelligence community assesses that China almost certainly is capable of launching cyberattacks that can disrupt critical infrastructure services within the United States,” State Department spokesman Matt Miller told reporters Thursday. “It’s vital for government network defenders in the public to stay vigilant.”
The news comes as U.S. and Chinese officials are holding their first Cabinet-level meetings in Washington during the Biden administration, with Commerce Secretary Gina Raimondo meeting with her counterpart, Chinese Commerce Minister Wang Wentao. U.S. officials said that the two had “candid and substantive discussions” Thursday and that Raimondo “raised concerns” about recent government actions against U.S. companies operating in China.
U.S. Trade Representative Katherine Tai was also scheduled to meet with Wang. They will both also attend a meeting of the Asia Pacific Economic Cooperation forum, commonly known as APEC, in Detroit on Friday and Saturday along with ministers from other countries in those regions.
Asked whether the cyberattack could affect the economic talks, Miller said, “We do intend to use our conversations with the Chinese government to press on areas where we have concerns.”
Before leaving a summit of leading industrial nations in Japan on Sunday, President Joe Biden expressed optimism that the U.S. and China would soon be able to improve bilateral relations. Tensions heightened after the U.S. shot down a Chinese spy balloon in early February off the South Carolina coast after it crossed the country from Montana to the Atlantic coast.
China has maintained it was a weather balloon that had blown off course, repeating that claim most recently in meetings national security adviser Jake Sullivan held with Chinese Foreign Minister Qin Gang two weeks ago in Vienna. China had earlier halted regular military communications with the Pentagon to protest then-House Speaker Nancy Pelosi’s trip to Taiwan last September.
A senior U.S. official told NBC News that the two meetings with the Chinese officials in Washington could bolster Biden’s push for a diplomatic thaw between the two countries. The official suggested that a trip to China by Secretary of State Antony Blinken that was canceled after the balloon was shot down could be rescheduled by August, as well as visits by Treasury Secretary Janet Yellen, Raimondo and climate envoy John Kerry.
But China’s Foreign Ministry reacted harshly to the hacking accusation Thursday, accusing the U.S. of working with its allies to launch a coordinated disinformation campaign.
“We noted this extremely unprofessional report—a patchwork with a broken chain of evidence,” ministry spokesperson Mao Ning said. “We also noted that the U.S. National Security Agency (NSA) and the cybersecurity agencies of the UK, Australia, Canada and New Zealand, almost simultaneously issued similar reports.”
Another negative signal came when China’s newly appointed ambassador to the U.S., Xie Feng, said on arrival Tuesday that “the relationship is faced with serious difficulties and challenges.”
On Thursday, Feng met with Victoria Nuland, undersecretary of state for political affairs, at the State Department. Nuland tweeted a photograph of herself shaking hands with the new Chinese envoy and tried to strike an optimistic note about easing tensions, writing, “Open dialogue is critical to managing our relationship.”