US Agency Broke Into China’s Telecom Networks, State Media Says

Sarah Zheng, Bloomberg News

Coaxial cables connect to a computer server unit inside a communications room at an office in London, U.K., on Monday, May 15, 2017. Governments and companies around the world began to gain the upper hand against the first wave of an unrivaled global cyberattack, even as the assault was poised to continue claiming victims this week. Photographer: Chris Ratcliffe/Bloomberg , Bloomberg

(Bloomberg) -- US intelligence agents gained control of parts of China’s telecommunications network after hacking into a government-funded university, a prominent state-backed newspaper reported, issuing Beijing’s latest accusation of US cyber-intrusion.

The National Security Agency’s cyber-warfare unit “penetrated and controlled” unnamed telecom operators, the Global Times reported on Thursday, citing information provided by officials. It gained remote access to their core networks through an email phishing attack on a leading university, which then opened a route into the carriers. The attackers made off with network equipment and administrative passwords, file-transfer protocols and other sensitive data, the newspaper said.

Beijing and Washington have increasingly sparred over claims of cyber-snooping, with China becoming more direct in naming American agencies as perpetrators. The US has in the past blamed China for widespread industrial espionage to “ransack” American companies, in addition to national security-related operations.

China’s network is largely run by three carriers -- China Mobile Ltd., China Unicom and China Telecom Corp. But the extent of the alleged hack remains unclear, and the Global Times didn’t provide many details on how the attackers made the leap from within Northwestern Polytechnical University, an institution known for its aeronautics and space research programs.

Shares in the three carriers as well as telecom gear makers ZTE Corp., FiberHome Telecommunication Technologies Co. and Datang Telecom Technology Co. fell in the morning, tracking regional market weakness. Representatives for the NSA weren’t available for comment outside normal US hours.

Read more: Chinese Firm That Accused NSA of Hacking Has Global Ambitions

Federal Bureau of Investigation Director Christopher Wray warned in July that China operated a “lavishly resourced hacking program that’s bigger than that of every other major country combined.”

But Beijing has taken a more aggressive approach in recent months, pushing back against US accusations. The Global Times has published multiple articles on reports from Chinese cyber companies, including a discovery by Qi An Xin Technology Group Inc.’s Pangu Lab of US-sponsored malware in domestic IT systems it claimed was linked to the NSA.

Thursday’s report from the Global Times, which is affiliated to the Communist Party’s mouthpiece People’s Daily, sprang from an alleged “overseas attack” that Northwestern Polytechnical reported in June after discovering trojan malware.

The country’s National Computer Virus Emergency Response Center and 360 Security Technology Inc. said this month their analysis of the university’s information systems found the NSA had collected more than 140 gigabytes of data of “great value,” spanning more than 10,000 cyberattacks against Chinese targets in recent years.

The NSA and US State Department had declined to comment on the earlier allegations.

Read more: China Says US Hacked Aeronautics, Space Research University