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China has denounced Washington's decision to identify and charge five Chinese army officers accused of engaging in the hacking of major American businesses.
The Foreign Ministry in Beijing even took the step of summoning U.S. Ambassador Max Baucus late Monday, the state-run Xinhua news agency reported, as tensions between the two countries threatened to escalate into a full-scale diplomatic incident.
Earlier in the day, U.S. Attorney General Eric Holder announced that the men, all members of the People's Liberation Army, 'maintained unauthorized access to victim computers to steal information from these entities that would be useful' to the victims' competitors in China.
Holder said some of the 'victims' included U.S. Steel Corp., Westinghouse, Alcoa, Allegheny Technologies, the United Steel Workers Union and SolarWorld.
READ: What were China's hacker spies after?
In an unusual step, the men were named in the indictment document as Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu and Gu Chunhui. These are the first charges against Chinese state officials for what the U.S. says is a widespread problem, U.S. officials told CNN before Holder's remarks.
But China angrily denounced news of the indictments and warned the issue could damage cooperation between the two super powers.
China a victim
Foreign Ministry spokesperson, Qin Gang, said the charges were based on 'intentionally-fabricated facts' that 'grossly violate the basic norms governing international relations,' and urged Washington to 'immediately correct its mistakes and withdraw the indictment.'
Qin also revealed China would be suspending its involvement in the joint China-U.S. Cyber Working Group, set up in April last year to work on measures to address cybersecurity - an issue that has driven a wedge between the two governments in the past.
]In a statement published by Xinhua, China's Foreign Ministry spokesman said the Chinese government, its military and 'associated personnel never engage in any theft of trade secrets.'
He claimed that China is itself a victim of 'severe U.S. cybertheft, wiretapping and surveillance activities.'
According to a Xinhua report published Monday, China's State Internet Information Office released what it claims is the latest data purporting to show U.S.-based cyberattacks on Chinese networks belonging to governments, institutions, enterprises, universities and major communication networks.
At a regular news briefing at the White House, press secretary Jay Carney was asked about Monday's developments.
'This is an issue that has been brought up by President Obama with (Chinese) President Xi (Jinping) in their meetings as recently as in March as a general problem that we have seen and reflects the president's overall concern about cybersecurity,' Carney said. 'We have consistently and candidly raised these concerns with the Chinese government, and today's announcement reflects our growing concern that this Chinese behavior has continued.'
He was adamant that the U.S. 'intelligence programs serve a specific national security mission, and that does not include providing a competitive advantage to U.S. companies or U.S. economic interests,' Carney said. 'In other words, we do not do what those Chinese nationals were indicted for earlier today. Period.'
A spokeswoman for the State Department told reporters that Washington wants to have more dialogue with Beijing about the issue.
'We remain deeply concerned about Chinese government-sponsored, cyber-enabled theft of trade secrets and other sensitive business information for commercial gain,' Jen Psaki said. 'And, again, this was specific to the actions of of just a few individuals. And we hope that the Chinese government can understand that.'
This was a law enforcement case, she added, not a diplomatic one.
'We continue to believe - and this is relevant to us, our role here at the State Department - that we can have a constructive and productive relationship with China,' she said. 'We're ready to work with China to prevent these types of activities from continuing.'
Joining Holder, David Hickton, U.S. Attorney for the Western District of Pennsylvania, said the alleged hacking has caused the victimized U.S. companies to lose capital investments in research and technology.
He added that the 'important message' is that cyberespionage 'impacts real people in real and painful ways,' he said.
'The lifeblood of any organization is the people who work, strive and sweat for it. When these cyberintrusions occur, production slows, plants close, workers get laid off and lose their homes,' Hickton said.
'Hacking, spying and cybertheft for commercial advantage can and will be prosecuted criminally even when the defendants are state actors,' he said.