Will the Chinese hack derail US hopes of a thaw with Beijing?

The State Department is warning U.S. businesses to be on guard against a new type of malware that a Chinese state-sponsored hacking group has attempted to insert into critical infrastructure computer systems across the United States. United States, including Guam.

The presence of the suspicious computer code was announced by Microsoft on Wednesday in a warning to private users of their software. Guam is the location of a critical US Navy base that would respond to China if it attacked Taiwan.

The National Security Agency has also issued an alert to electric utilities, nuclear power plants, water supply systems, railroads and other key sectors that may be vulnerable.

“The U.S. intelligence community believes that China is almost certainly capable of launching cyberattacks that could disrupt critical infrastructure services in the United States,” State Department spokesman Matt Miller told reporters on Thursday. . “It is vital that advocates of government networks in the public remain vigilant.”

The news comes as U.S. and Chinese officials hold their first cabinet-level meetings in Washington under the Biden administration, with Commerce Secretary Gina Raimondo meeting her counterpart, Chinese Commerce Minister Wang Wentao. US officials said the two officials had “frank and substantive discussions” on Thursday and that Raimondo “raised concerns” about the government’s recent actions against US companies operating in China.

US Trade Representative Katherine Tai was also scheduled to meet with Mr. Wang. They will also attend an AIPAC meeting in Detroit on Friday and Saturday with ministers from other Asia-Pacific countries.

When asked if the cyberattack could affect the economic talks, State Department spokesman Miller said, “We intend to use our conversations with the Chinese government to put pressure on areas that concern us”.

Before leaving the G-7 summit in Japan on Sunday, President Joe Biden expressed optimism that the United States and China would soon be able to improve relations between the countries. Tensions escalated after the United States shot down a Chinese spy balloon in early February off the coast of South Carolina after crossing the United States from Montana to the Atlantic.

China has claimed it was a weather balloon that veered off course, repeating that claim more recently in meetings between National Security Adviser Jake Sullivan and Chinese Foreign Minister Qin Gang there. two weeks in Vienna, Austria. China previously cut off regular military-to-military communications with the Pentagon to protest then-President Nancy Pelosi’s trip to Taiwan last September.

A senior Biden administration official told NBC News that the two meetings with Chinese officials in Washington could bolster President Biden’s efforts for a diplomatic thaw between the two countries. The official suggested that a trip to China by Secretary of State Blinken that was canceled after the balloon was shot down could be postponed to August, as well as visits by Treasury Secretary Yellen, Commerce Secretary Raimondo and the climate envoy John Kerry.

But China’s Foreign Ministry reacted harshly to the hacking accusation on Thursday, accusing the United States 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,” Chinese Foreign Ministry spokesman Mao Ning said. “We also noted that the US National Security Agency (NSA) and cybersecurity agencies in the UK, Australia, Canada and New Zealand issued similar reports almost simultaneously.”

Another negative signal came when China’s new ambassador to the United States, Xie Feng, arrived in the United States on Tuesday and said, “the relationship is facing serious difficulties and challenges.”

On Thursday, Ambassador Feng met with Under Secretary for Political Affairs Victoria Nuland at the State Department. Nuland tweeted a photo of herself shaking hands with the new Chinese envoy and tried to sound an optimistic note about easing tensions, writing, “Open dialogue is key to managing our relationship.”