Yellen Expresses Concerns Over China's Cyber Activities

By Andrea Shalal

WASHINGTON (Reuters) - U.S. Treasury Secretary Janet Yellen met virtually on Monday with Chinese Vice Premier He Lifeng and raised concerns about "malicious cyber activity" carried out by Chinese state-sponsored actors, the Treasury Department said in a statement.

Treasury last month reported that an unspecified number of its computers had been compromised by Chinese hackers in what it called a "major incident" following a breach at contractor BeyondTrust, which provides cybersecurity services.

Congressional aides said no date had been set yet for a requested briefing on the breach, the latest in a serious of cyber attacks against government agencies that the U.S. government has blamed on Chinese state-sponsored actors.

Those attacks have occurred even as the Biden administration has worked to improve communications with China and better manage the competitive relationship, including through establishment of economic and financial working groups.

"Secretary Yellen ... expressed serious concern about malicious cyber activity by PRC state-sponsored actors and its impact on the bilateral relationship," Treasury said, describing the call as candid, in-depth and constructive.

The two officials also discussed economic developments in both countries, and reviewed progress made during meetings of the working groups, Treasury said.

Yellen reiterated concerns she has raised repeatedly about China's non-market practices and policies and industrial overcapacity, noting they would continue to adversely affect the U.S.-China bilateral economic relationship unless addressed.

Yellen delivered a similar message when she met He in Beijing in April, warning him to rein in excess industrial capacity before President Joe Biden announced steep tariff increases on Chinese-made electric vehicles, batteries, solar products and semiconductors.

She also underscored the "significant consequences" that Chinese companies would face if they provided material support for Russia’s war against Ukraine, Treasury added.

President-elect Donald Trump, who takes office on Jan. 20, has threatened to impose steep tariffs on Chinese imports in excess of 60%, much higher than those imposed during his first term in office.

(Reporting by Andrea Shalal; Editing by Christian Schmollinger and Michael Perry)