Navy says China stole large amount of data

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In the case of the US Navy contractor, US officials told the Washington Post that the firm had been working for the Naval Undersea Warfare Center, a military organisation based in Newport, Rhode Island.

The hackers stole "massive amounts" of secret data from the Navy contractor - including plans to develop a supersonic anti-ship missile for US subs, American intelligence officials told the Post.

Following the Post's report, Defense Secretary James Mattis directed the Pentagon's Inspector General to investigate the incident. Bill Speaks was quoted as telling the Post.

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Much of the stolen material was linked to a secret project called Sea Dragon and included signals and sensor data, and submarine radio room information relating to cryptographic systems, according to the newspaper.

The data itself was stored on an unclassified network, but the officials who talked to the Post said that when all of the data that was stolen was put together the result would be considered classified.

"It would be inappropriate to discuss further details at this time", he said. It did not provide any specifics on the project, saying it was asked by the Navy to withhold the details from the report, so as not to damage U.S. security further.

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Security professionals have long observed Chinese spies conducting cyberattacks against USA defense contractors in order to spy on military capabilities.

Among the stolen data were plans for a supersonic anti-ship missle that was planned to be on USA submarines by 2020. Investigators told the paper the hack was carried out by the Chinese Ministry of State Security, a civilian spy agency.

The Pentagon has spent more than $300 million since 2015 on the Sea Dragon project, which involves adapting current Navy technology for new uses.

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The cyber attacks were part of China's effort to become the dominant sea power in the Asian Pacific, and come as Presideent Trump has touted his relationship with Chinese President Xi Jinping, whom the president is relying on to help negotiate an end to North Korea's nuclear weapons program. It conducts research and development for submarines and underwater weapons systems.