The hackers stole "massive amounts" of secret data from the Navy contractor - including plans to develop a supersonic anti-ship missile for USA subs, American intelligence officials told the Post.
Over 614GB of data was stolen from the computers of a contractor who worked for the Naval Undersea Warfare Center, a submarine and underwater weaponry research and development organization working under the U.S. Navy.
The data pilfered from the contractor's computer included plans on a USA project to build a supersonic anti-ship missile that can be mounted on American submarines by 2020, according to the Post, which cited an anonymous US officials. The aforementioned supersonic anti-ship missile was set to be developed by 2020 for use on USA submarines.
Chinese President Xi Jinping meets Britain's Prince Andrew, not pictured, at the Great Hall of the People in Beijing, China, May 29, 2018.
However, he also said that it would be "inappropriate" to add any more details.
The Navy is investigating the breach along with the Federal Bureau of Investigation, according to the Post.
The missile project, titled "Sea Dragon", along with submarine cryptographic systems, was part of the 614 gigabytes of sensitive information stolen by China.
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The contractor, which was not named in the report, works for the Naval Undersea Warfare Center, based in Newport, Rhode Island.
At the Navy's request, the Post withheld information about the compromised new missile system, but said it was for a supersonic anti-ship missile that could be launched from submarines.
According to the Post, the Sea Dragon project was created by the Pentagon in 2012 to adapt existing USA military technologies to new applications.
"The breach is part of China's long-running effort to blunt the USA advantage in military technology and become the preeminent power in East Asia".
It also comes as President Donald Trump continues to court Beijing in his efforts to denuclearize North Korea.
The little information the Pentagon has released about Sea Dragon says the program has the capacity to introduce "disruptive offensive capability" by 'integrating an existing weapon system with an existing Navy platform'. The incident reportedly caught the attention of US Defense Secretary Jim Mattis, who sounded the alarm over the military contractors' security against cyber-attacks, tasking the Pentagon's inspector general's office to look into the issue.