China announced it has arrested three people in connection with operating a hacker training school that distributed malware and hacking tools to its members in online forums.

According to Xinhua, China ’s state-run newspaper, three people were arrested in connection with making the tools available online through a business known as Black Hawk Safety Net. Established in 2005, Black Hawk Safety Net is reportedly headquartered in Xuchang of the central Henan Province and has more than 180,000 members. Police reportedly uncovered the operation as part of an investigation into a cyber-attack in Macheng City in 2007.

The three suspects arrested in the case are charged with offering online hacker tools, a crime newly listed in the country's criminal law last year, the paper reported.

The announcement about the arrests came as China and the United States grapple over cyber-security issues. China has been at the center of accusations involving a spate of cyber-attacks last year that affected more than 30 companies, including Google, which claimed an attack on its infrastructure originated in China. Google threatened to pull out of the country in response to the situation, as well as to concerns about censorship and what it deemed were attempts to spy on the e-mail of Chinese human rights activists.

 The Chinese government has sought to discredit those claims, and has publicly denied any involvement in the attacks. Meanwhile, the U.S. State Department has said it will press the Chinese government for answers, and the Senate passed a resolution Feb. 3 calling on the Chinese government to conduct a thorough and transparent review of the cyber-attacks.

 China says hackers caused 7.6 billion yuan ($1.02 billion) in losses in the country in 2009.