Chinese cyber-spying seen growing against U.S.

WASHINGTON (Reuters) - China's government appears increasingly to be piercing U.S. government and defense industry computer networks to gather useful data for its military, a congressional advisory panel said on Thursday.

"A large body of both circumstantial and forensic evidence strongly indicates Chinese state involvement in such activities," the U.S.-China Economic and Security Review Commission said in its 2009 report to Congress.

The 12-member, bipartisan commission was set up in 2000 to analyze the implications of growing trade with China.

Beijing has begun to broaden its national security concerns beyond a potential clash across the Taiwan Strait and issues around its periphery, the 367-page report said.

China is the most aggressive country conducting espionage against the United States, focused on obtaining data and know-how to help military modernization and economic development, it added.

The amount of "malicious" computer activities against the United States increased in 2008 and is rising sharply this year, it said, adding, "Much of this activity appears to originate in China."

The Chinese Embassy did not immediately respond to requests for comment.

The commission said the Chinese government had placed many of its capabilities for computer network operations within elements of the People's Liberation Army.

"China's peacetime computer exploitation efforts are primarily focused on intelligence collection against U.S. targets and Chinese dissident groups abroad," it said.

The report cited conclusions of Northrop Grumman Corp, one of the Pentagon's top contractors, that implicated the Chinese government in extensive cyber activities against the United States.

Omitted was any thorough description of the techniques used for forensic analysis of such suspected cyber espionage.

A Northrop Grumman study was prepared for the commission and released in October. It said Beijing appeared to be conducting "a long-term, sophisticated, computer network exploitation campaign" against the government and U.S. defense industries.

(Reporting by Jim Wolf; Editing by Peter Cooney)