China's cyber abilities worry U.S.: spy chief

Director of National Intelligence James Clapper testifies at a Senate Intelligence Committee hearing on Capitol Hill in Washington February 16, 2011.

WASHINGTON (Reuters) - China's growing capabilities in cyber-warfare and intelligence gathering are a "formidable concern" to the United States, the top intelligence official told a Senate panel on Thursday.

"The Chinese have made a substantial investment in this area, they have a very large organization devoted to it and they're pretty aggressive," Director of National Intelligence James Clapper told the Senate Armed Services Committee.

"This is just another way in which they glean information about us and collect on us for technology purposes, so it's a very formidable concern," he said.

Clapper, addressing questions at an annual hearing on worldwide security threats, did not elaborate on Chinese cyber activities.

But in his written testimony, the intelligence chief said 2010 saw a "dramatic increase in malicious cyber-activity targeting U.S. computers and networks." The passage did not specifically mention China.

Clapper also cited an April 8, 2010, incident in which state-owned China Telecom advertised erroneous network routes that instructed "massive volumes" of U.S. and other foreign Internet traffic to go through Chinese servers for 17 minutes.

"This incident affected traffic to and from U.S. government and military sites, including sites for the Senate, the Army, the Navy, the Marine corps, the air force, and the office of the Secretary of Defense, as well as a number of Fortune 500 firms," he said.

When that incident was revealed in late 2010, China Telecom denied that it hijacked U.S. Internet traffic. China's standard response to cyber-attack allegations has been to deny any connection to them and say it is also a victim of such attacks.

(Reporting by Paul Eckert; editing by John Whitesides)