China says suffers "massive" Internet spy damage

By Chris Buckley

BEIJING (Reuters) - China has suffered "massive" losses of state secrets through the Internet, a senior official said, as China faces reports that it has raided the computer networks of Western powers.

Vice Minister of Information Industry Lou Qinjian said his country was the target of a campaign of computer infiltration and subversion and proposed a raft of counter-measures including toughened censorship, new security bodies and commercial controls.

He did not address recent Western allegations of cyber-spying against China.

"The Internet has become the main technological channel for external espionage activities against our core, vital departments," he wrote in Chinese Cadres Tribune, a magazine.

"In recent years Party, government and military organs and national defense scientific research units have had many major cases of loss, theft and leakage of secrets, and the damage to national interests has been massive and shocking."

He did not give details of any specific cases.

China's computer networks were riddled with security holes that made a mockery of the ruling Communist Party's censorship and exposed valuable secrets to spies, Lou said.

The United States and other "hostile" powers were exploiting those weakness and their dominance of technology to use the Internet for "political infiltration", he said.

"In the Internet technology products exported by the United States there are 'back doors' planted to engage in technological infiltration and theft of secrets," Lou said.

U.S. companies have vigorously denied such claims.

FOREIGN INVESTMENTS

China's Ministry of Information Industry is one of several agencies, including the Ministry of Public Security and the Party propaganda department, seeking to control the country's Internet.

Lou urged a more unified approach, with a new agency to scrutinize the computer security implications of foreign business moves.

The screening agency would "resolve the Internet and information security issues of major foreign investments, major mergers and acquisitions, major technology product and service projects and major international science and technology cooperation," Lou wrote.

He also called for policies to encourage China to make and buy more of its own information security technology.