US warned of China 'cyber-spying'

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In its annual report to Congress, the panel warned that China was gaining increasing access to sensitive information from US computer networks.

It said China was aggressively pursuing cyber-warfare capabilities to gain an advantage over the US in any conflict.

There has been no comment so far from the Chinese on the report.

The US-China Economic and Security Review Commission was set up by Congress in 2000 to advise, investigate and report on US-China issues.

It alleges that the Chinese are looking for diplomatic and military secrets in government databases, and potentially lucrative industrial secrets held by American corporations.

The report said the US government and economy were critically vulnerable to cyber-space attack since both depended heavily on computers and the internet.

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