Beijing blasts call for cyber espionage inquiry

China on Wednesday accused a US congressional advisory panel of "indulging in a Cold War mentality" as the panel urged an in-depth assessment into cyberattacks from China and investments by State-owned companies in the United States.

Analysts warned that friction is rising between the world's two biggest economies as their competition becomes more intense along with growing interdependence on each other.

In its annual report, the US-China Economic and Security Review Commission on Wednesday advised the US Congress on the national security implications of the relationship between the two countries, including China's cyber-capabilities, military and investments, The Associated Press reported.

Accusing the commission of "indulging in a Cold War mentality", Chinese Foreign Ministry spokesman Hong Lei said during a regular news conference on Wednesday that "China urges the commission to respect facts, abandon its prejudice, stop interfering in China's internal affairs and hurting the Sino-US relationship".

The commission recommends that Congress conduct an in-depth assessment into so-called Chinese cyber-espionage practices, according to AP.

The report also said China's State-sponsored actors continue to exploit US government, military, industrial and nongovernmental computer systems, and that "Chinese exploitation capabilities are improving significantly", AP reported.

Hong said the accusations on China's cyber-activities are "groundless".

"China is opposed to cyberattacks in any form and has enacted laws on this issue," Hong said, adding that China is also a major victim of such attacks. "China believes the issue should be dealt with by constructive international cooperation based on mutual trust. In fact, China and the US have already started cooperating in fighting against cybercrimes."

The commission, Hong said, "repeatedly issues these irresponsible and misleading reports, and it does not help resolve the issue of cyberattacks or help the two countries establish mutual trust on cybersecurity".

Congress set up the commission with the aim of reviewing US policies on China since China attained most-favored-nation treatment in 1980, according to Zhang Yanyu, an expert on US studies at the China Institutes of Contemporary International Relations.

Since its establishment in 2000, the commission has frequently held hearings and investigations, which are kept low-profile but show a clear anti-China stance, Zhang wrote in an article published in International Data Information, a periodical on international affairs.

The commission also urged tighter screening of investments by Chinese State-owned companies in the US, saying they present unfair competition to US companies, according to the AP. The US International Trade Commission voted on Nov 7 in favor of double- and triple-digit duties on solar-energy products from China for the next five years, Reuters reported.

Last month, a US congressional committee requested that Chinese telecommunication giants Huawei and ZTE be banned from operating in the US due to security concerns and alleged spying practices — claims that both companies consistently disputed. Later, a White House review found no evidence that the two companies were spying for the Chinese government.

Such frictions will likely be more frequent in the future between the two countries as the US has to tackle its domestic economic difficulties and engage with countries in the Asia-Pacific region, said Wang Honggang, assistant director of the Institute of American Studies of the China Institutes of Contemporary International Relations.