WASHINGTON — China is sharply stepping up espionage against the United States as the rising Asian power grows more sophisticated in cyber warfare and spy recruitment, a report to Congress warned Thursday.
"China is changing the way that espionage is being done," said Carolyn Bartholomew, the chair of the US-China Economic and Security Review Commission.
In its wide-ranging annual report to Congress, the commission reported a steep rise in disruption and infiltration of websites of the US government and perceived Beijing rivals such as Tibet's exiled leader the Dalai Lama.
Colonel Gary McAlum, a senior military officer, told the commission that the US Defense Department detected 54,640 malicious cyber incidents to its systems in 2008, a 20 percent rise from a year earlier. The figure is on track to jump another 60 percent this year.
While the attacks came from around the world, the commission said China was the largest culprit. Some Chinese "patriotic hackers" may not receive official support, but the report said that the government likely planned to deploy them in a conflict to disrupt a foreign adversary's computers.
The commission found that China was the most aggressive nation in spying on the United States and was trying to recruit more Americans as spies.
The report said that while China historically tried to tap Chinese Americans -- believing, often incorrectly, that they would be sympathetic -- it was now turning to the Soviet model of seeking to bribe informants with cash and gifts.
It said that the Chinese were also expanding "false flag" operations, in which sources are deceived into thinking they are providing information elsewhere.
It pointed to the case of Tai Shen Kuo, a furniture salesman in New Orleans arrested last year after persuading two retired US military officials to give sensitive information by telling them it was headed to Taiwan, not mainland China.
"It's a new model for them. They tended to focus on sympathizers or on ethnic Chinese Americans and now they just go find some guy who retired," said the commission's vice chair Larry Wortzel, a former military attache at the US embassy in Beijing.
The commission also found that China has launched an effort to influence US think-tanks and academe by rewarding scholars with access and depriving visas to more critical voices.
"It becomes self-censorship. If you're in graduate school and want to become a China scholar, you need to go to China. And if you criticize the Chinese government on certain things, you won't get in," said Bartholomew, a former top aide to House Speaker Nancy Pelosi.
"What it means is that we have a generation of China analysts who are being created who don't necessarily have the freedom or the ability to think through a broader range of questions," she said.
The commission also criticized China on its trade policy, recommending that the United States press Beijing to make its yuan more flexible and to turn to the World Trade Organization to fight what it termed predatory trade practices.
"Just look at the sheer statistics," Bartholomew said. "Two-hundred-and-sixty-eight billion dollars in 2008 was the US trade deficit with China -- you can't say this (trade policy) has been working."
President Barack Obama this week paid his first visit to China, which is now the top holder of the ballooning US debt. His administration has sought cooperation with China on battling the global slowdown and declined to accuse Beijing of manipulating its currency.
The commission paid a field trip to Rochester in upstate New York, where it said core industries such as machine tools, auto parts and optoelectronics were struggling against Chinese competition that often enjoys state support.
"For 20 years we have watched China policy be controlled really by a handful of large multinational corporations. They're the ones who determine the interests," Bartholomew said.
"But there are a lot of constituency interests out there -- particularly small and medium-sized enterprises -- that are being hurt by the current US-China policy," she said.
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