The US has charged five Chinese military officials in Beijing with economic espionage and trade secret theft - allegations that China says are "deliberately fabricated" with "ulterior motives".
The indictment accuses the five hackers of targeting US nuclear power, metals and solar products industries.
Six American companies, including Alcoa and Westinghouse, and one labour union were cited as victims of the hacking attacks.
US Attorney General Eric Holder said the case "represents the first
ever charges against a state actor for this type of hacking".
"The range of trade secrets and other sensitive business information
stolen in this case is significant and demands an aggressive response,"
he told a news conference.
China's foreign ministry hit back at the claims in a very
strongly-worded statement and claimed it had been a victim of "large
scale" American spying activities.
Foreign ministry spokesman Qin Gang said: "This US move, which is based
on deliberately fabricated facts, grossly violates the basic norms
governing international relations and jeopardizes China-US cooperation
and mutual trust.
"The position of the Chinese government on cyber security is consistent
and clear-cut. China is steadfast in upholding cyber security... The US
accusation against Chinese personnel is purely ungrounded with ulterior
"The US government and relevant US institutions have long been involved
in large-scale and organized cyber theft," claimed the spokesman.
The US Attorney General however, called the indictment a "ground-breaking" step in addressing the threat of cyber-security.
FBI Director James Comey said: "For too long, the Chinese government
has blatantly sought to use cyber espionage to obtain economic advantage
for its state-owned industries."
The US believes China stole emails and other communications that could
have helped Chinese firms learn the inner workings of American
However, at least one of the US firms named in the matter appeared to downplay the impact of the alleged hacking.
Monica Orbe, the director of corporate affairs for metals giant Alcoa,
said: "To our knowledge, no material information was compromised during
this incident, which occurred several years ago."
Last September, President Barack Obama raised concerns over
cyber-security with his Chinese counterpart Xi Jinping while the two
were at a summit in St Petersburg, Russia.
When asked by the press about the accusations, Mr Xi said: "China not only does not support hacking but also opposes it.
"Let's not point fingers at each other without evidence but do more to safeguard cyber security."
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