Chinese espionage poses "the single greatest risk" to the security of US technology, a panel has told Congress.
China is pursuing new technology "aggressively", it says, legitimately through research and business deals and illegally through industrial espionage.
China has also "embraced destructive warfare techniques", the report says, enabling it to carry out cyber attacks on other countries' infrastructure.
A foreign ministry spokesman in Beijing denied any spying activities by China.
"China and the US have a fundamental common interest in promoting sound and rapid development," said Liu Jianchao, quoted by the Associated Press news agency.
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