China May Have 'Blessed' Hacking, But May Not Be In Total Control

Cybersecurity expert Dr James Lewis says China's central leadership have effectively "blessed" the hacking activities that stole massive amounts of information from military contractors, energy companies and other industries in the US.

China has frequently been accused of hacking, but the report by US security company Mandiant contains some of the most extensive and detailed accusations to date linking its military to a wave of cyberspying against US and other foreign companies and government agencies.

Mandiant said it traced the hacking back to a neighbourhood in the outskirts of Shanghai that includes a 12-story office building run by Unit 61398 of the People's Liberation Army.

The unit "has systematically stolen hundreds of terabytes of data from at least 141 organisations," since it began operations in 2006.

Dr James Lewis, senior fellow at the Center for Strategic and International Studies: "I think the way it works is that China's central leadership blessed hacking. And cyber espionage. And they did this years ago.

"So what they did is they let units like this off the leash, said go and hack, get Western technology. That would be a good thing. That's different from being in control. And in fact, one of the issues is having let groups like this off the leash, it might be hard for Beijing to get them back on."

Dr James Lewis added that the situation is complicated by the fact the China is "one of the most important relationships for the US".

China's Foreign Ministry dismissed the report as "groundless," and the Defense Ministry denied any involvement in hacking attacks.

Contains video from AP