Lawmakers urged to investigate Chinese cyber espionage

By Julian Pecquet - 11/14/12 12:18 PM ET

Lawmakers should investigate China's cyber espionage of U.S. military, government and commercial targets, a congressional advisory panel urges in a new report released Wednesday.

The U.S.-China Economic and Security Review Commission made 32 recommendations to Congress, including reviewing legal penalties for companies found to engage in or benefit from industrial espionage. It also urged lawmakers to reexamine foreign direct investment from China to the United States and to consider requiring a mandatory review of controlling investments by government-controlled firms and adding an economic benefit test for Chinese investments.

“We have recommended that relevant Congressional committees further review Chinese cyber espionage practices and report their findings in an unclassified format,” committee Chairman Dennis Shea said in his opening remarks at a congressional hearing on the report. “In addition, we have recommended that Congress review acquisition and procurement guidelines to ensure that the U.S. department of Defense has the necessary tools to mitigate cyber-related supply chain threats.”

America's trade deficit with China was a major issue during the presidential election, during which both candidates battled for votes in the industrial Midwest, which has been hit hard by the recession. Wednesday's report urges Congress to require reciprocity in any future bilateral investment treaty negotiations with China.

The committee was created by an act of Congress in 2000 to assuage lawmakers' concerns about admitting China to the World Trade Organization. Its reports often garner more attention in China than in the United States, and this year was no different.

“The relevant commission has not let go of its Cold War mentality. We hope the relevant commission can discard its prejudice, respect facts, and cease its interference in China's internal politics and making of statements that are harmful to China-U.S. relations," Chinese Foreign Ministry spokesman Hong Lei told reporters in Beijing on Wednesday.

“Regarding Internet security, we have repeatedly pointed out that China resolutely opposes internet attacks and has established relevant laws ... The content of the relevant report is not helpful in building trust and respect between China and the U.S., or in conducting further cooperation.”