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updated 3/31/2009 1:50:48 PM ET 2009-03-31T17:50:48

China on Tuesday denied a research report's contention that a China-based computer spy ring stole sensitive information from thousands of hard drives worldwide, calling the accusation a lie meant to feed anxiety over Beijing's growing influence.

In the government's first reaction to the report, Foreign Ministry spokesman Qin Gang said the conclusions were symptoms of a "Cold War virus" that causes people overseas to "occasionally be overcome by China-threat seizures."

The report by the Information Warfare Monitor added to growing concerns that China has become a center for cyber-warfare, spying and crime. Industry watchdogs have complained about junk e-mail generated in China. Officials in the U.S., Britain and Germany have accused Chinese hackers backed by China's military of intruding into their government and defense computer networks.

The Information Warfare Monitor report released Saturday said that a network, based mainly in China, hacked into classified documents from government and private organizations in 103 countries, including the computers of the Dalai Lama and his exiled Tibetan government.

Speaking at a media briefing, Qin did not directly respond to questions about whether the network exists and if its actions are supported by the government. Instead, he said Beijing opposes criminal activities that compromise computer networks and criticized the report for claiming otherwise.

"China pays great attention to computer network security and resolutely opposes and fights any criminal activity harmful to computer networks, such as hacking," Qin said. "Some people outside China now are bent on fabricating lies about so-called Chinese computer spies."

"Their attempt to tarnish China with such lies is doomed to failure," he said.

The Canadian report said that while evidence pointed to China as the main source of the network, researchers had not conclusively been able to determine the identity or motivation of the hackers.

Experts have noted that China has 300 million Internet users and thus is home to many insecure computers and networks that hackers in other countries could hijack to disguise their locations and launch attacks.

The Canadian group said its research initially focused on allegations of Chinese cyber espionage against the Tibetan exile community but eventually traced a much wider network of compromised machines.

The Dalai Lama said Tuesday that private information on his government-in-exile's computers regularly seems to reach Chinese authorities. He said, for example, that China appears to know almost immediately when people have requested an appointment with him.

"Before that particular person asks for Indian visa, the Chinese already (have) protested to the Indian government. Such things happen," he said.

Thirty percent of the 1,295 hacked computers studied by the Canadian group were described by the report as "high-value diplomatic, political, economic, and military targets."

It said the spying network, dubbed GhostNet, was able to take full control of infected computers, rifling files and even activating microphones and Web cameras to spy on people present.

The sophistication and the focus on spying makes GhostNet sound more like traditional espionage rather than the nationalistic attacks carried out by Chinese hackers, said Jack Linchuan Qiu, a communications professor at Chinese University of Hong Kong.

"Chinese hackers would hack the White House history Web site and put a Chinese flag on it," Qiu said. "That's the kind of thing individuals would do ... This really sounds like something more organized."

Many Chinese hackers have a strong patriotic bent, unlike those in the United States and other Western countries who tend to belong to fringe cultures opposed to state power.

Or it may be that only those hackers who are share the government's ideals survive. Authorities closely monitor the Internet for content deemed politically destabilizing, so perhaps hackers whose ideas are in line with the government's are avoiding punishment.

Qiu, the communications professor, said he had heard of officials jailing Chinese hackers who break into computer systems of domestic banks in a bid to steal money or who infiltrate and vandalize government Web sites.

"I've never seen people who are targeting — never mind if it's an individual or an organization — targeting a foreign computer arrested in mainland China," Qiu said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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