China says suffers "massive" Internet spy damage

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BEIJING, Sep 12 (Reuters) China has suffered ''massive'' losses of state and military secrets through the Internet, a senior official said, urging sweeping controls and new security agencies to fight computer threats and uncensored news.

Vice Minister of Information Industry Lou Qinjian's claims come as China faces reports that it has raided the computer networks of Western powers.

He did not address those allegations, but depicted his country as the target of a campaign of computer infiltration and subversion and he proposed new investment and censorship controls to counter the threat.

''The Internet has become the main technological channel for external espionage activities against our core, vital departments,'' he wrote in a magazine, Chinese Cadres Tribune.

''In recent years Party, government and military organs and national defence scientific research units have had many major cases of loss, theft and leakage of secrets, and the damage to national interests has been massive and shocking.'' He did not detail any of these cases.

China's computer networks were riddled with security holes that made a mockery of the ruling Communist Party's censorship and exposed valuable secrets to spies, Lou said.

The United States and other ''hostile'' powers were exploiting those weakness and their dominance of technology and standards to use the Internet for ''political infiltration'', he said.

China's Ministry of Information Industry is one of several agencies, including the Ministry of Public Security and party propaganda department, that seek to control the country's Internet.

Lou urged a more unified approach, with a ''state information security administration office'' and a new agency to scrutinise the computer security implications of foreign business moves.

The new screening agency would ''resolve the Internet and information security issues of major foreign investments, major mergers and acquisitions, major technology product and service projects and major international science and technology cooperation,'' Lou wrote.

His paper appeared in the September issue of the magazine, which is published by the Central Party School, an elite training academy.

Foreign officials have alleged through news reports that China has been mounting Internet raids on government computer networks in the United States, Germany, Britain and other countries -- allegations China has denied.

Lou said it was the United States and other developed powers that threatened China online.

They employed teams of writers to compile ''harmful information'' and exaggerated reports about bad news in China, he said, citing reports about mine disasters, medical problems and other volatile social issues.

''As soon as a major social situation occurs, Internet opinion makes waves and it becomes extremely easy for street politics to break out, directly threatening social stability,'' he wrote, apparently referring to public protests.

REUTERS CS DS1140

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