Mark Ralston / AFP - Getty Images

A Chinese paramilitary officer rides a scooter in Beijing on Wednesday. Beijing dismissed an annual Pentagon report that accused it of widespread cyberspying on the U.S. government, rejecting it as an "irresponsible

BEIJING -- China on Wednesday accused the United States of sowing discord between it and its neighbors after the Pentagon said Beijing is using espionage to fuel its military modernization, branding Washington the "real hacking empire.”

The latest salvo came a day after China's foreign ministry dismissed as groundless a Pentagon report that accused China for the first time of trying to break into U.S. defense computer networks.

The Pentagon also cited progress in Beijing's effort to develop advanced-technology stealth aircraft and to build an aircraft carrier fleet to project power further offshore.

The People's Liberation Army Daily called the report a "gross interference in China's internal affairs.”

"Promoting the ‘China military threat theory’ can sow discord between China and other countries, especially its relationship with its neighboring countries, to contain China and profit from it," the newspaper said in a commentary that was carried on China's Defense Ministry website.

The United States is "trumpeting China's military threat to promote its domestic interests groups and arms dealers,” the newspaper said, adding that it expects "U.S. arms manufacturers are gearing up to start counting their money.”

The remarks in the newspaper underscore the escalating mistrust between China and the United States over hacking, now a top point of contention between Washington and Beijing.

A U.S. computer security company, Mandiant, said in February a secretive Chinese military unit was likely behind a series of hacking attacks that targeted the United States and stole data from more than 100 companies.

That set off a war of words between Washington and Beijing.

China has said repeatedly that it does not condone hacking and is the victim of hacking attacks -- most of which it says come from the United States.

"As we all know, the United States is the real 'hacking empire' and has an extensive espionage network," the People's Daily, a newspaper regarded as a mouthpiece of the Chinese Communist Party, said in a commentary.

"In recent years, the United States has continued to strengthen its network tools for political subversion against other countries,” the article said.

"Cyber weapons are more frightening than nuclear weapons," the People's Daily said. "To establish military hegemony on the Internet by repeatedly smearing other countries is a dangerous and wrong path to take and will ultimately end up in shooting themselves in the foot."

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Carlos Barria / Reuters

A Chinese People's Liberation Army soldier stands guard in front of 'Unit 61398,' a secretive Chinese military unit on the outskirts of Shanghai, on Tuesday. The unit is believed to be behind a series of hacking attacks, a U.S. computer security company said, prompting a strong denial by China and accusations that it was in fact the victim of U.S. hacking.

BEIJING -- China's military on Wednesday responded angrily to accusations by an American computer security company of systematic hacking of U.S. business and military interests, arguing it "lacked technical proof and was "not based on fact."

In a statement published on the Chinese Defense Ministry's website in response to the controversial report by Mandiant Corp., the military denied the charges, arguing the data was not enough to connect the hacking to them.

"The report, in only relying on linking IP address to reach a conclusion the hacking attacks originated from China, lacks technical proof," the ministry wrote in its statement, "Everyone knows that the use of usurped IP addresses to carry out hacking attacks happens on an almost daily basis."

The ministry also argued that there was no globally accepted definition of what constitutes hacking.

"There is still no internationally clear, unified definition of what consists of a 'hacking attack'. There is no legal evidence behind the report subjectively inducing that the everyday gathering of online (information) is online spying."

The Defense Ministry said that China itself is a frequent victim of hacking, a common theme in China's rebuttal of accusations of foul play in cyberspace. The ministry said it had tracked a "considerable number" of attacks against its networks that originated in the United States, but it noted that those intrusions had not been used "as a pretext to accuse the U.S. side [of hacking]."

The statement came a day after Mandiant released an explosive report, first detailed in a New York Times article, that tied a People's Liberation Army unit based in Shanghai to a prolonged and focused campaign of stealing corporate and defense trade secrets.

According to Mandiant, the Chinese hacking unit, believed to be "PLA Unit 61398," employed hundreds, perhaps even thousands, of operatives to raid secure American servers, extracting trade secrets, blueprints, pricing data and other valuable information.

In total, Unit 61398 was said to have pillaged hundreds of terabytes of information from 141 companies -- 115 of which were American -- representing 20 industries in a variety of fields including telecommunications and defense.

The hackers reportedly used techniques such as "spear-phishing" -- using spoof e-mails to trick users into granting access to internal servers -- demonstrating a strong proficiency in English and advanced understanding of computer security and network operations.

China pointed out that its Ministry of Public Security had assisted more than 50 countries and regions in investigating cybercrime cases and that the Beijing had entered into a number of bilateral law enforcement cooperation agreements with those countries to help combat hacking.

The Mandiant report and the media maelstrom around it prompted Chinese state media to lash out at the hacking accusations, though the Chinese-language version of the New York Times story was still blocked in China.

China's typically nationalistic newspaper, Global Times, said Beijing should be more vocal in exposing hacking attacks conducted against China.

"Some officials have been punished for internally reporting that government websites have been hacked and secrets leaked, but almost no details have come out," the paper wrote.

"The Americans really know how to talk this (issue) up. All China can do is concede defeat."

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A U.S. security firm has exposed the role of the Chinese military in an overwhelming number of cyber-attacks on U.S. infrastructure, government agencies, and corporations, resulting in the theft of information from military contractors and energy companies. NBC News' Andrea Mitchell discusses the report's findings with Mandiant Vice President Grady Summers and Chris Johnson of the Center for Strategic and International Studies.

Carlos Barria / Reuters

A general view of 'Unit 61398,' a secretive Chinese military unit on the outskirts of Shanghai on Feb. 19. The unit is believed to be behind a series of hacking attacks, a U.S. computer security company said, prompting a strong denial by China and accusations that it was in fact the victim of U.S. hacking.

BEIJING – A group of hackers linked to the Chinese military has stolen reams of sensitive data from more than 100 prominent American companies and organizations, according to an explosive new report.

“The details we have analyzed during hundreds of investigations convince us that the groups conducting these activities are based primarily in China and that the Chinese Government is aware of them,” U.S. computer-security firm Mandiant Corp. said in a 74-page report released on Tuesday.

The story was first reported by The New York Times.

One group originating from China that Mandiant had been tracking since 2006 and identified in the study as “APT1” allegedly swiped data from 141 companies in 20 industries ranging from aerospace to telecommunications, according to the report. More than 110 of those companies were American, according to Mandiant.

Mandiant said that the data suggests that the hacker group was either working for or sponsored by China’s People’s Liberation Army. Indeed, according to the organization’s information, APT1’s activity originated from a People’s Liberation Army cyberware division known as “Unit 61398.”

“Our research found that People’s Liberation Army (PLA’s) Unit 61398 is similar to APT1 in its mission, capabilities, and resources,” it said, according to the report.  “PLA Unit 61398 is also located in precisely the same area from which APT1 activity appears to originate.”

Mandiant said that the hacking originated from a drab 12-story office building on the outskirts of Shanghai. Hundreds, maybe even thousands, of operatives performed covert corporate espionage and extracted trade secrets, blueprints, pricing data and other corporate information from countless American servers from the innocuous tower, according to Mandiant.

The hackers used techniques like “spear-phishing” -- using spoof emails to trick users into granting access to internal servers --demonstrating a strong proficiency in the English language and advanced understanding of computer security and network operations, the organization said.

Media blackout
Though the story exploded on Twitter and in the foreign news media, it has hardly made any waves in China. Twitter has long been blocked in the country and foreign media companies that broadcast on the mainland like CNN were blacked out when the report was mentioned on air. 

Coverage of Mandiant’s report was also absent from Chinese news websites, but some discussion of the report could still be found on China’s Twitter-like service, Weibo.

“Chinese hackers are so capable! I always thought Americans are very powerful!” exclaimed one user.

“Reports by foreign media cannot be fully trusted,” warned another user, “but there must be something.”

Related: Wall Street Journal infiltrated by Chinese hackers

This was a sentiment partly shared by China’s Foreign Ministry spokesman, Hong Lei, who responded today to questions about the hacking report by calling them “groundless” and reiterating the government’s unwavering position on the matter.

“To make groundless accusations based on some rough material is neither responsible nor professional,” he said, before noting that China was also the victim of hacking attacks.

Hong also argued that the new evidence provided by Mandiant and the New York Times will not withstand closer scrutiny.

But China’s cyber activities have been under increasingly closer scrutiny in recent weeks, as a slew of news stories have come out about Beijing’s reported hacking ambitions. Last month, the New York Times reported that its own servers had been attacked by hackers originating in China, possibly in response to an embarrassing expose it published showing the hidden riches of out-going Chinese premier, Wen Jiabao.

While the White House has largely remained silent on the hacking issue -- President Barack Obama mentioned hacking in his State of the Union but did not specifically cite China -- the government has been noticeably increasing efforts to strengthen cyber security.

Last week Obama issued an Executive Order calling for the improving of critical infrastructure tied to cyber security. That the move came on the eve of the publication of two similar exposes -- last week Bloomberg printed another story demonstrating PLA hacking of American systems -- suggests the administration could be taking a long called for tougher stance on Chinese hacking by “naming and shaming” known mainland hacking groups.  

NBC News' Le Li contributed to this report.

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By Ed Flanagan, NBC News

BEIJING – China ratcheted up criticism Friday of the United States following back and forth charges about cyberwarfare.

A day earlier, the government responded angrily to accusations that it was directly involved in a hacking scheme designed to trick American government workers, Chinese political activists, journalists and Asian regional defense representatives into giving up their Google email passwords. "Hacking is a problem that troubles the entire world, and China has always been targeted,” Hong Lei, a spokesman for the Foreign Ministry said Thursday. “The Chinese government resolutely opposes hacking and any other forms of cyber-crime."

And today, Chinese newspapers picked up where the government left off, publishing an inordinate amount of commentary on the Google hacking incident. The Global Times, China’s reliably nationalistic newspaper, alone carried three separate articles on the matter. 

China’s media coverage of the latest incident highlights many of the government’s talking points. Beijing contends that it has enough problems controlling hacking domestically, it couldn’t be exporting it.

Who is the victim? China
Late last year, China’s state news agency, Xinhua, reported that in the first half of 2010, 60 percent of China’s Internet users were subjected to some form of hacking and that over 30 percent of users had passwords stolen.

While positioning itself as a victim relatively unprepared to deal with increasingly sophisticated cyber threats, China has also framed the United States’ own cyber defense and warfare capabilities as far superior technologically and subsequently a larger threat to global stability.

This storyline took a sudden, dramatic turn just days ago after the Wall Street Journal reported on the Pentagon’s first formal cyber warfare strategy plan. Though not yet officially released to the public, the document allegedly argues for “equivalency” when meting out retaliation in response to cyber-attacks.

Or as one military official put it: "If you shut down our power grid, maybe we will put a missile down one of your smokestacks."

Predictably, news of the Pentagon’s strategic document in light of the Google hacks has been cited by the Chinese press as another example of the United States attempting to achieve strategic dominance.

The People’s Daily, the Communist Party’s official paper, was quick to jump on that idea, writing, “The U.S. is making the game rules of cyber war in order to seize the commanding heights of future cyber warfare.”

The article pumped up the rhetoric by quoted Lin Zhiyuan, from the Chinese Academy of Military Sciences, as saying: “The U.S. seeking ‘cyber dominance’ will definitely trigger a trend of building up cyber troops in the world.”

Lin’s line serves both as justification and warning for the necessity of China’s army of “cyber warriors,” known here as the “Blue Army.” The very existence of this 30-strong commando unit of cyber warriors was only acknowledged by a defense ministry spokesman late last month.

A recent report from the People’s Liberation Army Daily described a simulated cyber battle in which the Blue Army successfully defended China’s military networks against an army of hackers four times its size, belying the high degree of competency of its force.

Yet, despite the apparent triumph, defense ministry spokesmen continue to understate the unit’s capabilities, characterizing their ability to defend China from cyber attack as weak.

Who frames the issue?
Equally apparent in Chinese reports on the Google hackings is the apparent frustration with which a Western entity like Google can appear to frame and dictate the discussion. 

The Global Times’ coverage underscores an argument China frequently makes during these “he said, she said” disputes that erupt from time to time in the Sino-U.S. relationship: he who shouts loudest, longest wins. 

“Powerful Western public opinion makes people think that it is the Chinese who have done something bad,” said Professor Zhang Shaozhong of China's National Defense University in one article. “China needs to change its passive state it suffers whenever something bad happen.”

The idea that China must stand up and repudiate what it considers false accusations or face being found guilty in the court of public opinion was seconded in an editorial published Friday in the Global Times on the need for greater information transparency in China.

“In an era that people compete for voice and attention, silence often means tacit consent,” wrote one editor. “One who does not take the initiative to set an issue will be harassed by issues set by others.”