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Prism scandal may worsen cyber-relations between US and China

The US spying revelations made by Edward Snowden will make it harder for the US to confront China over its own alleged industrial spying at talks between the nations this week, reports Reuters (opens in new tab).

The US claims China (opens in new tab) is behind cyber attacks on the networks of its agencies and major companies, leading to the theft of trade secrets, as well as damage to those networks.

But as Reuters reports, Snowden's disclosures of US electronic surveillance around the world give China an argument to counter US complaints that it steals private intellectual property (IP) from US companies and research centres.

Cyber security is at the centre of high-level talks between the two countries in Washington as part of the Strategic and Economic Dialogue, a set of talks that have taken place over the last five years.

"This Snowden (opens in new tab) thing has muddied the waters in a terrible way," James McGregor, author of a book on China's "authoritarian capitalism and industrial policy", told Reuters.

He said, "China would rather have the waters muddy, because they can say 'You do it. We do it. What's the big deal?', and the cyber theft from companies will go on and on."

Many countries spy on each other, but US officials claim China is unique in the amount of state-sponsored IP theft it carries out, as it tries to catch up with the US and other states in technology and other arenas.

While denying it is behind cyber attacks on US firms and other agencies, China itself claims it is the victim of cyber-espionage.

Snowden maintains the National Security Agency hacked into critical network infrastructure at universities in China and Hong Kong, for instance.

Snowden, who is believed to still be holed up in the transit area of Moscow airport, is said to have been offered political asylum by Venezuela, Nicaragua and Bolivia.