Theft of trade secrets worsening in China

Chinese theft of valuable U.S. trade secrets, much via sophisticated cyber-attacks, is becoming a much more serious problem, U.S. industry officials said on Wednesday.

"This matter requires more attention," Jeremy Waterman, head of the U.S. Chamber of Commerce's China division, told a U.S. government panel led by the U.S. Trade Representative's office.

The issue "has risen substantially in importance over the last year, year and a half," Waterman said.

Peter Dent, a vice president at the Electron Energy Corp, said both large and small U.S. companies face "persistent and increasingly complex cyber-attacks (from China) in an effort to steal intellectual property from company computer networks."

Defending company trade secrets against the attacks was "very difficult" and caused a substantial drain on resources, he said.

Companies need the U.S. government to take action, which could include suspending "trade benefits to countries sponsoring these actions," Dent said.

USTR held the hearing as part of its annual evaluation of how well China is meeting the commitments it made to join the World Trade Organization in 2001. The office usually issues a report on China to Congress around December 11, the anniversary of Beijing's accession to the WTO.

U.S. exports to China have soared since China joined the WTO and the country is now the third-largest foreign market for U.S. goods. But business groups told the USTR-led panel China maintains a extensive web of discriminatory policies that prevent U.S. companies from making many additional sales and investments in the world's second largest economy.

(Reporting by Doug Palmer; Editing by David Brunnstrom)