Chinese cyber-attacks against the US are eroding the country's credibility and scaring off investors, say senior US officials.
The sheer scale of hacking attacks from China bred mistrust in the U.S. government as well as the business community, said Robert Hormats, US undersecretary of state for economic growth, energy and the environment.
China has repeatedly dismissed the accusations as groundless and claims it is the victim of a vigorous cyber campaign by the United States.
"The cyber intrusions are particularly troubling because they've gotten so much visibility lately that the intensified visibility is really undermining a lot of business confidence of people who would otherwise invest here," Hormats said.
"So it's hurt Chinese interests," he added after speaking at a US-China Internet Industry Forum in Beijing. "The Chinese really need to take a look at this and decide if it's in their interest for these policies to continue."
Hormats said it was difficult to determine the precise origins of the attacks, but a US computer security company released a report in February in which it said much of the hacking came from China.
"It's important to have a dialogue on this, but it's also important that the dialogue be a means to an end, and the end is really ending these practices", Hormats said.
But China's vice minister of the State Internet Information Office Qian Xiaoqian told the forum earlier that China does not abuse the Internet, and countries should not attack other countries using Internet resources.
China suffered more than 6,600 attacks by computers based overseas in January and February, he said.
"We shouldn't militarise cyberspace," he said. "Such attacks violate the rights of other countries and also moral standards."
Earlier the US envoy to China Ambassador Gary Locke said China and the United States must cooperate on combating Internet theft saying all countries must find a legitimate balance between governance and a free, open internet.
"As the world's two largest economies, both dependent on the Internet, China and the US must work together to address this problem, on behalf of our own citizens, our own companies, and our own institutions," he said.
Locke's comments come a month after U.S. intelligence officials warned that for the first time, cyber-attacks had replaced terrorism as the top threat to the United States.