China, US to set up cybersecurity working group

China and the US, which are embroiled in a bitter dispute over hacking, have agreed to set up a cybersecurity working group, US Secretary of State John Kerry said Saturday.

"All of us, every nation, has an interest in protecting its people, protecting its rights, protecting its infrastructure," he told reporters on a visit to Beijing.

"Cybersecurity affects everybody," he said. "It affects airplanes in the sky, trains on their tracks, it affects the flow of water through dams, it affects transportation networks, power plants, it affects the financial sector, banks, financial transactions.

"So we are going to work immediately on an accelerated basis on cyber."

The world's two largest economies have traded accusations this year over cyber attacks after US research company Mandiant said in February that a Chinese army unit had stolen huge amounts of data, from mostly US companies.

China dismissed the report as "groundless", saying its defence ministry websites were often subjected to hacking attacks originating in the US.

Last month President Barack Obama said cyber threats affecting US firms and infrastructure were increasing and some were "state sponsored".

That prompted to Beijing to repeat an offer to hold international talks on hacking, with the foreign ministry saying it wanted "constructive dialogue and cooperation with the international community, including the US".

China's new premier Li Keqiang last month used his first press conference after taking office to reject the US accusations, saying that Beijing did not support cyber spying and calling China a "major victim of cyber attacks".

Also last month, Obama signed a spending bill blocking government buying of information technology equipment "produced, manufactured or assembled" by firms "owned, directed or subsidised by the People's Republic of China".

Federal government agencies could buy IT products from China if they passed an official assessment of risks involving "cyber-espionage or sabotage associated with the acquisition of such system", the bill said.

China criticised the bill as "biased".

The American Chamber of Commerce in China also said two weeks ago that more than a quarter of its members had experienced data theft.

Beijing's foreign ministry dismissed the report and called on the US to stop "hyping cybersecurity issues".