US Defense Secretary Chuck Hagel on Saturday accused Beijing of involvement in cyber espionage against Washington in a speech at a Singapore security forum attended by Chinese military officials.
Stepping up US pressure on China over electronic espionage ahead of a summit between their leaders next week, Hagel pointedly blamed the Chinese government and military for repeated intrusions into sensitive US information systems.
"The United States has expressed our concerns about the growing threat of cyber intrusions, some of which appear to be tied to the Chinese government and military," Hagel told an annual Singapore conference known as the Shangri-La Dialogue.
"As the world's two largest economies, the US and China have many areas of common interest and concern, and the establishment of a cyber working group is a positive step in fostering US-China dialogue on cyber (issues)," the Pentagon chief said.
"We are determined to work more vigorously with China and other partners to establish international norms of responsible behaviour in cyberspace," he added.
The Chinese delegation to the conference was led by Lieutenant General Qi Jianguo, deputy chief of the general staff of the People's Liberation Army.
The Singapore forum came ahead of the June 7-8 meeting between US President Barack Obama and his Chinese counterpart Xi Jinping in California, the two leaders' first meeting since Xi took office in March.
Two days before Hagel's speech, China's defence ministry dismissed a Pentagon report released in early May accusing Chinese hackers of accessing US weapons designs.
In a statement posted on the ministry's website, spokesman Geng Yansheng said: "There are misjudgements in the US claims.
"First they underestimate the security defence capabilities of the Pentagon and second they underestimate the intelligence of the Chinese people.
"China is fully capable of building the weapons and equipment needed to defend national security."
The Pentagon report to the US Congress said China has engaged in widespread cyber espionage in a bid to extract information about the US government's foreign policy and military plans.
China kept up a steady campaign of hacking in 2012 that included attempts to target US government computer networks, which could provide Beijing a better insight into America's policy deliberations and military capabilities, it said.
"China is using its computer network exploitation (CNE) capability to support intelligence collection against the US diplomatic, economic, and defense industrial base sectors that support US national defense programs," said the report.
The report marked the most explicit statement yet from the United States that it believes China's cyber spying is focused on the US government as well as American corporations.