Researchers at the University of Toronto's Citizen Lab said they documented a "complex ecosystem of cyber espionage that systematically compromised government, business, academic and other computer networks in India, the offices of the Dalai Lama, the United Nations, and several other countries."

Data stolen from dozens of hacked computers mostly in India contained sensitive information about missile systems and artillery designs and Sino-Indian relations, they said in a report titled "Shadows in the Cloud."

Personal, financial and business information of citizens from 31 countries was accessed, including from Canadian visa applications.

"We recovered one document that appears to be an encrypted diplomatic correspondence, two documents classified as 'SECRET', six as 'RESTRICTED' and five as 'CONFIDENTIAL'," the researchers said.

At a press conference, researcher Greg Walton said these were "very targeted and deliberate attacks."

"They suggest to us a shift is occurring from criminal and industrial espionage in cyberspace to a possibility of political espionage, whether that is directed by government or not," he said.

Walton explained that the attacks "were specifically crafted to hit individuals, usually in positions of power."

He said state spies, or criminal groups aiming to sell information to governments are likely involved. "We believe a market has emerged for this," he said.

The researchers traced the attacks to southern China, "and to known entities within the criminal underground of the PRC (People's Republic of China)."

At one point, they even tracked down and chatted online with an unidentified suspect.

China denied involvement in the attacks cited in the Citizen Lab report, which comes just weeks after Google effectively shut down its China search engine over censorship and cyberattacks.

"Some reports have, from time to time, been heard of insinuating or criticising the Chinese government... I have no idea what evidence they have or what motives lie behind," Chinese Foreign Ministry spokeswoman Jiang Yu said.

The report highlighted what it said was "an obvious correlation to be drawn between the victims, the nature of the documents stolen, and the strategic interests of the Chinese state."

Recovered files detailed India's security situation in Assam, Manipur, Nagaland and Tripura states, India's international relations with West Africa, Russia and the Middle East, and concerned Naxalite and Maoist "extremists."

One file contained personal information on a member of India's Directorate General of Military Intelligence. Some 1,500 letters sent from the Dalai Lama's office in 2009 were also recovered.

The researchers said the attacks would start with the opening of an attachment in an email seemingly sent by a familiar person, infecting computers.

The hackers would then misuse services such as Twitter, Google Groups, Blogspot and Yahoo! Mail to send "new malicious binaries to compromised computers" ordering them to transfer documents to a "drop zone."

The Canadian researchers traced the cyberattacks to servers in Chengdu, China, but could not identify the culprits. Chengdu is home to the Chinese military's technical reconnaissance bureaus tasked with signals intelligence collection.

Several infected computers were also found to be "checking in" with a server in nearby Chongqing, China, where organized crime groups reportedly operate online.

"We have no evidence in this report of the involvement of the People's Republic of China or any other government in the Shadow network... or that the attackers were directed in some manner -- either by sub-contract or privateering -- by agents of the Chinese state," the report concluded.

"But an important question to be entertained is whether the PRC will take action to shut the Shadow network down."

The eight-month probe was a follow-up to a previous investigation of alleged Chinese cyber espionage against the Tibetan community dubbed "Ghostnet."

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