Tensions between the United States and China over accusations of industrial espionage have hit a boiling point as Beijing summoned U.S. Ambassador to China Max Baucus Monday in an attempt to counter Washington's charges.

The United States formally charged five Chinese military officers with cybertheft Monday, resulting in China's unabashed denial and retaliation. The major world player and holder of over $1 trillion in U.S. Treasury bonds accused the United States of "hypocrisy" and "double standards." Baucus met with assistant foreign minister Zheng Zeguang to try and difuse the situation.

"The Chinese government and military and its associated personnel have never conducted or participated in the theft of trade secrets over the Internet," Zheng said to Baucus, according to the foreign ministry.

"The accusations that the United States have made against these Chinese officials are purely fictitious and extremely absurd," Chinese Ambassador to the United States Cui Tiankai was quoted as saying by the state-run China News Service said.

The five Chinese military officers allegedly helped spearhead efforts to hack into major U.S. nuclear, metal, and solar companies. Companies such as Allegheny Technologies Inc., United States Steel Corp., and Toshiba Corp. unit Westinghouse Electric Co. are all believed to be victims. The scope of the damage done by Chinese cyberspies is still unclear, but officials have stated that it is "significant." 

Although discussions haven't yet made any significant headway, China has threatened that if the United States does not retract or change its stance on the case, it could take further action. Given China's entanglement in a number of U.S. interests, the possibilities are literally endless. For one, there's China's increased aggression concerning territorial claims in Asia and the Middle East.

China has already backed out of a joint thinktank that was just getting started between the two nations working on cyber issues as a result of the accusations.

"Suspending the operations of a bilateral group on cyber affairs is a reasonable start, but more countermeasures should be prepared in case Washington obstinately sticks to the wrong track," state news agency Xinhua said in a commentary.

This isn't the first time the two nations have tangoed over cybersecurity. Alongside a series of troubling incidents, last year it was revealed that China had been targeting confidential U.S. weapons system designs. The targets included a range of high-powered machinery including the F-35 fighter jet and PAC-3 Patriot Missile defense system.

China also banned the use of Windows 8 on government computers Tuesday, citing the need to use energy-saving products. Xinhua, however, says that cybersecurity concerns were a factor.

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