The Chinese government has denied having any relationship with “a malware-based cyber espionage network” called GhostNet, an operation revealed Sunday by a Toronto-based research team. GhostNet is suspected of infiltrating a number of military and diplomatic computer systems, including the Dalai Lama’s, and is based in China.

The network, dubbed GhostNet, is based in the People’s Republic of China. In the report, researchers stated that almost 30% of the infected computers were “high-value,” diplomatic, political, economic or military in nature. (At the same time, a group from Cambridge University issued a similar report entitled, “The Snooping Dragon.”)

GhostNet is extremely sophisticated and allows its operators to take “full control” of infected systems. They could, for instance, capture documents, issue commands, implant software, and even see and hear what was happening in a room by turning on cameras and microphones of affected computers. According to the report, GhostNet is still operating.

Is China’s government involved? “These are old stories and they are nonsense,” said a spokesman of the Chinese consulate in New York.

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