China has denounced a US congressional panel that issued a report accusing it of stepping up computer espionage attacks on the American government, its defence contractors and businesses.

The US-China Economic and Security Review Commission, a congressional advisory panel, also said in an annual report to lawmakers that aggressive Chinese space programs were allowing Beijing to better target US military forces.

In a statement, Chinese Foreign Ministry spokesman Qin Gang rejected the findings, dismissing them as "not worthy of rebuttal."

The commission "deliberately slanders and attacks China" and always sees it in a bad light, Qin said. "It attempts to mislead public opinion and the general public as well as set obstacles for Sino-US cooperation in extensive fields."

The panel of six Democrats and six Republicans said China's massive military modernisation and its "impressive but disturbing" space and computer warfare capabilities "suggest China is intent on expanding its sphere of control even at the expense of its Asian neighbours and the United States."

It recommended that lawmakers provide money for US government programs that would monitor and protect computer networks.

The report also focused on what it said was China's use of prison labour to produce export products and found fault with Beijing's lax regulatory oversight of an estimated 4.5 million fish farms.

China was also accused of violating commitments to avoid trade-distorting measures, adopting new laws that may restrict foreign access to China's markets and keeping its currency undervalued to get an export advantage.

Qin warned that such complaints could backfire.

"We advise this commission to change its course, stop issuing reports of this kind and stop interfering with China's internal affairs so as not to further harm its own image," he said.