Chinese scholars Wednesday rebutted US's allegations that China was engaged in spying and forging secret nuclear deals with foreign countries, saying these were induced by the perceived "China threat" worrying Washington.

US politicians have been debating the country's foreign and military strategy shifts in the wake of the financial crisis, and some took the opportunity to play up the "threat" posed by China for their own gains, experts in Beijing said.

The Wall Street Journal, quoting American national security officials, Wednesday reported that spies from countries like China and Russia had infiltrated the US electrical grid, planting software programs that could disrupt the network in a time of war.

China was accused earlier of using malicious software to infiltrate and take control of almost 1,300 computers belonging to the Dalai Lama in 103 countries.

In another development Wednesday, US prosecutors accused a Chinese metals company, along with six Iranian firms, of collaborating on a scheme to transfer missile and nuclear technology from China to Iran.

The Dalian-based LIMMIT Economic and Trade Co Ltd was among seven companies from China, Iran and the Democratic People's Republic of Korea that were sanctioned by US President Barack Obama on Feb 2 for spreading missiles and other weapons technology.

But the company's manager, Li Fangwei, told the Financial Times Wednesday that the company was "unaware of the charges", denying that the products were intended for "military use".

Teng Jianqun, deputy general-secretary of the China Arms Control and Disarmament Association, said these sanctions on China took place only in recent years, and it was a common strategy of the US to interfere in China's civilian trade.

"More accusations are being made nowadays, probably because the military contractors are fighting against a fundamental defense budget now proposed by the US defense chief," said Beijing-based military expert Song Xiaojun.

(China Daily March April 9, 2009)