China paper warns Google may pay price for hacking claims

BEIJING (Reuters) - Google has become a "political tool" vilifying the Chinese government, an official Beijing newspaper said on Monday, warning that the U.S. Internet giant's statements about hacking attacks traced to China could hurt its business.

The tough warning appeared in the overseas edition of the People's Daily, the leading newspaper of China's ruling Communist Party, indicating that political tensions between the United States and China over Internet security could linger.

Last week, Google said it had broken up an effort to steal the passwords of hundreds of Google email account holders, including U.S. government officials, Chinese human rights advocates and journalists. It said the attacks appeared to come from China.

The Chinese Foreign Ministry rejected those accusations, and the party newspaper warned Google against playing a risky political game.

By saying that Chinese human rights activists were among the targets of the hacking, Google was "deliberately pandering to negative Western perceptions of China, and strongly hinting that the hacking attacks were the work of the Chinese government," the People's Daily overseas edition, a small offshoot of the main domestic paper, said in a front-page commentary.

"Google's accusations aimed at China are spurious, have ulterior motives, and bear malign intentions," said the commentary, written by an editor at the paper.

"Google should not become overly embroiled in international political struggle, playing the role of a tool for political contention," the paper added.

"For when the international winds shift direction, it may become sacrificed to politics and will be spurned by the marketplace," it said, without specifying how Google's business could be hurt.

A Google spokeswoman said the U.S. firm had no comment on the remarks.

The latest friction with Google could bring Internet policy back to the foreground of U.S.-China relations, reprising tensions last year when the Obama administration took up Google's complaints about hacking and censorship from China.

Google partly pulled out of China after that dispute. Since then, it has lost more share to rival Baidu Inc in China's Internet market, the world's largest by user numbers with more than 450 million users.

Google said last week that the hacking attacks appeared to come from Jinan, the capital of China's eastern Shandong province and home to an intelligence unit of thePeople's Liberation Army.

U.S. Defense Secretary Robert Gates over the weekend warned that Washington was prepared to use force against cyber-attacks it considered acts of war.

In February, overseas Chinese websites, inspired by anti-authoritarian uprisings across the Arab world, called for protests across China, raising Beijing's alarm about dissent and prompting tightened censorship of the Internet.

China already blocks major foreign social websites such as Facebook and Twitter.

(Editing by Miral Fahmy and Alex Richardson)