China is "the most threatening actor in cyberspace" as its intelligence agencies and hackers use increasingly sophisticated techniques to gain access to U.S. military computers and defense contractors, according to the draft of an annual report mandated by the U.S. Congress.

"China's persistence, combined with notable advancements in exploitation activities over the past year, poses growing challenges to information systems and their users," the U.S.- China Economic and Security Review Commission said in the draft obtained by Bloomberg News.