China probes Canadians for alleged spying -Xinhua

HONG KONG - Chinese authorities are investigating two Canadians for alleged espionage, state media reported Tuesday, a week after Canada accused Beijing of "state-sponsored" hacking.

"Two Canadian nationals are under investigation for suspected theft of state secrets about China's military and national defence research," the state-run Xinhua news agency said.

Xinhua identified the pair as Kevin Garratt and Julia Dawn Garratt, though provided no personal details other than nationality.

China's definition of state secrets can be very broad, and the report did not specify what was allegedly stolen, though it added the probe was being conducted by the State Security Bureau in Dandong, on the border with North Korea in Liaoning province.

A Canadian-run coffee shop in the town, Peter's Coffee House, overlooks the Yalu river and the Friendship Bridge linking the two countries.

Canada's Globe and Mail newspaper last year profiled the owners, identifying them as Kevin and Julia Garratt of Vancouver.

The region is a sensitive military area for China, and the border crossing is a key trade lifeline for nuclear-armed, diplomatically isolated North Korea.

Calls to the coffee shop went unanswered Tuesday morning.

On its website it describes itself as "only metres from the border of North Korea", and "the perfect stop off while en route to or returning from the Hermit Kingdom".

The Canadian Embassy in Beijing did not immediately respond to an e-mail query seeking comment.

The development came a week after Canada accused China of hacking into the computers of its research and development arm.

"Recently, the government of Canada, through the work of the Communications Security Establishment, detected and confirmed a cyber intrusion on the IT infrastructure of the National Research Council of Canada by a highly sophisticated Chinese state-sponsored actor," a government statement said last Tuesday.

Canada did not provide details on the nature of China's alleged cyber intrusions.

Beijing dismissed the claim as "groundless speculations and accusations" in a statement issued by its embassy in Ottawa.

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