WASHINGTON - China’s extensive spying inside the United States is the greatest threat to the security of American technology secr-ets.

Advances by the Chinese military are catching U.S. intelligence officials by surprise.

And the Defense Depart-ment may be inadvertently outsourcing the manufacturing of key weapons and military equipment to factories in China.

These are among the key findings released Thursday by a bipartisan panel commissioned by Congress to study the economic and security relationship betw-een the United States and China. The U.S.-China Economic and Security Review Commission, created by Congress in 2001, has been criticized in the past for taking a hawkish stance on China in its annual reports.

The book-length report, the fifth produced by the panel, said China appears to be reversing its move tow-ard free markets by setting up state-owned ent-erprises to maintain control over 12 key industries, including oil, telec-ommunications, shipping, automobiles, steel and information technology.

The commission also urged Congress to find ways to work with China to reduce its pollution, which is blowing significant amounts of smog into the air over the western United States, according to new studies quoted by the report. China, it added, is scheduled to build 562 coal plants over the next five years, a rate of about two a week, and may have already replaced the United States as the largest greenhouse-gas polluter in the world.

The panel presented 42 recommendations to Congress, and several of them raised questions about whether the Defense Department has been lax in overseeing the production of sensitive military technologies and gathering intelligence on the Chinese military.

The Pentagon increasingly is buying planes, weapons and military vehicles from private contractors that outsource the manufacturing to plants in China and elsewhere in Asia, the report said. But when questioned by the commission, defense officials said they do not have the ability to track where the components of military equipment are being made.

“As weaponry gets more and more sophisticated ... I think we’ll find ourselves more vulnerable for parts that are being manufactured by an adversary. It’s really something the Pentagon needs to look at seriously,” said commission member Bill Reinsch, who is also president of the National Foreign Trade Council, which promotes free trade on behalf of businesses.

Commission members said the group had never before delved so deeply into national security issues.

The report stated that China’s military advances “have surprised U.S. defense and intelligence officials, and raised questions about the quality of our assessments of China’s military capabilities.”

In January, the Chinese military successfully blew up an out-of-date weather satellite, a move that some analysts said was a signal by China that it could take out U.S. military satellites if a conflict broke out in the Taiwan Strait. China has also made attempts to blind U.S. spy satellites with lasers and is building a fleet of diesel-powered submarines that could sneak up on large aircraft carriers.

Jia Qingguo, vice dean of the School of International Studies at Peking University, said he believes the conclusions in the report are exaggerations.

“When talking about spying technologies, the U.S. is second to no other,” he said. “It is true and fair to say that the speed of the modernization of China’s national defense technology has been really fast, but it still lags substantially behind the United States’.”

Among the biggest worries about China are its projects to develop a superior aircraft carrier, expanding its military far beyond the Asia theater, and anti-satellite technology. If you take down a country’s satellite, he “becomes blind and paralyzed,” Jia explained.

But, Jia said, China has given no indication that it wants a military confrontation with the United States. So, “as long as the United States doesn’t want to invade China, China should not be a threat to the United States,” Jia said.

Shen Dingli, a professor who focuses on Sino-U.S. relations at Fudan University in Shanghai, said that if U.S. companies that outsource sensitive technology to China “are afraid we will take their technology, they don’t have to let us work on it.”

“When companies come to China for outsourcing, it is them asking for favors, not the opposite. But then they turn around and say we are bad,” Shen said.

U.S. defense officials declined comment on the report, which they said they had not yet seen. Department spokesman Stewart Upton responded Thursday in a statement: “We are closely watching China’s military modernization. China’s lack of transparency regarding its military modernization raises uncertainty - for the U.S. and for others - regarding its strategic intent, and causes hedging against the unknown.”

In the past, the U.S.-China review commission has come under fire from its own members. Reinsch has refused to support two previous reports because he disagreed with their harsh rhetoric and stances. The commission has 12 members, with Democrats and Republicans appointing six each.

The current report got unanimous support, largely because it is more objective and supported cooperative efforts on pollution issues even as it criticized China for its trade surplus with the United States, Reinsch said.

“This year we are more boring, but the result is a more balanced and more thoughtful report,” said Reinsch.