veil on a kind of invisible war. China, unleashing its full spy power on american power grids and the wealth of american manufacturing. A new report even locates this building in shanghai. It doesn't... See More
veil on a kind of invisible war. China, unleashing its full spy power on american power grids and the wealth of american manufacturing. A new report even locates this building in shanghai. It doesn't look threatening, but what are they doing inside? And what does it mean for americ america's national security? Here's abc's brian ross. Reporter: The chinese people's liberation army is the biggest military force in the world, with more than 2 million soldiers. But it is the thousand or so in this nondescript building in shanghai that may pose the biggest threat to the u.S. This is the headquarters of the army's secretive unit number 61398, where, according to the new report today by the mandiant security firm, english-speaking computer experts spend their days stealing secrets from u.S. Companies and hacking into government sites. This is an espionage operation run by the chinese people's liberation army targeting a broad swath of western organizations. Reporter: Among the most troubling targets, american inf infrastructure sites, including water treatment plants, transportation control centers, pipelines and power grids. It's costing, according to u.S. Intelligence, hundreds of billions of dollars and thousands of u.S. Jobs every year. Reporter: Among the many corporate espionage targets the chinese army hackers, according to u.S. Officials, lockheed martin, the country's largest defense contractor, and the maker of the f-35 jet fighter. U.S. Officials say, not surprisingly, the chinese version of the plane has some distinct similarities. The only reason anybody would want to get into that control system would be so that I they wanted to, some day, they could cause planes to crash. Reporter: The white house today confirmed this severity, though not the details, of the chinese cyber espionage. We have repeatedly raised our concerns about cyber theft with chinese officials. Reporter: But why that remains in denial, according to abc's gloria riviera in japan. Reporter: Chinese military say they do not support hacking activity. But when a bbc news team tried to film the building, military personnel confiscated the footage. Reporter: Of course, the u.S. Is believed to be doing its own cyber attacks on iran and its nuclear program, but officials say it is different than the economic espionage china is conducting and president obama has ordered government agencies to help american companies spot and deter hackers from that secret army building in shanghai, diane. All right, brian ross, thank you.
This transcript has been automatically generated and may not be 100% accurate.