The authorities are tightening their grip on cybercrimes by imposing stricter penalties.
The Supreme People's Court and the Supreme People's Procuratorate jointly issued a legal interpretation on Monday that will make the purchase, sale and cover-up of illegally obtained computer data a criminal offence.
People who obtain more than 5,000 yuan (HK$6,100) by 'transferring, purchasing, selling or covering up' such data or control of a network will be criminally liable under the new rules, which go into effect tomorrow.
Hackers who intentionally implant viruses in more than 20 computers, or who provide viruses to other parties more than 10 times, could face jail terms of up to five years. Those who steal 10 to 50 usernames and passwords for online payment or stock trading accounts will face a penalty of up to three years' imprisonment.
Many foreign companies have said China appears to be a major source of hacking attacks.
Last year, Google accused China of launching a series of hacking operations of companies such as itself, Yahoo and Adobe. In July, a military propaganda documentary was aired on state television, and the footage contained a six-second clip showing a military university using hacking software that it had developed to target dissident groups.
However, the authorities say China is one of the world's biggest victims of hacking.
The Supreme Court cited Ministry of Public Security figures that said that the number of cases related to computer hacking increased annually by 110 per cent. In a State Council Information Office report last year, more than a million internet addresses were said to be controlled by foreign hackers in 2009.
Xiang Ligang, an analyst on information technologies and telecommunication, said the new interpretation was urgently needed, especially as smartphone usage was growing more prevalent.
'In our phones, there is usually more private information, such as the contact information of our friends, text messages, photos and videos,' he said.
'What's worse, compared with personal computers, smartphones are connected to the internet all the time.
'In the past, most Chinese didn't tend to consider hacking attacks as crimes.' New laws would change the public's perception, he added.
The fundamental cause of the rampant hacking on the mainland was the profit people made from the production and sale of hacking tools, as well as from illegally obtaining data, the supreme court said.
The court's interpretation is intended to hit the profits of the online criminals, a tactic the interpretation paints as the key to combating such online crime.