The White House report comes ahead of next week's critical meeting between President Donald Trump and his Chinese counterpart, Xi Jinping, aimed at defusing their escalating trade and strategic row.

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Financial markets are becoming ever-more concerned a breakthrough won't be achieved and Ambassador Lighthizer's hardline report will only cement these doubts.

"China shows no sign of ceasing its policy and practice of conducting and supporting cyber-enabled theft and intrusions into the commercial networks of US companies," said the report released on Wednesday morning Australian time.

And rather than curbing its theft of commercial secrets in line with an agreement struck in 2015, the report alleges the "frequency and sophistication" of attacks has increased over the past eight months.

Under President Barack Obama, the US was criticised for ignoring Asia and doing little to contain China's efforts to challenge America's historical dominance in the region. Mr Trump's erratic leadership and dealings with China have prompted their own concerns from security officials and diplomats, but over the past six months US agencies have bolted together a uniform approach to actively – and publicly – call out and combat Chinese government hacking, commercial theft and espionage. Multiple indictments in US courts have followed.

The "frequency and sophistication" of attacks has increased over the past eight months.

White House report

In contrast, two senior government sources said Australian agencies, which last year argued for sweeping legislative reforms to better counter Beijing's cyber and foreign interference operations, are yet to produce compelling evidence in prosecutions or public parliamentary hearings.

Parliamentarians from both major parties, who backed the reforms, have privately called for national security and policing officials to follow through on the rhetoric they used to advocate for the changes. AFP Commissioner Andrew Colvin and ASIO chief Duncan Lewis both pushed for the reforms, and their agencies have formed a taskforce to investigate cyber-hacking, interference and espionage. But a senior police source recently told Fairfax Media that any prosecution was at least 18 months away.

In contrast, the Lighthizer report is blunt in its language, revealing the US Department of Homeland Security issued an alert in October against Chinese hacking group "APT10" and what is known in cyber circles as "Operation Cloud Hopper".

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"Information obtained from the ongoing monitoring of APT10 by the US Department of Homeland Security has also indicated a rising incidence of Chinese cyber-enabled theft," the report said.

This is the same group Fairfax Media has linked to China's Ministry of State Security (MSS), which has overseen a surge in attacks on Australian companies over the last year.

The attacks were detected by Australia and its partners in the Five Eyes intelligence sharing alliance and described by a senior government source as "a constant, significant effort to steal our intellectual property".

The report also highlighted the issue of internet traffic being maliciously diverted via mainland China, giving credence to research conducted by the Naval War College in the US and Tel Aviv University.

"Assessments in the US law enforcement and intelligence community dovetail with industry views," the report said.

Fairfax Media used new data from the same research to show internet traffic heading to Australia was diverted via mainland China over a six-day period last year, in what some experts believe may have enabled a targeted data theft.

The diverted traffic from Europe and North America was logged as a routing error by the state-owned China Telecom.

The lead researcher on the project, Yuval Shavitt, a professor at Tel Aviv University, said the data diversions happened between June 7 and June 13 last year and resulted in a small portion of the internet traffic coming into Australia taking up to six times longer to arrive as it went via China.

Chinese officials have downplayed the reports.

"Cyber security is a global issue and cyber hacking is a common challenge faced by every country in the world," a Foreign Ministry spokesman said at a regular press conference when asked to respond to the reports.