The commission also recommended structural changes, including assigning the president’s national security adviser to coordinate the US response to intellectual property theft.
Commission co-chair Dennis Blair, the ex-director of national intelligence, said governments should also toughen laws to prevent a “cyber war going on well outside the control of governments, the consequences of which no country wants.”
The damning report comes ahead of talks between Presidents Barack Obama and Xi Jinping at a California resort on June 7-8, their first meeting since the Chinese leader took office.
Cyber issues are expected to be high on the agenda amid growing US accusations that China has waged a campaign of online espionage against US companies and the government.