The U.S. has criticised Chinese authorities for not handing over the ex-NSA contractor who leaked sensitive surveillance information.

China has undermined its credibility to develop trust with the U.S. to manage difficult situations, said Deputy Secretary of State William Burns. He was speaking to officials on the sidelines of a meeting on trade and cyber security.

After speaking with Chinese officials, Mr. Burns said Beijing had compromised on bilateral trust. However, China responded to those allegations, stating that Hong Kong acted appropriately and was in line with the law of the land.

In related news Seattle, Washington-based Microsoft has been accused of sending user data to U.S. intelligence agencies. In response, the software giant said, "Microsoft does not provide any government with blanket or direct access to SkyDrive, Outlook.com, Skype or any Microsoft product," in a BBC news report.

In the latest case of leaking sensitive information by Snowden, the Guardian had reported that Microsoft worked with the National Security Agency and the Federal Bureau of Investigation in accessing sensitive information.

The Guardian noted that Microsoft had bypassed encryption rules for NSA to obtain access to information. The paper also revealed access of information through SkyDrive and chat software Skype.

Both Hong Kong authorities and executive management at Microsoft, founded by philanthropist extraordinaire Bill Gates, have rejected claims by the U.S. that they have acted unlawfully.

Meanwhile, Mr Snowden is believed to be at a Moscow airport. He has applied to 21 countries for asylum according to news reports. Unofficial reports say that Venezuela, Bolivia and Ecuador are ready to accept his bid for asylum.