To change that, the United States will have to play more aggressively in the gray space, both openly and not-so-openly. On the open side, we should begin imposing visa and financial restrictions on a select set of actors and their families. If we can prove particular companies have benefited from stolen technology -- that's difficult, but we should devote more resources to it -- let's ban their products or impose heavy import duties and encourage our allies to do the same.
Legislation pending in the House would push the government to provide more classified information to the private sector, or at least to the companies that own the vertebrae of the telecommunications backbone. Less well known is the reluctance of private firms to share information about network threats among themselves. Sometimes the reluctance arises from perceived competitive advantage. But that explanation cannot possibly apply to every firm in an industry, and even the most secure firms would be better off if they were privy to industry-wide information about emerging cyberthreats. The House bill would protect companies that act in good faith to protect their networks or share threat information, and it contains strong privacy protections. Passing this bill should be a no-brainer, but the civil liberties lobby has consistently opposed it. Their opposition is a replay of that lobby's defense of the pre-9/11 "wall" that prevented the criminal side of the Justice Department from knowing what the intelligence side of the department knew and vice versa. Artificial legal barriers that prevent the flow of threat information to agencies and companies that need it cannot be defended. It's time to pass the House bill.
The name for the not-so-open side is covert action -- carefully calibrated and decidedly unfriendly steps to raise the price to China of its wholesale economic espionage. Speculating openly about actions intended to be covert would be decidedly unhelpful, so I'll say only: This sphere of action demands serious consideration. But this is no time for chest-thumping. Frozen relations between the United States and China would be costly; war would be a strategic disaster for both sides. America's strategic goal must remain China's peaceful integration into international institutions and expanded trade while maintaining our strategic position in the western Pacific.
In the Cold War, the United States and Soviet Union took years to understand each other's strategic behavior and reach tacit agreement on how to escalate and de-escalate tensions before they led to war, and even then we came terribly close to conflagration. Similar understandings do not yet exist in cyberspace, but they can emerge only through carefully considered action and reaction, much of it out of public view. Those who say the threat is hyped must now confront the evidence. Inaction on our part will make the situation worse. American and other Western businesses are being stripped of their intellectual property. It's time we defended ourselves.