The cyberelephant in the room

Good question in The Economist from December of last year, before all the Mandiant madness:

As Mr Libicki asks, “what can we do back to a China that is stealing our data?” Espionage is carried out by both sides and is traditionally not regarded as an act of war. But the massive theft of data and the speed with which it can be exploited is something new. Responding with violence would be disproportionate, which leaves diplomacy and sanctions. But America and China have many other big items on their agenda, while trade is a very blunt instrument. It may be possible to identify products that China exports which compete only because of stolen data, but it would be hard and could risk a trade war that would damage both sides.

Given what China-U.S. relations are today, its not clear there are any good options. This situation reminds me of America’s early history of piracy. Until China is better integrated into the global order, the executive is going to have quite a challenge on his hands.