The war in Iraq is over; the US mission in Afghanistan is winding down. But a bloodless but dangerous economic war is underway and the U.S. is losing. Badly. The U.S. government is convinced that the Chinese military is behind a wave of digital espionage that according to one long-time Washington hand has hit virtually every major American company. The New York Times reports the Chinese are looking for an edge in every facet of the U.S. from its military and defense contractors to auto and truck makers, banks and finance corporations, food producers and technology firms. So far, the Obama administration and the best minds in U.S. corporate security have been powerless to stop the attacks. It’s not known just how much military intel and corporate secrets the Shanghai based hackers have obtained, but it’s believed to be considerable. So much so, a firm warning to the incoming Chinese leader is said to figure high on the agenda of Secretary of State John Kerry, who is expected to visit China this spring.
The curious mix of capitalism and communism in China, which has become far more westernized in the past 20 years, has prevented China from becoming a post war enemy, as Russia once was. But the hacking, which the Chinese deny could undermine the economic relationship between the two nations - which at the moment is huge. Not only does China now hold about a trillion dollars of our national debt, more than any other country and more than all U.S. bill owning citizens combined. China is the second largest global trading partner to Uncle Sam and closing fast on the top U.S. business partner, Canada. The U.S. and China swapped 425 billion dollars in goods last year. The U.S. economy badly needs that kind of business, but the fear is the more the Chinese learn about America, the more they’ll produce on their own - diluting the trade relationship.
By any account, the government sanctioned hacking is bad news and until we can figure out a way to block the hackers or convince the Chinese to knock it off, we’ll be flooded with knock offs and a bloodless but costly war could be lost forever.
