Another timely James Fallows reality check
I have an article on this subject in the new issue of the Atlantic (subscribe!). I had done the reporting and writing for the story long before the Google-v-China controversy broke. We had a day or so to take note of that development before the issue went to press. Welcome to life in the monthly magazine business! I think that the analysis in the story actually stands up well in light of the Google episode -- including the insiders' estimate that China is a serious source of international cyber-attacks, but not the leading source and perhaps not even the second most important.
An excerpt from the full article:
But short of outright war, the main losses have come through economic espionage. “You could think of it as taking a shortcut on the ‘D’ of R&D,” research and development, one former government official said. “When you create a new product, a competitor can cherry-pick the good parts and introduce a competitive product much more rapidly than he could otherwise.” Another technology expert, who serves on government advisory boards, told me, when referring to the steady loss of technological advantage, “We should not forget that it was China where ‘death by a thousand cuts’ originated.” I heard of instances of Western corporate officials who arrived for negotiations in China and realized too late that their briefing books and internal numbers were already known by the other side.