I know this is the second post on this subject but I think it is extremely relevant. The 2013 National Intelligence estimate says that China is systematically hacking nearly every sector of the United States economy. As stated in earlier posts, big name companies all across the nation have reported being attacked. Some sources say that this hacking has already accounted for loses of tens of billions of dollars.Other countries such as Russia and Israel are also suspected of hacking for economic gain. Another important thing to note is that it is difficult to detect hackers and so it is safe to assume their is more hacking that we do not yet know about.
This is an interesting representation of how technology effects and economy. Increases in technology push out the production function causing economic growth, and China is showing that advancements in hacking are having a similarly positive effect on their economy as other technological advancements like more efficient factories. However, the United States is absorbing huge negative externalities as a result of the hacking. The United States can try diplomatic measures to end this, but they would be unlikely to work. Our government is unable to stop hackers through laws on our own soil so their is no reason to think we would have more success in China.
The best defense is to increase our cyber security. The Defense Department is ramping up their Cyber Command with 4,000 new jobs, which should add protection, but one can only assume China has more hackers working to systematically hack our economy than we have security measures.
My term paper will focus on why China is overcoming us on the cyber front, and what the United States needs to do in response.