Confrontation with China over cyber spying carries risk

The Obama administration is considering whether to use economic sanctions to retaliate against China for allegedly hacking into and spying on U.S. companies, but aggressive measures risk sparking a trade war with an important economic partner.

Mike McNerney, a cybersecurity consultant and former Defense Department official, said the Chinese government is engaged in a massive campaign to steal the innovations of US companies. "We don't hack into a Chinese company and steal their [intellectual property] and give it to Google or Apple or Ford. We view that as out of bounds," he said. McNerney said the use of economic sanctions to punish cyber espionage would be "groundbreaking" and would demonstrate the seriousness of the United States to confront the problem. "I do think China will take these actions very seriously," he said. But McNerney warned the sanctions would have to be well-tailored or they could escalate tensions between the nations. "There's always the possibility of triggering a reciprocal response. The reality is China is the second largest economy in the world," said David Fagan, a Washington-based attorney who works on cybersecurity and trade issues. "We have to be very careful in how we manage that economic relationship."