An investigation into electronic industrial espionage attacks on the US reveals that "most are sponsored by the Chinese military," according to a report in the Wall Street Journal. Citing sources briefed on the inquiry led by US intelligence agencies, the WSJ says that the US is preparing the groundwork to confront China more directly on the topic. The US warned Chinese officials of the "diplomatic consequences" of its economic spying a few weeks ago.

The report claims that the bulk of the electronic eavesdropping is done by 20 Chinese groups: a dozen associated with the People's Liberation Army, another half-dozen nonmilitary outfits with known links to universities, and two others of mysterious pedigree. The 20 organizations contain hundreds of hackers — far fewer than China's estimated 30,000 - 40,000 censors — which the US believes are responsible for most of the electronic theft of US secrets in attacks on companies like Google, Lockheed, RSA, and EMC. The US National Security Agency has identified many individuals working in these groups through a process of cyberforensics and its own electronic and human-based spy network, allowing the US to more effectively confront Chinese denials or stage its own counter attacks.

Of course, the public battles waged by governments are often very different from the types of diplomacy practiced behind closed doors. And US officials are keenly aware of China's status as the largest holder of US debt. As such, we expect little to change in the face of the new evidence: China will continue proclaiming that industrial espionage is illegal under Chinese law, the US will maintain its silence on Stuxnet, and covert cyberwarfare and espionage will persist unabated on intercontinental data cables.