I have to quote Lewis Page of the Register on this: A US government panel specially created to warn of danger from China has warned of danger from China. The panel, The US-China Economic and Security Review Commission (USCC), just published a 56 page document that they reported to congress last June. Most of the information for it was collected last February through May when members toured China to gather information and interviewed members of the US Defense Department. Significant timing in that this report was completed before the Pentagon, Whitehall, and German Chancellery attacks were publicized.
If you care to read the whole report you can download the PDF here. The report attempts to link many disparate instances of Chinese activities to paint a picture of a concerted attempt to undermine the US. Parts of it are rather sensationalist. As in this quote:
Speaking of the magnitude of the damage cyber attacks could cause, General Cartwright said, “I think that we should start to consider that regret factors associated with a cyber attack could, in fact, be in the magnitude of a weapon of mass destruction.” Here, by “regret factors,” General Cartwright was referring to the psychological effects that would be generated by the sense of disruption and chaos caused by a cyber attack.
In all fairness the report did follow up this silly comparison with:
James Lewis from the Center for Strategic and International Studies testified that ... " what many of us call cyber attacks [are] not weapons of mass destruction but weapons of mass annoyance.”
The concerns about cyber warfare are effectively summed up by this segment:
As evidenced by the trajectory of its military modernization, Chinese defense planners are seeking to accomplish the goal of undermining the U.S. military’s technological edge through a variety of disruptive means. Among these is cyber warfare. USSTRATCOM Commander General Cartwright testified before the Commission that China is actively engaging in cyber reconnaissance by probing the computer networks of U.S. government agencies as well as private companies. The data collected from these computer reconnaissance campaigns can be used for myriad purposes, including identifying weak points in the networks, understanding how leaders in the United States think, discovering the communication patterns of American government agencies and private companies, and attaining valuable information stored throughout the networks. General Cartwright testified that this information is akin to that which in times past had to be gathered by human intelligence over a much longer period of time. He went on to say that in today’s information environment, the exfiltration that once took years can be accomplished in a matter of minutes in one download session.
This is good insight into how the Defense Department is viewing cyber attacks. So, OK, what is the response? Where is the tightening down? Have they stopped using telnet and ftp in clear text yet? We're waiting.