President Obama, two years ago, rejected a series of tough actions against China, including counter-cyber attacks and economic sanctions, for Beijing's aggressive campaign of cyber espionage against the US government and private businesses networks, according to administration officials.

Meanwhile, China recently issued a veiled threat to the United States about US accusations of Chinese military cyber espionage. China told US officials that continued US public accusations of cyber espionage would render future bilateral discussions unproductive during recent US-China talks following the release of a security firm's report linking the Chinese military to cyber spying.

On plans to deter Chinese cyber attacks, senior administration officials turned down a series of tough options designed to dissuade China from further attacks that were developed over a three-month period beginning in August 2011.

According to administration officials familiar with internal discussions, the options were dismissed as too disruptive of US-China relations.

The president's closest advisers feared that taking action would potentially undermine US relations with China, a major economic trading partner that currently has holdings of $1.2 trillion in Treasury debt, the officials told the Free Beacon.

Government security and military officials under the White House Interagency Policy Committee, a working group directly supporting the National Security Council, developed the options.

The committee is made up of representatives from the Pentagon, intelligence community, law enforcement, homeland security, and foreign affairs agencies.

Caitlin Hayden, a White House National Security Council spokesperson, declined to comment...Hayden said because China and the United States are major "actors" in cyberspace "it is vital that we continue a sustained, meaningful dialogue and work together to develop an understanding of acceptable behavior in cyberspace."

"We have repeatedly raised our concerns at the highest levels about cyber theft with senior Chinese officials, including in the military, and we will continue to do so," she added.

Disclosure of the administration's failure to take a tough stance on Chinese cyber intrusions is likely to further upset US industry, which has been pressing the government to do more against China for the hacking.

The interagency group was tasked in August 2011 with developing options for Obama to deter China in cyberspace, as evidence mounted for years that China's government, despite repeated public and private denials, is continuing a highly damaging program of stealing US secrets and proprietary economic information that has helped China's industry and its military to leapfrog technological hurdles and more favorably compete against the United States.

The options that eventually were presented included using bilateral and multilateral diplomacy, conducting covert computer network attack operations, levying economic sanctions, and taking legal action against the Chinese government and military.

The officials said the options developed by the committee covered the full spectrum of statecraft, including diplomatic, military, intelligence, and economic measures designed to pressure China into halting the cyber attacks.

Hayden, the White House NSC spokeswoman, defended administration cyber security efforts. "We are taking an active approach to addressing cyber theft," she said. "We regularly release technical information intended to improve the ability of the private sector to defend against cyber intrusions."

The security of US government networks is also being boosted, along with critical infrastructure, she said, adding that the president wants legislation to create new tools and authorities to address cybersecurity challenges, she said.

The head of the US Cyber Command Gen. Keith Alexander last year estimated that foreign computer attacks are costing US companies $250 billion a year in stolen data. Alexander said in a speech in July 2012 that the data theft is "the greatest transfer of wealth in history."

READ FULL SOURCE ARTICLE: 03/11/2013

Editor's Note: Boy, Mr. Obama sure is looking out for us, isn't he? Good thing those evil pro-American business Republicans didn't win the White House!...