Why I disagree with Scott Sumner on China

U.S. government investigators increasingly believe that Chinese state hackers were most likely responsible for the massive intrusion reported last month into Marriott’s Starwood chain hotel reservation system, a breach that exposed the private information and travel details of as many as 500 million people…

Story here.  And:

Armed with a rich array of personal data, an intelligence agency can also tailor an approach to a person to see whether the individual can be recruited as a spy or blackmailed for information. The passport data, which is not often collected in data breaches, probably was a particularly valuable find for the hackers.

You will note that no one is trying to sell the data.  And this:

The report, citing two people briefed on the investigation, reported China had launched an intelligence-gathering campaign which included hacking into health insurance companies and hacking security clearance files of millions of people living in the U.S. The New York Times reported the hackers are believed to be employed by the Ministry of State Security, which is China’s spy agency. The paper noted that the revelation that China was behind the Marriott hack comes as the U.S. government is gearing up to launch actions against China’s trade that include indicting Chinese hackers that work for the government. The New York Times noted the Marriott hacking isn’t expected to be part of the indictments but does add a sense of urgency to the moves the White House was mulling.

The Trump administration is also planning on declassifying intelligence reports that show China had been trying to create a database of American executives and government officials that have security clearances, reported The New York Times.

I could go on.  I am genuinely unsure what are the economic costs of these mischievous activities, but would note simply that it is sometimes necessary to punch back.  The choice is not free trade vs. protectionism (I strongly suspect Scott and I agree on the economics of trade), but rather a partial return punch now vs. a worse situation much later on.