Now, new warnings over cyber security and the growing cyber war between U.S. And China. U.s. Officials charging members of a shadowy unit in the Chinese military, accusing its agents of stealing trade... See More
Now, new warnings over cyber security and the growing cyber war between U.S. And China. U.s. Officials charging members of a shadowy unit in the Chinese military, accusing its agents of stealing trade secrets from American companies. Pierre Thomas is back with the dramatic details. Reporter: The FBI claims the scale of China's theft of U.S. Company research, design and marketing strategy has reached a point that something had to be done. The amount of theft that's going on is staggering. Reporter: So, for the first time ever, the justice department prosecutors charged the Chinese military for hacking into U.S. Companies, stealing extraordinary amounts of trade secrets, costing American jobs. It's going to make a big difference in the competitive landscape. American companies won't exist any more in some fields. Reporter: He was part of the security firm that helped uncover the alleged Chinese hacking. -- A significant breach. Reporter: In other words, we spend billions and billions of dollars developing products to sell and then they take those secrets and therefore they don't have to spend the money. That's exactly right. We're at a vulnerable point now. Reporter: Case in point, five Chinese military officials allegedly part of specialized military unit 61398 where charged this week with targeting U.S. Companies. The Chinese government called the charges bogus, fabricated. Do you have the goods? We would prove beyond a reasonable doubt that this conduct was done by these five guys. Reporter: It's a delicate line for the U.S. After Edward Snowden revealed that the U.S. Engaged in its own spying against our own allies. On Monday, in charging these military officials would say, look at what the NSA is doing, we're spying all the time. Isn't this hypocrisy? We're not targeting private companies in order to take their trade secrets and then pass them to American companies. We are aware of no nation in the world that publicly states that theft of information for commercial gain is acceptable. Reporter: The stakes could not be higher, and with these charges, the U.S. Entered a new frontier. A fight with China for economic supremacy. For "This week," Pierre Thomas, ABC news, Washington. And joining us now former ambassador to China and gop presidential candidate Jon huntsman and our ABC news contributor Steve ganyard. Governor huntsman, I want to start with you. One of the commissions found was quote, the American response to date of hectoring governments and prosecuting individuals has been utterly inadequate to deal with the problem. So, what good does this indictment do? Is the Obama administration doing enough? Well, it's been a problem for probably 40 years. And it ratcheted up about eight years ago with the creation of pla unit. And the systemic development of innovation, picking winners locally in the Chinese economy. So, we have a real problem today. We assessed theft of intellectual property as costing the United States roughly $300 billion, that's everybody combined, China is probably 70% of that number.xd but what it does, Martha, it gets to the heart and soul of innovation and the creation of new industries in America that we do better than anybody else. It's really hard to put a price tag on innovation. Let me ask you again, are we doing enough? Will this do any good? This is symbolic. You put five pla members in the most wanted poster, we're not going to make any headway on this until we target market access in this country. What does China want more than anything else? They want access to our market, they want to go public on our stock exchange, they want access to our banks and financial services. And at some point, we have to get serious about how we respond beyond the symbolic measures. And Chile this ratchet up the level of discussion, I don't it's going to stop the P activity. Steve, you heard in Pierre's piece and you know this well, Edward Snowden revealed that the U.S. Of course was spying on China D cyberspying. So, what's the difference between what the U.S. Is doing and what China is doing? Right. The U.S. Tried to make a legal and moral distinction between what we do in terms spying for national security and what the Chinese do, which is spy for national security and for profits. You saw secretary Gates this week confirmed the open secret that the French government has been stealing directly from U.S. Industry for decades. So, this is a view that's held only by the U.S. But as the governor said, it costs us hundreds of thousands of jobs a year. How do the Chinese retaliate or will they retaliate? And when do we call this is an act of war? Well, the law of physics apply in the u.s./china relationship. For every action there's a reaction. I fully expect there will be a reaction from China. We need to be very fatisdouse in identifying country to country espionage. We don't do a very good job of differentiating those two. We'll figure out the red lines between our countries and if you cross them you have a certain penalty to pay. But, in the meantime, let's work on this serious economic issue which is theft of intellectual property rights. And begin to determine the price people will pay. But the government can really only do some much to protect private industry, so we get cyber mercenaries, Steve, what happens now for these companies to actually try to protect themselves? That's right. There are real limits what the U.S. Government can do. You know, some of the responsibility has to go back to private industry. They parked the for rai overnight in a bad area and left the keys in the car. The real fight here is between private industry, those who would steal, whether it's transnational groups, countries that would steal from there, there's no Marine Corps in cyberspace. We're only about to hit the cusp of where private companies are going to have to hack back.
This transcript has been automatically generated and may not be 100% accurate.