In The Great Google Coverup? Douglas Rushkoff ponders the mysteries of the Chinese breaks-in at Google's Texas servers (and perhaps 33 others including Adobe). This case does not pose the usual false choice of privacy versus security:
"At least a conspiracy theory, in which Google willingly gave the Chinese authority over its clients' communications, offers the comfort of there being some human agency in all this. Just as we prefer to find out that a single pilot was drunk than that there's a problem with every plane in the sky, it is easier to contend with the notion that Google's young executives made a stupid decision by engaging with dictators than to consider the alternative: that the cloud being entrusted with an increasing amount of our banking, business, and everything else, is the for the taking."
For more on this see the Techmeme cluster headed by the McAfee Security Insights, which according to Arstechnica has found evidence that a vulnerability in Internet Explorer -- not Acrobat Reader as in recent attacks on the Dalai Lama’s computers -- was exploited in the attacks on individuals and corporate infrastructure.
Update: Techie Buzz says that "Reuters is claiming that the attackers were aided from the inside. According to its sources, one or more Google China employees colluded with the attackers. Local media has been reporting that, Google China employees were denied access to internal networks after January 13th, while several staff members were transferred or put on leave."
Also, Glenn Greenwald makes a good point, "It goes without saying that countries like China and Iran -- along with many of our closest allies -- are far more repressive of internal dissent than is the U.S. But the role of the American Congress is supposed to be to check surveillance abuses by the U.S. Government and to safeguard the privacy of American citizens inside the U.S. Instead, they do the opposite: flamboyantly condemn transgressions by other governments (at least the ones we don't like) while enabling, empowering and protecting our own government officials and private telecoms who illegally spy within our own country."
Update 2: as background, note that China and the US have been conduction trade negotiations, as well as relations on climate change and loan and other financial matters.
Update 3: Hackers target friends of Google, Adobe and other workers, and from the Christian Science Monitor (January 25), "At least three US oil companies were the target of a series of previously undisclosed cyberattacks that may have originated in China and that experts say highlight a new level of sophistication in the growing global war of Internet espionage." Read more in US oil industry hit by cyberattacks: Was China involved?