•Inflated Threats and Growing Mistrust. The United States and China have more to gain than lose through their intensive use of the internet, even as friction in cyberspace remains both frustrating and inevitable. Threat misperception heightens the risks of miscalculation in a crisis and of Chinese backlash against competitive U.S. firms.

• The U.S. Advantage. For every type of Chinese cyber threat—political, espionage, and military—there are also serious Chinese vulnerabilities and countervailing U.S. strengths.

• Protection of Internet Governance. To ensure the continued high performance of information technology firms and the mutual benefits of globalization, the United States should preserve liberal norms of open interconnection and the multistakeholder system—the loose network of academic, corporate, and governmental actors managing global technical protocols.