• With: Dan Henninger, Dorothy Rabinowitz, Matt Kaminski, James Freeman, Bret Stephens

    GIGOT: Yes. But that is the point of Rove and that is the point of the donors and particularly with Democrats who come in at the end of these Republican primaries and say, we're going to help the least electable Republican candidate. What Rove is saying is, we're going to stop some of that so we can actually have better quality of nominees.

    (CROSSTALK)

    RABINOWITZ: It is possible to say, OK, Rove -- but he has his hands on something that is really a profound truth about one of the reasons the Republican Party is in such disarray. He should not be the subject. It is the focus he is that is making -- we should not be having unelectable people.

    GIGOT: Right.

    FREEMAN: Republicans believe in markets. I think there's a question of, show us the measurable, Rove. You had all that money. You spent it on X. What was the result exactly? There were bad candidates, as you point out, on the right wing and in the center for Republicans. Both lost. I think candidate recruitment needs some work. It's a question of the credibility for conservatives of who is going to lead that effort.

    RABINOWITZ: But, James, what can you say about a Republican Party today that threatens, with a contest, anybody who deviates from what is so called a violation of the bases purity? What can you say?

    FREEMAN: They nominated Romney.

    HENNINGER: You know -- we haven't even brought up one concrete issue that we are complaining about here. Which raises the question of -- the "Wall Street Journal" had an interesting story about the so-called red state model, which is governors like Sam Brownback and Walker and the rest of them, who are cutting taxes and doing something real.

    GIGOT: Education reform, pension reform. But we're going to have to wait to get to that another time, I'm afraid.

    HENNINGER: All right.

    GIGOT: We've exhausted our time today.

    Thank you.

    When we come back, the Wall Street Journal becomes the latest U.S. news organization to report being hacked by the Chinese government. Why they do it, what can be done about it, and how big a threat is it to American national security? Next.

    (COMMERCIAL BREAK)

    GIGOT: The Wall Street Journal revealed last week that the email accounts of nearly two dozen editors and reporters and even some of our editorial writers had been hacked by the Chinese government. In recent months, hackers have also targeted The New York Times and Bloomberg News, all part of an ongoing attempt to monitor American news organizations' China coverage.

    We're back with Matt Kaminski. And Wall Street Journal foreign affairs columnist, Bret Stephens, also joins the panel.

    So, Bret, how extensive is this China hacking of the United States companies, private and public, the government?

    BRET STEPHENS, FOREIGN AFFAIRS COLUMNIST: As you know, last year, we had a visit from a U.S. lawmaker with knowledge of intelligence affairs and he said there are two kinds of companies in America. There are companies that have been hacked by the Chinese and those that don't know they have been hacked --

    (LAUGHTER)

    -- by the Chinese. So it's absolutely ubiquitous. And we've been seeing story after story. Google being hacked --

    GIGOT: Right.

    STEPHENS: -- and making it public. The Wall Street Journal broke the story about British Aerospace. Its programs with the F-35 being hacked.

    GIGOT: But is this a nuisance or is this genuinely a threat to national security or to the U.S. economy?

    STEPHENS: It's a real threat to the U.S. economy because it allows the Chinese to steal terabytes of intellectual property. And it shows up suddenly with the China putting out fighters that look like our fighters --

    (LAUGHTER)

    -- and new bullet trains that look like German or Japanese trains. So it allows them to have these technological leap frogs without the huge investment that American companies and other Western companies put into research and development. That's a serious threat to the world economy?

    GIGOT: Why do they do this? Bret gets out the economic -

    (CROSSTALK)

    KAMINSKI: Right.

    GIGOT: -- easier to steal secrets than it is to actually -- innovation than to do it yourself. Why else do they do it?

    KAMINSKI: To me, what is new here is the attacks on media companies. We've known that for a very long time the Chinese have really been so focused on commercial espionage and cyber is now the best way in, in a way. But the attacks against The New York Times, against the Journal suggest there's now a great concern within China and the Chinese Communist Party of their image abroad and back in China. A lot of these stories reveal things about the Chinese leadership, how much money they have, internal squabbles that they don't want come out in China itself. And what they're trying to do is sort of figure out who the sources are for these stories. It's part and parcel of their political repression at home.

    GIGOT: Our information is that they did not, in hacking us, go after customers, for example, or commercial business. They really wanted to monitor our coverage, to see who our sources were --

    (CROSSTALK)

    STEPHENS: Right. And we ourselves are personal not affected, but sources in China, the method by which we get information. There was a huge scandal with this character, Bogi Li (ph) and his wife, accused of murdering an English businessman.

    GIGOT: Almost made it to the politburo, at the senior levels of the politburo.

    STEPHENS: That's right.

    (CROSSTALK)

    STEPHENS: And there were revelations about the huge wealth of China's senior leadership.

    GIGOT: So is this the nature of secretive authoritarian regime that does this kind of thing? I mean --

    (CROSSTALK)