Or totally brilliant. What they are hopefully doing is keeping the true designs off the internet and letting the Chinese hack are things full of backdoors, poison pills, massive malware, virus and Trojan farms.
You have to remember that what the Chinese are getting if they are getting anything worthwhile are prototype designs. Full production models are a different animal. Even the developers don't know what the final product will look like until years of testing take place. This whole report smacks of kabuki theater if you ask me.
A precept for internet censorship?
Sounds plausible.