You can't really stop this sort of thing with China. It's like a force of nature. I mean, have you ever seen those fake Apple stores that are so good, even the employees think that they're working for Apple?
LOL, China is like the Twilight Zone or an parallel universe, those guys control everything, the people can't even access a normal internet. Never heard that about Apple, pretty amazing...
I doubt this is a surprise for anyone, there is no doubt a lot of spying being done internationally and the US is a prime target for it for obvious reasons. Not sure what the punishment needs to be but I doubt it will be anything significant.
We are not just barking dogs, we have the strongest military in the world. Most countries realize that if they truly piss off the United States, the only way they could defend themselves would be through nuclear strikes, not traditional warfare. If it wasn't for Bush's legacy, Obama would be far more likely to use military force.
I don't think the last guy's legacy should factor in to the current president's decision to use or not use force. He should use force if need be, and not worry about what the polls say. But Obama is largely opposed to military force anyway - he will only do it when it's politically advantageous. It's not like he's worried about spending more money...