your point 1 proves what I was saying: it's technically very easy to defend against Chinese spies -- just enact more stringent ethnic profiling. I'm not saying this is desirable, but even at very high level it clearly restricts attacking surface quite dramatically. The difficulties are political rather than technical in nature.

I partially agree with your point 2, but "according to American counterintelligence" the sky is falling every other day unless the spooks get more money and less supervision. Relying on government sources in a thread about Snowden feels a bit weird.