China has the security clearances of the entire US government.

That hack into the data of every US government employee is worse than you imagine. The fingers point straight to China. China now owns it all.  What's in those data files?  90% of all the security clearances given to US government staff.  (Story at Hot Air).

"(Questionnaire S-86) runs 127 pages and demands incredibly personal information, not just about the applicant but about relatives, too. Are you a close relative or an in-law of an executive-branch employee with a security clearance? The hackers now have your information, too, and there’s no getting it back from them. Are you a foreign national that had a business relationship with a person who later became a cleared federal employee, or even had contact with them?"

That last line in the quote is click bait for any serious spy. China had a year to roam through several million searchable files looking for tasty bits.   This can't be fixed.  The names of people in your network that have security clearances and the social service numbers are what they are.

"It’s impossible to overstate the scope of this defeat in cyberwarfare, or its utter permanence".

"China has the security clearances of the entire US government" is how I read the story but it isn't proven.