"The New Digital Age" authored by Schmidt in collaboration with Jared Cohen, a former US State Department adviser who now heads a Google Ideas think tank, is due for release by Random House in April.
The book looks at how the Internet impacts culture, commerce, politics and other aspects of life, while depicting China as a powerful and dangerous force in this new world, according to the Journal.
The authors called China the most prolific hacker of foreign companies and the most enthusiastic filterer of information.
"The disparity between American and Chinese firms and their tactics will put both the government and the companies of the United States at a distinct disadvantage," the newspaper quoted the authors as saying in the book.
"The United States will not take the same path of digital corporate espionage" due to stricter laws and the American "sense of fair play," it added.
The book reportedly also points to US flaws, such as Washington's suspected role in a Stuxnet virus that targeted nuclear facilities in Iran and private companies here that sell surveillance technology to oppressive regimes.
Schmidt and his co-author verge on suggesting that Western governments emulate China when it comes to building tight relationships between government interests and moves by technology companies, according to the Journal.
Countries stand to have an advantage if the gear and software they use to get online is made by companies they can trust, the book reportedly argues.
"Where Huawei gains market share, the influence and reach of China grow as well," the Journal quoted the authors as writing.
Despite unscrupulously using Internet technology to its advantage, China will see "some kind of revolution in the coming decades" as citizens armed with digital age gadgets are pitted against tight government controls, the book is said to predict.