July 09, 2020

Hidden Hand: How the Chinese Communist Party Is Reshaping the World Clive Hamilton & Mareike Ohlberg

Published on Jul 3, 2020

Professor Clive Hamilton and Dr Mareike Ohlberg

Moderated by AIIA National Executive Director Dr Bryce Wakefield

With its enormous economic power, China is now a global political and military force engaged in an ideological struggle with the West. Clive Hamilton and Mareike Ohlberg outline in their new book, *Hidden Hand*, _the nature and extent of the Chinese Communist Party’s (CCP) influence in operations across the Western world – in politics, business, universities, think tanks and international institutions such as the UN and WHO._ They argue that this new authoritarian power is using democratic systems to undermine democracy in pursuit of its global ambitions.

Clive Hamilton is an Australian author and academic. His influential books include Silent Invasion: China’s Influence in Australia, Growth Fetish, Requiem for a Species: Why We Resist the Truth About Climate Change and Defiant Earth: The Fate of Humans in the Anthropocene. For fourteen years he was the executive director of The Australia Institute, a think tank he founded. A professor at Charles Sturt University in Canberra, he has held visiting academic positions at the University of Oxford, Yale University and Sciences Po. His articles have appeared in Foreign Affairs, The Guardian, The New York Times, Times Higher Education Supplement, Nature and Scientific American.

Mareike Ohlberg is a senior fellow at the German Marshall Fund in Berlin. She has an MA in East Asian Studies from Columbia University and a PhD in Chinese Studies from the University of Heidelberg. She has authored a doctoral thesis on Chinese propaganda targeted at foreign audiences, and was a co-author of the landmark report Authoritarian Advance: Responding to China’s Growing Political Influence in Europe. Her articles have been published in The New York Times, The Neue Zuercher Zeitung and various other European media

Public Diplomacy Magazine, "Ethics in Diplomacy,"



The spring 2020 issue of the USC Annenberg student-run Public Diplomacy Magazine, "Ethics in Diplomacy," is out now! Read the new issue here.

This issue focuses on tools for diplomats to navigate murky ethical waters and emphasizes the development of policies to prevent problematic situations in the first place. Editor-in-Chief Jasmine Kolano identified several pervasive tenets found throughout this issue:

  1. Diplomats do not advocate for their own agenda but seek to foster a spirit of collaboration in everything they do.
  2. Diplomats operate in humility and are active listeners, seeking first to understand before they are understood.
  3. Diplomats do not place great demands on a community without empowering them first.
  4. Diplomats recognize when a program has deviated from its original purpose and will put in place measures to realign its outcomes for the benefit of the right audience(s).
  5. Ultimately, diplomats use their positions of privilege to serve humanity.

Public Diplomacy Magazine is produced by the Society of Public Diplomats (SPD) at the University of Southern California, with support from the USC Center on Public Diplomacy and the USC Annenberg School for Communication and Journalism.

Read the latest issue of PD Magazine here.

To read all issues of the online magazine, click here.

Magazine art (top) by Public Diplomacy Magazine Creative Director Valery Zhukova


July 08, 2020

Li Keqiang promotes new infrastructure

Trivium China 

Premier Li Keqiang continued his travels in Guizhou on Tuesday (see yesterday’s Tip Sheet).

The highlight of his Tuesday itinerary was a visit to Tencent’s Qixing Data Center in the hills outside provincial capital Guiyang.

Some context: The newly completed center is built into the mountains. It has over 30,000 square meters of tunnels and is reported to house tens of thousands of servers.

More context: Since 2014, Guizhou has released a series of policies to support the big data industry.

Premier Li’s visit was all about promoting the government’s “new infrastructure” push (Gov.cn 3):

  • “Construction of new infrastructure, new urbanization, and major projects remain the priority for China in expanding effective investment this year, Premier Li said.”
  • “He asked related departments to increase support for the construction of new infrastructure facilities, and back up the big data industry and other new-emerging industries.”

Get smart: Tencent recently promised to invest RMB 500 billion in “new infrastructure” over the next five years. Premier Li’s visit is meant to show that the government took notice – and is pleased.

Get smarter: China’s big tech companies know that their success depends on staying in the government’s good graces.

read more

Gov.cn: 李克强在贵州考察时强调:突出做好重点民生工作 推动改革创新增强发展动力
Gov.cn: 李克强贵州考察数据中心释放什么信号
Gov.cn: Premier Li visits data center in Guizhou

American universities are a soft target for China's spies, say U.S. intelligence officials

University of Texas professor Bo Mao is the latest defendant in a string of U.S. criminal cases alleging Chinese spying in the academic world.

By Ken Dilanian

It was a brazen scheme to steal another company's product, according to a federal criminal complaint.

University of Texas professor Bo Mao, prosecutors say, took proprietary technology from an American Silicon Valley start-up and handed it over to a subsidiary of Huawei, the Chinese telecommunications conglomerate.

But what makes the case against Mao particularly noteworthy is how he was accused of carrying out the theft: By using his status as a university researcher to obtain the circuit board under the guise of academic testing.

Mao, who has pleaded not guilty, is among the latest defendants in a string of U.S. criminal cases alleging Chinese spying in the academic world. In late January, the chairman of Harvard's chemistry department was arrested by FBI agents in his office, charged with lying about a lucrative relationship with a Chinese talent recruitment program. The same day, a former Boston University student was accused of visa fraud after she allegedly failed to disclose her status as a lieutenant in the People's Liberation Army.

Department of Justice / FBI

America's world class university system has become a soft target in the global espionage war with China, intelligence officials say — and they are pressing universities to do something about it.

"A lot of our ideas, technology, research, innovation is incubated on those university campuses," said Bill Evanina, the top counterintelligence official in the Office of the Director of National Intelligence. "That's where the science and technology originates — and that's why it's the most prime place to steal."

Much of this campus spying is never caught, let alone prosecuted, officials say. But in recent months:

  • A Chinese Harvard-affiliated cancer researcher was caught in December with 21 vials of cells stolen from a laboratory at a Boston hospital.
  • A Chinese professor conducting sensitive research at the University of Kansas was indicted in August on charges he concealed his ties to a Chinese university.
  • A Chinese scholar at the University of California, Los Angeles was convicted in June of shipping banned missile technology to his homeland.
  • A Chinese student at Chicago's Illinois Institute of Technology was charged last year with helping to recruit spies for his country's version of the CIA.

"No country poses a greater, more severe or long-term threat to our national security and economic prosperity than China," said Boston's top FBI agent, Joseph Bonavolonta. "China's communist government's goal, simply put, is to replace the U.S. as the world superpower, and they are breaking the law to get there."

In response to what they say is systematic espionage, the FBI and other agencies have been pushing universities and research institutions to tighten up policies governing outside relationships, travel disclosure and conflicts of interest for graduate researchers and professors.

But the government pressure — backed by the leverage of billions in federal grants to universities — has sparked accusations of racial profiling and pushback by college presidents who say they fear that a massive overreaction risks what makes America's university system special.

Bo Mao Attends Court As Chinese Professor Accused of Theft to Help Huawei
Bo Mao, a professor at Xiamen University in China and a visiting professor of computer science at the University of Texas at Arlington, departs federal court in the Brooklyn borough of New York on Sept. 11, 2019. The Chinese professor has been accused by a Silicon Valley startup in a civil lawsuit of stealing its trade secrets for Huawei Technologies Co. He now faces a federal criminal charge, as the U.S. escalates its crackdown on the telecom giant.Mark Kauzlarich / Bloomberg via Getty Images file

"Our greatest strength is our openness," Thomas Rosenbaum, president of the California Institute of Technology, said in an interview. "And if we wind up thwarting the ability of people to exchange ideas, we will not make discoveries."

Columbia University President Lee Bollinger was even more blunt in an op-ed in the Washington Post in August. The headline: "No, I won't start spying on my foreign-born students."

In September, hundreds of scholars, business leaders, politicians, activists and at least two former cabinet secretaries gathered at a Silicon Valley conference designed to highlight what the participants portrayed as a corrosive bias against ethnic Chinese in the United States.

"Today we face a dangerous narrative out there that anyone of Chinese ancestry out there could be a national security threat and should be viewed with more scrutiny and suspicion than others," said Rep. Judy Chu, a Democrat who represents parts of Los Angeles.

At the conference, Temple University physics professor Xiaoxing Xi choked up as he recalled being taken out of his house in handcuffs in front of his children by FBI agents who accused him of spying for China.

Four months later, prosecutors dropped the charges after it became clear the case was based on a misunderstanding of information Xi sent to scientists in China, which turned out to be available on the internet.

"There have been so many cases of wrongful prosecution, of lives ruined because of a rush to judgment," former Washington state Gov. Gary Locke, who served as U.S. ambassador to China and commerce secretary in the Obama administration, said at the conference.

Robert Daly, who directs the Wilson Center's Kissinger Institute on China and the United States, says concerns about broad brush suspicions are valid.

But it's too simplistic, he said, to dismiss the government's approach to Chinese espionage as a product of racism.

While many nations conduct economic espionage against the U.S. he said, China is in unique in the way it seeks to harness its citizens abroad in the service of a national policy explicitly designed to overtake the West in technological supremacy.

Critics "have been saying it's McCarthyism, its Reds under the bed, it's racial profiling," he said. "That danger is inherent in these issues. But they don't negate the security concern. The security concern is real."

A bipartisan November report by the Senate Permanent Subcommittee on Investigations highlighted China's Thousand Talents Plan, under which China recruits overseas scientists and induces them to sign secret contracts that "violate U.S. research values."

"The contracts include provisions that violate U.S. standards of research integrity, place (Thousand Talents) members in compromising legal and ethical positions, and undermine fundamental U.S. scientific norms of transparency, reciprocity, and integrity," the report says.

In the Boston case announced in late January, Charles M. Lieber, the chair of Harvard's Department of Chemistry and Chemical Biology, is alleged to have violated federal law by failing to disclose his involvement in China's Thousand Talents Plan to Harvard administrators, who allegedly then passed along false information to the federal government.

Court documents say Lieber was paid more than $1 million by China in exchange for agreeing to publish articles, organize international conferences and apply for patents on behalf of a Chinese university.

Lieber, who has not yet entered a plea, has been placed on administrative leave, Harvard officials said, adding in a statement that the charges were "extremely serious."

Lieber's case shows that China's alleged reach goes beyond Chinese nationals and Chinese-Americans. But the majority of China spying cases involve people of Chinese ancestry, complicating the discussion of the problem.

Daly, a fluent Mandarin speaker who has been studying China for years, said the Chinese government "does attempt to influence American views and gather American intelligence and information through Chinese Americans. You can't ignore that fact because it contains the danger of racial profiling, which it does. You just need to have an open discussion of the dangers."

In July, FBI Director Christopher Wray disclosed that the FBI has nearly 1,000 open investigations into economic espionage and attempted intellectual property theft, nearly all of them leading back to China.

"There is no country that poses a more severe counterintelligence threat to this country right now than China … and I don't say it lightly," Wray told the Senate Judiciary Committee.

The FBI doesn't seek those cases out, Evanina said — victims report the thefts. He rejects the idea that the government engages in ethnical or racial profiling.

"We respond to the threat," he said. "We don't racially profile anybody, but the numbers don't lie."

Evanina told NBC News the China spying threat is vastly underappreciated, adding: "The economic espionage threat from China is second to none."

William Evanina, Director of the United States National Counterintelligence and Security Center.
William Evanina, Director of the United States National Counterintelligence and Security Center.Office of the Director of National Intelligence

U.S. intelligence agencies assess that America is suffering economic losses of up to half a billion dollars a year from Chinese espionage, he said.

"That's theft of intellectual property and trade secrets, which results in a loss of about $4 ,000 per American family of four after taxes," he added.

A significant portion of that loss comes when Chinese hackers, many backed by the country's intelligence services, siphon valuable information directly from U.S. corporate networks. There also have been many cases of Chinese operatives who embed themselves in U.S. companies to steal secrets.

But in recent years officials have grown increasingly concerned about spying at American universities, home to research that drives future innovation.

Chinese nationals made up about 30 percent of all foreign students in the U.S. and there are about 340,000 of them, according to government data.

The vast majority are there to study and learn, officials say. But if even a tiny portion are stealing research, that can add up to huge losses, they add.

The criminal cases involving alleged campus spying don't generally involve charges of espionage, which are specific to stealing national defense information.

Sometimes the charges can be as simple as concealing a foreign relationship. That's the case against "Franklin" Tao, 47, of Lawrence, Kansas, an associate professor at KU's Center for Environmentally Beneficial Catalysis, who was charged in August with one count of wire fraud and three counts of program fraud.

"Tao is alleged to have defrauded the U.S. government by unlawfully receiving federal grant money at the same time that he was employed and paid by a Chinese research university — a fact that he hid from his university and federal agencies," John Demers, the assistant attorney general for national security, said in a statement. "Any potential conflicts of commitment by a researcher must be disclosed as required by law and university policies."

Tao's lawyer, Peter Zeidenberg, declined to comment, but has argued in court papers that Tao rejected the offer from the Chinese university, so there was no hidden conflict.

Other cases go further. Ji Chaoqun arrived in the U.S. in 2013 on a student visa to study electrical engineering at the Illinois Institute of Technology in Chicago. In 2016, he enlisted in the U.S. Army Reserves under a special program for foreigners whose skills are considered vital to the national interest.

According to a federal criminal complaint filed last year, he was also working under the direction of a high-level intelligence officer in China's Ministry of State Security — tasked with providing biographical information on eight individuals for possible recruitment. The targets included Chinese nationals who were working as engineers and scientists for U.S. defense contractors, according to the complaint.

He has pleaded not guilty and his lawyers have moved to dismiss the charges on various legal grounds.

The case of Yi-Chi Shih, an adjunct professor of electrical engineering at UCLA, involves export control laws. Shih faces up to 219 years in federal prison after being convicted over the summer of conspiring to export semiconductor chips with military applications to China.

According to a statement by the Department of Justice, Shih, 64, accessed the unnamed victim company's web portal by posing as a domestic customer, purchased products, and sent them to China. The technology he sent is used in missiles, missile guidance systems, fighter jets, electronic warfare, electronic warfare countermeasures and radar applications, prosecutors said.

Academic leaders argue that these cases are outliers, and that whatever they cost the United States, that loss is outweighed by the benefits of having a university system open to the world's best and brightest.

At science powerhouse Caltech, in Pasadena, California, half the graduate students are international, many of them from China. This is to America's benefit, says Caltech president Rosenbaum.

"The influx of talent to the United States from around the world has been an extraordinary boon to our security, to our economy, to our way of life," he said. "If you look at Americans who won Nobel prizes in the sciences, physics, chemistry, physiology or medicine, 40 percent of them have been awarded to Americans who were born outside this country. If you look at the faculty of the California Institute of Technology, 45 percent of our faculty were born outside of America but are now productive American citizens producing knowledge for the benefit of society."

Daly, the China scholar, added: "There's no question that we benefit more than we lose" from Chinese students at American universities. "We have hundreds of thousands of American citizens of Chinese origin who are keeping companies and laboratories and hospitals going with the knowledge they got in American universities. It's profoundly in our interest."

It's important that the FBI remain vigilant, he said, "but the list of demonstrable harms to the United States, of loss of vital information via Chinese scholars, that list is relatively thin compared to the huge benefit we've had from the brain drain from China."

The harm Daly fears may already be occurring. U.S. universities this fall have reported drops, some by as much as 20 percent, in the numbers of Chinese students enrolling.

Jason Zhou of the University of Rochester.
Jason Zhou of the University of Rochester.NBC News

Jason Zhou, a math and computer science major at the University of Rochester, told NBC News he has felt the chill in U.S.-China relations.

He says he was taken aback one day when a student in a driving course asked him an odd question, after he explained that he was from China.

"He was like, 'Do you work for the government?'"

Zhou says what he wants most is to work in tech in America. But he worries he won't be welcome.

"I'm in the center of some ocean, and I have, like, one foot in each boat," he said. And the boat is kind of sailing apart. And I'm basically in a bad situation."

Image: Ken DilanianKen Dilanian

The Threat Posed by the Chinese Government and the Chinese Communist Party to the Economic and National Security of the United States

Washington, D.C.
July 7, 2020


Remarks as delivered.

Good morning. I realize it’s challenging, particularly under the current circumstances, to put on an event like this, so I’m grateful to the Hudson Institute for hosting us today.

The greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China. It’s a threat to our economic security—and by extension, to our national security.

As National Security Advisor O’Brien said in his recent remarks, we cannot close our eyes and ears to what China is doing—and today, in light of the importance of this threat, I will provide more detail on the Chinese threat than the FBI has ever presented in an open forum. This threat is so significant that the attorney general and secretary of state will also be addressing a lot of these issues in the next few weeks. But if you think these issues are just an intelligence issue, or a government problem, or a nuisance largely just for big corporations who can take care of themselves—you could not be more wrong.

FBI Director Christopher Wray speaks at the Hudson Institute in Washington, D.C. on July 7, 2020, regarding the threat posed by China to U.S. economic and national security.

FBI Director Christopher Wray discusses the threat China poses to U.S. economic and national security during a July 7, 2020 video event at the Hudson Institute in Washington, D.C.

It’s the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history.

If you are an American adult, it is more likely than not that China has stolen your personal data.

In 2017, the Chinese military conspired to hack Equifax and made off with the sensitive personal information of 150 million Americans—we’re talking nearly half of the American population and most American adults—and as I’ll discuss in a few moments, this was hardly a standalone incident.

Our data isn’t the only thing at stake here—so are our health, our livelihoods, and our security.

We’ve now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours. Of the nearly 5,000 active FBI counterintelligence cases currently underway across the country, almost half are related to China. And at this very moment, China is working to compromise American health care organizations, pharmaceutical companies, and academic institutions conducting essential COVID-19 research.

But before I go on, let me be clear: This is not about the Chinese people, and it’s certainly not about Chinese Americans. Every year, the United States welcomes more than 100,000 Chinese students and researchers into this country. For generations, people have journeyed from China to the United States to secure the blessings of liberty for themselves and their families—and our society is better for their contributions. So, when I speak of the threat from China, I mean the government of China and the Chinese Communist Party.

The Chinese Regime and the Scope of Its Ambitions

To understand this threat and how we must act to respond to it, the American people should remember three things.

First: We need to be clear-eyed about the scope of the Chinese government’s ambition. China—the Chinese Communist Party—believes it is in a generational fight to surpass our country in economic and technological leadership.

That is sobering enough. But it’s waging this fight not through legitimate innovation, not through fair and lawful competition, and not by giving their citizens the freedom of thought and speech and creativity that we treasure here in the United States. Instead, China is engaged in a whole-of-state effort to become the world’s only superpower by any means necessary.

A Diverse and Multi-Layered Approach

The second thing the American people need to understand is that China uses a diverse range of sophisticated techniques—everything from cyber intrusions to corrupting trusted insiders. They’ve even engaged in outright physical theft. And they’ve pioneered an expansive approach to stealing innovation through a wide range of actors—including not just Chinese intelligence services but state-owned enterprises, ostensibly private companies, certain kinds of graduate students and researchers, and a whole variety of other actors working on their behalf.

Economic Espionage

To achieve its goals and surpass America, China recognizes it needs to make leaps in cutting-edge technologies. But the sad fact is that instead of engaging in the hard slog of innovation, China often steals American intellectual property and then uses it to compete against the very American companies it victimized—in effect, cheating twice over. They’re targeting research on everything from military equipment to wind turbines to rice and corn seeds.

Through its talent recruitment programs, like the so-called Thousand Talents Program, the Chinese government tries to entice scientists to secretly bring our knowledge and innovation back to China—even if that means stealing proprietary information or violating our export controls and conflict-of-interest rules.

Take the case of scientist Hongjin Tan, for example, a Chinese national and American lawful permanent resident. He applied to China’s Thousand Talents Program and stole more than $1 billion—that’s with a “b”—worth of trade secrets from his former employer, an Oklahoma-based petroleum company, and got caught. A few months ago, he was convicted and sent to prison.

Or there’s the case of Shan Shi, a Texas-based scientist, also sentenced to prison earlier this year. Shi stole trade secrets regarding syntactic foam, an important naval technology used in submarines. Shi, too, had applied to China’s Thousand Talents Program, and specifically pledged to “digest” and “absorb” the relevant technology in the United States. He did this on behalf of Chinese state-owned enterprises, which ultimately planned to put the American company out of business and take over the market.

In one of the more galling and egregious aspects of the scheme, the conspirators actually patented in China the very manufacturing process they’d stolen, and then offered their victim American company a joint venture using its own stolen technology. We’re talking about an American company that spent years and millions of dollars developing that technology, and China couldn’t replicate it—so, instead, it paid to have it stolen.

And just two weeks ago, Hao Zhang was convicted of economic espionage, theft of trade secrets, and conspiracy for stealing proprietary information about wireless devices from two U.S. companies. One of those companies had spent over 20 years developing the technology Zhang stole.

These cases were among more than a thousand investigations the FBI has into China’s actual and attempted theft of American technology—which is to say nothing of over a thousand more ongoing counterintelligence investigations of other kinds related to China. We’re conducting these kinds of investigations in all 56 of our field offices. And over the past decade, we’ve seen economic espionage cases with a link to China increase by approximately 1,300 percent.

The stakes could not be higher, and the potential economic harm to American businesses and the economy as a whole almost defies calculation.

Clandestine Efforts

As National Security Advisor O’Brien discussed in his June remarks, the Chinese government is also making liberal use of hacking to steal our corporate and personal data—and they’re using both military and non-state hackers to do it. The Equifax intrusion I mentioned just a few moments ago, which led to the indictment of Chinese military personnel, was hardly the only time China stole the sensitive personal information of huge numbers of the American public.

For example, did any of you have health insurance through Anthem or one of its associated insurers? In 2015, China’s hackers stole the personal data of 80 million of that company’s current and former customers.

Or maybe you’re a federal employee—or you used to be one, or you applied for a government job once, or a family member or roommate did. Well, in 2014, China’s hackers stole more than 21 million records from OPM, the federal government’s Office of Personnel Management.

Why are they doing this? First, China has made becoming an artificial intelligence world leader a priority, and these kinds of thefts feed right into China’s development of artificial intelligence tools.

Compounding the threat, the data China stole is of obvious value as they attempt to identify people for secret intelligence gathering. On that front, China is using social media platforms—the same ones Americans use to stay connected or find jobs—to identify people with access to our government’s sensitive information and then target those people to try to steal it.

Just to pick one example, a Chinese intelligence officer posing as a headhunter on a popular social media platform recently offered an American citizen a sizeable sum of money in exchange for so-called “consulting” services. That sounds benign enough until you realize those “consulting” services were related to sensitive information the American target had access to as a U.S. military intelligence specialist.

Now that particular tale has a happy ending: The American citizen did the right thing and reported the suspicious contact, and the FBI, working together with our armed forces, took it from there. I wish I could say that all such incidents ended that way.

Threats to Academia

It’s a troublingly similar story in academia.

Through talent recruitment programs like the Thousand Talents Program I mentioned just a few moments ago, China pays scientists at American universities to secretly bring our knowledge and innovation back to China—including valuable, federally funded research. To put it bluntly, this means American taxpayers are effectively footing the bill for China’s own technological development. China then leverages its ill-gotten gains to undercut U.S. research institutions and companies, blunting our nation’s advancement and costing American jobs. And we are seeing more and more of these cases.

In May alone, we arrested both Qing Wang, a former researcher with the Cleveland Clinic who worked on molecular medicine and the genetics of cardiovascular disease, and Simon Saw-Teong Ang, a University of Arkansas scientist doing research for NASA. Both of these guys were allegedly committing fraud by concealing their participation in Chinese talent recruitment programs while accepting millions of dollars in American federal grant funding.

That same month, former Emory University professor Xiao-Jiang Li pled guilty to filing a false tax return for failing to report the income he’d received through China’s Thousand Talents Program. Our investigation found that while Li was researching Huntington’s disease at Emory, he was also pocketing half a million unreported dollars from China.

In a similar vein, Charles Lieber, chair of Harvard’s Department of Chemistry and Chemical Biology, was indicted just last month for making false statements to federal authorities about his Thousand Talents participation. The United States has alleged that Lieber concealed from both Harvard and the NIH his position as a strategic scientist at a Chinese university—and the fact that the Chinese government was paying him, through the Wuhan Institute of Technology, a $50,000 monthly stipend, more than $150,000 in living expenses, and more than $1.5 million to establish a laboratory back in China.

Malign Foreign Influence

There’s more. Another tool China and the Chinese Communist Party use to manipulate Americans is what we call malign foreign influence.

Now, traditional foreign influence is a normal, legal diplomatic activity typically conducted through diplomatic channels. But malign foreign influence efforts are subversive, undeclared, criminal, or coercive attempts to sway our government’s policies, distort our country’s public discourse, and undermine confidence in our democratic processes and values.

China is engaged in a highly sophisticated malign foreign influence campaign, and its methods include bribery, blackmail, and covert deals. Chinese diplomats also use both open, naked economic pressure and seemingly independent middlemen to push China’s preferences on American officials.

Just take one all-too-common illustration: Let’s say China gets wind that some American official is planning to travel to Taiwan—think a governor, a state senator, a member of Congress. China does not want that to happen, because that travel might appear to legitimize Taiwanese independence from China—and legitimizing Taiwan would, of course, be contrary to China’s “One China” policy.

So what does China do? Well, China has leverage over the American official’s constituents—American companies, academics, and members of the media all have legitimate and understandable reasons to want access to Chinese partners and markets. And because of the authoritarian nature of the Chinese Communist Party, China has immense power over those same partners and markets. So, China will sometimes start by trying to influence the American official overtly and directly. China might openly warn that if the American official goes ahead and takes that trip to Taiwan, China will take it out on a company from that official’s home state by withholding the company’s license to manufacture in China. That could be economically ruinous for the company, would directly pressure the American official to alter his travel plans, and the official would know that China was trying to influence him.

That would be bad enough. But the Chinese Communist Party often doesn’t stop there; it can’t stop there if it wants to stay in power—so it uses its leverage even more perniciously. If China’s more direct, overt influence campaign doesn’t do the trick, they sometimes turn to indirect, covert, deceptive influence efforts.

To continue with the illustration of the American official with travel plans that the Chinese Communist Party doesn’t like, China will work relentlessly to identify the people closest to that official—the people that official trusts most. China will then work to influence those people to act on China’s behalf as middlemen to influence the official. The co-opted middlemen may then whisper in the official’s ear and try to sway the official’s travel plans or public positions on Chinese policy. These intermediaries, of course, aren’t telling the American official that they’re Chinese Communist Party pawns—and worse still, some of these intermediaries may not even realize they’re being used as pawns, because they, too, have been deceived.

Ultimately, China doesn’t hesitate to use smoke, mirrors, and misdirection to influence Americans.

Similarly, China often pushes academics and journalists to self-censor if they want to travel into China. And we’ve seen the Chinese Communist Party pressure American media and sporting giants to ignore or suppress criticism of China’s ambitions regarding Hong Kong or Taiwan. This kind of thing is happening over and over, across the United States.

And I will note that the pandemic has unfortunately not stopped any of this—in fact, we have heard from federal, state, and even local officials that Chinese diplomats are aggressively urging support for China’s handling of the COVID-19 crisis. Yes, this is happening at both the federal and state levels. Not that long ago, we had a state senator who was recently even asked to introduce a resolution supporting China’s response to the pandemic.

The punchline is this: All of these seemingly inconsequential pressures add up to a policymaking environment in which Americans find themselves held over a barrel by the Chinese Communist Party.

Threats to the Rule of Law

All the while, China’s government and Communist Party have brazenly violated well-settled norms and the rule of law.

Since 2014, Chinese General Secretary Xi Jinping has spearheaded a program known as “Fox Hunt.” Now, China describes Fox Hunt as some kind of international anti-corruption campaign—it is not. Instead, Fox Hunt is a sweeping bid by General Secretary Xi to target Chinese nationals whom he sees as threats and who live outside China, across the world. We’re talking about political rivals, dissidents, and critics seeking to expose China’s extensive human rights violations.

Hundreds of the Fox Hunt victims that they target live right here in the United States, and many are American citizens or green card holders. The Chinese government wants to force them to return to China, and China’s tactics to accomplish that are shocking. For example, when it couldn’t locate one Fox Hunt target, the Chinese government sent an emissary to visit the target’s family here in the United States. The message they said to pass on? The target had two options: return to China promptly, or commit suicide. And what happens when Fox Hunt targets refuse to return to China? In the past, their family members both here in the United States and in China have been threatened and coerced, and those back in China have even been arrested for leverage.

I’ll take this opportunity to note that if you believe the Chinese government is targeting you—that you’re a potential Fox Hunt victim—please reach out to your local FBI field office.

Exploiting Our Openness

Understanding how a nation could engage in these tactics brings me to the third thing the American people need to remember: that China has a fundamentally different system than ours—and it’s doing all it can to exploit the openness of ours while taking advantage of its own closed system.

Many of the distinctions that mean a lot here in the United States are blurry or almost nonexistent in China—I'm talking about distinctions between the government and the Chinese Communist Party, between the civilian and military sectors, and between the state and the “private” sector.

For one thing, an awful lot of large Chinese businesses are state-owned enterprises—literally owned by the government, and thus the Party. And even if they aren’t, China’s laws allow its government to compel any Chinese company to provide any information it requests—including American citizens’ data.

On top of that, Chinese companies of any real size are legally required to have Communist Party “cells” inside them to keep them in line. Even more alarmingly, Communist Party cells have reportedly been established in some American companies operating in China as a cost of doing business there.

These kinds of features should give U.S. companies pause when they consider working with Chinese corporations like Huawei—and should give all Americans pause, too, when relying on such a company’s devices and networks. As the world’s largest telecommunications equipment manufacturer, Huawei has broad access to much that American companies do in China. It’s also been charged in the United States with racketeering conspiracy and has, as alleged in the indictment, repeatedly stolen intellectual property from U.S. companies, obstructed justice, and lied to the U.S. government and its commercial partners, including banks.

The allegations are clear: Huawei is a serial intellectual property thief, with a pattern and practice of disregarding both the rule of law and the rights of its victims. I have to tell you, it certainly caught my attention to read a recent article describing the words of Huawei’s founder, Ren Zhengfei, about the company’s mindset. At a Huawei research and development center, he reportedly told employees that to ensure the company’s survival, they need to—and I quote—“surge forward, killing as you go, to blaze us a trail of blood.” He’s also reportedly told employees that Huawei has entered, to quote, “a state of war.” I certainly hope he couldn’t have meant that literally, but it’s hardly an encouraging tone, given the company’s repeated criminal behavior.

In our modern world, there is perhaps no more ominous prospect than a hostile foreign government’s ability to compromise our country’s infrastructure and devices. If Chinese companies like Huawei are given unfettered access to our telecommunications infrastructure, they could collect any of your information that traverses their devices or networks. Worse still: They’d have no choice but to hand it over to the Chinese government if asked—the privacy and due process protections that are sacrosanct in the United States are simply non-existent in China.

Responding Effectively to the Threat

The Chinese government is engaged in a broad, diverse campaign of theft and malign influence, and it can execute that campaign with authoritarian efficiency. They’re calculating. They’re persistent. They’re patient. And they’re not subject to the righteous constraints of an open, democratic society or the rule of law.

China, as led by the Chinese Communist Party, is going to continue to try to misappropriate our ideas, influence our policymakers, manipulate our public opinion, and steal our data. They will use an all-tools and all-sectors approach—and that demands our own all-tools and all-sectors approach in response.

Our folks at the FBI are working their tails off every day to protect our nation’s companies, our universities, our computer networks, and our ideas and innovation. To do that, we’re using a broad set of techniques—from our traditional law enforcement authorities to our intelligence capabilities.

And I will briefly note that we’re having real success. With the help of our many foreign partners, we’ve arrested targets all over the globe. Our investigations and the resulting prosecutions have exposed the tradecraft and techniques the Chinese use, raising awareness of the threat and our industries’ defenses. They also show our resolve and our ability to attribute these crimes to those responsible. It’s one thing to make assertions—but in our justice system, when a person, or a corporation, is investigated and then charged with a crime, we have to prove the truth of the allegation beyond a reasonable doubt. The truth matters—and so, these criminal indictments matter. And we’ve seen how our criminal indictments have rallied other nations to our cause—which is crucial to persuading the Chinese government to change its behavior.

We’re also working more closely than ever with partner agencies here in the U.S. and our partners abroad. We can’t do it on our own; we need a whole-of-society response. That’s why we in the intelligence and law enforcement communities are working harder than ever to give companies, universities, and the American people themselves the information they need to make their own informed decisions and protect their most valuable assets.

Confronting this threat effectively does not mean we shouldn’t do business with the Chinese. It does not mean we shouldn’t host Chinese visitors. It does not mean we shouldn’t welcome Chinese students or coexist with China on the world stage. But it does mean that when China violates our criminal laws and international norms, we are not going to tolerate it, much less enable it. The FBI and our partners throughout the U.S. government will hold China accountable and protect our nation’s innovation, ideas, and way of life—with the help and vigilance of the American people.

Thank you for having me here today.

China blackmailing dissenters in US to return home – FBI chief

Christopher Wray condemns campaign against ex-pats and says Beijing espionage is ‘greatest threat to US economic vitality’

Christopher Wray said of Fox Hunt: ‘The Chinese government wants to force them to return to China, and China’s tactics to accomplish that are shocking.’

Chinese agents have been pursuing hundreds of Chinese nationals living in the US in an effort to force their return, as part of a global campaign against the country’s diaspora, known as Operation Fox Hunt, the FBI director has said.

In a speech about the security threat posed by China, during which he said Beijing’s counterintelligence work was “greatest long-term threat to our nation’s information and intellectual property and to our economic vitality”, Christopher Wray gave the example of one Fox Hunt target who was given a choice of going back to China or killing themselves.

Fox Hunt was launched six years ago by President Xi Jinping, ostensibly to pursue corrupt officials and business executives who had fled abroad. Beijing has celebrated its claimed successes, publicising the return of hundreds of economic fugitives, and issuing wanted lists of those still at large. The Obama administration complained about the activities of undercover agents in 2015.

Wray said the operation’s principal aim now was to suppress dissent among the diaspora.

He told the Hudson Institute in Washington: “China describes Fox Hunt as some kind of international anti-corruption campaign. It is not. Instead, Fox Hunt is a sweeping bid by Xi to target Chinese nationals who he sees as threats and who live outside of China, across the world.

“We’re talking about political rivals, dissidents and critics seeking to expose China’s extensive human rights violations.”

The FBI director said: “Hundreds of these Fox Hunt victims that they target live right here in the United States, and many are American citizens or green card holders. The Chinese government wants to force them to return to China, and China’s tactics to accomplish that are shocking.

“For example, when it couldn’t locate one Fox Hunt target, the Chinese government sent an emissary to visit the target’s family here in the US. The message they said to pass on: the target had two options, returned to China promptly or commit suicide.”

Wray said that Fox Hunt operations, directed by China’s ministry of public security, were also under way in other countries, and the FBI had been cooperating with its partners to foil Chinese efforts at intimidation. He said Chinese nationals in the US were often coerced by thinly veiled threats against their families back in China.

Asked about other coercive tactics used, he replied: “Use your imagination. You’re not going to be far off.”

He appealed to anyone in the US who thought they were a Fox Hunt target to “please reach out to your local FBI field office”.

Wray portrayed China as an aggressive rival with little or no regard for international or national laws. He said that nearly half the FBI’s 5,000 active counter-intelligence cases were China-related.

“We’ve now reached a point where the FBI is now opening a new China-related counterintelligence case every 10 hours,” he said. “Of the nearly 5,000 active counterintelligence cases currently underway across the country, almost half are related to China.”

China was using leverage, pressure or persuasion through intermediaries on federal, state and local officials, as well as US corporations and media, to win support for Chinese foreign policy positions. Wray said such efforts had been stepped up during the coronavirus outbreak, aimed at generating praise for Beijing’s handling of the pandemic.

Although he did not say whether China backed either Donald Trump or his presumptive Democratic rival, Joe Biden, he claimed China was pushing its preferences for the outcome of the 2020 presidential election.

“China’s malign foreign influence campaign targets our policies, our positions, 24/7, 365 days a year,” Wray said. “So it’s not an election-specific threat; it’s really more of an all-year, all-the-time threat. But certainly that has implications for elections and they certainly have preferences that go along with that.”

The FBI director said that China was also involved in mass hacking, identity theft and intellectual property espionage, and there are 1,000 investigations into “China’s actual and attempted theft of technology” in all the bureau’s 56 field offices.

“The people of the United States are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history,” Wray said.

He said China was “engaged in a whole-of-state effort to become the world’s only superpower by any means necessary”. “The stakes could not be higher.”

In an interview on Tuesday, the US secretary of state, Mike Pompeo, said that the US was considering banning the social media platform TikTok and other Chinese-made apps.

India banned TikTok and over 50 other Chinese apps last week, in the wake of clashes on the China-India border in which 20 Indian soldiers were killed.

“We’re certainly looking at it,” Pompeo told Fox News. “With respect to Chinese apps on people’s cellphones, I can assure you the United States will get this one right. I don’t want to get out in front of the president, but it’s something we’re looking at.”


China’s security fears and the Cold War economy

 Now that the US and China are widely, if perhaps inaccurately, said to be entering into a new “Cold War,” stories of the original Cold War can feel particularly relevant. The timing for Covell Meyskens’ new book Mao’s Third Front: The Militarization of Cold War China is thus pretty good: its central subject matter is how geopolitical tensions and fears of conflict affect countries’ economic strategies.

The Third Front was a nationwide campaign, running from roughly 1964 to 1973, to prepare China to fend off military invasion and aerial attack. It was essentially a crash program to build industrial and transportation infrastructure in remote parts of the nation’s interior. Mao feared that China was too reliant on industrial capacity scattered along the coast, where it could be easily targeted by bombers and nuclear missiles. The facilities necessary for China’s military to survive a protracted war therefore had to be built in locations that were “mountainous, dispersed and hidden.” Coastal areas were also the most likely to be first occupied in any invasion of China. Leaders recognized that China’s poorly-equipped military would be outmatched in a direct confrontation with either the US or the USSR. China’s military doctrine thus called for making the interior serve as a “rear defense area” in the event of an invasion: their forces would fall back and regroup in the interior, much as the Communist guerrillas had during the Japanese invasion of the 1930s.

The Third Front was kept entirely secret until the 1980s, and has received limited attention from scholars even in more recent years. Barry Naughton wrote a classic article about it in 1988, but it has never really become part of the standard historical narratives of the Mao era. One of the very best books on Maoist China, Andrew Walder’s China Under Mao, does not even mention the Third Front. This is an oversight, as Meyskens makes clear that the Third Front was the main industrial policy of China for at least a decade. The great virtue of his book is to bring this hidden history to light in comprehensive fashion: it covers everything from the deliberations of Mao’s high councils to the shortages of baby formula on Third Front construction sites.

The Third Front definitely changed the shape of China: before and after the Third Front campaign, the targeted provinces accounted for 30% or less of nationwide investment spending; during the campaign, that share rose to around 50% (see chart). The remnants of the numerous Third Front projects scattered around the country can still be seen today; there are some striking photo collections on Meyskens’ website of old Third Front facilities in SichuanHubei and Shaanxi. It’s not all a legacy of decay, though: some industrial sites that were launched during the Third Front are still going strong today, such as the Panzhihua Steel factory in Sichuan.

In official Chinese accounts, the Third Front is now considered the first in the long lineage of the regional development campaigns the Communist Party has mounted to bring prosperity to China’s poor interior provinces. One recent example is a retrospective of the first 70 years of the People’s Republic published by the National Bureau of Statistics in 2019. Because of the Third Front, it says, “a number of railway, oil, machinery, electricity and other projects were built in the central and western regions, effectively improving the weak development foundation in the central and western regions.” That kind of focused investment in infrastructure and industrial projects was also characteristic of the Great Western Development campaign that Jiang Zemin launched in 1999.

But to recast the Third Front as just a regional aid program wrapped up in some Maoist slogans is to miss its real driver: fear. The Third Front was not an economic development program with some security benefits. It was a crash program to put the Chinese economy on a war footing and prepare for what was believed to be imminent attack. At the time the Third Front was launched, Mao’s disastrous Great Leap Forward was still fresh memory, and most of the government was focused on trying to get the civilian economy back to normal. Other leaders had little appetite for signing up for another one of Mao’s crash industrialization programs. What changed their mind was the stepped-up US intervention in Vietnam after the Gulf of Tonkin incident in 1964. Suddenly, a US-led invasion of China from the south seemed like a realistic possibility; and Mao’s falling-out with Stalin had made a Soviet-led invasion from the north also seem a real risk.

Building Third Front projects was hard: it required mobilizing hundreds of thousands of workers and scarce resources to build things that were technically difficult, in inaccessible locations, at impossible speeds. There were easier, better and more efficient ways to develop the economy, and every analysis of the Third Front has concluded that it led to many failures and enormous waste (even an official government review in 1984 found that only 48% of projects were successful). The only possible justification for such a waste of resources was that it was necessary for the survival of the nation.

The Third Front helps make clear just how central security fears were to the organization of the Maoist economy–as they were also to the Soviet economy. In his review essay “Foundations of the Soviet Command Economy 1917-1941,” the historian Mark Harrison remarks that “Economists have tended to describe the Soviet economy as a developmental state that provided civilian public goods and pursued civilian economic growth, although inefficiently.” This perspective is fundamentally misleading, he argues, because Stalin was not really pursuing consumer welfare or economic development. The Soviet command economy was in essence a war economy: state ownership of industry, collectivization of agriculture, political purges and the all-pervasive security state were all necessary because the economy “had to be organized for defense against internal and external enemies acting together.”

That phrase also describes China in the 1960s quite well. A big reason why China under Mao systematically failed to develop the economy was because Mao was, mostly, not really trying to develop the economy. He was instead obsessed with political campaigns against real and imagined enemies inside and outside the country. And although Mao was paranoid, he did have enemies. Meyskens reminds us that the Cold War was only really cold from the perspective of the US, which carefully avoided direct conflict with the Soviet Union; from China’s perspective, it was pretty hot:

Similar to Moscow, Beijing also did not think of the Cold War in John Lewis Gaddis’s famous phrase as a period of “great power peace.” They considered the postwar world to be in a period of ongoing conflict in which China had directly fought against America in the Korean War, the capitalist camp constantly besieged socialist states, and the United States and European countries regularly interfered militarily in decolonization and the affairs of postcolonial states.

It is therefore impossible to separate China’s later successful economic development from changes in the international environment. If China’s leaders had continued to feel threatened militarily by both the US and Soviet Union, they may not have been able to focus on civilian economic development rather than military preparations. Meyskens suggests that the turning point for China’s economic development came with Richard Nixon’s visit in 1972, and the subsequent commitment by both sides to avoid military conflict. Soon after, the Third Front campaign was downgraded in importance, and planners began to direct more resources to light industry and consumption rather than defense and heavy industry.

Of course, it took many more years, and Mao’s death, for the leadership to settle on a coherent and successful program for developing the civilian economy. But, as Deng Xiaoping saw clearly, they would not have been able to de-militarize the economy without confidence that China’s borders were secure. Deng’s project of enlisting the US as a de facto partner of China against the Soviet Union was thus the necessary international condition for domestic economic reform and the opening to foreign trade. Meyskens’ essay on “the profound national consequences of international military tensions” makes for fascinating reading, but it is hard not to find its lessons troubling at a time when the US and China appear stuck in an escalating geopolitical rivalry.