China has its own definition of what's fair and what's not fair among countries, according to author William J. Holstein. Collage: Asia Times/Patrick Dunne

To read part 1 of this piece, click here.

In late-night drinking sessions, when truth often emerges, if you confront Chinese friends about China’s systematic pilfering they will point out that their ancestors invented gunpowder, the compass and paper – and other nations stole those technologies. They also point out that the United States stole technology from Britain; such as the steam engine. So if we Americans did it, we’re being hypocritical in saying the Chinese don’t have a right to do the same thing.

That’s why the Chinese cannot be persuaded to stop – they have convinced themselves it is their right to do so. If we are naive enough to leave ourselves vulnerable, they will take advantage of that weakness. That’s entirely fair in much of Chinese culture. The question is whether we have the will to recognize the pattern and stop it.

It’s not just some abstract technologies at stake. Developing and manufacturing high-tech goods creates tens of thousands of the kind of high-skilled, high-paying jobs that every nation wants. If we lose control of the development of a technology, we also lose the possible jobs that go with it.

Elsewhere, our governmental institutions have been under assault. The FBI revealed in 2017 that Joey Chun had been feeding secrets about the agency’s technology and surveillance practices for a long, long time. That almost certainly weakened the FBI’s ability to detect Chinese operatives – although the FBI was able recently to break up an apparent plan to insert a mole into the US Army.

Moreover, the Chinese army may have succeeded in planting chips on the servers used by the US Navy, both houses of Congress, and the Department of Homeland Security that give them a “trapdoor,” or a way to control them, according to Bloomberg BusinessWeek. Chinese hackers have repeatedly targeted the Navy, seeking not only technological secrets but also mundane details such as ship maintenance data and lists of 100,000 naval personnel with their names, birthdays, Social Security numbers and cell phone numbers.

Hacking groups that either work directly for the Chinese government or are affiliated with it have conducted massive penetrations of US computer systems, seizing nearly 400 million personal records from the Marriott Hotel group and 22 million records of US government employees from the Office of Personnel Management. The thievery does not appear to be taking place for commercial gain. Experts believe the Chinese party-state is attempting to use the data to prevent US agencies from planting their own spies in China and to identify travel patterns of dissidents and other critics in the United States.

At the same time, the Chinese government is seeking to manage the American debate about China by creating new opinion platforms, denying visas to professors who do not adhere to the party-state’s line, spending millions on projecting soft power and intimidating Hollywood studios into making movies that will please Chinese censors and therefore be shown in China as well as other markets.

Many nations seek to obtain American technology and seek to influence American perceptions and decision-making. But the sheer scale and ambition of what China is doing is more significant because the United States and China are the world’s two largest economies and China, under Xi, is clearly seeking to upstage the United States and create its own world order based on Chinese interests.

It seems clear now that China’s emergence under one-man authoritarian rule is the greatest challenge the United States has faced since World War II – larger even than the Soviet threat, which ultimately crumbled, and larger than Islamic terrorism, which is much less complex than the multi- dimensional challenge the Chinese government is posing. The party-state is clearly utilizing the size of its population – 1.4 billion, versus 327 million people in the United States – as an advantage.

Americans might be forgiven for not being terribly interested in what China is doing in South Africa or South Asia. But certainly Americans have a vital stake in what China is doing in our own country. That’s why the China challenge on our own territory is so dangerous – we have not recognized it. Nor, in the present state of a seemingly permanent social and political divide in our society, is it certain that we will be able to agree on a response.

Our goal should not be preventing the Chinese from emerging on the world stage. It is their right to develop on their own steam. But we need to make sure that we retain leadership in at least some critical technologies. One obvious reason is that technologies such as artificial intelligence (AI) have clear military uses. But more broadly, if we have to rely on others for advanced products, that creates a measure of dependency. If the Chinese sell us AI systems and we sell them only soybeans, that tilts the balance of power and unacceptably so. And we certainly need to maintain the integrity of the institutions that make up the American democracy.

Both President Trump and Vice President Mike Pence have suggested that China’s actions are aimed at defeating Trump at the ballot box. They hope to deflect attention from Russia’s involvement in the 2016 election. I am not involved in any political gamesmanship. I have no dog in that hunt. I am simply documenting that the Chinese government’s actions are much deeper, longer-term and more strategic than Russia’s. Judging by their actions, they seek to extract the technology necessary to give China parity with the United States or outright dominance and to prevent our institutions from either recognizing the challenge or mounting an effective defense.

Each of the strategies that I discuss in this book could have appeared in the ancient Chinese text The Art of War, which discussed the psychological and perceptual issues that affect the outcomes of great battles. That book dates to the Warring States era from the 5th Century B.C. to the 3rd Century B.C. The Chinese were skilled strategists and warriors long before European civilization developed.

For the record, the Chinese government routinely and consistently denies that it interferes in the internal affairs of other sovereign nations or engages in cyber attacks – positions that simply do not square with the facts I present in this book.

The challenge today is this: how can America’s fractured democracy and diverse society respond to a centrally orchestrated strategy from China on our own soil that challenges our interests and our values? I provide answers in my final chapters, no matter how unpopular and complex they may be. We need a structural response, not rhetorical flourishes. The first step is hardening our technology targets and government institutions while at the same time opening up the valves of innovation even further. We need to do a better job of training and retraining, which is connected to our ability to bring at least some jobs home. And politically, we must define a new center to concentrate on issues where broad American agreement is possible rather than dwelling exclusively on the issues that divide us.

Throughout this book, I use my own research but also material from news organizations. This is deliberate, not an act of intellectual sloth. I wanted to show that the facts presented in this book are more than the fertile imagination of one author. Further, the reality is that no single writer would be able to establish expertise and contacts in Hollywood, Silicon Valley, immigration enforcement, universities, intelligence agencies, business and the media. They are different universes unto themselves, which is one reason Americans have been slow to understand the pattern of how Chinese efforts in each sector fit together.

Similarly, different arms of the US government have described different pieces of the Chinese government’s strategy, as have academic studies. Court documents contain a treasure trove of insight and detail. The experts have been talking to other experts, but no one has told the people. What has been missing is the effort to add up the facts and assemble them into a coherent and comprehensible whole, which is what this book represents.

The reader may fairly ask about my political persuasions. I consider myself a radical centrist who wants to focus on what I think are the big economic and technological challenges we as a nation face. I also accept the label of being an “economic patriot.” I think the term “nationalist” is too harsh because it implies a willingness to run roughshod over the interests of others. But I want America to win in the world, and at home, by doing what it does best – rallying around common causes.

Veteran Asia-focused journalist William J. Holstein learned to grapple with Beijing’s spies as China bureau chief for United Press International in the 1980s. The New Art of War can be purchased here.

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

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