China’s ‘New Art of War’ includes stealing cutting-edge technologies

“The supreme art of war is to subdue the enemy without fighting.”

—Sun Tzu, author, The Art of War

Australians are engaged in a highly emotional debate about China’s influence in their lives. A book by Clive Hamilton entitled, Silent Invasion: China’s Influence in Australia, describes how the Beijing government and Communist Party are systematically attempting to influence Australian policies and cultural life. Hamilton calls it “rot at the heart of the Australian democracy.” The Australians may now understand what China is attempting to do in their country.

But halfway around the world, in the United States, the Chinese government is pursuing a similar strategy and the vast majority of Americans don’t understand it. If anything, the party-state’s campaign in the United States is even deeper because it involves obtaining access to cutting-edge technologies, hacking massive amounts of personal information, undermining our institutions and trying to shape American perception of and policies toward China.

Even in the face of President Trump’s so-called trade war with China, the Chinese appear to be accelerating their efforts to penetrate American institutions and opinion-shaping bodies. This is far deeper – and more systematic – than Russian efforts to polarize America through the use of social media.

Just as Clive Hamilton does in his book, I acknowledge the extreme sensitivity of these issues. What makes the debate about China’s role inside America particularly sensitive is that some nearly four million Chinese-Americans are targeted by Beijing – which believes they should be loyal to their ancestral country, not America.

Some Chinese-Americans and Chinese residents in the United States have cooperated in obtaining technology for the Chinese government. And many Chinese nationals who obtained years of experience working at American companies have returned to China to help competitors there. The Chinese have a nickname for these individuals, haigui, or returning sea turtles who come ashore once a year to lay their eggs.

The challenge is to analyze and discuss the range of China’s actions, some of which are entirely legitimate, without triggering hysteria or xenophobia of the sort that Senator Joseph McCarthy specialized in during the “Red Scare” of the early 1950s. (A similar outburst of xenophobia earlier in history led to the Chinese Exclusion Act of 1882.)

One major issue is reciprocity in the overall relationship between China and the United States today. If the Chinese government were allowing Western non-governmental organizations to create a stronger legal system in China, to fight for the rights of women and different nationalities within China and to use the Internet as a tool to achieve greater political power for an emerging middle class, then we might conclude that there is a mutual process unfolding, of each country trying to learn from and shape the other.

In fact, President Xi Jinping, who has emerged with unexpected ideological intensity since taking power in 2012, is forcing NGOs to register to work with Chinese police (which subjects them to near-complete control), cracking down on dissidents and their lawyers and turning the Internet into a tool of monitoring and repression.

Simply put, Xi is attempting to eliminate Western ideas and establish himself as an absolute ruler for as long as he chooses. It is reminiscent of the worst type of Chinese authoritarianism, which I learned about in Beijing in the early 1980s.

Xi is rallying his nation around his version of “the China dream,” referring to previous eras in which China was an advanced world power. Chinese children learn about their nation’s 100 years of humiliation at the hands of foreign powers who occupied large swathes of territory beginning in about 1840. The Chinese were divided among themselves as a dynasty slowly collapsed and they lacked the wealth or the technology, in the form of weapons, to resist the foreign barbarians.

That period ended when Mao Tse-tung and the Communist Party won the Chinese civil war in 1949. China had “stood up.” It’s against that backdrop that today we see the Chinese attempting to settle historical scores and project power.

Some of the Chinese government’s practices in the United States have been developing for 10 and even 20 years. It was in 1998, for example, that Joey Chun obtained top secret clearance from the Federal Bureau of Investigation’s New York office. Starting in about 2005, he fed secrets about the FBI back to China for more than a decade before he was caught.

The Central Intelligence Agency’s network was compromised by a renegade former CIA agent from Hong Kong in the 2010-2011 time frame.

It appears that the full range of Chinese government actions have intensified under Xi. They have taken on a more systematic and urgent character.

Inevitably some may feel I am displaying racism, am being anti-Chinese, in writing this book. Nothing could be farther from the truth. I lived in Hong Kong and Beijing and traveled throughout much of China. I studied the Chinese language. I loved China’s deep history and magnificent temples. I believe the Chinese possess deep wisdom as reflected in their practice of tai chi, feng shui and acupuncture, and I came to admire Chinese art and porcelain vases long before they became fashionable. I have truly embraced the culture of China.

Moreover, I’ve greatly admired many of the Chinese I became friends with. Their personal stories, of how they survived the Cultural Revolution, for example, were inspiring. Their determination to emerge from abject poverty has been impressive. When I first traveled in China, the cities were dark at night because they had no power. The only sound was the whir of thousands of bicycles making their way through darkened streets. What a remarkable people for having come so far since then.

But I realized over time, that there were things I didn’t like about the China government – its detention camps, its silencing of dissidents, the overbearing hand of the police and security forces – and the surveillance of my communications, including a listening device in our Beijing apartment’s living room. Every morning, the “listeners” would bicycle into the back gate of the diplomatic compound where my wife and I lived, Qi Jia Yuan, and go to low-slung unmarked buildings where they monitored all our communications. I knew what it felt like to live in the palm of an authoritarian government.

And of course, the mass killings at Tiananmen Square in June 1989 (after I had returned to the United States), were appalling. Since returning to the United States, I have visited China approximately 20 times.

I recognized that I had to maintain a kind of neutrality, a balance, between the good and the bad. Most Westerners who grow up in the Judeo-Christian tradition of right and wrong find that difficult. In this yes-no, black-white view, the Chinese are either our friends or our enemies. But the reality is much more nuanced – they can be both. As a result, we have to learn how to manage a form of technological and economic warfare with China’s government at the same time that we may cooperate on other issues.

The media asks whether President Trump is trying to start a trade war or create a “new cold war.” The reality is that it has already started. We just haven’t recognized it as such.

Over the years, I have been a great supporter of America’s engagement with China. I thought it was good for America, good for China, and good for the world. It has only been since President Xi took power that I have recognized the darker side of what China is trying to achieve in its own country – and ours. Never in my wildest dreams, or nightmares, did it occur to me that I would one day write a book about Chinese government activity in my own country.

(I make a distinction, by the way, between the Chinese people and the Chinese government. It is possible to admire the Chinese people but be critical of their government.)

Up until the Xi presidency, it was possible to argue that China could emerge onto the world stage in a way that didn’t pose a direct threat to American military or economic interests. China would accept the world order that the United States and its allies established after World War II. It certainly would not seek to interfere in our internal affairs. It would be a “responsible stakeholder,” in the hopeful words of one US diplomat.

But Xi has changed all that and not a single Western expert on China saw it coming. In late 2014, under the auspices of New York’s Overseas Press Club, I organized a reunion of about 70 correspondents either currently based in Beijing or earlier posted there. It was the largest such gathering since China and the United States normalized relations. We organized four-panel discussions and I edited the material for a book entitled, Has the American Media Misjudged China? Thirty-five years after China’s opening to the world, some of the key assumptions that have guided coverage are being tested by the presidency of Xi Jinping.

We were like the canary in the coal mine, the first sign of trouble. It was clear that Western news organizations and, by proxy, Western governments and academic experts had failed to predict that Xi was going to steer China in a direction dramatically different from what the outside world had expected.

While some experts believed he was on the verge of imposing sweeping Western-style economic reforms, he surprised everyone by seeking to rebuild and revitalize the 89-million-member Communist Party and insert it into every aspect of Chinese life. He tightened control of China’s Internet, securely lodged behind the Great Firewall.

He also accelerated a campaign to obtain American technology as part of the Made in China 2025 policy. The Chinese government, under the leadership of the Ministry of State Security, is coordinating digital hacks and cultivating spies in US companies and government bodies. The arrest in October 2018 of a senior MSS official attempting to extract secrets from General Electric’s jet engine division is a case in point.

Meanwhile, China is using its economic clout to systematically snap up technologies, through either buying distressed or undervalued units of technology companies or investing in highly innovative start-ups in Silicon Valley. That’s not necessarily stealing – just acquiring our best thinking for pennies on the dollar.

Moreover, our open scientific research climate means Chinese researchers can find the latest discoveries in fields such as artificial intelligence by simply clicking on online links. They do not have to be physically present to reap the rewards of American research.

In short, if you add up all the threads, there is a massive, coordinated assault taking place on American technology, perhaps the largest, fastest transfer of intellectual property in human history, and much of it is taking place on US soil.

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. Click here for the second and concluding part of the book’s  Introduction. The New Art of War can be purchased here.