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David Shedd and Andrew Badger, co authors of The Great Heist, China's epic campaign to steal America's secrets, and I can let out another secret, and that's you'll be on One Nation Sunday night at ten o'clock. You right if I give that secret out? Please give it that out. All right.
So David, let's start with you. What is your can we just go through, first off, the background in China? When did you first become aware of what they were capable of? Look, having worked this target during the 1990s, it was pretty clear to me that China was on the ascendancy, especially after 1986, when Deng Xiaoping laid out this plan in order to bring together the sort of controlled capitalism around the whole issue of the socialist authoritarian government of the Chinese Communist Party. But it really took off and it was very personal in 2015 when about 22 million files From our security backgrounds, we were stolen out of the Office of Personnel and Management in May of 2015.
Subsequently, two years later, Equifax, one of the three largest credit bureaus in the United States, had all their data stolen on 145 million people. And then you have a plethora of cyber attacks on our health care system. In terms of privacy data. And that was a wake-up call under Made in China 2025, which was launched by Xi Jinping in 2015. And that's really when I.
Right. And David, I should give people your background. Former director and acting director of the Defense Intelligence Agency, Chief of Staff for the Director of National Intelligence, and National Security Council, Senior Director, Special Assistant to the President for Intelligence under George W. Bush.
Now, Andrew, you're an Intel analyst. You spent two decades serving as DIA case officer, strategic risk advisor over at McKinsey. Also, you went to Harvard, but you have to overcome that yourself. I can't help you. All right.
So, first off, so you two have a real concern as very patriotic Americans, and you feel as though, in a way, I get this sense that America is not fully aware. of how bad this is. Definitely not. This is the largest heist or the theft of secrets in history. And the consequence of that is changed the global balance of power.
Now China is dominating these frontier emerging markets, these critical technologies. They're the superpower for innovation right now. But they didn't earn it. They didn't earn. They stole it.
And that's exactly the point of our book: showing that it's not just because China has a command and control economy, it's not just because they have 1.3 billion people and this massive economy of scale. The speed at which China has now become the preeminent technology superpower is because they literally stole these secrets from America, from the West, from all of our years of research and development. One thub drive into the computer, boom, it's gone. China benefits from it. Give me an idea, David, of what they've taken.
So, for example, for Tesla in 2019, as Elon Musk was breaking ground in Shanghai. For the production in the giga factory of Teslas that a year later would be producing 300,000 Teslas in China. Mr. Powell, three days earlier, is removing $1 billion of source code on the driverless cars that today are part of BYD, the Chinese leading manufacturer of EVs. Which everyone says is a great car, but you're saying they stole the technology for the driverless portion.
For the driverless portion. By the way, they stole the technology of the driverless portion from Elon Musk. Does he know it? Absolutely. And he responded by going to the FBI about the issue, but too little, too late.
It had already occurred. And he made the choice to build there. Exactly. And he cut a deal in which once it's in Chinese territory, the Chinese government threw again this Ministry of State Security Which is the CIA, FBI, NSA, cybersecurity, and cyber command. is the organization that then pulls that out and carries out the requirements of the Chinese Communist Party.
But they also took our F 35, right? They certainly did. And with that, then they create the F C thirty one, which is a near Mock-up of the same thing as the F-35 costing Northrop Grumman $100 million to do damage repair on what was taken out of it. Andrew, don't we realize? I mean, these are people, this is all you do for a living.
You're working on the F-35. Aren't you thinking, as much as I want innovation, but I want security with it? Were we not aware of how good they were at it? Or did we just leave the back door open? There's just been this hubris from the United States that China can't compete with us.
They're this third way. Agrarian power, and then they're never going to compete with us.
So, actually, Elon Musk, he was warned: hey, if you set up this factory in China, they're going to steal your code. He said, Don't worry about that. We'll out-compete them, we'll out-innovate them. At the time, Tesla was the superpower in terms of the EV market.
Now, BYD, China's EV company, has overpassed Tesla. And so, this is the shock value that the United States, we've overlooked this threat for many years, and now it's coming home. And now we're seeing the consequences of it. China just held a Victory Day parade in September. We had the leaders of the Axis of Resistance, Russia, North Korea, Iran, and China has their Times Square.
And they were showing off all their latest military equipment. And it's some of the best in the world. Their hypersonic missiles, their stealth technology, their AI-enabled underwater submarines, which could all be used against the American military. All of that can ultimately be traced to, in part, being stolen from the United States.
So we have a peer power who's now competing against us. Stole all of our IP and technology, and now they're turning that weapon back towards us. And the hypersonics, were they taken from us too?
So the hypersonics are absolutely critical.
So, Los Alamos, which is our lab in New Mexico, this is the frontier of American innovation in terms of our defense technology. You might remember it from the Manhattan Project, where we developed the atomic weapon, which was stolen by the Soviets. We had an advanced hypersonic program there, and a leading scientist who left the Los Alamos hypersonics program, went back to China and created what Chinese called the Los Alamos Club. He recruited almost 160 people who worked in Los Alamos in some of the most cutting-edge hypersonic technology, and they took all of that back to China. Where are we today?
China is now beating us in terms of hypersonic technology. They have nuclear-enabled cruise missiles that are hypersonic, which means they can move super fast, Mach 5, Mach 7, and they can maneuver in the air.
So our air defenses can't shoot them down. And now those cruise missiles can reach the United States.
So we've seen all of our research and development on this critical technology. The scientists come here, take our RD, go back to China, and then give it to the Chinese military. And now we're at a strategic discussion. That is something the United States has not been able to accomplish.
So we know that they're ahead of us on the hypersonics program. And just to be clear for your audience. They didn't steal a hypersonics package. They stole the know-how associated with wind tunneling, high-grade materials at high heat and speed and all of that out of Los Alamos. The knowledge.
So it wasn't no one walked off with a hypersonics package. It's maddening. An excerpt from your book: How China Isn't One of the Top Threats, It Is the Top Threat. You're right. No doubt, cheap labor indeed played a role in China's economic surge.
So did favorable trade terms and massive infrastructure investments, guided by top-down long-term state planning. But none of these variables explain the speed at which Beijing has closed the gap with America in sensitive sectors. The leap was powered in significant part by what can be described as an epic level of state-sponsored espionage. China's espionage activity against the United States far outweighed that of any other nation, including Russia. And then, you say, they've made it another step.
They said they've embedded in our infrastructure so they could shut off our water and shut off our power. Do you want to explain that, David?
Well, certainly the Andrew, you can take it in terms of the typhoon attacks. Exactly. So, this great heist, this theft of all of our secrets, has laid the foundation for what we call phase zero.
So, China has embedded all of these critical malware into our critical infrastructure. Think water systems, think your electric grid, think your ports, think your air tower system. And what they've done is they've identified the weak points in there, embedded these malware. And the moment that a war between the United States and China kicks off, for example, if China were to invade Taiwan for the United States to respond, they would all unleash all that chaos. Phase Zero is shaping the battlefield environment before the actual kinetic conflict.
And their goal is to create psychological panic. And their hope is that by manipulating that panic in the United States, I mean, imagine, imagine the telecom systems go down. Imagine your water doesn't come out anymore. Imagine your electric car. Grade goes down, that's going to create mass psychological panic in the United States.
And their hope is then to use that against us and say, don't come to Taiwan, don't fight us, because we can hit you hard in the U.S. home. And we know they have the lasing technology into space.
So, what do I have to do? Lasing capability to take out our GPS as well. Our satellite system. And so, for our satellite system, they'd have to do it one at a time, wouldn't they? No, not necessarily.
It's likely this would be a mass coordinated attack.
So they would attack our satellites, but then they would also unleash this malware into our infrastructure. And the part, again, about our book is that they laid this foundation through decades of theft.
So they've been mapping our systems. They've been embedding into our systems. They've been understanding our weak points, our vulnerabilities. They've been stealing our secrets. And now they have the potential to not just steal secrets, but launch a kinetic effect.
When we come back, does the government know about this? What can they do about it? Are we doing the same to them? And what is their obsession with Taiwan? Why is it such a threat, this small island just off their coast?
David Shedd is here. Andrew Badger is here. Their book is doing great. It's out this week. It's called The Great Heist: China's Epic Campaign to Steal America's Secrets.
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Again, that's dra.com. Hi, everyone. It's Brian Kilmead here. Are you tired of those uncomfortable dress shirts, especially when they bunch up under a sweater? If so, then you must check out Collars Co., makers of The dress collar polo.
Listen up. These shirts are four-way stretch, buttery soft polos with firm dress collars on them, so they give you the dress shirt look, but extremely comfortable polo feel. You can wear them with anything under a sweater, with a blazer, or by themselves as an elevated polo. They work for any occasion. These polos are perfect, whether it's in the office, on a golf course, or a night out.
Collars Co. is exploding and have gone viral on social media thanks to the 1 million investment they received on Shark Tank from Mark Cuban and Peter Jones. You don't have to worry about collars that flop down and spread out. They stay firm and sharp all day. It's an amazing array of sweaters, quarter zips, pants, and outerwear.
If you're looking for the performance dress shirt or polo that looks great all day, check out collarsandco.com. Use promo code Brian for 15% off of any purchase of $100 or more. That's promo code Brian. We're back. David Chedd is here.
Andrew Badge is here. Their best-selling book, The Great Heist, is out: China's epic campaign to steal America's secrets. And Andrew, let me start with you. Um What is the Chinese obsession with Taiwan? Why would they worry about Taiwan?
I mean, they got so many other challenges. They want to take us on. They're stealing all our stuff. Why do they need to bring them in like they did Hong Kong? There's a significant historical and cultural attachment to Taiwan.
I mean, imagine if a part of the United States had broken off, say, Texas. We'd obviously have that deep desire to reclaim what we see as our divine territory, our manifest destiny and respect. But there's also significant geopolitical advantages. Taiwan was described by General MacArthur, I believe, as a sitting aircraft carrier in the middle of the Pacific. And it sits right at a critical junction point where all the trade routes for our allies Japan and South Korea all pass by Taiwan.
So if the Chinese conquer Taiwan, it's not just going to be a huge PR victory for the Communist Party, but it'll provide them strategic leverage over some of our most critical allies. And it's personally critical for Xi Jinping's personal own legacy. David, the other thing is When you see a thriving Capitalistic democracy. in Taiwan and the quality of life that they have in that small island. Do you think that they hate that, that the Chinese people in mainland China see the quality of life they have in Taiwan and the freedom that they're able to enjoy?
What's interesting is that business drives so many of the relationships between the mainland and Taiwan. And so that there are many from the mainland, and I'm talking about the non- People's Liberation Army side of things in the Chinese Communist Party, which is really only about 80 million strong out of 1.4 billion people. Is that the relationship with the Taiwan citizens is very fluid in both directions. It accounts for about 30 to 35 percent of the economic trade between both countries. And so there are many in Shanghai and Beijing and Guangzhou that are very attracted to the kind of relationship that exists today.
Because again, there has been a growth in mainland China of the middle class. that sees business as business. Um What could you what should our listeners know? What could we do right now? And you're going to be going to government, you're going to be briefing the China Select Committee on China, and they've reached out to you and they've noticed how great your book is, the great heist and how valuable it is.
What are some of the things you'd recommend we do right now? I think the first thing, right, is we have to identify what are our crown jewels of the 21st century technology? What are our most important critical technologies that we have to protect? First among them is AI, right? Artificial intelligence is going to transform not only economic power, but military power.
AI can be embedded into missiles.
So these are private companies, though. These are private companies. The most fundamental step is we have to bridge that gap between the public and private sector. And most importantly, reframe how we think about economic security. In the America, we're separate.
We have the private sector, we have government. China has no private sector government. It's all civil-military fusion. Everything's blended together. We have to kind of start thinking about how do we protect our economic security?
And we have to think economic security is national security. Right, so I got that. What else would you recommend?
So when I think back to how my career developed starting with the Soviet Union in 1982 when I joined the CIA. We operated under the National Security Act of 1947, which was the structure in which the U.S. government looked at national security matters in what now 80 years ago you would say would be a very traditional form. We advocate for creating a National Economic Security Council within the White House under the President, ultimately, but really chaired by the Vice President, that brings private sector and government, because this is part of our industrial base. The other thing, we need to strengthen and harden our perimeters in the cybersecurity arena in major ways around these protected goals.
We don't have a director of cybersecurity right now in the government. I think that job is open. It's hard to believe that you have that vacancy in place on something that is so absolutely critical for America in terms of driving that. The other thing we need legal reform because the bar is so high on prosecuting these individuals. That are involved in economic espionage, that many of the companies simply give up.
And we need to understand that this is about our national security back to the National Security Act of nineteen forty seven.
So those are several elements. We have seven pillars that are defined in the book and laid out in the epilogue of the book. On steps that you can materially take. To enhance this. And by the way, they completely jive, they completely comport with the special committee that's looking at this in terms of that.
There isn't any conflict in terms of our recommendations. And the beautiful thing is we finally found something that's bipartisan. And I was going to say that. I very hear people stick up for China. I mean, how can you ever?
Yeah, I know, but I mean, I always thought we could see who the bad guy was between Russia and Ukraine, but some people are confused by that. But we do need stronger bipartisan support.
So, to give you one example, in 2018, President Trump and the Department of Justice set up what's called the China Initiative.
So, this was a special task force. We're going to go after this China threat. We're going to finally stop them from stealing all of our technology. One of the scalps they got, they arrested a Harvard professor who was a nanotechnology expert. They prosecuted him.
So, they were having success. Joe Biden shut down that initiative because they were afraid of political correctness. I mean, we were allowing our enemy to steal our secrets and we shut it down because we were scared of offending people. We spoke to a DOJ insider for our book who was part of that program. He said they did a review, they found no trace of any type of.
Discrimination or what have you. And that program has been shut down since then. We need Democrats and Republicans to support that, and we need to start taking this as serious as it deserves. Yeah, I mean, it's crazy to think that. Number one, the President Trump saw the threat with the Chinese students.
You say there's 280,000 here. He's like, let's bring 600,000. It's money, and these institutions need it. But there's a problem, especially you say, with these students who get to higher education. They keep their families back there.
And they essentially, if they don't want to spy for them, they extort them to say, Your family's going to pay the price, right?
So the national intelligence law that was passed in 2017 requires. this is in China, requires that every Chinese citizen, whether they're living in China or outside anywhere in the world, or any Chinese business entity to cooperate with the Chinese Communist Party, And so, what you have is this, as the old adage goes, we have our ways. There's that you can cooperate. In a manner that is of so-called free will, or we will force that. And they bring the families into the police station and all the rest when they want to do that.
Right. And yet we have to coexist in the meantime while doing everything we can to get rare earth, be responsible ourselves because they have us over a barrel on that. Exactly right. All right.
So, congratulations, guys, on the book: David Cheddar and Andrew Badger. The Great Heist is out: China's epic campaign to steal America's secrets. And we'll see you Sunday at 10 o'clock. All right.
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