China’s Silent Takeover While America's Elite Slept

the biggest threat to America is not al-qaeda it's not Isis it's not Putin it's not any of these guys it's China do you really believe that I believe it I think it's the most consequential existential threat in 2011 and 2013 they poured more concrete than we did an entire 20th century is that a factual stance of factual statements they had a hundred years of bad luck and now they're back on top they are still in their minds perfecting their ability to control people at any moment this thing can become unraveled for you more concern about the totalitarian regime or the large technology company today they have the same business model really you're talking about having to change a lot of things for us to move forward what you can criticize is the policies of the government that allowed for the behavior to occur in the first place a strong statement server your senior during high Garrincha and russia's in our net I guarantee it particularly because you put out that video on China not only can you not knocked out you don't know who owns the data everything that you do can be watched is it political to me it's not political it's not about quid pro quo it's about adopting chicheme things world view there is terabytes and terabytes of data that's created about you and you have no control over [Music] all right today I have a special guest with me here obviously we did a China video a couple weeks ago they've got a few million views on a lot of content so I wanted to go a little bit deeper we reached out to General Robert Spaulding who wrote a book called stealth war how China took over while America's elite slept I literally couldn't put this book down and once you read it as well we'll put the link below you'll know exactly why he was the former senior director of strategy at the National Security Council and he was kind enough to fly out to Dallas for us to have this conversation together by the us-china 5g and a lot of other technical issues that have to do with that having said that thanks for coming up appreciate you for making thank thanks for having me yes so let's let's get right into it so pre going into China what is your journey of you becoming a general at the air force and then from there being part of National Security Council how did that go about I came into the Air Force before you know I really knew much about the military and you know my picture of the military was about peeling potatoes and somebody yelling at you know essentially Gomer Pyle and I saw a movie Top Gun and it was it fascinated me and really got me excited so I joined and and just went in with no expectations just had fun and and really just worked hard but also played hard but you know I wanted to fly jets and that was that was what got me started and you know one thing led to another I had an opportunity to years before I was supposed to leave the service to go live in China and so I took it and the rest is kind of history because when that when I made that fateful decision and it was really about um you know thinking about what opportunity I had to go live abroad but also how strategic China was in our future it really opened doors for me that quite frankly I would have never considered I even had had no clue about so little so there was no plans of that there was no plans there was really really no plans in fact I didn't want a career in the Air Force so you know I didn't look to become a general in fact and when my wife heard that I had made it she laughed why is that that you've made it a general like how could you make that because you know I mean I was an e4 in the military in the army you know when we saw generals we would shiver it's like this is a general you know and this is a big deal but for me it was you know just having fun serving my grandfather how you think of it that way yeah it's pretty wild how you think of it what is a percentage of people becoming generals it's minotaurs it's very very small you see that star on the Humvee or whatever you're being driven around I mean that's pretty unique to have that but what year was it when you went to China I'm curious so first time it was 2002 so actually went to language training at Monterey the Defense Language Institute the allotted in China for for 52 weeks it's a 62 week course I left in 52 weeks in June of 2002 staff and I and our two boys went in the country and and lived in Shanghai and pudong on the east side of the city and that's the side that the Communist Party built up in the 90s so that's where the jinmao building is and all a lot of the financial district of Shanghai and we just traveled the country and live with people and it was probably one of the most phenomenal two years of my life it was a phenomenal experience it was incredible you know the people were great they're hard-working resilient people and you know having learned the language before I got there I could communicate and really travel all over and really got to know how they think and you know in a lot of ways you know not really fully understanding what was going on I don't think you can live in China and fully understand what it is to be Chinese but for me from as an outsider looking at that country it was it was exciting and it was it was the place that I wanted to be and so when I left in 2004 I told Stephanie that hey we're gonna we're gonna when I retire from the Air Force I'm gonna come back here and I'm gonna start a startup business and guess what was the plan to one that was a plan now what's your rank at that time when you were doing okay so when I got there I had just made major just made me just so you were already you were already I've been in ten years you have been in ten years your major and what was your job what were you doing in China for us so the olmstead program which is a program that I was selected for essentially picks three officers from each branch of the service and sends them to language school it's not for you to go into a country that does has English as a as the national language but a foreign language and so and then send you in the country for two years and I went to University in Shanghai tone G University and studied MBA courses and really was about getting to know the people it's really becoming immersed in what it was to understand China the Chinese culture and history in the language so does China know that you're going in as a major is that a something that it's a basic open conversation hey we're sending one of our majors from Air Forces spent years with you one of the great things about the homestead scholar program is that you do everything on your own so you once you're accepted into the program and you go to language training it's upon your responsibility to go and get accepted into University to apply for a visa because they want you to understand what it takes to travel to a foreign country and so it's almost like being on a sabbatical you're not you don't got it you don't have a detailer that you're talking to you're basically cut loose on your own on your own recognizance to go and and and figure it out what you're getting paid so the mill getting paid okay that that's I mean it is it is really an incredible opportunity because you are you're really learning because you don't have a lot of support you're out there by yourself trying to figure it out and you know there was you know how so how do I get there become a student get a student visa but also how do I get my family in there and how do I make sure that they so we had to take them out of country every 60 or every 90 days to six months to renew the visa and come back in so so China didn't know you were there and you were major they didn't I was not there in an official capacity I wasn't there on I wasn't there on an official visa our diplomatic passport I was there on a on a basically a tourist passport with a student visa going to a university now when I met Chinese I would tell them hey I'm I'm in the Air Force I'm a b2 pilot of course they thought that was quite strange that I would be there but you know that's exactly what I would be thinking about because from what you read on culture you sense a certain level of not a paranoia or suspicious but why are you here what do you do are you a spy you'd look like a CIA guy I mean if you go there I'd look at you saying maybe you are working and you're trying to gather Intel to bring you back but that was actually not the case but it's just 2002 to 2004 and what was happening there if you remember we had just China just entered WTO so it was it was breakneck speed to grow the company our country and grow the economy and all of my neighbors were there building factories for fortune 100 companies and so there was a lot less scrutiny on me as a military guy I think it was the country at the time was focused on making money and and you know certainly people found out who I was but I didn't get a lot of scrutiny that's good to hear that they didn't do anything now the second time when you won back was what year the second time I went back was in December of 2016 and that was to be the defense attache in Beijing and this time around this is a little bit more public so they know a little bit more that you're going or still you know this is this is definitely I am the senior defense official representing the Secretary of Defense and the chairman of the Joint Chiefs to the Chinese military the People's Liberation Army in Beijing and so I for example I got there a week before they took the uuv I don't know if you remember but they took one of our underwater gliders in the South China Sea essentially while one of our ships was trying to retrieve it and so there was a big controversy there was a big dip diplomatic controversy and that was beginning to be a crisis and I was the one that negotiated the return with the People's Liberation Army of that glider to the to the US what was the biggest difference you felt culturally and spirits from o2 o4 to December 2016 I never saw a guy with a gun when I was there from 2000 2004 when I got back in 2016 there were people with guns at the subway stops not all of them but they were there and you could definitely feel a palpable change in kind of the tone of the country now some of that may be because it's it's not Shanghai its Beijing which is a nation's capital but clearly things were a heck of a lot more tense when I had been there in 2002 - mm my mind different vibe what from your experience and what you obviously to write a book like this specific to China you've had to do a lot of research to be able to write what you've written here do you think a part of that happened where they are now growing up to the point where they're not growing up that's maybe a bad word they're becoming a bigger I mean GDP wise they grew you know to being at a higher number than what they were before they're become a little bit more competitive 2008 Olympics it was a statement they're opening so hey we are here to compete do you think a part of that is also their level of confidence to know that we can compete with everybody let's be a little bit more cautious and protections protect protective of what what we're trying to build so look out there or that was just a different city for you well no I think there's a couple of things one the party the Communist Party was really concerned about corruption if you go back to 1989 the the Tiananmen Massacre the three things that the Chinese Communist Party learned during that time was one the Communist Party was under attack by elements within China in league with the United States - that openness was great for globalization in terms of Science and Technology and economic economics and finance but in terms of ideology they needed to pour a whole lot more into what they were doing in order to prevent their population from becoming democratized and three if the party ever became separated from the people that the party would fail and you can see that there's a definite paranoia on the part of the party in terms of not want to make sure that while there people are very advanced in terms of the technology in the models with regard to the e economy they're very cautious about that kind of getting out of control and so I think you know they are still in their minds perfecting their ability to control people but at the same time they're concerned about you know at any moment this thing could become unraveled so it creates this kind of you know I really believe that they really believe that that it could in at any moment the party could essentially lose control because the population essentially awakes and and so I think it plays into their that paranoia yeah so so I do more concerned internally for it to collapse or somebody from the outside to come and penetrate and confuse them and divide you know from with them I think it's a combination it's a combination of internally in terms of are they do they have legitimacy in the eyes of the people and then what are some things that might in their minds confuse the people in terms of you know democracy or human rights or civil liberties so with you now being who you are and you know you were with the National Security Council senior director strategy you've written this book it's very obvious on who you are what your position is that is someone like you able to go back with no issues like would you be comfortable saying I'm gonna take my family to China absolutely not absolutely now why is that well because clearly what I say in that book is that the Communist Party is not great for the Chinese people and that's not something that they appreciate people like me saying certainly the way that you become a China expert in the United States is that you go to China in order to go to China that you say things that actually the Communist Party doesn't get angry about and so are they may not even give me a visa but even if they were to give me a visa I would be concerned that I would go there and they would they would find some reason to not let me go back not let you come back here right even though I mean today would be a good time to actually keep you if you went over there so if you have any plans of staying right I don't I don't want to go on vacation so so let me go back to something you said because the other thing that that really and you mentioned 2008 and it's important because it's not only the paranoia that they have but also if you go back to dung shopping and what he said about hiding capability and biding time this is not a change in what the Communist Party who they are it's really in 2008 when when our financial system essentially said that we really don't know how to run global finance that they really believed that they had arrived and so there's also element of they've been you know having to play second fiddle based on the century of humiliation and the fact that you know they were the dominant Society for 5000 years they had a hundred years of bad luck and now they're back on top they're they're ready now to essentially take a leading role in the international system so you know part of that goes with not just you know that vibe is not just with you know how they treat their population but also how they treat the the West how they treat foreigners because there is an element say we're not gonna back down anymore we're gonna be we're gonna stand up for for what we believe and and we're gonna we're gonna make a name for ourselves in the international or don't worry and we're gonna we're gonna fight to have our interests respected you mean them them yeah so you say in the book I mean obviously I got a lot of notes here I got seven eight pages of notes to go through with you but you said in the book that you will not you said this I think Steve bana said this but you quoted it the biggest threat to America is not al Qaeda the biggest threat to America is not actually this is you saying it in the book I believe Christie Bennett said something else the biggest threat to America is not al-qaeda it's not Isis it's not Putin it's not any of these guys it's China you really believe that I believe it I think it's the most consequential existential threat not just to America just to democracy the world's ever seen and it's because it's cloaked itself in this picture of adoption of the international norms that were established and the rules and norms and the systems and the institutions that were established after World War Two perpetuated through the cold or and essentially and our thoughts was dominant after the end of the Cold War it was they wrapped themselves in that and so there's a belief that they that they accepts those principles and what they say is they they want to have the international system essentially correspond to their interests but what they don't say what their interests are and the interests are essentially counter to every democratic principle that that we stand for human rights civil liberties rule of law it's interesting when you say that because that's a pretty bold statement to make you hear a lot of people talk about climate change you're a lot of people talk about cyber sea you know cyber war all this other stuff what you talk about in the book as well but to say China is at the highest level more than Isis al-qaeda Putin those are some good that's strong statements to be making but let's go a little bit back to you are working as the senior director strategy of the National Security Council and you go in you said you have two reasons why you wanted to be a part of them and one was to educate the members about who they are and the other one was to ensure the security of 5-g for us and also other countries right not just us right everybody else that's involved and then you you're giving this one talk and you brought some other people to also give inside there was a lot of dialogue and then it got a little bit heated and then you held a meeting back kind of trying to bring everybody together hey this is a good question we're having this discourse it's a very good thing where did it go from there to the you know press leaked and you know being leaked to the press and then from there you getting fired from National Security Council how did that process take place so the the debate on what was going how we were going to treat China really was taking place during the summer of 2017 and there was really about how are we gonna structure the national security strategy what we're gonna what was going to be our priorities and that was a process of discovery what and quite frankly I that's all I had been working on since 2014 so from 2014 to 2017 17 when I get to the White House my two years in the joint staff my time in Beijing and then coming to the to the White House in May of 2017 everything have been focused on this competition between the in China and what the implications were on us from on a societal level and economic level on a national security level when I get into the National Security Council in 2017 we start the discussions on framing and writing the new national security strategy and so in that dialogue was you know the first thing you do when you have a strategy is what's your problem statement what are you you know what what are the threats that the United States faces and of course you know the same thing that you just mentioned a lot of people talk about climate change that talk about terrorism what we had to contend with is there's a lot of things happening that people outside of national security policy may be aware of don't talk about that infects that affects everything that we do and so we start I started because I had had those discussions outside of the national security policy establishment I started bringing that information in and really for the first time you know by the spring of 2017 I had formed in my mind a good picture of how to describe it what the elements of it were and then you know essentially how to have a logical conversation that said these are the challenges we face and this is what we need we need to do that conversation by August of 2017 was complete and then I said I'm gonna be here a short amount of time if I could do one thing for national security policy to change the course of the United States going forward to preserve our republic it would be to secure the Internet and so I started working on talking to engineers about what is 5g what's the state of play today because we'd said in the national security strategy that data is a strategic resource like oil in the 20th century data in the 21st century which will drive artificial intelligence everything that that all the algorithms that got that essentially guide our lives to better places if we didn't secure that strategic resource then we were at risk as a democracy and so how do we take that you know you essentially beamforming antennas with software-defined radios and networks which something that we had used in the military for a long time and a plot and give it to the people but then do it in a way that actually provides security for their data which is in essence what you know I had come to conclusion the only way that you democratize in a digital sense is by protecting is by giving control of the at the citizen level of their data of their data of their data it is and the analogy I make when I talk to people is if you go back to Alexander Hamilton and the framing of the Constitution you know essentially what he was shooting for after having surveyed you know done an extensive survey of all the governments that existed prior was how do we create a government where no one person party or group can attain ultimate power because ultimate power is ultimately corrupting and so that's the Constitution but then what if it fails what if you know we don't actually provide for the people and somebody can gain power then we give the American people the second amendment the right to keep and bear arms so that they can fight an oppressive government if that dream ever fails and of course in a digital world what you saw what you had begun to see is a world where you may not know you're being oppressed or you may not know who your oppressor and in that world you may not know you're the oppressor you may not know you're being oppressed or the second war that you your oppressor is who your oppressor is right because we'd seen in for instance after election using big data analysis AI BOTS and social media networks the Russians had created protests right they had it was ostensibly on behalf of black lives matter I'm talking about the one in New York City a few days after the election but it was really the Russians and so what you what you're seeing is in going back to date as a strategic resource in in the digitized world the ability to aggregate data is equivalent to aggregating power and if you can aggregate power then you have to wonder about who has the ability to aggregate data in that world and today the two entities that can really aggregate data are large tech companies and totalitarian regimes democracies have a hard time aggregating data the United States cannot aggregate data because the law prevents it from doing so so we started this this unit within the State Department called the global engagement center the global engagement center was supposed to fight radicalization for instance by Isis and and prevent influence of our population but they can't do their job because they can't aggregate data not even public facing Twitter data right because there's concern that we use the resources of the government to spy on our own population but one of the was so one of the ways that foreign States go after us is actually take our own social media data and use it in ways that influence us and so in order to discover that you actually have to be in the data and so the only ones that can be in the data today are the large tech companies and so you're essentially offloading to the large tech companies one of the primary purposes of forming the Constitution which is in the preamble provide for the common defense and so if you think about national security and gets really the heart of things right if you think about national security we have an Air Force we have an army we have a Navy we have a Marine Corps right I don't think you're worried about you know Marines jumping into your building here or getting bombed right you're not concerned about that but I guarantee you the Chinese are in your networks and the Russians and the North Koreans and everybody I'm Jerry I guarantee it they're in your networks they're in everybody's networks this is what they do and so if they're in your networks that's strong statements you're you're saying you Jerry I guarantee and Russia's in our net I guarantee it I guarantee it particularly because you put out that that video on on China I guarantee they're there they've come at this place but so who's responsible for protecting you from that government I don't know who is it not at all the government protects their own networks they don't like your networks what you're responsible for to protect your own network and then of course if you have you have a Twitter account yeah I do okay Twitter is responsible for protecting that Twitter is responsible for protecting my account on Twitter right and I'm responsible for protecting mine your data your data what are you which we have we've ice it's not the US government sure but now let me ask you this so I had a former undercover FBI agent right here he said and that's sure three weeks ago so I asked him I said so what is the what is the real you know the line you don't cross between the government protecting me right because the government getting too involved and hey you know the whole app will go into DMV getting IDs and not Apple the government going to the DMV and saying we want to get the licenses and then government getting to Apple and saying we want to be able to get access to the phone conversations in case the terrorist does this well in China because some people will say well China is set up in a way where they feel like they're a company and they control what everybody does because they work for the company right what America looks at this is actually how I view America America sees their citizens as 1099 China sees their citizens as w-2 so because they have more control it's tougher to infiltrate their system than America's because America kind of leaves everybody alone would you agree with that where we are left a little bit more to ourselves without the top have an access to the private companies to get data to see if anybody's tapping into our systems or no you mean from our government yes you're met your left totally alone do you think that's okay no I don't think it's okay oh so you're saying they should be more involved they should be involved in protecting your data they should be involved insuring that that there is not undue influence placed on you by a foreign nation so that you are making decisions based on influence that's coming from outside our borders okay so now somebody's watching this and saying well Pat that's exactly what a big government guy would say because let them control us and they can do what they know what's best for us to keep I'm not saying I'm not saying that the government has access to your data you're saying they should they should not have access to your data they should ensure that nobody else has access to your data either why do you remember that San Bernardino and you have there's an argument between Apple and FBI absolutely right you know Apple said we're not giving you the back a little clear ok so think about that in the context of what we're talking about here I don't think anybody should have that backdoor dub access to your data a foreign country you're not foreign country no nobody should what I'm saying is the only the only one that should have say over who has access to your data is you that's what it means to live in it in a democracy right in a digital world but then this gives me the question so if you're saying the only one that should have access to my data that's fine we're on we're in agreement there but if China is hacking into my data and getting access to what I'm doing you're saying the government should prevent that from happening how can they do that if they don't have access to what I'm doing well they can have access to the network they don't have to have to ask you access to your data right because if your data is encrypted they can't actually see what your data is but they can certainly see what China is doing I mean that that piece I'm confident that we have an understanding what they're doing within our networks just their actual protecting that or preventing that from happen doesn't occur that's why by the way China built the Great Firewall because they wanted to protect their population because they realize that if they didn't protect their population then globalization and the open Internet would allow for democratic values to seep in so they wanted to protect their people from influence that came from outside there's a good move I think that's a great move because if you're connected to a totalitarian regime and you're open and the totalitarian regime is intent on influencing your population the way we've designed our current internet absolutely lost but doesn't that mean that we become total totalitarian if we do that as well like to match against them we kind of have to if we if we did what they did right so they did what they didn't protect their individual data from them as a government they just protected it from the outside so they build a wall around it what I'm telling you use you you have control over your data not the government not our government not their government not Twitter not Facebook that you own it and so if Facebook's wants to sell your data then they have to get your permission and may even have to pay you to do so if they want to someone if they want to sell your data who are you more concerned about it totally totalitarian regime or the large technology companies I would say today they have the same business model really of course tell me why look at them today the both China and Facebook have sensors China sends their sensors to school what do the sensors learn the sensors actually learn about Tiananmen Square the truth right okay because they have to censor that discussion on the network Facebook has sensors the sensors go to school to learn what they need the sensor on Facebook's network right same business model it's about free data it's about using that data except for this one it's about profit for this one it's about control and they even down to the sensors they have the same model you're putting them at the same level Wow I'm not saying no I'm not at the same level because one is about profit one's about control what I'm telling you is the system that we built the technological foundations of the system we built then the app services and business models that we built on top of that allow for power to be equated with aggregation of data when you do that you create business models the business model of a large tech company is equivalent to the business model of China so do you think you know how for them like they don't they don't allow Twitter or Facebook YouTube to go and they have their own YouTube they have their own Facebook all of that that they have do you think are you suggesting that we should only create it for us and not have it available to other countries to have access to or social media but that or that's not what you're saying that's not what I'm saying okay so you're not saying for the firewall where the social media is just now no you're saying firewall to protect us from somebody else coming through the system and really what I was saying and what if you go to page 19 of the national security strategy it says it right there we're going to nationwide secure 5g network in other words we're going to be able to build a network unlike any network that's ever been built before and it's really about protecting individual data so that you have control of your data and nobody else does and then you can figure out how to how to use it and that then we would take that and you know network that we built and then we share it with our our Democratic allies and partners if you build a network network like this a totalitarian regime can't control the population because they can't prevent them they don't know what they with the information they have access to they can't see into what they're saying right which is what you can have in China they can't block you out from having other information that they might not want you to have because I can't see what you're doing and it really becomes a competitive advantage both from economic standpoint but also from a societal standpoint let me ask you this when you came out and you had the meeting and you talked about China the way you did right and you kind of said here's what we have to worry about with this side and this is what they're gonna be doing there may be our biggest they are our biggest threat and then here's 5g what's really going on did you immediately get a sense on who was for you and who was against your talking points it's kind of like in this room if I all of a sudden say Tom Brady's the greatest of all time within five seconds I know who waits the Patriots and who likes him right did you kind of sit there and say oh wow that guy crossed his arms he's definitely not happy he's curious did you get that feeling yes and was it cross the board one side politically or was it both sides were happy and said so so let's go back to 5g right you know what I'm asking you I know exactly what you're asking once the decision made to confront China that was a process that was just going to run I didn't need to really focus on that I focused on 5g I focused on a secure internet when I started sharing because what I had done is I spoke to and you know network engineers people that build networks when I started sharing the ideas of though that we had come up with if I had been smarter politically at the time I would have known exactly how to answer that question and I would have said anybody that's got telecom in their portfolio was immediately against it because economy industry was immediately against it right that was that was a clear signal that if I was paying attention at the time and really understood DC in a political way I would again I was a national security professional I was a military guy I didn't really get into politics but in in in much the way same way that you see industry influence on just about anything in DC the industry the telecom industry in particular was once this and kind of made its way outside of government channels because those people that are in a telecom job in DC have some relationship with the industry it that information got out once it got out the industry said uh-huh and and that's when I you know started my pathway to having my paper leaked and me asked to leave the national security cam did you come would do you know how sometimes you know if you say something you you either don't know the consequence of you saying something or you know and you say it anyways which one were you I would say that both are you okay right so some of them I did not and some of them I didn't know I didn't know the political lay of the land but at the end of the day it was about preserving our republic it was about our Constitution it was about national security it's not about me it was never about me went the first time day one when I take the oath of office and in putting on the uniform it's not about me anymore it's about the Constitution it's about preserving the Republic there's if if it ever became about me then that's my time to leave do you think most people start like a statement statesman like you and then when you're around too much then you get kind of a tainted based on the environment you're on you know what I'm you know what I'm saying right you get in to me most people I see originals like you I really want to make an impact I really want to do this it's statements mentality right any or like a we have an opportunity make 10 million year or 15 million here 22 million and we can have control over here we can have more influence here do you think starts that went into the changes where if you want to move up you kind of need to get a little bit out there and accept the reality of what politics could do well so I look at myself as an entrepreneur and when you take somebody that's entrepreneurial and that really believes in the oath of office that they've taken and then you put him in a bureaucracy where they're not you I had when I went to China that I took a year at language institute two years living in China that's three years I told the airforce I'd give them back three for one so that added 10 years to my commitment and so as time went on that and as I rose up in the ranks and I would move say every year I would get a two-year commitment so you move every year and get a two-year commitment you never really have the opportunity to get out and so I'm an entrepreneur I'm living in a bureaucracy but I can't leave I have no I have no choice I have to stay so I can either say you know get angry about it right that I'm beating my head against the wall because you know things need to be done or I can just learn to you know live within it and try to drive as much change as deep as I can for as long as I'm there I asked this question for one reason like you know you listen to Joe Biden he's been in the world in the pilot political world for a long time right yeah okay did he start off you know having to play all these political games that you have to play or was it a good cause and you look at Mitch McConnell two names that you talk about in your back ones the Republican was a Democrat and they're both have some ties to China right one Mitch McConnell 1993 I think he married his wife whose father's a very powerful I don't know if you want to say to business owner entrepreneur and they're connected to the communistic regime and then on the other side Joe Biden his son Hunter it's all over the news everybody's hearing about all the issues with what happened there I ask it again this is not something that's a favorable to Democrats not liking China or wanting to support China or this is not just Republicans not liking China or dislike in China this is purely on both sides on what you're seeing all right and and when you and investigated more were you kind of like oh my gosh I didn't know the Biden family was like this or the McConnell was it one of those things where the more and more and more research and investigation you did the more like this is bigger than you thought it was did you have one of those moments yourself well there was so the one moment that I had was when I got the briefing in the fall of 2014 that was from one of the major audit firms and when I looked when I opened that briefing and I realized you know a lot of the elements of that we would use to attack a country using an air attack I saw play out in front of my eyes using economics finance and information and so you know that was a that was a moment it broke my mind because up until that point I thought the America is the greatest nation on earth and we're unassailable we're the most powerful you know nothing could happen to us and that was a point when I realized that no I mean we could have carrier battle groups nuclear subs f-35s and all of this capability and spend eight hundred billion dollars a year on defense but if our society was basically being attacked at their job level at their societal level then we had lost ability to protect our nation in a globalized internet powered world and from that point on I just started studying and and I read everything I could and I talked to everybody I could so because I had been at the Council on Foreign Relations I had access to a lot of executives of finance companies of investment companies and so I started going around and talking to you know there are some of their research offices and talking to people and trying to understand what was going on in our country and how global business work how global finance worked how did investment work and what you know did I ever stop finding rot no it's I find it every single day as you you continue to pull back the layers of it you realize it goes through a society because it's based on this fundamental belief that openness will lead to democracy and that is a key to China the Chinese Communist Party's power because when we believe that open must would lead to democracy they said there's my opportunity because they're gonna let me have access to their finance their trade their investment their immigration their media their politics the Internet academia I have access to everything you know think about Commodore Perry sailing in with the great flight fleet into Japan he had to use guns to get into Japan we just let the Chinese in and sometimes we force them to pay sometimes we just gave it to him it's kind of a part of their philosophy though if you think about the whole Confucius and art of war its battling without having a battle right the whole philosophy there you talk which was brilliant when you talked about in the book but what did you learn from the McConnell family and what did you learn from Biden's connection to China what I learned at the White House and this is really at the White House because when you before you go to the White House you always hear these stories about you know it's the White House calling you know people like stand-up or like you know how can I help you so I'm at the White House and I'm working with think tanks and law firms trying to number one expose what the Chinese were doing but number two come up with you know credible policy options that we could implement that would get them you know that would prevent them from taking advantage of our population and time after time they say sorry I can't help you I don't want to anger my Chinese funders or my Chinese customers my partners don't you know aren't comfortable with us because we have a lot of shipping business in China and I'm like I'm calling from the White House and our top would they be this answer top think tanks and the top law firms in the country we're telling me I can't help you and so you know I knew about I knew this already right so it but then when you you really get an understanding of okay if they won't even help the White House then we've got a serious serious problem what did you learn about McConnell and Biden family well so I put they're the only ones that I named in the book and the reason I did is because it's all out in the open you can go read the sources a New York Times report Wall Street Journal reports Biden his son went with him on Air Force two over to China ten days later is named a board member of Bo high harvest hedge fund which is a billion and a half dollar hedge fund McConnell you already talked about his his family his father-in-law knows John Ziemann former chairman of the Chinese Communist Party and his sister-in-law is on the board of the Bank of China all right what influence would you say is there you would they would say there is no influence that just happened part of McConnell it happens to be my family relationships on the part of Biden he would say that was my son you really had nothing to do with me although he did go over with him on Air Force two but that being said it's not about quid pro quo it's about adopting chicheme pings world view and his world view at which he says that Davos many times is globalization's good you know we should we should continue to have open markets we should continue to have open systems so that we can all collectively do well together as a global community that's that's essentially I'm paraphrasing what Xi Jinping says but that's not what he believes because if you read the Chinese Communist Party documents like for instance the document number nine that have been that have come out of the country and have been translated then you realize they repudiate every single element of for example the Atlantic charger which is a good one page template for the international order signed by FDR in Winston Churchill eight paragraphs one page democratic principles free trade rule of law and self-determination that's it that's that in a nutshell that tells you about what the UN WTO Bretton Woods all that's about the Chinese Communist Party doesn't believe in any of those so when it's when he goes to Davos Xi Jinping goes to Davos and he says we need to stay open for business it's not we need to stay to open for business because democracy human rights civil liberty and rule of law are great it's because if you stay open for business I can ensure that we have access to science technology innovation in capital and talent so let me ask this question so for me I used to be in business with a guy who behind closed doors this one guy I would always look at him and I would talk to him he was always afraid of one guy and he couldn't stand the other guy was working with but it was frightened of him why are you afraid of that guy you know and I would always ask him trying to figure out why you're afraid of this guy why are you afraid of this guy finally a year and a half later I found out what it was so he was doing some things with business behind closed doors and it was not great it was a little bit past great close to you know breaking the law and eventually he got caught but under the table he was paying him twenty five thousand dollars a month cash not 1099 not w2 which 25 cash is 50k among pre-tax right the same as $600,000 your income so one day he's upset and you know he tells one of my competitors and that comes to me and I find out about it like now it makes sense why he is afraid of him but then when he stopped paying to $25,000 cash the other guy told everybody about his business and he lost it anyways right right so for me here's how it here's how I view it and I want to get your perspective to see how you see this the MBA situation right now with what's going on with LeBron right or not just LeBron there was Maury Maury right the Houston GM yeah makes a comment about YouTube it you know what's going on over there and then they're upset canceling golf preseason games and then all of a sudden the owner of Houston makes his comments and then from there Adam silver says I support freedom of speech Steve Kerr didn't want to say anything because he kind of didn't have a wasn't too educated on the situation at that time Popovich said a few words and then LeBron says maybe he misspoke right he would what he shouldn't have said so for me I look at that it's okay why is this happened I want to kind of get your thoughts as but why why are they doing this okay why would they be doing this is political to me it's not political to me it's one and a half billion viewers there same reason why US is trying to make movies over there and you're getting rock making movies doing six hundred million dollars here with giving love to China versus just doing it it's another market actually to me that's pretty honest because it's money play right it's not political play or anything man we can sell one-and-a-half billion people more shoes we can sell them more media we can go out there and you know get the games to go over there instead of making a 40 million year we make fifty million right 60 million year in a situation like this before I asked you to LeBron opinion but in a situation like this do you do you process it from the standpoint of well maybe mitch has some a business that he's doing it out of respect to his wife he's just kind of given the respect to China and maybe Biden's son has some respect and it's a son you know you don't have fifty sons you had a couple sons it's blood he's just trying to protect his son to do what he's doing do you think that is an acceptable reasoning to allow them to do what they're doing or should it be America first because of the responsibilities that you have then your kids your wife your family how do you process that well let me put it this way and this was really something I had told my wife leading up to 2016 elections now you were in the military right if I had any of the relationships that I just talked about there is no way I could have a security clearance wouldn't happen I could not get that through the system it would not grant me a top secret security if you were let me clarify if you're Mitch McConnell or Joe Biden would those a relationship you wouldn't be able to get the security clearance that you're right fair enough right yep absolutely this just facts so if I had done if I had taken my you know personal email or my professor my work email and basically taking that all off and put it on you know a server and had some classified message what do you think would happen to me you're fired you you know you're you're Marshall yeah or Marshall absolutely kicked out I don't want you right no there's no doubt sure and so as you see these things these kinds of things that that I know that you know whoever's gets elected as and chief has a responsibility there that they are the the the chief diplomat there the chief law enforcement arm officer there the commander in chief so how can that person have the kind of relationships that I as a military member can team have a security clearance with or do the kind of things that I would be fired or court-martialed with so you know I it's pretty black-and-white of me when you're the commander of chief and you are requiring the people that work for you that swear an oath that are working for you as the chief executive particularly commander in chief because commander of a military force is much different than being the senior executive at a company it's a completely different type of authority over somebody you know the authority to to not just fire but also in prison right because that's court-martial authority and you and yet you do the things that you say or you must enforce that they cannot do then you've you've created a problem and we this is pervasive in our system that our politicians can have the kind of relationships that we can't even allow our military members to have security clearances having let's leave that aside okay we'll just set that aside now you have the president United States saying here's a non-market economy that we basically let into the WTO in 2001 and they broke every rule in the book and continued to and they're not going to stop so you know what we're gonna do we're gonna treat them just like we did prior to going to w2 prior to going the WTO they had to have a vote on most favored nation status every single year right once that stopped then corporate money started pouring in foreign direct investment started pouring into China and they grew like crazy they took seventy thousand factories and 3.4 million manufacturing jobs and so the President of the United States says okay they're clearly not don't have any intention on following the rules we're gonna put tariffs on because that's what we had before they start we started and we let them in we're gonna do the same exact thing and then you have Joe Biden and you have Mitch McConnell saying that's a bad idea now does that relation to those relationships contribute to that or is it just because they believe that I don't know the answer to that but I guarantee you any counterintelligence officer that brought me into interrogation asked me why I made that decision they would have grounds to say you know you're untrustworthy you didn't report that you know you're you're your relative was making you know millions of dollars from the Chinese or you didn't report that you've got millions of dollars from the Chinese so I'm not saying that there's quid pro quo there but there's enough of hey I don't like tariffs - hey I've adopted Xi Jinping's worldview - hey this is actually harmful to the United States I'll leave it to other people to kind of figure that out it's not for me to figure out it is for me to say that if I had done it on active duty in the military I'd either not have a security clearance that I've been court-martialed so so let me ask you this that same argument you got two different communities here okay you got those who have political power and influence say McConnell Biden and many other names who support China and they're saying hey take it easy right there an ally I think you went to the Department of Commerce and they said China's not the adversary they're our friends we cooperate with them these were the words you wrote in your book right okay so on one side you have the political people that they shouldn't be doing this because if they have interest with their kids wife whatever okay then the other side is investors business owners right hedge fund folks entrepreneurs folks who made their money in America yet they they want to make sure China still has the ability to do business because they lose money right this goes to the bottom line right do you think their motives is okay because it's just purely money and they want to protect their investments for themselves their clients their businesses and these two are complete different ways to be held accountable that's the system we built right yes I know exactly what you're asking that's the system we built and so you can't criticize businessman because they're our system says you owe fiduciary responsibility to the shareholder that's your job and and oh by the way you can actually be sued or brought up on charges for not doing your job not fulfilling your fiduciary responsibilities so there could be an argument made that if you're not cooperating with the Chinese Communist Party that you're actually harming your company okay there you go right so so you can't criticize them for that what you can criticize is the policies of the government that allowed for the behavior to occur in the first place and I'll give you an example level 1 versus level 3 assets I talked about in the book China has non-committal currency strict capital controls since 2015 you can't get money out of the country only in special circumstances and only depending on what the business is you're doing so then we have plenty of corporations that have billions of dollars over there that they're carrying on their financial statements that's level one assets meaning just like cash in the bank here but you can't get it and so but if you're showing profits and it's going in to cash in the bank in China then how are you being compensated as an executive or or on a board of directors for that company you're probably getting compensated based on the money you're making in China but yet the shareholders can never see that money because you have strict capital controls in a non convertible currency okay so we've created an incentive system just based on our accounting standards faz B and the Securities Exchange Commission can change this the Treasury Department could change this and say no if it's in China it's non convertible currency strict capital controls they can't get the money out that's a level three asset and therefore all you corporations need to do a restatement what would that say now CEOs wouldn't want to invest in China because they it wouldn't count story their conversation now board of directors wouldn't advise the CEO that they should invest in China because it wouldn't take towards the compensation we build a system that incentivizes behavior for the destruction of the country that's not the fault of the business community that's a fault of the government great point so it's so essentially a company who runs a sales organization runs a compensation structure that produces bad behavior it's not the sales person's fault it's the end it's the organization's fault for producing compensation structure the way did so what you're saying is a complete restructure of our agreements and arrangements with China you're talking about having to change a lot of things for us to move forward you're not just saying some Sal here but but I'm not saying that we're that we're doing something that's untoward I'm just saying let's follow the rules for instance in invest right let's let's us blow the rules for everybody China's all - everyone - right exactly so they're not going to follow the rules though right then for example so let's go into investing so now right now we have MSCI all world index going from went from zero to five percent to 20 percent weighting in and Chinese equities right okay Chinese companies they come here they register your stocks and list on some of our exchanges but let's go the unlisted ones the registered ones that's a trillion dollars they've made off our capital markets there's no audit or transparency requirements that resembles anything that a US company has to follow right so a Chinese company can come in here and get registered and get listed on our Stock Exchange and get access to our retirement funds that's what MSCI MSCI all World Index is followed by all the institutional investors and the endowments the university endowments so our retirement funds get sent over to China to pay for investments so we have no idea actually what they have because they don't have the same audit and transparency requirements as a unit of a US company that's a policy that we have right now so China can register and list their stocks on our exchanges and our retirement investment investment officers can send money over to China and they don't have to correspond to the same rules that US companies have - so make Chinese companies correspond to the exact same rules that US companies have - and I'll tell you why they won't because sending over the audit data is a national security violation in China in other words it is treason for you to send the audit information from a Chinese company to the US let me ask you do you see any possibility of an agreement coming up with all these technicalities this is not a small thing here okay so you are or you know Chinese have already decided to decouple it's not about us decoupling it's about the Chinese Communist Party maintaining control over their society and in order to maintain control over their society they need to maintain control over the state-owned enterprise system that they built which says that we are not going to a Buy by US laws about sending it over audit and transparency requirements if you force us to do that tough we're not going to how China took over while the America's elite slept okay is the monster too big right not to control no not at all okay that's what I was asking so it's not yet so what would be some of the things I know you talked about it at the end of the book but if you're saying monsters not too big to control is that your four points that you talked about at the end of the book it is let's get to the end of the interview with that I want to go into that right now because we'll get to that while we're going through it so okay so we just talked about business what responsibilities they have etc etc and we talked about politics what are your views on how MBA is handling the bullying of China saying hey we're gonna not show any of the preseason games in China do you know what ECMO machine is no so an ECMO machine is a machine that is used to keep a body alive when heart and lungs are failing okay so it takes blood out of the system it oxygenates it and puts blood back I actually knew somebody that had been hooked up to one of those things it's not it's not a fun thing when you're dying and hooked up to an ECMO machine Chyna if you say you're a dissident your Bureau your Falun Gong you're a Christian you're a Muslim and you get sentenced to say seven years in prison for for being a you know religious follower and you won't stop they'll type your blood no sequence your DNA and they'll give you an ultrasound your organs and you go in a match list if that match comes up they'll hook you up to an ECMO machine hook your body up to an ECMO machine they'll give you an injection to paralyze you and they'll have a surgeon come and remove your organs put them into somebody that's come in for hundreds of thousand dollars to buy your organs to have it put because they need a heart or need a liver or need two kidneys or whatever and when they've taken all the organs out that they can use they'll throw the body in the incinerator so when we do things like equate that kind of behavior with say the social challenges that we have in the United States then it then it shows a fundamentally misunderstanding of the difference between a democracy and a totalitarian regime and that's that's what I find so infuriating about what the NBA is doing because that kind of behavior that's what that's the kind of behavior that Hitler was doing that's the kind of behavior that existed in Stalin's Soviet Union that's the kind of behavior that the Chinese Communist Party is doing today you can go look it up on the UK tribunal on the forced organ harvesting of prisoners of conscience summary reports their final reports coming they've interviewed hundreds of people this is happening and yet we equate you know our social challenges here in the United States with that kind of behavior in China that is I think the challenge of the NBA is not understanding and understanding who they valid themselves with so let's take away the fiduciary responsibility that you know the NBA Commissioner has to not anger the Chinese Communist Party because the NBA makes a lot of money there let's take that away let's say he's an American and a lot of Americans died fighting to stop the kinds of things that are going on right now in communist controlled China so business guy understand it American I can't for the life of me understand it you know only the only reason it is is because they do such a good job of obfuscating of hiding what they do which is why they've titled the book of stealth war and we've done a very very poor job of opening in our eyes and the reason we've done a poor job of opening in our eyes is because we are being compensated welcome to look the other way so fine let's just say I watch this and you said this on I'm gonna be a person I'm like okay what are you talking about I don't really you know I get that but everybody's got dirt on their hands America does look what America did to Japan look what America did to so you know that's the argue right so so everybody's done some stuff how many people do we do this how many times have we killed people so we have blood on our hands as well somebody from being being watching this we're just trying to do business you know we're just trying to make sure we keep a relationship with them because we want those 1.5 billion eyeballs that's what we're trying to do we saw what happened to Berkeley when he went to the Olympics and it from there Kobe's the identity Olympics after you know the the center from Houston Yao Ming and then now LeBron is getting bigger all these guys are getting a big exposure there what's wrong with us wanted to keep our relationship with China's solid to not create any kind of a issue between us let the politicians go at it which is basketball players we're just trying to play over there and entertain that audience as well yeah and I would say not surprising because people were doing it for Hitler and when those army soldiers walked in the Dachau and saw what the hell was going on there you know I would have hated it to be one of those guys seeing that to see that you know what could be done to people and you know I don't know what else to say about yeah the horror of this thing that that that that we can sit here and basically say you know that's not my D that's not my deal I'm gonna get my my compensation deal I look I get that I get the other thing where people were saying well you know America is just as bad as everybody else okay but you know it's just not III can't see it for me it just it doesn't make sense to me it did I don't think it or whatever makes sense to me I just don't like us to be bullied I've never been a fan of bullies net my entire life I've never liked bullies and I've never liked games and if you allow a bully to constantly bully you and you walk on eggshells with the next moves you're making you will forever walk on eggshells because they officially know that they scared you and so the next time you do something it gets deeper and deeper and deeper it almost goes to the story of the Roy Jones guy that worked at Marriott right I think his name is Roy Jones because same as the boxer right it's working on Marriott and if you can elaborate on what happened with the story with him liking the tweets yeah he worked in the social media Department of Marriott corporation you like to tweet about Tibet it was from a it was a the tweet was from a Tibetan dissident group he didn't know anything about Tibet he didn't know anything about China he was just saw that somebody had you know given a shout-out to Marriott and he's like he liked the tweet Shanghai Tourism Bureau found out about it Chinese called the Marriott corporations they deal with this person and apologize and they fired him and apologized the NBA situation is no different where they almost fired Maury this is and by the way this is happening it's happened to mercedes-benz it's having the Tiffany's that's happened you know it's a Cathay Pacific I don't know if you remember the CEO resigned rather than giving up the names for the people that were working for Cathay that we're going with the people of Hong Kong in the protest and oh by the way where do the people of Hong Kong protesting being exercised extradited to a country that could basically put them on a donor list so I mean it's it is really a fundamental difference there's a there's a stark difference in the type of country that you live in where you know we live in today where the NBA players live and the country that is China and the the problem is and there's a good article op-ed by Li yuan who's who's from China in the New York Times recently talking about what it's like to live in China and not understand the world you're living in because of the indoctrination and control over you know the way they think so when you go there you might think everybody's happy well they are happy because they have very little access to anything to know anything else now this this Roy Jones guy from Marriott did he get caught because the government is surveilling every move we make social media or is it the culture because I was in UK a few months ago and I was sitting out with a couple people saying UK we used to be people that we protected our nation now the government has taught people to become spies and all tell on each other or is it the culture of China of telling on each other and say look what he's doing look what he's doing is it more they have you know a whole massive community around the world that's still watching out for China or is it actually the government associate but I have they have knowledge they have huge numbers monitoring so it's powerful but they also have their citizens that are taught you know that this is an affront to China you know that the Hong Kong people aren't don't really want peace there they're like the the protester or not the they're like a terrorists of 9/11 what is the biggest difference in the way you do business in China versus the way you do business in US and here's what I mean by it I don't mean I go start a business in China and since 2015-2016 I can't take profits I'm not talking about that I'm talking about I'm a Chinese citizen I live in China I want to start a business and compete a marketplace there what is the difference between me competing in China and what kind of ways I'm controlled versus me competing in America oh that that's easy there you can do whatever you want in China in China it's literally it means that whatever you need to do to get ahead is is fair game as long as you don't challenge the Communist Party whatever steal you no trick anything I mean seriously seriously not against each other dole yes against each other it is the most cutthroat come you know you know in a lot of ways it's the most capitalist system there is I think there's little regulation there there is no regulation which is why you have the challenges that you have with regard to fentanyl and other things because you know if you're making profits and laws it's not causing problems for the Chinese Communist Party any things so you want you want to have a business your competitor has a proprietary formula for something you go find the guy that has a proprietary formula hire them and and bring them in and hire Minh and you can do that it's now the the guy can sue you but you know this is a kind of behavior that happens all the time there if there's such things as patents they're like can I just steal your idea no you can't sue me you know how there's a two-year patent being that nobody can use and you have the rights to go and put it out there first or I come steal it from you you can't do nothing about it you can't take me to court so they do have patents okay and you can sue and and sometimes you can even win but you know in the end what the what the government is looking for and it's watching out for and particularly it's in industries that they care about like 5g right didn't they're not really focused on some industries but they are focus on for instance made in 2020 made China made in China 2025 really pulls out ten industries if it's one that they're focused on then they'll they'll look at that competition and then they will incentivize those that are starting to rise to the top and so but if you happen to be you know part of the Chinese Communist Party you know leadership family then you'll have incentives to even more incentives in another you will have more instant you'll have more so over there is it the typical old-school politics of if you want to be rich first go into politics have enough influence and then go started we can't just go into politics you can't know how do you you have to you know even Xi Jinping applied to go to the Chinese Communist Party like five or six times before he is finally accepted it's like a club right and once you're in you know then you give them into the club you know that you have to demonstrate your loyalty of the party got it I'll continue to apply it is not I mean it's very similar you can just going it is very similar someone to the money to be a made man you have to do everything you have oil to them and then they bring you in the reason they've given Xi Jinping so so much power by the way is because he is probably the most dialed in to what the Chinese Communist Party believes of anybody like if if you said who is the most communist of the Chinese Communist Party Xi Jinping is that guy and that's the only reason they get out of all the power you how powerful is their economy right now like how much control do they have what areas are they taking it I know like eighty percent of AC you know when you look at these numbers here what are some of the stats you know about how powerful China has become you mean in terms of economy manufacturing production what they're building steel phones shoes well I mean so just one of the things I said in the book from 2011 2013 they poured more concrete in those two years and we did an entire 20th century that's very important for you to state this one more time they did more in two years of pouring concrete I remember the stat then us did in 114 years yes is that a factual statement factual statement I'm gonna I'm gonna find it and let's put it because if that is true two years versus a hundred and fourteen what was that all about when you talk about that they're building 9220 cities with the average population of five to ten million and one of the city's become the Silicon Valley it's like by a lake but they won't give the name of what the city's name is gonna be and it's got 550 square feet of office space where 95% is not occupant and they're willing to sell it for cheap and rent it for cheap like is that really part of the strategy if you want to keep people employed and you have one model and you're facing a financial challenge then you go back to the model it's just like if it's working don't don't make it quit the problem that they run into is can they get the raw materials in the energy and the food to actually sustain that and what they've needed to do that is to get US dollars and we've enabled them through our trading relationship with them to do that you know recently with the tariffs they'd have they've had to dip into the capital markets and get through MSC I get money from mm-hmm from our retirement funds but for the most part it keeps people employed and that's that by the way is also why the belt and wrote in this should have exists it's not just an an opportunity to really gain control of the Eurasian landmass it's also an ability to offload some of its spare capacity in order to employ Chinese you know they harvest most of the world's frozen fish right they export 50% of their catch right and there's a million people employed in the frozen fish industries right so it's it's all about keeping people employed and so that while they dominate these industries it's not because not merely because they want to dominate the industry it's because they want to maintain legit estate the way you maintain legitimacy is keep people employed 9220 cities with the population of five to ten million that's nuts to me well to be able to build something like that well think about if you're gonna build a city though the best way to build a city is to build it a total green green field right if you're if you're building a city or if you're increasing the size of a city say like Shanghai it's far more expensive than this is to go out in the middle of a field and build a city right you don't have to do all the you don't have to tear down and rebuild and be go through all the things used to build a city and and and I think if you if you think about how they financed it with our recovery money a lot of it a lot of the loans came from us banks with recovery money and not in that the price of those things collapse as they talked about in the book now you have an ability to move the extra three or four hundred million of people that are out in the country into those cities I mean that's very that's a very it's brilliant brilliant formula absolutely but what what's the motive behind not allowing you to foreclose on your home like if you have a hundred thousand dollar loan on your home you're late four thousand dollars they don't foreclose on the home they just add two four thousand dollars that you're late on the loan-outs $104,000 is that actually the banking so it's brilliant is that really what they yes it's brilliant you're serious that so that that is a real actual methodology for that right did you understand that part like so you got a hundred thousand dollar loan I'm going through crisis I miss couple payments I still stay in the home they just tack it on the loan at the oh you're not even in them you've probably got four or five of these things do you think that's a good formula though good formula for a wife or any other person any other banking system to use well but wouldn't you have a strict capital controls national currency you have essentially a closed financial system these banks can't get their money out so you can keep doing it you doing it that's just it's brilliant yeah so if if we will if we were doing that yeah those would be flowing out of this country well let me ask you you know how the whole saying goes that if you got somebody that's coming up and they're competing with you you know beat them while they're small don't let them get too big right right it's too late well what what I mean is beating them because okay let's transition into five G let's talk about five G because you know this whole thing when I think Trump tweeted out something in 2014 and he said remember China is not our friends or not our ally and he got like 300 retweets it wasn't something big he tweeted this back in 2014 or 2015 and then all of a sudden you know one they everybody in the news is Tom l5g and prior to that day we were really talking about it all of a sudden hey we got to be the leader on 5 June like 5g someone's started looking 5g ok 1g 2g 3G 1g is the regular phone back in the days to G is whatever 3G is the iPhone you know and then 4G is the latest one and now 5g is gonna be changing a game and most people go to 5 G's just a faster phone right because that's what initially if we've always seen the G linked to a phone oh my gosh I can download a movie in 3.6 seconds now on Netflix a 2 hour movie where before it was three minutes or six minutes whatever right when you think about 5g what do you think about of 5g and the capabilities and what it can really do to whoever that has access to it that's a good question so if you go back to 2007 and when the iPhone came out the 7 2007 the top 5 in market cap were 80 General Electric Microsoft ExxonMobil and shell mm-hmm right the phone comes out in in 2007 we have I had one 3G networking it's not a very good not a very good experience for G network comes out by the way we're the second country in the world to build a 4G network now you've got something right so when still Steve Ballmer laughed at Steve Jobs said we don't need one of those when you took the the platform which was the iPhone and you married up to the 4G network which is which was the pipe for data and it was a fast enough pipe now you can create the apps services of business models that in ten years led to the top five in market cap being Facebook Amazon Netflix Google and Microsoft right so the Chinese see this and like huh the platform and the pipe so the smartphone this thing this iPhone you know which was the first one then Android so apple an ant Apple and Google right dominate the mobile platform that the app services and business models of that economy are built on now look at that iPhone it's a hardware software tightly integrated closed walled system like in Steve Jobs liked and the data was encrypted why was the data encrypted why did San Bernardino happen because apples in the American company right you know you want privacy they encrypt the phone so now you've got the platform and Android also went tune on to encrypt their platform so both encrypted right so private devices take the cloud away from it just look at the devices so it's meant to be a private device why it's American American product fast forward you know to 2009 China starts to look at that says okay we want to dominate the next level right not that not just a technology we want the app services and business models to be Chinese companies and so qua weight gets hundreds of billions of dollars to develop 5g and ZTE but then you have Baidu Alibaba and $0.10 so they're there behind the Chinese firewall they're protected you can have the fangs going in there it's just the bats that control the e economy within China and then you start at the same time you're developing 5g right the platform and I'll get to that in a second but you're also developing and Baidu Alibaba in $0.10 so now when you walk into and you're starting to see the emergence of the 5g world in China so you walk into a restaurant after you've ordered your food and a camera picks you up and you said David welcome here's your food right so you you're starting to get the feel of what a 5g world is and what is a 5g world the platform is the network so this is mobile computing paired with the pipe 5g is computing and networking combined on the same platform so this goes away you walk outside your door and you say uber you don't get on your phone and say I want to know where you say uber camera picks up your face or a microphone picks up you come on that's what 5g is that's what 5g is and then the uber shows up the uber there's a camera on the car that sees you knows who you are don't have to ask you your name you get in and you go to wherever you want you get out and you go do whatever you want so in this world in the 4G world this is a platform it's yours right you don't want to be built you don't want to be part of that all of that data member we just talked about how do you influence society you all that data to be out there about what you're doing just don't carry one of these right just opt out in a 5g world you cannot opt out who owns the data this you could conceivably say you lease the data on here you own if you're getting Google services you don't own that data but in the five-year rule not only can you not opt out because it's built around the city it's not in your phone anymore not only can you not nopt out you don't know who owns the data everything that you do can be watched and for every person by 2022 there's gonna be for every there's two cameras for every for every person there's to two people for every camera in in China by 2022 they have a billion right now I'm billion cameras in China with artificial intelligence for facial recognition right so all of this is getting built right now in China and who's helping them do it Microsoft Google right all of these companies that are want to deploy this world into our country so Baidu Alibaba and ten cents that's where the world goes he goes from 2007 18 tge and in Microsoft to the fangs to the bats right who owns the pipes me as a b2 guy the first thing I look at in the country is who's where is the telecommunications gotta take that out number one but if rather instead of taking it out you own or control it soap Huawei builds the pipes then because you're behind the Great Firewall you built the app services and business models of the 5g world and you're like I said you're already starting to see that you know where your facial recognition is built-in to your interaction when you go into a restaurant when you go into a store when you go into a bank you know everything's about you know the device is connected then as you build the network than those proliferate so 4G network 10,000 devices per square mile 5g network three million devices per square mile you're not gonna carry 12 smartphones you may not even carry a smartphone and cousin to three million 10,000 three that's what 5g does it the connectivity explodes right so that allows you to put devices literally everywhere that can make your life more convenient or can track you there's a bike in DC's called mo bike have you seen these things they're silver and orange look out for him the next time you're in DC there's silver in yours called mo bike they had him when I was in 2016 when I get to Beijing you take your phone and by the way I took my I took a phone write a telephone that I threw away when I got home and I had said who threw it away what do I do I'm going to go load all the apps on it that a Chinese person has so I can understand what they do you never have to carry a wallet you never have to carry key it's all done on your phone you can pay any anybody anywhere for anything and they do 900 people are on WeChat and they spend 90% of their time in app doing things you know ordinaire Line tickets buying food whatever you want you can have anything not 100 people or nine hundred million nine hundred million people okay so let me let me explain to you how how effective what they built is I have one of the guys working for me on one of these mobiles now the mobike is it's just parked there in the street with a lock on it you go where you hit a QR code on your phone it unlocks the bike you get on you ride it and you lock the bike okay so where does that data go you they know it's you you got on that back you went to locations okay so or you went to a location so that data is available so I have one of my guys he gets on a mobile BI ride somewhere has his iPad in the basket gets off the bike comes back the embassy and realizes oh I forgot my iPad goes in the the regional Security offices office and says I forgot my iPad in my bike calls a local Public Security Bureau and those guys call the guy that's got his iPad on his phone on a cell phone and say can you bring the iPad back to the embassy that's how wired Beijing is right now so if I'm if I'm by the way I heard about self-regulating brake pads self-regulating is that really the case like your brake pads are gonna be fixing everything there so it's there's there's there is the very high speed low latency things like if you need a surgeon in Dallas to perform surgery on somebody that's 60 miles away he can do that from his office in Dallas and you can have a robot you know in 60 miles away doing the surgery it's called the tactile internet that's coming that's part of the that's part of this fabric in addition to this kind of low-power thing that you're talking about that just sends a signal hey I've got somebody passed by this location or I have I need to change a brake pad all of that is built into the 5g network so it really becomes a network of machines not a network of people but more importantly there is terabytes and terabytes of data that's created about you and you have no control over it and the people that do have control over it are the large tech companies and you know increasingly because 5g not just quoi way builds a network but the 3gpp standards which is the industry standard making body has been dominated by China and so not only the standards have been dominated by China the underlying patents for the technology of 5g have been dominated by China so even if you're not building Huawei you're still building Chinese technology into your network so you have Baidu Alibaba $0.10 Huawei you have the technology and you have the app services and business models you have everything you need right so you used to have Facebook Amazon Netflix Google dominant as those other companies become dominant because they've created the 5g world now you're gonna see the ability for China to boy control literally everywhere so why would we want that technology why would we want that technology wisely precisely which is what the was what the fight about Huawei is but I took it a step further I say even if you're building Ericsson nokia or Samsung because China dominates the standards in the technology you're still building a lot of their technology into your network so rather than doing that build a military-grade network and deploy that for the people give them access to the same type of protections that we give our military access to because we don't want their day to be spied on so for me I look at it from this standpoint because then there now I'll give the the other side of the argument I'm curious I know what you'll say about it because you know the whole made in China 2025 and you know you read the article and you kind of look at the stats and you see how joy is from where the operating system is from South Korea I believe right it's Samsung it's from South Korea Apple iPhone is from us and then you have Wow way and ZT all these guys are from an TZ I think is it call right is that what is ZT ZT e ZT is what is kind ZT is limitless would Bradley Cooper my brain would the whole different place so you have Wow way from China that they're making this phone right okay on the 5g site if I'm looking at this okay they're saying China's gonna be ready to deploy 5g 2020 and everywhere else they're not gonna be ready till 2025 China's ready 2020 we're not ready till 2025 how much of a penetration in the marketplace can China get having access to 5g five years before us to get it going versus us not having Acts because Qualcomm everybody you talk to them now we're not ready until 2025 we're not ready until 25 how much of a negative impact is it going to have on countries outside of China the fact that they're starting in 2020 and most of us one till 2025 well I think there's they've sign up something like 90 countries to deploy 57 but maybe it's not a country that was you know it's move towards more accept us by the way except the United States and Austria everybody else is you know there's some hemming and hawing them there's some of course saying no but you know essentially they have the lead this is what this is a industrial strategy on the on the part of of China it's really about seeing the future and this is what I give them credit for you know when I in in my book I call it a beautiful strategy because I think it is the most incredible incredibly well thought strategy that I've ever seen and it probably will go down in history as one of the greats and and it is smart for them to figure this out but even if we have it would we use it we probably wouldn't use it if we even if we haven't that's why I mean I think I would be terrified to have you know to use it and I think you know the good that we have is that our telcos here or so in burden with debt that they that they're slow to deploy 5g anyway but if we got it let's just say we have access to it okay with the voters vote for it to be deployed because if you need two cameras per let's just say because you need that technology as well it's not like day one we have it hey we got it we you know let's have the server we go use 5g turn it on it's a switch it's a lot of development for us to be ready with the camera with all that technology to be created and they're saying there's some threats to it as well with health it may not be even health before you tell but I mean our guys are over there working with the Chinese right now building it right they're designed they're helping them design the algorithms they're helping to design a lot of the technology because they've moved a lot of their design facilities over there because there's so much data and you can go to Baidu and say I just need tons of data so that I can run you know work on my algorithm so you know it's not like they're not already working with the Chinese you know our companies are working with them to build the stuff do you think a form of trumps a negotiation with tariffs is a way for him to expect them to give access to 5g where I'm not negotiating with you until you put that to us and help us speed up the process as well or you know so again let's just go back to what 5g is it's it's beamforming antennas with software-defined radios and software-defined networks we've been working with that stuff in the US military for years we have the technology we don't have to go to China China doesn't necessarily have all the best technology it's just we have all this technology we haven't commercialized so we just need to turn around and put it out ourselves then why do you say we can't do it till 2025 because the companies that do it the equipment manufacture we don't have anymore we don't have any commercial equipment manufactured we have companies that work with the with the Defense Department we don't have any to build for commercial telecoms now you know Ericsson and Nokia Samsung they still build equipment but again as I said they're so in part nerds with with China except for Samsung which pulled out four device manufacturing three or four years ago but not equipment manufacturing you know that that where they're all so corrupt or not corrupt but you know essentially having Chinese technology built into their systems I got a couple more questions here and we should be done next thing is with Nixon you know a lot of times you really I like the fact that you mentioned Nixon in the book with Kissinger you know a lot of times people give credit to Nixon for what he did with China even Democrats Republicans independents yeah Nixon opened it up right and then there's a part you talk about at the time I think it was Mao who is the leader of China at the time and he's sitting with Kissinger and there's the interpreter that says hey you know they're having a conversation and he says to him a certain phrase Emma the Baba and the interpreter what was that all about well I think again it goes to the to the the premise of the book there is there is obfuscation built in everything they do and and even when you do negotiations with them by the way say you come you're you're looking at an English document and then there's a translated Chinese translation right next door right next to it that you're looking at both documents oftentimes what they'll do is we'll negotiate a document in English and then they'll change the word in Chinese right so so in a lot of ways China uses that language that language barrier as the it's almost like the first layer of encryption and so since you know many Americans have really no clue about the Chinese language it's very difficult for them to have access to and so it may it actually it's good for the Chinese because it allows them to obfuscate things and then then what they'll do is they'll make transit they'll make translations in negotiations where they're all they use one word and and sometimes our translators will catch it sometimes they won't really sometimes our translators don't catch don't catch it so in that statements what America is the leader what he really meant to say is America is the tyrant right his wedding because he looked at America as the Hitler his similar to Hitler's regime I think we look at it so and then they'll say well we didn't want to offend well perhaps or you know perhaps something else was and was intended there is the interpreter trying to save the person making a statement is it like because that just means that the interpreters making the decision you know what I'm sorry seen these before where the interpreter is trying to make a judgment call on how to interpret I mean I'm not one well that's not a clear interpretation yeah Mike Wallace goes to Iran sits with Khomeini and tells them hey you know a certain question that Purdue interpreter says I can't ask him that question this is I think it's a fair question ask him and then when he asked the question got up and walked that so I've seen that before as well so what are we gonna see moving forward because with China you know you talk about the fact that China came in and said hey we're gonna help help you out Africa we're gonna put 60 to 80 billion dollars into Africa and you know they're deep into u.s. educational system now out of our I think 1 million 20,000 students 32 and a half percent of the students something like the 32 and a half percent of our students in u.s. the international students that are here are from China right right so they're coming in they're going into NYU they're going to all these schools they're essentially bringing a bunch of business to these universities so are they going so deep in these different organizations where people are forced to support them due to the money and the power they're bringing in and then all of a sudden they're gonna be the same Empire they were for five thousand years are you kind of seeing that yeah that's exactly that's exactly what's happening and it really is it's a smart strategy because we spend brilliant 800 billion dollars on defense yeah and you know Greece basically makes a deal with the port of Piraeus and so we say well you know things aren't working we're gonna build a couple more carrier battle groups in Greece says I don't really care what I want is jobs for my people what I want is money and and that's what China comes in and says okay we'll give you money very cool that's I mean not very cool it's good to know that part because I just don't think these guys gonna slow down I think they're you ever met people where they say oh you know I'm really not that competitive you know I'm just just you know I'm just I just fear the most they want to do good for and I'm just a very you know I go to church on Sundays and I'm just you know I love my family and we're just trying to be good citizens and then deep down inside they're like wanting to whoop your ass you know like that that's cool did you study for the test no not really I mean I don't know how it's gonna be I'm a little bit worried but we'll see and then again 90 years wait a minute you were studying freaking for two weeks for this test right I'm the one that was party and you were the one that was studying for the test anyways last into your speedrun I'll give you a name you give me the first thing that comes to your mind and then we'll go from there Mitch McConnell I think he's an establishment establishment okay Dalai Lama dissident leader Trump not the establishment got it Ren Xing Phi PLA PLA okay again excuse my pronunciation G Jim pink Communist Party okay Joe Biden establishment John Bolton establishment really okay hunter Biden and the child of the establishment okay Jack Ma Pa Boris Johnson hmm I think the the iiiii I don't know if he's establishment or not I think the jury verdicts yeah okay Joe jury stood out the Roger Robinson Jr he's it for even a freedom fighter freedom fighter okay and then the American Constitution absolutely necessary absolutely necessary absolutely necessary you know it's funny you say that American Constitution is absolutely necessary one of the things that I was debating another very very established a multi-billionaire we were talking about China and one of the things that came up I said believe it or not I believe one of the strengths China has is they don't have freedom of speech and what does that mean they don't have freedom of press I went online and I looked at China's unemployment 3.4% 2.8 percent 3 percent 3.1 percent for the last 20 years how do I know that and then you look at real numbers like 15 20 percent how do I know these numbers right and us you know some may hate CNN some may hit Fox some made him an MSNBC some a hey Drudge some may hate these guys but at least they're going back and forth allowing us to kind of watch them go back and forth and say let me go do my own research kind of figure out so as much as Free Press is annoying here it's amazing annoying to the opposite group I'm sure folks at MSNBC can't stand folks at Fox vice versa it's amazing how much that allows us to kind of decipher from all the you know you know part propaganda that's being sold and I kind of go out there and say okay this is what I see so I agree with you on the American Constitution extremely necessary that's why I'm here from Iran and we escape there to come here final thoughts here before we leave your thoughts I am an investor I'm an entrepreneur I'm an executive I'm seeing what's going on with China I'm watching this I'm a little bit more educated I'm about to order your book I have an order that I'm going to click on a link order and read the whole thing because obviously you can't get the 230 pages in a two-hour sit down what should I be thinking about and adapting or making certain audibles right now for my courier to prepare myself for the next 12-24 60 months in the future I would pick up the Constitution I would pick up the Atlantic Charter I read those two things and I'd think about it because my campaign is about making sure that those things last and if they last and you continue to do business in the way that you're doing you're gonna go broke if you continue to do business the way that you're going you're gonna go broke because you can ignore me you can get on my side or you can fight me but my goal is to preserve the Constitution the way we do it is to preserve the way the rules of the road that we created and I'm about read establishing those rules and if you're doing business and you're in you're making money from the Chinese Communist Party and you you think that that's the way that you're going to continue to make money going forward if you think that this government is going to support that and I think you're a hundred percent wrong and I'm gonna do everything in my power to make sure that doesn't happen fair enough if you ever thought about being a motivational speaker maybe it's not a good career for your mother because that was a very direct statement and I love it it's my style of communication I wanted to tell you I had the Mario ink I get a gift for you guys we are gonna send you to China for one week for vacation to go have a great time on us it's on the house it may turn into seven years but we're gonna start off with a week and it will sit as long as as long as it's like a four-star hotel please please don't send me one of those two star hotels those are really bad anyways having said that general thank you so much for coming out also I know you came with your family or thank you for making the time to come out it was a pleasure sitting down and talking with you value Tanner's there are books I read when I have guests that come out and I read it to get as much information as I can if you could see the amount of marx's in this book I couldn't put this book down it's a must read for anybody that's planning on competing in a marketplace we're gonna put the link below go to the book and any of the topics that he talked about little links anything that he will may have mentioned if we find their links we'll put the link below as well but make sure you go to this book having said that general thank you for coming out preciate you thank you yes this was great you know I actually want to hear your thoughts to see where your opinion was about us and China or 5g pre watching this interview and post watching Robert Spaulding with his latest book that came out stealth war so tweet me at Patrick with them and kind of let me know how you process today sit down because this was very different for me as well to see it from a guy that's on the inside national security presenting 5g who's lived in China very different kind of an interview so that's that and by the way if you watch this interview you may like the interview I do with Ray Dalio as well because it's somewhat about this topic as well as a video I did on 5g and Huawei that's obviously about this topic as well and if you haven't subscribed to the channel please click on the button over here to subscribe thanks for watching everybody take care bye bye you [Music]

Channel: Valuetainment

Views: 3,386,392

Rating: 4.8511539 out of 5

Keywords: Entrepreneur, valuetainment, patrick bet david, general robert spalding, robert spalding, china takover, 5g, huawei, stealth war, China’s Silent Takeover While America's Elite Slept

Id: h8IEtlOVzq4

Length: 103min 12sec (6192 seconds)

Published: Fri Nov 29 2019

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