Online Event: Countering Chinese Espionage

welcome to csis online the way we bring you events is changing but we'll still present live analysis and award-winning digital media from our drakopolis ideas lab all on your time live or on demand this is csis online thank you uh hello and nihal to everyone thanks for joining us we're going to be talking today to john demers who's the assistant attorney general for national security a job he's held for more than two years he leads doj's efforts to combat national security related cyber crime terrorism espionage enforce export controls uh oversee fisa and conduct national security reviews under syphilis as for the doj he was selected about two years ago almost two years ago to lead the china initiative at doj to counter the chinese persistent and aggressive economic economic espionage and that's a lot of what we'll be talking about today um prior to his service as the assistant attorney general um john was the vice president and assistant general counsel at boeing and prior to that he was also at the you were in the first generation right of the msd division right yeah yeah so nsd is relatively new and you were there starting in 2006. right so long career uh distinguished and thank you for doing this what we're gonna do today is john will talk for a few minutes i'll ask him some questions we'll have a conversation and then uh we'll turn to the audience so get your questions ready um we will screen them so uh but we'll be happy to entertain anything you want to ask john over to you great well thanks very much jim and thanks for having me and and proposing that that we do this uh on this topic i know you know the national security division has done a number of events with csis including our 10-year anniversary event in 2016. uh and uh you know more recently on this topic like uh just earlier this year we were kind of looking at the one year a little bit more than one year mark on this topic but this is a topic obviously that continues uh to develop over time so thank you for having me again so just for a little background then on the what the china initiative is here at the department you know it really was an organic outgrowth of the intelligence briefings that the prior attorney general and i were receiving on you know a daily every other day basis and we were just seeing in those briefings how much uh theft of intellectual property was emanating from china and directed by the chinese government and began talking about what could we do to uh you know step up our efforts to combat this obviously this falls squarely in nsd's portfolio and for years nsd has been working on this issue but the question was what more can we do so we came up with this china initiative which as you said was to focus on uh theft of uh intellectual property uh by the chinese government mainly on the theft side i just you know to give some statistics 80 percent of our economic espionage cases that the department brings so that means theft of intellectual property on behalf of a state on behalf of the government itself uh or for the benefit of the government uh involve china the chinese government 60 of our trade secret cases involve china so the trade secret denominator is much bigger that includes any theft of intellectual property by anyone anywhere not necessarily government uh oriented or for the benefit of the government so uh significant numbers and that was before uh the initiative so that's that's the kind of thing we were looking at when we were deciding to put this together and we put this together uh for a couple of purposes one to make sure that we obviously here at maine justice were focused on this issue and prioritizing it but a lot of it was to message to the united states attorneys 94 u.s attorneys around the country who are doing the bulk of the investigations and prosecutions together with the fbi and uh these cases are difficult they're not cases where you're going to have high numbers every year and so we wanted uh the us attorneys to understand though that they were a priority of the ag's and he was going to understand if you know you had one economic espionage case in a year that's actually a good year in a given district the two is fantastic and zero is you know not a shocker so uh these are not going to be cases where you've got 30 50 100 150 cases a year we wanted to focus on them the second thing we wanted to do was empower the us attorneys around the country to develop relationships with the private sector and with academic and research institutions so a lot of what we see when we see it on the intelligence side those of us who sort of live in this space what becomes difficult is when you go out and you talk about it and you can get paralyzed because you think well i learned all this in a classified environment what can i say what's classified what's not classified so we but we need those u.s attorneys around the country to develop locally the relationships with the companies and academic institutions in this in their area so we empowered them in terms of materials and uh trainings that we did etc on you know what it is that they could say to the companies to sensitize them to this risk and to try to develop the relationships we need the private sector in this uh working with us to help us defend them uh and uh and then the third goal really is to look also at our other tools like you mentioned jim the committee on foreign investment in the us that looks at uh foreign uh acquisitions here in the us mainly of technology but increasingly of data we could talk a little bit about that as relevant in china and uh and and work that process and make sure that we were adequately focused on the national security risks so uh you know we kicked it off about two uh falls ago two autumns ago uh look we were building as i said on a series of cases that uh began in about 2014 with the first indictment of uh people's liberation army officers for cyber intrusions into a variety of companies and institutions that was really a seminal moment so i always like to start there because you know as you start to think about it you realize that many of these cases um are traditional law enforcement actions but ones with significant foreign policy ramifications and so back then that was back in the obama administration getting you know the entire sort of interagency on board with the idea that the justice department was going to charge members of another country's military with cyber intrusions this was a big lift you know but they did it uh we went ahead and i think that has is a precedent that we've been able to build on and you know we had a cyber uh indictment just a couple of weeks ago again that one uh involving the ministry of state security the chinese intelligence services so um we were building on that and what we were trying to combat in this is you know what i've called a rob replicate and replace approach to economic development that we were seeing from the people's republic of china and that is you know stealing american intellectual property um replicating that product uh and then replacing the us um company first on the chinese market and if all went well on on the global market and uh we saw this being done as i mentioned through cyber cases but if you look at our more recent cases what most of the cases we charge uh are actually insider cases so they're individuals at companies or academic institutions here in the us who are stealing and bringing the technology to china now there's even within that there's a couple of different kinds there's one set which i think of as sort of the state directed cases what we saw since 2014 was an expansion of responsibilities within the chinese government from pure people's liberation army hacking cyber intrusions to the use of um mss or the chinese intelligence services just take intellectual property as a consequence i think of that shift in who's working on this issue on the chinese side you have a shift in tactics because when you bring in the intelligence services what they're really good at is developing relationships to get information that's their trade right since the beginning of civilization for all of us and what we're seeing in china is them using that same trade craft and those same approaches to develop relationships with individuals in companies here yeah in order to co-opt them to give information there and that's what they do on the traditional espionage side and have done for a long time so that means that a lot of our cases aren't just the cyber intrusion cases although the mss does that too they're uh these insider cases and you know an example of that would be uh the mss officer who we extradited from belgium uh two years ago who had co-opted an individual at a u.s aerospace company in order to steal a commercial jet engine technology and bring it to china uh the the second category in this these individuals these insiders are people who have been induced by chinese programs like the thousand talents program to uh take intellectual property from their employer uh whether it's a company or it's a university and uh take that to china in one way or another by entering into these thousand talents contracts uh where and get paid either for doing work there or really ultimately for transferring at the intellectual property so the thousand talents just to level set everybody is you know program that at one level is totally fine it's about recruiting the best human talent you can from around the world of bringing it to china something obviously a lot of companies do right a lot of organizations do when they go after the best people but it has a underbelly and the underbelly is that uh when you apply for this program it's very formal bureaucratic process to apply for this program you've got to show that you're going to bring intellectual property there and an aspect of this and if you look at our cases that we brought a lot of our academic cases involve individuals who were members of these thousand talents programs and a hallmark of the ones we've charged is that they're hiding their thousand talents affiliation so this isn't as if you know i worked at one company and i openly sort of you know have a have a weekend job or something like that these are individuals who were hiding from the us government from which they were getting grant money to do the same research hiding from their institutions their affiliations with chinese universities or other chinese entities uh and their work there and uh and so if you look at our cases they all kind of sound in you know fraud uh tax fraud yeah um you know grant fraud things like that so that's you know the way and that last piece you know jim has really developed i mean when we started this initiative i we didn't really have that peace in mind that's developed through the investigations uh that we have done you know together with the bureau so i was talking i was just talking to somebody who's on the board of one of the big tech universities and um what do you think the reaction is to the universities of this i know this is a little off topic but uh they weren't entirely persuaded that all their board colleagues were understanding of our problem yeah i mean look i think here's the thing when i go to a company and i say you know what the most important thing is that you protect the intellectual property that difference differentiates you from your competitors and people are trying to steal it you should really protect it it's you know like no duh this is what i'm supposed to be doing uh if you go to a university with a very different uh environment which is one that begins and frankly that the chinese are taking advantage of which is an open environment sharing information you know the hallmark of being successful at universities publishing your findings not keeping them secret to monetize them right right and uh and you go there and you start to talk about theft of intellectual property it sounds very different so the the what we have been emphasizing to the universities is one here's the risk that you're facing here's what's happening we could talk about you know the recent actions involving the pla researchers in this context um and look what we're saying is we expect you to have clear uh conflict of interest in conflict of commitment policies so that your disclosures to the federal government are accurate but if you're comfortable that your professor has this relationship with china and it's all openly disclosed to you we're not going to tell you not to do it unless you know the information is classified or export controlled so we're not telling unless it's government information or export control information we're not going to tell them what to protect but we are going to push the value of uh transparency at those colleges and if you look at the cases that we've uh indicted if you look for instance at the harvard case which sure because it's harvard probably got you know the most notice here's an individual who unbeknownst to harvard was using harvard's logo and name in china i should say these are all allegations that case is still pending using that name uh in or you know as part of this collaboration with with a chinese university uh and and again that had he been doing that openly at least with respect to the university piece you know the university could decide what is uh inbounds and what's not in bounds so the different reaction but we've been working very hard with the universities the bureau has coronavirus has you know sort of hampered us in our ability to continue our outreach to them but we're doing what we can you know it's been a busy couple of months for you so i think people will be disappointed if we don't talk about tick tock and wechat if we don't talk about the houston consulate and you know then the whole china telecom huawei clean network thing so i don't know where you want to start maybe with houston i mean why is houston yeah so uh you know a couple things on houston one houston has long been on the radar screen of the fbi as a source both of uh significant intellectual property theft emanating from including including recruitment into uh the talent program spotting and assessing folks and then uh on the foreign influence side of think covert foreign influence side which we at least at this point can talk a lot less about uh but i hope one day we'll be able to to talk more about so that's why houston and you know was not chosen at random out of the consulates out there um they were actually at the forefront in both of these areas and the closure of the houston consulate and the simultaneous actions taken with respect to the uh pla folks who were here but not disclosing their affiliations they were here on j-1 research visas they were not disclosing their affiliations with with the pla were all attempts at disruption of what we had been tracking for quite some time of activity here in this country and um what you've seen sort of publicly in terms of those disruptions for arrests you know i think more than 50 interviews in 30 different cities even at that number is still just the tip of what was going on under the surface and what we were trying to disrupt together with the bureau and together with the state department of course whenever you're talking about a consulate closure so it we recognize that we're not going to just be able to prosecute our way through these issues we've there have been years of uh folks being sent here undercover in a variety of covers and what we need to take our actions to disrupt that level of activity and that's really the best way to understand what happened in houston and also to understand what was happening on the on the pla side of things now i'm going to warn you that what you say next could alienate millions of 15 year olds but do you want to talk a little bit about tick tock yeah well it's alienated me for my daughter as well i think you know so what are our national security concerns with tick tock tick tock look is a very interesting case let me just step back and say one of the things we've seen and and really kind of exploded on the scene with the um hack of opm right and all the office of personnel management records but after that with you know as recently as the equifax uh indictment we brought a few months ago anthem the healthcare company hack and other cases we've seen sure it is a chinese appetite for large volumes of sensitive personal data and we have seen that on the cyber intrusion side as i just talked about uh we also see it on the syphia side so we see a targeted acquisitions or proposed acquisitions of u.s companies that wouldn't traditionally be thought of as falling within cypheus because cyphus was traditionally thought of as protecting technologies right on the data side you know that brings into sort of the syphilis purview health insurance company financial services companies all sorts of data especially as you think about the fact that more and more smart technologies exist and those smart technologies are gathering data continually on your life and the way you're living your life we've had a lot more of those come through the syphilis process so what's interesting about tick tock is you have one of the first instances in which individuals are signing up for and providing the app with their sensitive personal data first when they sign up for it right and there's you know information you can give and some people tell the truth and some people don't right and then there's the data that the app uh collects about you while it's on your phone and like a lot of other apps that app is collecting geolocation data if you enable it it's connecting your contact list it's it it is uh following your use of the phone and other apps on the phone part you know certainly on the surface to provide you with a better tic toc user experience right but can also be uh used abused really by by the the state so one is the sensitive personal data piece the second is you know what we saw a lot of allegations and tick tock when it comes to censorship of certain policy views so you know uyghurs hong kong protests tibet taiwan all those issues you know there are many reports of the content being censored from uh from a foreign influence perspective so those are the national security risks associated with tick tock what's interesting about tick tock is you have an instance of you know americans voluntarily signing on to this product as opposed to the chinese stealing the data or the chinese buying the data uh and that's what you know the the recent executive order was was meant to address and we'll kind of obviously there's more for that process to play out but we'll see how it goes so when you look at the actions over the last really year i mean you've got uh huawei you've got uh china telecom in the u.s uh you've got clean network you've got tick tock in 10 cents and maybe we come back to that but what's the goal here for the administration what is it they're driving for well certainly a very focused on uh telecommunications as you point out and and what you strung together there um there's a uh a real i think appreciation that especially as we move to 5g technologies uh you know as i think any of us who think about it for a little while realize it's just so much of your life is running over telecommunications network right now and never more so than during covid right as we're doing right here uh your professional life your banking life your personal life you know your social life on and on and with the internet of things of course more and more things are going to be connected through 5g cards you know your i just bought a new oven your oven is connected to your phone if you want it to be your refrigerator you know all of those things all of which can be used to paint a very interesting picture of your life to someone who wants to learn more about you um so one is that and understanding that the security therefore of the networks over which all that data is running is really paramount to national security in this century and so what you're seeing with the focus on the telecommunications licenses the use of huawei and or the resistance of the use of huawei and 5g networks is a desire to ensure that we have trusted vendors from trusted countries and that is countries that share our same political values that are running these telecommunications networks over which our entire lives are already running and only will run more so in the future huawei brings up the issue of cooperation with other countries and we're not the only ones to experience chinese espionage and you know i the canadians of course have people now being taken hostage in china um what's it like working where do you how do you assess cooperation not just five eyes but nato others japan australia what's the effort to cooperate with allies in these cases there's on the 5g you know there's been a tremendous effort to to cooperate with these other countries starting with the five eyes but then growing out from there in europe and in asia and it's been a difficult road but it has it's also born successes obviously the uk just changed its position on the use of huawei in 5g networks uh that is you know the result of i think a lot of discussions with with these countries and trying to illustrate to them the risk but where the main thing that we're up against in these discussions is not a failure to appreciate what the risk is it's a uh worry about the economic impact that angering a country like china can have um china remains a tremendous market for a number of these uh countries investment opportunities both sort of foreign direct investment into them and then investment by their companies in the chinese market for their companies so um that's always a and we've seen numerous reports of this but that is very openly an economic stick that's you know held over the heads of these countries as they're making a decision on on the 5g front and that's been something that we have had to to work through i think in this regard actually china's behavior during the corona virus has actually uh you know helped move some folks into our camp especially in europe by illustrating some of some of the risks yeah it's just as a footnote we have a separate project with my colleague heather conley interviewing uh scandinavian countries and one thing that surprised me about chinese investment and one thing that surprised me is how many of them brought up hong kong as uh yeah something that that created you know unhappiness a right bad feeling in the relationship so i don't know if the chinese always get that for our chinese viewers no offense uh no yeah um i mean i think i think you're right jim hong kong and the uyghurs have been the biggest issues especially in my discussions with the europeans yeah uh it those are the two issues that have really uh you know sort of brought to life i think some of the risks we're talking about and also solidify the importance of sort of sh look we have a lot of our uh disagreements with the europeans and uh about different things but the truth is at the end of the day we do share the same political values and uh that is very helpful when we're having these discussions and i think you know what happened in hong kong with the breaking of promises obviously that they made in 97 what's happening with the uyghurs uh has has really uh helped us well i want to come back to the economic issues but since you brought it up one of the things that i admired kind of in the executive orders would it look it looked like it was fairly skillfully written in a way to try and catch apps so apps are a new problem you've got a foreign service uh located outside the u.s made by another country so what were you guys thinking when you wrote the app language which you know the europeans share that problem they like to catch apps not just chinese apps but what are you thinking in terms of extra territorial sovereignty what's the story on apps i mean apps are you know really raised the problem that i think tick tock illustrates best and that is you know you have they're available on your app store and you have us users who are choosing to download those but once you do that you really have no idea where any of that data is going i think all of us even use the most ubiquitous uh apps that we use we we don't really appreciate everything our phone is collecting on us in our lives and we tolerate that risk maybe if we think that the worst thing that's going to happen is i'm going to get strange solicitations for something that i didn't realize anyone ever knew that i was interested in that i was talking while siri was on and siri picked that up and suddenly sent me an ad on my washington post app for the very thing that i was talking to my wife about so uh you know we sort of tolerate that because it provides us i think with benefits but once you start looking at that from a national security perspective and thinking about the data that that the phone and the apps are collecting on you uh it's a very different matter if a country uh with very different values from our own and without the same rule of law and separation of powers that we have in an active court system uh is uh collecting all that data and what what we see in terms of what what are the chinese doing with this data which is the other question that often comes up and and we see two different things one huge quantities of data are needed to perfect artificial intelligence tools algorithms so one of them is you know that the second is from more from a counterintelligence perspective 99 of that data they will not be interested in from a counterintelligence perspective but once they're interested in somebody if it's as a potential co-op tea or somebody who has just gotten an important government job or something like that if they can mine those existing data sources to find out uh what uh that person's financial like life is like what their health life is like what their uh you know married life is like you know if you're a married person and you have a dating app on your phone that's a little strange and of great interest to an intelligence officer right and they can use all that to paint a very effective picture of you and to think about where your vulnerabilities might be or even how best to approach you if the purpose is co-optation how to uh how to approach you uh for that purpose so um you know that's what we think they're doing with these uh with the information then of course geolocation is very important for for targeting someone if in fact that's what you're doing i don't mean targeting by killing i mean targeting just by following around in fact for instance that my phone uh doesn't move throughout the workday would tell you if you didn't already know that i work in a secure facility right because your phone probably moves during the workday right it's it's it's in your pocket it's in you know and so if i'm let's say i'm undercover and i'm pretending that i have one job but in fact you see my phone behaving in a way that suggests i have another job that tells you a lot about me too so the other company that uh the executive orders went after was uh 10 cent and wechat 10 cents a great company if they were located anywhere else they would be giving american companies a real run for their money but the eo was crafted in a way that it it goes after wechat a very popular app not a lot of users in the u.s but it didn't seem to go after the game side of 10 cent is was that intentional was it an oversight i don't want to tag you guys on i don't want to ruin 10 cents business here they'll probably be happy you know that's where they make most of their money in the us is on gaming and they have some really good games so this is your chance to alienate even more teenagers exactly now look the the uh there was not an oversight in the grafting of that uh yo there uh on on the wechat part so it's a little different right it's a communications app fundamentally it it does collect a lot of the same information about the users that we were talking about before yeah back to tick-tock there's that piece of it in addition wechat is used here in the us um as a method by the chinese communist party to communicate with chinese individuals here in the us for instance i'll give an example from the university setting where the chinese students at a university students who are visiting here from china all have wechat and they will be in a group chat with the other students at the university and the chinese will use the wechat to message what they want to the chinese students so for instance the state department has some great examples of messaging by the two here's the goal of the chinese government send the chinese student here to reap all the benefits of the us technical education but do not allow them to get polluted by ideas like liberal democracy or religious freedom right how do you do that you need to control the space around them both electronically and you need to encourage what already happens with foreign exchange students just like they you know they like to hang out with people who speak the same language and have the same cultural references as them you look at us students in rome for instance you're like are you really learning italian here you just keep hanging out with each other so uh the um they try to encourage that by creating these bubbles around the chinese students and by messaging for instance america is very violent look what's happening look at this uh uh picture the the global engagement center estate has great examples of this look at this picture of this chinese guy who was beaten by the police i have no idea whether the picture is true or not but a message that how um you know dangerous america is don't go out there don't you know basically get to know the country so wechat has a kind of foreign influence and in this case it's a little even less foreign influence and more controlling aspect to it um which uh you know obviously an app like tick tock doesn't have so it's a slightly different risk uh profile but still one that's been on our radar screen as a use because of the chinese government's use of it here in the us we have a boatload of questions so i'm going to just start going down the list yeah one one of the first was that the recent indictments have highlighted the efforts to steal vaccine and antiviral activity um you know are there other hacking teams what's the situation going on there how much is china focused on stealing uh vaccine data yeah so look first of all you have to sort of see that in context we know from our prior cases that the chinese have long been interested in biomedical research of all kinds right so just recently we stopped someone in boston who had vials of biomedical uh material in in their uh on their on themselves as they were trying to you know go back to china they've been a researcher here in the u.s um we we've seen it in in other cases that we've indicted it's on the main in china 2025 plan right so that gives you a sense of where the focus of chinese efforts are so in that context it would be surprising if they were not trying to steal the most valuable biomedical research that's going on right now valuable from a financial point of view and invaluable from a geopolitical point of view to be the first maybe the russians have them beat now i don't know to develop a uh corona virus vaccine or treatments so what you saw charged in that one case was just one of multiple that was an attempted intrusion intrusions and attempted intrusions that we have seen around the country uh and uh you know obviously we haven't charged all of those for for a variety of reasons but um it that isn't sort of the exclusive uh uh piece of it it's part of a of a greater effort to see you know to try to collect whatever research there is to try to get ahead of this i'm going to combine a couple because they overlap uh people ask how do we avoid the appearance of racism and that among chinese students and researchers of chinese descent there's a concern that this might lead to a red scare and racial profiling so the red scare one is a legitimate one uh racial profiling um i know what are you thinking on that how do we avoid that impression yeah so look this is something that we are very focused on have sort of flagged as an issue from the beginning uh we launched this i mean one if you look at our cases you'll see that although many do involve individuals of chinese descent others do not the libra case the harvard case in massachusetts is not a chinese-american person um to the extent that they do it's because we um what we've seen is that the chinese government itself focuses on uh in when they're trying to co-opt they focus on individuals of uh chinese ethnicity the more recent the immigration the better because it's part of the the um focus could be coercive so if you have family back in china that you feel like is at risk or uh are planning on going back to china and want to make sure you have a job then you're going to be more willing to uh help the chinese government um but uh the what we always say on the to the businesses we talk to obviously to the agents we work with and to the schools you need to focus on behaviors ethnicity is not a risk factor don't focus on ethnicity then the upside of focusing on behavior as well as being of course consistent with you know the values that we hold dear is that you're going to catch people who are misbehaving regardless of their motivation so you're gonna find that person who's trying to take intellectual property of your company and is stealing it and wants to send it to the chinese but you're also gonna find the guy who's just uh unhappy with the company and looking at revenge you're going to find the guy who wants to sell it to another us competitor or who wants to go out on his own and set up a competing enterprise so it's really to your benefit not to focus on on this security risk as a chinese intellectual property theft risk but as an intellectual property risk and then you'll find people you know as i said regardless of motivations but we're uh we are very sensitive to this uh we like to talk about it in terms of what the chinese communist party is doing what the prc government is doing um because it really is a concerted top-down authoritarian plan here um it's not about you know people of a certain ethnicity you know uh doing this kind of activity on their own so a related question that i got from a couple people is concerned that screening uh chinese students or chinese researchers when they leave the us screening them at the airport is going to become a new norm is that a realistic concern is that what you know what's the attitude on that i think you know what we're trying to do is really write with a fine pointed pencil as opposed to a big magic marker so if you're you know that means you know folks may get screened on the way out but that's not gonna be everybody that's gonna may depend on what institution they're coming from in china if we have reason to believe that that institution has been involved in intellectual property theft in the past what fields they were studying in here the guy who's the undergraduate studying mesopotamian architecture uh is probably not not going to get screened at the airport uh but you know but someone who's here as a visiting researcher who's a professor in you know an advanced field and comes from a university that's been affiliated with the pla and we know who we know folks have come and gone from there in the past they may get screened so i think you know there has been uh some for sure some significant screening at the airports as people leave but it's it's not you know it's more targeted than it may first appear someone asked if you see a connection a strategic connection between the soft power and cultural propaganda activities in the u.s that we talked about with tick tock and wechat and the data theft the data i p theft the acquisition of stolen ip is there a connection between these two that you see is it are they two separate programs running by the chinese um that's a hard one at first blush i would say that they are separate certainly you can use the data as i said to create targeting packages for individuals who you might want to to influence but for the most part i would say that these are two separate efforts with some overlap on the part of the government but i'd have to think about that a bit more okay we're getting a ton of questions so uh we'll try and get through as many as we can i appreciate it they're really good too um we got one someone was actually listening to what you said and they noted that you said china's behavior during the coronavirus has actually helped move some folks into our camp especially in europe could you talk about specific behaviors that prompted this move yeah i think um uh the uh somewhat ham handed attempts for instance to dole out uh assistance personal protective gear et cetera while requiring countries to uh thank them publicly for the great assistance they receive from the wonderful country of china now you can do this subtly but when you do it really obviously yeah it comes off the wrong way right and it looks like you're conditioning humanitarian assistance on deep expressions of gratitude and i think folks don't appreciate that and they see through your ostensibly charitable uh intentions so that is a piece of it i do think that there's been you know continued uh questions about uh not necessarily that although it's still open questions sort of the origins of the virus but you know how did the chinese government respond initially in terms of their um suppression of knowledge about the virus and even their uh the retaliatory acts they took against or the pressure they put on countries that were starting to for instance restrict flights to certain parts of china that was very offensive to the chinese government when those things were happening in hindsight you might say gosh i wish we had all done that sooner but while it was happening the chinese government reacted to those actions by certain european countries like it was a uh an offensive to them and pushed them including through you know economic means to reverse their decisions so all of those things i think sort of um illustrated um to individuals and coming on top of what you mentioned jim which was the backdrop of the hong kong and the uyghurs um that you know maybe this isn't a country that we share the same values with so one of the questions this is actually a question i was going to ask too they said how do you differentiate what the chinese are doing both in tradecraft and in objectives from what other countries do when they spy on us and i was going to ask specifically about russia how would you compare russia and china the questions from the four raised other countries whom i shall not name but how does chinese how does chinese espionage compare uh yeah so if you look at let's start with economics if you look at that because that's where we've been focused today we definitely see um russian attempts to steal military technology and export control technology we don't see the same effort to steal commercial technology for the purpose of developing russian competitors to american companies or to european companies so the breadth of that made in china 2025 plan inclusion on that plan of technologies that run the gamut from agriculture to you know engines that could be used in fighter planes um is not something that we see not just in russia but honestly we don't see it in any other country and so um although we do see and we've charged a number of cases that involve right f's from russia they're they tend to be more focused on the military controlled technology uh aspects of it maybe a related question is uh people asked and it's reasonable as the the us and china go into a more tense relationship as we move down the path of decoupling have you seen um a more urgent set of chinese efforts or expanded chinese efforts has as decoupling affected the level of chinese espionage i don't think it's affected the espionage that i've seen so far i think that you know clearly the talk on both sides uh including on the chinese side is stronger you know including out of you know folks who tend to use diplomatic um uh ways of speaking so there's been an increase in rhetoric but i don't see an increase in espionage right now as a result of this you know we have seen this espionage for many many years i think it has gotten more persistent more sophisticated more well-resourced over time but that's kind of a longer time trend a lot of these programs take quite some time to develop and programs like the undisclosed pla individuals are things that we're trying to undo now but they've actually you know been going for quite some time someone asked related to that is uh most of the and you said this in your remarks uh most apps collect this kind of data so what's to stop the chinese from simply turning around and purchasing it or hacking it and stealing it um what and this is this is in some ways a privacy question is it do the relative porousness of our privacy rules give china other avenues even if you shut off their apps yeah look probably the biggest avenue that that gives them is purchasing bulk data on the open market there are data amalgamators yeah who will sell who will collect data and then sell it either for commercial purposes or but they're happy enough to sell it to um to nation states as well um the uh so what's to stop them from like stealing you know some other you know u.s apps data i mean not you know that country's uh information security uh protocol and uh it's just another avenue so if we're talking about purchases of data some of which when it comes through purchases of companies we can regulate through the foreign investment review process we are trying to combat the theft of data and that's in our cyber improvement cases and you know our work with the private sector and then the app is just sort of a third way to get uh data from uh from users and and who are voluntarily providing the data whether it's knowingly or unknowingly so we did get one question started off by saying wechat is so critical to business and social life in china i have wechat i have wechat on my china phone it's currently in a drawer with the battery out but that's a different story um is the eo designed to really speed decoupling to going beyond simply blocking wechat and tick tock is it is it a measure to really decouple the us and china well uh i i certainly didn't read it that way or think of it that way um the uh you know and look there's a lot to be left now with the commerce department to work on their uh the regulations and how this is actually gonna work so i think there's a lot that needs to be worked out there but i didn't see it as a greater effort to decouple or to accomplish it related to that someone asked um what sort of things do you think the commerce department will ban or could ban uh for tick tock under the eo and one of the things i've been saying is ipa gives the president a lot of authorities there is perhaps some first amendment issues but where do you see the how do you see the band playing out what do you think commerce should do when they when they implement this they should ban people embarrassing themselves no that would make serious first amendment concerns so no sorry that's permitted exactly you know where to make a fool out of yourself that's right i think that uh look i don't want to get ahead of where commerce is i think there's this is going to be a pretty quick process we'll know the answers in september uh but i i don't want to get ahead of that process okay um someone came that makes sense uh someone asked can you gave an example of tick-tock collecting data for analytical purposes um does in the they i shouldn't be asking this one i should have read it before i asked it they said is this what you think tick-tock can do or do you have evidence that it's being done i can answer that one for you if you want but you should take it look it's certainly what tick-tock can do uh it's not tock itself that we're worried about obviously it's the chinese government's access to the tick tock data under their national security laws that we worry about and you know beyond that to what we know but then i'm i just i'm not going to get into that piece yeah is someone asked given the scope of the problem how much additional hiring has the usg done and i know when i go up to the hill i always say more fbi agents in california but are we expanding our efforts are we expanding our personnel what are we doing you know i think we have uh i mean i i can speak for the department at maine justice we have certainly increased the number of prosecutors who work generally on the counter-intelligence side of the house so for many many years we had you know ramped up the counterterrorism uh prosecution side and yeah unless growth on the the nation state countering nation state threat side over the last few years as um the terrorism threat you know let's all knock on wood that it sticks has receded somewhat and the nation's state threat has amped up those are the two big differences by the way jim you know when i was here from 2006 to 2009 when nsd got started it was a counter-terrorism organization and coming back to it nine years later you know seeing how much had grown on the national security side the cyber work so we have definitely increased resources on that side in the u.s attorney's offices i think it's been more about a redeployment of resources than an increase in resources the bureau has increased resources on the nation-state side um so there has been uh an increase obviously you know director ray gave some pretty startling numbers about the number of um chinese uh investigation counterintelligence investigations are opening up each day uh so there's um there has been an increase in resourcing this problem generally um we have uh a few more questions and so if we can slide a little bit over a lot of time i think we can hit almost all of them i'll stop taking questions now but um one of them is with the focus on chinese this is a good one um focus on chinese students and academics do you see the chinese co-opting people from other countries countries foreign students and academics of other nationalities who might be under less scrutiny classic intelligence technique yeah it is but it's also a lot harder to pull off because if that foreign student isn't looking to get a job in china and doesn't have a family in china and has no ties to china um it's just that much less likely that they're going to be willing to be co-opted it doesn't mean that they won't that you know it can't happen people are obviously susceptible to all sorts of uh inducements right uh usually financial uh but um it's that much harder and look we know you know a lot of what we're doing here every step of the way you know these are not silver bullets to end a problem but we're trying to make the job a lot harder right so when we extradite that intelligence officer from china what was the significance of that obviously we disrupted that one instance of intellectual property theft but the broader significance was that europe was a place that chinese intelligence officers liked to meet americans because they both felt safe there right chinese intelligence officers don't want to come here a lot of americans who are being co-opted especially at the beginning felt nervous going to china but you can meet in europe if the chinese intelligence officers don't feel safe doing that kind of activity in europe following that um extradition from belgium that's a broader disruption than that now that doesn't mean they can't do it but it just makes their job that much harder so we got a couple questions on the thousand talents program uh one of them is to how what extent do you see the people recruited by the program is supporting the chinese military or are the cases mainly commercial um uh i mainly it's been commercial uh but i'd have to i haven't sort of gone through the cases but that's sort of a first blush that's my impression has been mainly uh commercial it's easier to do on the commercial side uh but you know there's obviously a lot more controls on the military technology and information uh but um i wouldn't exclude it from the risks but as i think about it most of our cases have been on the commercial side what about uh other countries particularly small countries that might have a strong high-tech industry do you see and and not a chinese diaspora i have a funny story to tell you about the middle east of this after the call but what do you see on um what do you see outside the u.s when it comes to thousand towns are we the primary target are they going after other high-tech centers uh what are the chinese up to they're no uh well we're probably the primary target because that's where the bulk of that high-end technology is that they're interested in but uh certainly europe is also uh a target and you know again you you step back and you look at that made in china 2025 plan if you go through those areas of technology you know you could figure out which countries have either companies or professors or institutions that are at the cutting edge of all of these different technologies and there's definitely going to be you know uh any number of europeans and european countries that fit into that japan south korea et cetera so it's not exclusive to the us it is a means of developing china in part by taking technology from outside china so we're almost done we just have a couple more questions if you'll bear with me i'll give you a break someone asked is there any evidence of data surveillance being used to suppress ethnic and religious minorities such as the weakers yes okay the next question is you got to be kidding me this one's a little outside your bailiwick but it touches on things you you pay attention to how do you think the administration is thinking about balancing the needs of the semiconductor industry to continue to sell commodity items to china with the need to close off maybe the high end and so when you think about intel qualcomm micro and the other guys how can we how can we find a balance in permitting safe sales to go i will say i was talking to someone from dod who said there are no safe sales to china a little extreme but where do you think we're gonna go with balancing uh controls and continued sales i mean on that topic um i can say that that is a topic of discussion you know in the interagency um and i think you know i don't want to say where i think you're headed in the future i think you know it has been an issue that we have considered while we've had these policy discussions and you know when i talk about sort of write writing with a fine pencil those are the kinds of distinctions i think that we can make and but you know there are a lot of players in this so two quick questions at the end uh one is can we expect more indictments for chinese hacking this year that's a yes or no question now you can go a little further if you want okay all right good so yes any predictions on when no if i say it wouldn't be a prediction yeah that's right that's right so so what are the this will be the final question what are the next steps you think for the uh china initiatives what where do you think how's the momentum going how's this expansion going um what are the things you're going to target on will be additional things what are the next steps for the china counter espionage initiatives i think look this has been an initiative that sort of as i said it was born kind of organically and it's developed organically from what we've seen in the cases and as we talk about the the academic side of thing i think we're going to continue to work with the universities i think our work has been somewhat interrupted by um ronavirus and our inability to do the same level of outreach and thinking we were in you know in the spring as as recently as the spring um i think but we're gonna you know what i have appreciated is i think we've all and this event proves that jim is we're starting to shift from the well let's delay that and you know see if we can do it in person later to the let's just do it and do it virtually now right and i know as we do that our activity has sort of ramped up and i appreciate getting back uh into that both on the private sector side but especially on the academic side i you know i think um you know we continue with the cyber investigations and we continue on the traditional espionage side i don't see any big new initiatives but that's not really the way this has grown it's just kind of followed our investigative leads and and let those leads take us to wherever we end up and that's kept you kind of busy yeah the ground is fertile jim any final thoughts or words you'd like to leave the audience with my request is help me figure out how to persuade people that this is a major perhaps the major national security problem for the us what are your final thoughts on this well my final thought on that is uh think about the many many uh gym bipartisan issues that we are taking on at this time in the united states you'll come up with a very short list but china will be at the top of it so that's how serious this issue is that's you know how much the facts underpin you know everything i think that that we've been saying and looking at um and it's not that over time folks can't take different approaches to the problem but i think there's a real appreciation that the problem is real and it needs to be addressed uh and uh there is more you know just from my perspective more sort of um coalescing in the interagency process around this issue that i've seen um and then i saw the first time i was in government on on these sets of issues so um but i i look thank you for all the attention that you're paying and uh thanks for putting on this event it's always great to talk about uh these issues and uh you know i really appreciate your doing this despite all the the technical issues that go along with this no it's one of my favorite issues and i really appreciate you coming on this has been very helpful uh i would at this point i would normally say please thank john john devers and wait for applause but right you'll just have to you'll have to take my word for it that people are applauding thank you for doing this okay thanks a lot appreciate it talk to you later you

Channel: Center for Strategic & International Studies

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Id: k-b5rQo2P28

Length: 65min 26sec (3926 seconds)

Published: Wed Aug 12 2020