The Growing Threat of China, and How US Should Respond

Heritage Foundation scholar Klon Kitchen joins “The Bill Walton Show” to discuss TikTok, cyberwarfare, China’s growing economy and buying power, and more. Read a portion of the transcript, lightly edited, below, or watch the full episode above.

Bill Walton: Welcome to “The Bill Walton Show,” featuring conversations with leaders, entrepreneurs, artists, and thinkers; fresh perspectives on money, culture, politics, and human flourishing. Interesting people. Interesting things.

Welcome to “The Bill Walton Show.” American politics increasingly do not address many of the big issues that we face. The clearest example is how information technology is radically changing how we need to think about national security or economic well-being and even American culture.

See, changes are happening in matters like crime, privacy rights, and even the financial security of local governments. The rapid rise in the power of information technology means that issues like economics, culture, and national security are no longer separate.

Joining me to help understand this is Klon Kitchen, who leads tech policy at The Heritage Foundation as its senior fellow for technology, national security, and science. Klon steers an enterprise-wide interdisciplinary effort to understand and to shape the growing convergence of policy issues.

Before joining Heritage, Klon was national security adviser to Sen. Ben Sasse of Nebraska. He also served more than 15 years in the U.S. intelligence community working on counterterrorism, counterproliferation, covert action, and cyber issues. Klon, welcome.

Klon Kitchen: It’s my pleasure.

Walton: Before we get into convergence, 15 years in the U.S. intelligence community, maybe we can start with what you were doing and what’s counterproliferation all about.

Kitchen: Yeah, yeah. So again, thanks for having me. I’m very happy to be here.

Walton: Yeah.

Kitchen: So my career in the intelligence community … can’t be separated from 9/11. So 9/11 happened. I had recently graduated with a theology philosophy degree from a classical liberal arts school.

Walton: Great training for counterintelligence.

Kitchen: Yeah. Honestly, I was given an intellectual toolkit to think well, I’m very thankful for that. But 9/11 happened. At the time I had been doing some kind of low-level writing on terrorism issues, and I had recently applied to the FBI to be a counterterrorism agent before 9/11. So this was an interest of mine.

When 9/11 happened, I got recruited into the Department of Defense. The early years of my career were spent doing the high-value targeting mission, looking for terrorist bad guys, deploying to Afghanistan, Pakistan, and other areas of the world.

As you mentioned, I eventually, especially when my wife and I started having a family, decided that running around the globe with my hair on fire was perhaps not the best use of my time. And I transitioned and I started running programs for other agencies, including counterproliferation, which on that was trying to prevent the spread and illegal use of weapons, particularly chemical, biological, and nuclear weapons. And there are a host of both offensive and defensive programs that we do to minimize that threat.

Walton: And one of the things that you did was you, and this sort of bears on what we’re going to talk about today, you were coordinating among all the agency’s policy or strategies to go after threats.

Kitchen: Yeah. One of the peculiarities of my career is that my entire career was in a joint environment, which means that prior to 9/11, it was the norm for an intelligence official to spend the overwhelming majority of their career within their agency, and to work almost exclusively with that agency.

9/11 demonstrated the need to have a more integrated comprehensive approach toward analysis. And I was that first generation of intel professionals who kind of built that culture and came up into that culture. And that’s just the way I kind of think and breathe now.

Walton: That’s a great background for your current project.

Kitchen: I hope so.

Walton: You gave a testimony to the Senate Judiciary Committee earlier this week, “Cybersecurity Threats to Corporate and Personal Data.” I guess [Sen.] Josh Hawley was there and [Sen.] Sheldon Whitehouse—

Kitchen: That’s right.

Walton: … among others. What would you tell them?

Kitchen: Yeah, so it was an important committee hearing and the kind of presenting fact was the growing popularity of a Chinese app called TikTok.

TikTok is a social media app, it allows users to do funny videos where they lip sync videos, and they have different filters, and they can do all kinds of messages and that kind of thing. But it’s exceedingly popular amongst American youth. In fact, American teenagers have adopted that even more than Facebook over the last several months. So it’s a growing trend.

Well, the challenge with it is that it is a Chinese app. And what I was explaining to the committee is that because of Chinese cyber law, that means inescapably that any data that is being captured by that app, and it is capturing a lot of data, is automatically fed back to Chinese servers. And because it’s on Chinese servers and because it’s a Chinese company, that means that the Chinese government has access to that information.

And so the particular application is a concern, and we talked about that at length, but I was trying to make the point that there’s actually a broader concern that this is going to be the case with essentially any Chinese company precisely because of the way the Chinese government works and integrates with them.

Walton: Well, all significant Chinese companies are tightly integrated and controlled with the Chinese Communist Party.

Kitchen: By design.

Walton: I mean, this TikTok sounds like a Trojan horse. It sounds like a great way to gather lots of data about lots of Americans.

Kitchen: Yeah. I mean, there’s no doubt that it is a moneymaker. I mean, there’s a legitimate kind of commercial side to it, but it absolutely feeds a double need in terms of the exfiltration of data.

Walton: Well, your focus was on security, and you mentioned a couple of things in here, that you had three big issues—cyber crime, cyber-enabled economic warfare, and we have ransomware as the third one. Cyber-enabled economic warfare, would TikTok be a part of that?

Kitchen: Yeah. That’s really the core thing. And that’s what I emphasized in my opening statement, was the use of technical and the tech industry as a means of exfiltrating American strength, both in terms of data and economics.

Walton: So when we talk about state actors, … all we hear about is Russia, I guess I’m less concerned about Russia because what’s their economy? About the size of California, maybe smaller?

Kitchen: Yeah. And I often refer to Russia as a declining state with a growing authoritarianism.

Walton: OK.

Kitchen: That’s how I think about it.

Walton: Which can be lethal and dangerous.

Kitchen: Which is dangerous. That’s right.

Walton: But not nearly as big [and] as well organized as China. So in terms of state actors in cyberwarfare, we’re talking basically China? … What’s going on in that world of cyberwarfare?

Kitchen: Yeah. Well, so, it’s a great question because the world of cyberwarfare and kind of geopolitical cyber is a pretty active world right now. So there’s a great deal of engagement that’s happening online between nation states.

The challenge with cyber is that it’s a pretty diverse threat spectrum. So Russia’s a real concern in certain categories. So if we started going toe to toe with Russia, their cyber capability is going to be a real concern and we’ve got to be smart about that. Same thing with North Korea. Same thing with Iran.

The
reason why the United States tends to speak about China differently is because
with China, it’s so much more than just cyber. China is the, in my view,
systemic peer competitor that we have to be worried about. And unlike Russia,
and unlike Iran, and unlike North Korea, China is deeply integrated into our
economy and to other aspects of our national strength. And so it requires both
nuance and increasingly some hard choices.

Walton: I believe this is right, that the United States in terms of its military opponents hasn’t faced an economy of our own size since 1875.

Kitchen: Yeah, that’s right.

Walton: And now as the economy becomes a purchasing power, China is almost where we are right now.

Kitchen: That’s right. Yup. So what China is able to do is, it’s able to increasingly, and we see this, I mean, the NBA example here recently is a great example where because of their economic power, they’re the fastest growing marketplace in the world. And they are able to exert significant kind of soft power and influence toward very real strategic geopolitical ends.

And again, that’s more than just kind of high-minded policy talk. That really affects Americans. So it affects how movies are made and how China is portrayed in those movies. It affects what NBA managers and coaches can and cannot say about events like the Hong Kong protests. It affects the types of services and provisions that companies will provide to Americans.

It’s a type of influence that we have never allowed previously and that we ought never allow going forward.

Walton: You’re watching “The Bill Walton Show.” I’m here with Klon Kitchen [of The] Heritage Foundation and we’re talking about the pervasiveness of China’s efforts to, I would say, return us to their Middle Kingdom.

Kitchen: Yeah. And if you don’t mind, I’ll put that in a little bit of context. … I don’t have a problem with an economically prospering or socially prospering China in principle. I would like that. The challenge is that China, it’s like every other nation in the history of the world. It wants to amass and to wield influence for its own ends. And again, that’s coherent and not novel at the same time. It has made the decision, I think correctly, that to do that going forward, it’s going to have to dominate technology generally and 10 industries specifically.

Again, I think that’s right. But what that means is their view is not some type of a compatible approach with the United States and with the Western world, but it’s actually confrontational. They want to displace. That moves us into a realm of confrontation.

Walton: Well, I mentioned the Middle Kingdom. We’ve talked about this before here, but their view is that they have 3,000 years as an empire, govern, ruled by an emperor. Very similar to what GE would like to be now.

They’re not used to liberal democracy. And they view themselves as a country entity without borders, all the rest of the worlds and comforts, and therefore no other laws, no international laws, no other countries laws, no other countries boundaries or even to be respected with that worldview.

Kitchen: Well, and one of the peculiarities of it is that they actually understand their nation to extend to every individual Chinese. So … the cultural expectation is that if you’re Chinese, wherever you are in the world, that your responsibilities are to the Chinese nation, that your authorities are the Chinese nation, and that you will act accordingly. And you see that in how they engage with their people overseas.

Walton: So we have 350,000 Chinese students studying in the United States right now. They see them as part of the Chinese state.

Kitchen: That’s how the government would have them understand themselves.

Walton: And with their surveillance systems they can enforce that.

Kitchen: They can certainly enforce that domestically within China. In the United States, I think there are constraints somewhat, but I mean, they’re active. Any counterintelligence professional will tell you that China is exceedingly active in the United States.

Walton: The more I learn about China, the more I grow both alarmed and confused. Three hundred million Chinese children are learning English because … of the barriers, I guess, they feel. In Singapore, the head of Singapore decided that Mandarin, or whatever the language was, wasn’t good enough for science and business, and so he has everybody learning English. Now Singapore speaks English. China’s moving in that direction.

Kitchen: Sure. Yeah. I mean, well, again, if you want to exercise the type of global influence that the United States has enjoyed, that means that you have to be able to participate in kind of the lingua franca. You’ve got to be able to have a global language both in economics and politics.

Walton: Well, the Chinese, we talk about the Chinese Communist Party, but they’re not really using communism anymore as the spur for people’s ambition or the country’s ambition. They’re using the century of humiliation.

Kitchen: Yeah, no, there’s definitely a profound sense of grievance. I mean, and you hit on this earlier … China’s been around for a long time, and this is not the first time where that nation has tried to reassert itself globally. They’ve gone through these cycles before, and any honest reading of history would show that they’ve done so successfully.

And so, one of the points I try to make—I made it in the testimony, I make it in these types of conversations—is that the United States is not inevitable. It’s the type of thing that must be secured. It must be defended. It must be considered. The Chinese are certainly doing that in the context of their nation.

And while I don’t think conflict is inevitable, or inescapable, the reality is that we have a very focused challenger who is capable, historically proven, and shows all of the strengths that are going to be necessary to achieve many of the objectives that they’re kind enough to lay out for us.

Walton: So, how are they using the technology, the cyberwarfare against us? When you’re one of a U.S.-based corporation, you go to China and they say, “Well, sure, come on in, but we’ve got to join your board and maybe you have to hand over all your IP.”

Kitchen: Yeah, yeah, exactly. So standard operating procedure for doing business in China includes they require you to do a joint venture. So if you want to be a business in China, that means that you have to have a business arrangement with a domestic Chinese partner. You have to turn over intellectual property. You have to have members of the CCP as a board within your company to ensure that any decisions that are made are in keeping with the CCPs, the Chinese Communist Party, with their objectives and what they’re trying to do.

And now, beginning in January, there’s going to be a new cybersecurity law that also requires all companies, including foreign-owned companies, to build their networks in such a way as to where the Chinese government, both their law enforcement and intelligence apparatus, has near unfettered digital access to all communications, all trade secrets, essentially every bit and byte of data that either resides on Chinese servers or transits Chinese servers.

Walton: So what companies used to do is they kept their information on their own servers, in their VPNs.

Kitchen: Yeah. These virtual private networks were essentially encrypted communications lines and they would just do all business on those. And theoretically the Chinese government wouldn’t have ready access to that.

Walton: And now—

Kitchen: That’s illegal.

Walton: As of January, that would be, as of January 2020, that will be illegal.

Kitchen: There will be no place to hide.

Walton: So how are companies reacting to this? One of the reasons why I have you on is we’re talking about things that most people are not talking about.

Kitchen: Yeah. And this is my—

Walton: Yeah, this is huge. And we have how many companies doing business in China? How many technology companies? A couple thousand?

Kitchen: Oh, easy. Yeah.

Walton: And so all of their intellectual property, to hold it inside China is illegal. I mean, what do you do if you’re—

Kitchen: Seems existential. No, I think your response is exactly right. That’s the way I—

Walton: What’s happening? This is terrible.

Kitchen: It’s the same response. Well, my first response was when I started reading through this, it was like, OK, I’m obviously not understanding something. Maybe I don’t get this. Maybe there’s some nuance to this that I’m not picking up on. But in my engagement with IP experts, trade experts, economists, and security experts, it’s inescapable.

In fact, if you go back and watch the video of my testimony, there’s a representative from Microsoft there. Microsoft has a huge presence in China.

Walton: Yeah. The video is on Google, is on YouTube.

Kitchen: The video is on YouTube. Yup, yup. And you can also get it I think from the Senate Judiciary website.

Walton: Great. It was riveting. I mean, it was very, very good.

Kitchen: Well, but one of the things you’ll note is that the Microsoft representative doesn’t dispute any of the assertions I’m making. So there’s no dispute about what I’m saying this law does. It’s clear because people have to comply.

Now, what I think companies are doing is, I suspect that they will test it initially. They’ll try to resist it to the degree that they can. And if the Chinese enforce it the way I think they’re going to, well, then they’ll have to think about, “Are there alternative mechanisms?” But that’s going to be difficult. And then finally I think they’re going to be forced into a decision.

Now, some I suspect will actually interpret this as an opportunity because in the past they had to deal with the idea of, “Well, if the Chinese government comes asking for information, I now have a hard choice that I have to make. Do I give it to them or don’t I under this new regime?” However, the government is just going to get it. …

Walton: The government’s just going to—

Kitchen: The government is going to have digital access to this information by design, which means they don’t necessarily have to ask for it, which means if a company was so inclined, they could make themselves sleep at night by saying, “Well, we never gave anything to the government. They never even asked.” All the while knowing that the government was getting it all.

Walton: We’re wandering all over this, but this is a big security issue because we have U.S.-based companies acting like they’re global companies, not acting like they’re American companies, at the same time putting American security at grave risk.

Kitchen: Yeah. I made that point. … Look, there is a rationale for why a company wants to go to China. I get it. It’s a huge marketplace. It’s a growing marketplace. But the reality is that as they make these decisions, they’re making decisions that affect more than their bottom line.

These things have implications for American economic competitiveness, American data streams, American national security, ultimately. And up until here recently, we’ve tried to keep a lot of these different issues as separate silos of issues. And the reality is that they’re intermingling in a way that won’t allow us to do that anymore.

Walton: You’re watching “The Bill Walton Show” and I’m here with Klon Kitchen of The Heritage Foundation, and we were talking about an alarming new law that the Chinese are about to implement, which will require all U.S. companies operating in China to turn over all their intellectual property.

Kitchen: Yeah. So I think these are the things that companies are going to have to face. One of the points I try to make too, I have conversations with these companies, is that I don’t want this. This is not something that we want to happen.

And I understand how it makes their business and their decisions more difficult, especially as the U.S. government starts to turn an eye on this and really turn the screw. But at the same time, I don’t get, … as a national security professional, I don’t have the luxury of denying reality. My fellow citizens, my nation depends on me having a clear—

Walton: Most of our political class does. Why should you single yourself out?

Kitchen: Well, I can only speak for myself, you know what I mean? Look, the thing that makes this important—

Walton: That’s why I wanted to talk with you because this is something everybody should know about.

Kitchen: I certainly agree with you.

Walton: But they’re not just taking property or intellectual property there, they’re taking it here too. What’s happening with the intrusion and our cyber realities here?

Kitchen: Yeah. So, Chinese theft of intellectual property in the United States continues. Under the Obama administration, we had apparently signed a memorandum of understanding with the Chinese government. We blew through that pretty quickly. It doesn’t seem to have had any real meaningful impact in terms of their theft of IP.

This is something that the president articulates as one of his justifications for his posture toward China. I know that it’s a key negotiating point with our representatives and the Chinese representatives, that there has to be a demonstrable decline in Chinese theft of American IP. But part of this goes back to my point about China’s intentions in terms of reasserting itself.

So, the Chinese industrial base for decades wasn’t anywhere near what the United States was in terms of technology and emerging technology. And one of the ways that they thought that they would leapfrog the United States was to skip the burdensome process of research design testing and evaluation and just steal intellectual property from the United States and implement it.

Well, they’ve done that long enough and well enough to where they’re legitimately innovating on their own now. They’re still stealing all kinds of information from us, but they’re not nearly as dependent on that theft as they once were. And that’s why … four of the big 10 global tech companies are Chinese now, and they are real market players. They have U.S. tech companies worried. And I think that that’s a well-placed concern.

Walton: Well, we’re talking about the economic impact, but this is also a national security issue because one of the things that they’ve done over there in China is every Chinese company is required to give over all their information and cooperate with whatever the government does. And they link economic warfare with kinetic warfare.

Kitchen: That’s right. So that’s actually one of the interesting things that is true about that is that that’s the way the United States has thought about these things for a long time too. That economics is an element of national power, like military, diplomacy, information, economics, there’s even an acronym called DIME.

So the idea of economics being separate from national security or from national power, that’s peculiar in terms of history, certainly in terms of American history. The Chinese certainly understand that.

Now, the key distinctive is that they are arranging a partnership between their government and their industry that it’s called civil-military fusion. And that … takes it to a whole new level. And I don’t think the United States should try to out China … in that regard. That’s not my objective.

My point is that we don’t get to deny that they’re doing that. We understand it’s a violation of everything that we hold sacred and how we view economics. But my high view of economics and that separation doesn’t allow me to deny the reality of what they’re doing. And we have to build policies that recognize and roll that reality back because it creates distortions in the global marketplace.

Walton: Well, the leadership makeup of China is worth getting into. I’ve done this before, but it’s worth repeating. The Politburo, the Chinese leadership, they all come up through a rigorous system of—like the Mandarins used to—the test after test, year after year, after year. …

So by the time you get in a leadership, you’ve sort of been stamped as having a 130 to 160 IQ, and they’re not trained in the law, they’re trained in STEM, science, technology, engineering, math. And so they think like engineers, they’re trained to think in terms of process and systems and to think long term.

And I was at a White House event recently, and there were 20 senators there and there were 19 lawyers. … Our mindset is completely different.

Kitchen: Yeah. It’s one of those things where it can be easy to be lulled into the position that China is 10-feet-tall and bulletproof, and that they’re human machines that are thinking on these different levels. And I don’t think that’s true at all. I think they have some systemic challenges that they’re facing even in terms of their form of governments and the system that you’re describing.

That being said, they are patient. They do think systematically, and the types of strategies that they’ve been rolling out and that President Xi [Jinping] articulates, they’re coherent.

I mean, that’s the thing, it’s like they’re not guaranteed success anymore than we’re guaranteed failure. But the reality is that only a fool would deny that they have intentions, that they have capabilities, and that they have plans, and that those things are coherent with one another. Well, that’s the definition of threat.