The director of the FBI has spoken openly, and at length, on how the Chinese Communist Party (CCP) threatens the economic and national security of the U.S.
“The greatest long-term threat to our nation’s information and intellectual property, and to our economic vitality, is the counterintelligence and economic espionage threat from China,” said FBI Director Christopher Wray on July 7. “It’s a threat to our economic security — and by extension, to our national security.”
In a wide-ranging speech given at the Hudson Institute in Washington, D.C., Wray repeated remarks made last month by National Security Advisor Robert O’Brien: “We cannot close our eyes and ears to what China is doing.”
During his speech, the FBI director clarified that when he referred to China, he was referring to the communist regime, not the Chinese people.
“This is not about the Chinese people, and it’s certainly not about Chinese Americans. Every year, the United States welcomes more than 100,000 Chinese students and researchers into this country,” Wray said.
“For generations, people have journeyed from China to the United States to secure the blessings of liberty for themselves and their families — and our society is better for their contributions. So, when I speak of the threat from China, I mean the government of China and the Chinese Communist Party.”
The FBI director said the threat posed by China’s communist regime to America is so significant that U.S. Attorney General William Barr and Secretary of State Michael Pompeo will address many of the issues covered in his speech in the near future.
Wray pointed out that the issues involved are not only intelligence concerns, or a government problem, or a nuisance just for big corporations who can take care of themselves.
“It’s the people of the United States who are the victims of what amounts to Chinese theft on a scale so massive that it represents one of the largest transfers of wealth in human history,” Wray said.
“If you are an American adult, it is more likely than not that China has stolen your personal data,” he said, while giving examples including how the Chinese military conspired to hack Equifax in 2017 and made off with the sensitive personal information of 150 million Americans.
“We’ve now reached the point where the FBI is opening a new China-related counterintelligence case about every 10 hours. Of the nearly 5,000 active FBI counterintelligence cases currently underway across the country, almost half are related to China,” Wray said.
“And at this very moment, China is working to compromise American health care organizations, pharmaceutical companies, and academic institutions conducting essential COVID-19 research.”
How to respond
Further into his speech, the FBI director said the American people should remember three things in order to understand the threat the CCP poses and how the US needs to respond.
“First: We need to be clear-eyed about the scope of the Chinese government’s ambition. China — the Chinese Communist Party — believes it is in a generational fight to surpass our country in economic and technological leadership,” Wray said.
“That is sobering enough. But it’s waging this fight not through legitimate innovation, not through fair and lawful competition, and not by giving their citizens the freedom of thought and speech and creativity that we treasure here in the United States,” he said. “Instead, China is engaged in a whole-of-state effort to become the world’s only superpower by any means necessary.”
Wray went on to describe the CCPs’ diverse and multi-layered approach in trying to achieve this.
“The second thing the American people need to understand is that China uses a diverse range of sophisticated techniques — everything from cyber intrusions to corrupting trusted insiders. They’ve even engaged in outright physical theft,” he said.
“And they’ve pioneered an expansive approach to stealing innovation through a wide range of actors — including not just Chinese intelligence services but state-owned enterprises, ostensibly private companies, certain kinds of graduate students and researchers, and a whole variety of other actors working on their behalf.”
Wray then went on to describe China’s economic espionage efforts.
“To achieve its goals and surpass America, China recognizes it needs to make leaps in cutting-edge technologies. But the sad fact is that instead of engaging in the hard slog of innovation, China often steals American intellectual property and then uses it to compete against the very American companies it victimized — in effect, cheating twice over,” he said. “They’re targeting research on everything from military equipment to wind turbines to rice and corn seeds.”
Wray went on to describe the CCP’s talent recruitment programs, like the so-called Thousand Talents Program.
“[Through it,] the Chinese government tries to entice scientists to secretly bring our knowledge and innovation back to China — even if that means stealing proprietary information or violating our export controls and conflict-of-interest rules,” he said.
Wray then gave several case examples including one concerning a Chinese national and American lawful permanent resident who stole more than $1 billion worth of trade secrets from his former employer, an Oklahoma-based petroleum company.
“These cases were among more than a thousand investigations the FBI has into China’s actual and attempted theft of American technology — which is to say nothing of over a thousand more ongoing counterintelligence investigations of other kinds related to China,” Wray said.
“We’re conducting these kinds of investigations in all 56 of our field offices. And over the past decade, we’ve seen economic espionage cases with a link to China increase by approximately 1,300 percent,” he said.
“The stakes could not be higher, and the potential economic harm to American businesses and the economy as a whole almost defies calculation.”
Clandestine efforts, threats to academia
Wray next went on to describe how China’s regime uses both military and non-state hackers to steal corporate and personal data. After giving several examples he asked: “Why are they doing this?”
“First, China has made becoming an artificial intelligence world leader a priority, and these kinds of thefts feed right into China’s development of artificial intelligence tools,” Wray said.
“Compounding the threat, the data China stole is of obvious value as they attempt to identify people for secret intelligence gathering. On that front, China is using social media platforms — the same ones Americans use to stay connected or find jobs — to identify people with access to our government’s sensitive information and then target those people to try to steal it,” he said and then gave examples of how this occurs.
The FBI director then went on to explain how the CCP threatens academia and how talent recruitment programs like the Thousand Talents Program are used by the regime.
“China pays scientists at American universities to secretly bring our knowledge and innovation back to China — including valuable, federally funded research. To put it bluntly, this means American taxpayers are effectively footing the bill for China’s own technological development,” Wray said.
“China then leverages its ill-gotten gains to undercut U.S. research institutions and companies, blunting our nation’s advancement and costing American jobs. And we are seeing more and more of these cases,” he said and then gave more case examples.
Malign foreign influence
Continuing his speech, Wray went on to describe how the Chinese regime aggressively subverts America’s democracy and pressures U.S. leaders to bend to its will.
“Another tool China and the Chinese Communist Party use to manipulate Americans is what we call malign foreign influence,” he said.
“Now, traditional foreign influence is a normal, legal diplomatic activity typically conducted through diplomatic channels. But malign foreign influence efforts are subversive, undeclared, criminal, or coercive attempts to sway our government’s policies, distort our country’s public discourse, and undermine confidence in our democratic processes and values,” he said.
“China is engaged in a highly sophisticated malign foreign influence campaign, and its methods include bribery, blackmail, and covert deals. Chinese diplomats also use both open, naked economic pressure and seemingly independent middlemen to push China’s preferences on American officials,” he said.
Wray went on to describe how the CCP carries this out.
“China has leverage over the American official’s constituents — American companies, academics, and members of the media all have legitimate and understandable reasons to want access to Chinese partners and markets,” he said.
“And because of the authoritarian nature of the Chinese Communist Party, China has immense power over those same partners and markets. So, China will sometimes start by trying to influence the American official overtly and directly.”
Wray said that the CCP often goes further than just attempting to influence.
“If China’s more direct, overt influence campaign doesn’t do the trick, they sometimes turn to indirect, covert, deceptive influence efforts,” he said giving examples of how the CCP uses co-opted middlemen to apply pressure on American officials.
“These intermediaries, of course, aren’t telling the American official that they’re Chinese Communist Party pawns — and worse still, some of these intermediaries may not even realize they’re being used as pawns, because they, too, have been deceived,” Wray said.
“Ultimately, China doesn’t hesitate to use smoke, mirrors, and misdirection to influence Americans,” he continued.
“Similarly, China often pushes academics and journalists to self-censor if they want to travel into China. And we’ve seen the Chinese Communist Party pressure American media and sporting giants to ignore or suppress criticism of China’s ambitions regarding Hong Kong or Taiwan. This kind of thing is happening over and over, across the United States.”
Wray said that the COVID-19 pandemic hasn’t brought an end to any of the CCP’s influence campaigns.
“In fact, we have heard from federal, state, and even local officials that Chinese diplomats are aggressively urging support for China’s handling of the COVID-19 crisis… Not that long ago, we had a state senator who was recently even asked to introduce a resolution supporting China’s response to the pandemic,” he said.
Wray went to point out that China’s government and Communist Party have brazenly violated well-settled norms and the rule of law.
“Since 2014, Chinese General Secretary Xi Jinping has spearheaded a program known as Fox Hunt. Now, China describes Fox Hunt as some kind of international anti-corruption campaign — it is not,” the FBI director said.
“Instead, Fox Hunt is a sweeping bid by General Secretary Xi to target Chinese nationals whom he sees as threats and who live outside China, across the world. We’re talking about political rivals, dissidents, and critics seeking to expose China’s extensive human rights violations,” Wray said.
“Hundreds of the Fox Hunt victims that they target live right here in the United States, and many are American citizens or green card holders. The Chinese government wants to force them to return to China, and China’s tactics to accomplish that are shocking,” he said.
“For example, when it couldn’t locate one Fox Hunt target, the Chinese government sent an emissary to visit the target’s family here in the United States. The message they said to pass on? The target had two options: return to China promptly, or commit suicide. And what happens when Fox Hunt targets refuse to return to China? In the past, their family members both here in the United States and in China have been threatened and coerced, and those back in China have even been arrested for leverage.”
Exploiting America’s openness
The FBI director went on to describe how a nation could engage in such tactics.
“China has a fundamentally different system than ours — and it’s doing all it can to exploit the openness of ours while taking advantage of its own closed system,” Wray said.
“Many of the distinctions that mean a lot here in the United States are blurry or almost nonexistent in China — I’m talking about distinctions between the government and the Chinese Communist Party, between the civilian and military sectors, and between the state and the ‘private’ sector,” he said.
Wray explained that “an awful lot of large Chinese businesses” are state-owned enterprises and are thus owned by China’s government, and in that regard, the CCP. “And even if they aren’t, China’s laws allow its government to compel any Chinese company to provide any information it requests — including American citizens’ data,” he said.
He went on to say how Chinese companies of any real size are legally required to have Communist Party cells inside them to keep them in line. “Even more alarmingly, Communist Party cells have reportedly been established in some American companies operating in China as a cost of doing business there,” he said.
“These kinds of features should give U.S. companies pause when they consider working with Chinese corporations like Huawei — and should give all Americans pause, too, when relying on such a company’s devices and networks,” he said.
Wray further described Huawei as “a serial intellectual property thief, with a pattern and practice of disregarding both the rule of law and the rights of its victims.”
Wray described his concerns about Huawei’s mindset and its founder Ren Zhengfei.
“At a Huawei research and development center, [Ren Zhengfei] reportedly told employees that to ensure the company’s survival, they need to — and I quote —’surge forward, killing as you go, to blaze us a trail of blood.’ He’s also reportedly told employees that Huawei has entered, to quote, ‘a state of war.’ I certainly hope he couldn’t have meant that literally, but it’s hardly an encouraging tone, given the company’s repeated criminal behavior.”
The FBI director then pointed out what this means in relation to the security of America’s telecommunications infrastructure.
“In our modern world, there is perhaps no more ominous prospect than a hostile foreign government’s ability to compromise our country’s infrastructure and devices. If Chinese companies like Huawei are given unfettered access to our telecommunications infrastructure, they could collect any of your information that traverses their devices or networks,” he said. “Worse still: They’d have no choice but to hand it over to the Chinese government if asked — the privacy and due process protections that are sacrosanct in the United States are simply non-existent in China.”
‘The truth matters’
Wray then summed up the threats of the CCP and then described how the U.S. can respond.
“The Chinese government is engaged in a broad, diverse campaign of theft and malign influence, and it can execute that campaign with authoritarian efficiency,” he said. “They’re calculating. They’re persistent. They’re patient. And they’re not subject to the righteous constraints of an open, democratic society or the rule of law.
“China, as led by the Chinese Communist Party, is going to continue to try to misappropriate our ideas, influence our policymakers, manipulate our public opinion, and steal our data. They will use an all-tools and all-sectors approach — and that demands our own all-tools and all-sectors approach in response,” he said.
Wray said that the FBI is “working their tails off every day to protect our nation’s companies, our universities, our computer networks, and our ideas and innovation.” To do that, he said a broad set of techniques were being used and that they were proving to be successful.
“With the help of our many foreign partners, we’ve arrested targets all over the globe. Our investigations and the resulting prosecutions have exposed the tradecraft and techniques the Chinese use, raising awareness of the threat and our industries’ defenses, he said.
“They also show our resolve and our ability to attribute these crimes to those responsible. It’s one thing to make assertions — but in our justice system, when a person, or a corporation, is investigated and then charged with a crime, we have to prove the truth of the allegation beyond a reasonable doubt. The truth matters — and so, these criminal indictments matter. And we’ve seen how our criminal indictments have rallied other nations to our cause — which is crucial to persuading the Chinese government to change its behavior.”
Wray said that the FBI is working more closely with partner agencies in the U.S. and with partners abroad.
“We can’t do it on our own; we need a whole-of-society response. That’s why we in the intelligence and law enforcement communities are working harder than ever to give companies, universities, and the American people themselves the information they need to make their own informed decisions and protect their most valuable assets,” he said.
“Confronting this threat effectively does not mean we shouldn’t do business with the Chinese. It does not mean we shouldn’t host Chinese visitors. It does not mean we shouldn’t welcome Chinese students or coexist with China on the world stage. But it does mean that when China violates our criminal laws and international norms, we are not going to tolerate it, much less enable it.
“The FBI and our partners throughout the U.S. government will hold China accountable and protect our nation’s innovation, ideas, and way of life — with the help and vigilance of the American people,” Wray said, finishing his speech.
Watch this episode of China Uncensored about Wray’s speech.