Latest / Sid & Friends In The Morning / Gordon Chang | Author & Geopolitics Expert Speaks on Chinese Hacking Operation Being Exposed in the United States

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Gordon Chang | Author & Geopolitics Expert Speaks on Chinese Hacking Operation Being Exposed in the United States · Sid & Friends In The Morning

• 0:00
  Speaker 1: China.
• 0:00
  Speaker 2: China's all over the news, and when that happens, what
• 0:03
  Speaker 2: do you speak to? The best in the business. Follow
• 0:05
  Speaker 2: him on Twitter at Gordon G. Chang, one of the
• 0:09
  Speaker 2: all-time greats, my friend Gordon Chang. Gordon, good morning, buddy.
• 0:12
  Speaker 2: How are you?
• 0:13
  Speaker 1: I'm fine, Sid, and thank you so much.
• 0:15
  Speaker 2: Always great to have you. So this story... where the
• 0:18
  Speaker 2: Justice Department and the FBI are now seizing platforms operated
• 0:23
  Speaker 2: and used by China state-sponsored hackers is scary. Some of
• 0:30
  Speaker 2: the U.S. critical infrastructure they're talking about targeting include the
• 0:35
  Speaker 2: Federal Reserve, Department of Energy, Department of Justice, Health and
• 0:40
  Speaker 2: Human Services, National Institutes of Health, the U.S. Senate. Now,
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  Speaker 2: you and I have talked about this for years, Gordon Chang,
• 0:47
  Speaker 2: for years. Water systems, electrical grids, and hacking happens all
• 0:53
  Speaker 2: the time. Every now and then, some airline, they go bonkers, right?
• 0:57
  Speaker 2: Something happens. They're actually out there targeting vital U.S. infrastructure,
• 1:03
  Speaker 2: we found out, but they're denying it. So now what?
• 1:07
  Speaker 1: Well, the now what is what do we do about it?
• 1:10
  Speaker 1: Because we've known for decades that the Chinese have been
• 1:13
  Speaker 1: doing this. And by the way, Sid, we have the
• 1:16
  Speaker 1: means to stop them. And as a society, we have
• 1:19
  Speaker 1: decided not to employ those means. So really, it's up
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  Speaker 1: to us. We need a national conversation on what's more
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  Speaker 1: important for us, you know, friendly relations with Beijing or
• 1:30
  Speaker 1: protection of our critical infrastructure, you know. To me, there's
• 1:34
  Speaker 1: no choice. Let's protect ourselves. Yeah.
• 1:37
  Speaker 2: Well, how do we do it, though? If you were
• 1:39
  Speaker 2: on the phone with President Trump right after me, what
• 1:40
  Speaker 2: would you advise the president to do?
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  Speaker 1: Well, first of all, we need to bolster our, you know,
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  Speaker 1: our cyber defenses because, you know, they're not as good
• 1:50
  Speaker 1: as they need to be. And certainly they're not as
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  Speaker 1: good as we can make them. But that's, you know,
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  Speaker 1: attackers always win over defenders. So ultimately, it's a question
• 1:59
  Speaker 1: of the cost that we impose on China. And I'd
• 2:02
  Speaker 1: say to President Trump, look, the Chinese have never been
• 2:05
  Speaker 1: more trade dependent this century and maybe in their history.
• 2:09
  Speaker 1: So if we're going to protect our networks, we know
• 2:12
  Speaker 1: how to do it. 100 percent, 200 percent tariffs. And
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  Speaker 1: I bet you within about two or three hours, you'd
• 2:20
  Speaker 1: have Xi Jinping on the phone saying, let's talk. So, yeah,
• 2:24
  Speaker 1: let's impose those costs. You know, we know Xi Jinping
• 2:28
  Speaker 1: does not respect the United States. That was clear in
• 2:31
  Speaker 1: May when President Trump went to Beijing because we saw
• 2:35
  Speaker 1: Xi Jinping go out of his way to humiliate Trump. Now,
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  Speaker 1: Trump let it roll off his back. That's fine. But
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  Speaker 1: we need to show the Chinese that they've got to
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  Speaker 1: start respecting the United States of America.
• 2:46
  Speaker 2: Well, you got to tell people that may not be
• 2:48
  Speaker 2: aware of what you're talking about. How exactly did China
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  Speaker 2: humiliate my guy?
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  Speaker 1: Two things. First of all, on Thursday, the first day
• 2:57
  Speaker 1: of the summit, you had Xi Jinping talk about the
• 3:01
  Speaker 1: Thucydides trap, which is a reference to a declining hegemon
• 3:05
  Speaker 1: dangerously challenging a rising power. And in Xi Jinping's view,
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  Speaker 1: we're the declining hegemon. He also, and this was even
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  Speaker 1: more insulting, used the words new era. Now, in Xi
• 3:18
  Speaker 1: Jinping's speak, new era refers to a time when the
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  Speaker 1: United States is no longer on the scene and China
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  Speaker 1: rules the world. On Friday at Zhongnanhai, which is the
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  Speaker 1: Chinese leadership compound, you saw Trump and Xi Jinping sitting
• 3:33
  Speaker 1: in chairs side by side. Yeah. Well, Trump's chair was
• 3:36
  Speaker 1: noticeably lower than Xi Jinping's.
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  Speaker 2: I did notice that.
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  Speaker 1: Yeah. That was made to make Trump feel uncomfortable and
• 3:44
  Speaker 1: look diminished in the eyes of the Chinese. So those
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  Speaker 1: three things showed that Xi Jinping was out to humiliate Okay.
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  Speaker 2: But here's my question, because you're brilliant, okay? And you
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  Speaker 2: saw that. You figured that out. Did President Trump figure
• 4:02
  Speaker 2: that out, too?
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  Speaker 1: Well, he figured out the Thucydides trap because he actually
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  Speaker 1: issued a statement a few hours later about that. But
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  Speaker 1: it was a very mild statement. And, you know, we
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  Speaker 1: haven't heard Trump talk about the chair business yet. But
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  Speaker 1: I'm sure that he knew because he was obviously uncomfortable.
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  Speaker 2: I saw it. It looks silly. You know, he comes
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  Speaker 2: back after China, President Trump, and he puts he talks
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  Speaker 2: to the American people primetime.
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  Speaker 1: Right.
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  Speaker 2: And he talks about how China is gathering all this data.
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  Speaker 2: and how they played a part in what was, what
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  Speaker 2: he thought, a rigged 2020 election, people said to me,
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  Speaker 2: why didn't Trump say something to Ping when he was
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  Speaker 2: in China? Why did he wait to come back and
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  Speaker 2: do a press conference for the American people? I said,
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  Speaker 2: I don't know, maybe he did. They didn't show every
• 4:54
  Speaker 2: single second those two were together, but Trump certainly talked
• 4:58
  Speaker 2: tough about China when he came home. Do you think
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  Speaker 2: he did any of that when he was there?
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  Speaker 1: I'm sure that President Trump did. And I'm sure that
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  Speaker 1: Xi Jinping stiffed him, which is the reason why when
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  Speaker 1: Trump came back, he gave that primetime address to the
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  Speaker 1: American people about China's election interference. And by the way,
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  Speaker 1: Trump didn't mention everything. Matter of fact, he left out
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  Speaker 1: the most bad bits that the Chinese did. So, you know, again,
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  Speaker 1: a lot of restraint. But we should have talked about
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  Speaker 1: the things that China did in 2020, including fomenting violence
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  Speaker 1: on American streets just before the election. And when a
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  Speaker 1: foreign power urges Americans to commit acts of violence on
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  Speaker 1: our soil, that's an act of war. And, you know,
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  Speaker 1: Trump didn't mention it, but he should have.
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  Speaker 2: Well, can you be more specific about that? Give me
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  Speaker 2: one of those events you're talking about.
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  Speaker 1: Yeah. First of all, openly, October of 2020, the European
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  Speaker 1: Bureau Chief for China Daily on X urged Americans to
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  Speaker 1: throw petrol bombs. This is a representative of the Chinese government,
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  Speaker 1: and it's an official statement. And God, you know, glad
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  Speaker 1: I caught myself. I'm really angry about this.
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  Speaker 2: I know, I can hear. I love it, actually.
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  Speaker 1: But that's also... You know, the night that St. John's
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  Speaker 1: Church was burned, that's one block north of the White House.
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  Speaker 1: There were Chinese dressed in black, acting in coordinated fashion.
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  Speaker 1: The U.S. government believes that they were not organic, that
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  Speaker 1: this was organized by the Chinese state. I don't have
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  Speaker 1: proof of it. I'm sure the State Department does. But
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  Speaker 1: this is something, again... And we saw in 2020 some
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  Speaker 1: really very dangerous acts. So, for instance, at the International
• 6:53
  Speaker 1: Falls Port of Entry, this is Minnesota, just before the
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  Speaker 1: George Floyd protests, we intercepted counterfeit $ 1 bills that came
• 7:03
  Speaker 1: in from China. First of all, nobody in China can
• 7:05
  Speaker 1: counterfeit American currency without the regime knowing about it. Second
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  Speaker 1: of all, nobody counterfeits $ 1 bills for profit. This was
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  Speaker 1: obviously a Chinese state operation. I don't know exactly what
• 7:18
  Speaker 1: they were doing. I think they were funding protests, protesters
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  Speaker 1: in a way that would be hard to detect. That motive,
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  Speaker 1: I don't know, but I do know that it was found.
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  Speaker 1: I do know that this was a Chinese state project
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  Speaker 1: counterfeiting another country's currency, by the way, Sid. That's an
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  Speaker 1: act of war as well.
• 7:37
  Speaker 2: Oh yeah, 100%, 100%. So Gordon Chang, tell me this.
• 7:41
  Speaker 2: Where does China get their oil from these days?
• 7:46
  Speaker 1: Well, they're getting it from Iran.
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  Speaker 2: Okay, let me stop you right now. Let me stop
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  Speaker 2: you right now. So when China comes out and is
• 7:53
  Speaker 2: furious with the United States, furious... This is in the
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  Speaker 2: papers today, that we are widening our sanctions on Iran.
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  Speaker 2: It all makes sense because they count on Iran for
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  Speaker 2: oil and other things. That's why they're furious. They are
• 8:10
  Speaker 2: in bed with the enemy. They are the enemy. But
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  Speaker 2: they're in bed with the enemy.
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  Speaker 1: Yeah, they're in bed with the enemy. Now, Kepler reports
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  Speaker 1: that this year China has received Each day, 1.2 million
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  Speaker 1: barrels of Iranian oil. That's only slightly less what they
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  Speaker 1: got last year. So they're still relying on Iranian oil. Now,
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  Speaker 1: we can stop this, and we should, because why are
• 8:35
  Speaker 1: we allowing China to finance the war against us? But
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  Speaker 1: we also know more important that China allowed Iran to
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  Speaker 1: use their satellites for targeting purposes. Right. That almost certainly
• 8:47
  Speaker 1: resulted in the deaths of six American service members on
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  Speaker 1: March 1st in Kuwait. And also, I think, but I'm
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  Speaker 1: not as certain that China allowed the targeting data in
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  Speaker 1: the rest of the war, which also resulted in American deaths.
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  Speaker 1: But certainly on March 1, this was this was China.
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  Speaker 2: There is rumors, too, that the Chinese have been providing
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  Speaker 2: Iran with weapons all along, maybe the Caspian Sea. I
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  Speaker 2: don't know the exact route, but do you believe that's true?
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  Speaker 1: Yeah, I do believe it's true because we saw Chinese
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  Speaker 1: military transports landing in Iran during the course of the war.
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  Speaker 1: We know that Iran has Chinese weapons. That's 100%. We
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  Speaker 1: just don't know when they were delivered. So in March,
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  Speaker 1: for instance, Iran fired 101, according to President Trump, 101
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  Speaker 1: anti-ship cruise missiles at the Abraham Lincoln Carrier Strike Group.
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  Speaker 1: Those were Chinese CM-302s. Now, they could have been delivered
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  Speaker 1: before the war. But we also know that every Iranian
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  Speaker 1: weapon with a microchip has a microchip that was either
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  Speaker 1: made in China or was sourced foreign. Iran by Chinese intermediaries. So,
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  Speaker 1: you know, this is something that's continued throughout the war,
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  Speaker 1: and we need to stop it.
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  Speaker 2: Yeah, look, there's a reason why I bring you on
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  Speaker 2: all the time, me and Maria Bartiromo. We love you,
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  Speaker 2: the two of us, because... While the world is concentrating
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  Speaker 2: on Iran, and I get it, and the world now
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  Speaker 2: lately has been concentrating on Canada, especially the United States,
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  Speaker 2: I get it. Me, Maria, you, we haven't lost sight
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  Speaker 2: of the fact that the biggest enemy, the most dangerous enemy,
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  Speaker 2: and the country that can hurt us the most, it
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  Speaker 2: ain't Canada, it ain't Iran, it's China. That's why, Gordon Chang,
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  Speaker 2: you remain such an important guest, because we haven't lost
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  Speaker 2: sight of that. Sometimes I don't think we talk enough
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  Speaker 2: about it.
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  Speaker 1: Yeah, look, Russia is able to continue the war against
• 10:52
  Speaker 1: Ukraine because of China. Russia would have been out of
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  Speaker 1: the war long ago were it not for comprehensive Chinese support, which,
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  Speaker 1: by the way, includes combat personnel. Iran couldn't challenge Israel.
• 11:05
  Speaker 1: It could not have launched the October 7th attacks. It
• 11:08
  Speaker 1: could not maintain the war against us. But for China,
• 11:12
  Speaker 1: China in North Africa is fueling insurgencies that look like wars.
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  Speaker 1: And we've been on the wrong end of some of
• 11:18
  Speaker 1: those actions. So, look, China is roiling the world. It's
• 11:24
  Speaker 1: right now a very dangerous place. You take the Chinese out,
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  Speaker 1: and these bad actors couldn't challenge the United States, our friends, partners,
• 11:32
  Speaker 1: and everybody else for that matter.
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  Speaker 2: I agree. So, in the AI war, in the AI race,
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  Speaker 2: we're always trying to keep up with China. They're trying
• 11:41
  Speaker 2: to keep up with us. Right now, Gordon Chang, who
• 11:44
  Speaker 2: is winning the AI race, the United States or China?
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  Speaker 1: Our best AI, our frontier models are a couple months
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  Speaker 1: ahead of China's best models. But that overstates China's position
• 12:00
  Speaker 1: in the AI race because we've got two critical advantages.
• 12:03
  Speaker 1: One of them is compute. In June, there were 5,427
• 12:06
  Speaker 1: American data centers. In June, China, how many data centers?
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  Speaker 1: 499 data centers. The other thing is our capital markets
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  Speaker 1: are far deeper. So our AI companies have much more
• 12:21
  Speaker 1: access to money. The thing where China is doing very
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  Speaker 1: well is it has got basically open weight models that
• 12:32
  Speaker 1: are very inexpensive. So they are gaining adoption in places
• 12:37
  Speaker 1: that is important, like Africa. the Chinese have not been
• 12:42
  Speaker 1: really able to monetize their AI because they want to
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  Speaker 1: spread it. This is a government project, basically. So China's
• 12:49
  Speaker 1: private AI companies, they're very, very, very good, but they're
• 12:53
  Speaker 1: not really making money. Who's making money is Anthropic and
• 12:58
  Speaker 1: OpenAI and the rest of them, but they're not gaining
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  Speaker 1: as much adoption because they charge a lot of money.
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  Speaker 1: And this is going to be a national conversation for
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  Speaker 1: the United States, but we're winning. As I said, When
• 13:10
  Speaker 1: you look at their best models, their best models are
• 13:12
  Speaker 1: almost as good as ours.
• 13:14
  Speaker 2: Almost, but not as good. So then when you talk
• 13:16
  Speaker 2: about these data centers, how idiotic is the New York governor,
• 13:20
  Speaker 2: Kathy Hochul, who put a moratorium on building data centers
• 13:25
  Speaker 2: for a year in the state of New York? How
• 13:27
  Speaker 2: idiotic is that?
• 13:28
  Speaker 1: That's really idiotic. What she's doing is she's responding to pressure. Now,
• 13:36
  Speaker 1: that pressure is not entirely organic because we know that
• 13:39
  Speaker 1: China has been funding a lot of the anti-data center protests.
• 13:45
  Speaker 1: That guy, Neville Roy Singham, he's an American, but he
• 13:49
  Speaker 1: coordinates his activities with the Communist Party's United Front Work Department.
• 13:53
  Speaker 1: He lives in Shanghai. He funds organizations such as Code Pink,
• 13:57
  Speaker 1: Code Pink protests against data centers. Code Pink, by the way,
• 14:01
  Speaker 1: was co-founded by Jody Evans, who's Neville Roy Singham's wife.
• 14:05
  Speaker 1: So we know that China is funding a lot of
• 14:07
  Speaker 1: this protest. And by the way, there's a senator from Vermont.
• 14:11
  Speaker 1: I think his name is Bernie Sanders. I've heard of him.
• 14:14
  Speaker 1: You may have heard of him. Yeah, he has been
• 14:16
  Speaker 1: working with China to stop all U.S. AI development and
• 14:21
  Speaker 1: data centers. He's got a bill in Congress with Senator
• 14:25
  Speaker 1: Markey of Massachusetts. This is China because Sanders and Markey,
• 14:32
  Speaker 1: they held that– That session on Capitol Hill on, I
• 14:37
  Speaker 1: think it was April 30th, urging the United States not
• 14:41
  Speaker 1: to do anything on AI for a year, actually for
• 14:44
  Speaker 1: longer than that, until we figure out what to do,
• 14:46
  Speaker 1: which is like the Chinese, are they going to stop
• 14:49
  Speaker 1: for a year? Please. Of course not.
• 14:50
  Speaker 2: No way. No way. Gordon G. Chang, you can hear
• 14:55
  Speaker 2: all this, read all this, I should say, brilliant stuff
• 14:58
  Speaker 2: on his amazing Twitter feed. Gordon, you're so good, man.
• 15:01
  Speaker 1: I love it.
• 15:01
  Speaker 2: I think you're great. Give my regards to Lydia. We'll
• 15:03
  Speaker 2: do this again very, very soon, buddy. Thank you so much.
• 15:06
  Speaker 1: Oh, well, thank you, Sid. I really appreciate it. Thank you, Justin.
• 15:10
  Speaker 2: Oh, Justin gets a thank you, too. Oh, thank you, Gordon. Oh,
• 15:13
  Speaker 2: you just made his whole day, Gordon. Oh, look at Justin.
• 15:16
  Speaker 2: How about it? How about the great Gordon Chang? My man, Gordon.
• 15:19
  Speaker 2: Thank you, Gordon.
• 15:20
  Speaker 3: Thanks for listening to Sid and Friends in the Morning.
• 15:23
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• 15:26
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• 15:29
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• 15:47
  Speaker 3: so you never have to wonder.
• 15:49
  Speaker 2: What the heck is going on here?