Former CIA Agent on Huawei and the Chinese Government

I know you want to talk about Huawei. Huawei, Huawei. Which I think is a really fascinating subject to me and a lot of people that are tech inclined because they are at the tip of the spear when it comes to technological innovation in the cell phone space. Yeah. And I know that they're doing that with in regards to modems and a bunch of other things as well, but it appears at least, and a lot of companies are exclusively using their 5G modems as 5G rolls out. Oh yeah. And it appears they are involved in some serious shenanigans and they have deep roots with the Chinese government. They do. They claim they don't. They claim, look, we're independent. We would never do whatever the Chinese authorities say. Think about that sentence. Think about a company with the global reach of Huawei of that importance to the Chinese state. And think about them saying, trying to say with a straight face, we wouldn't do things that the Chinese government might ask us to do. What a lot of shit. If you were a real Chinese company and you said that and you meant it, they would shut down. Yeah, exactly. They'd be like, you won't? Yeah. You would not be in business for that long or there would be a change in the senior management of the business. Right. So, and Huawei's been caught out. They've been caught out in Europe to the degree where at a certain point you think Germany and others that are deeply involved with Huawei now in terms of the 5G infrastructure, where they've just made this decision. Look, it's financially better for us to work with Huawei and we can set aside the security risks. They literally made that decision. Yeah, that was, I was reading an article about that very recently that they've just decided to have some sort of a risk to reward conversation and the risk is worth the reward. Right, right. And so, you know, that's their calculation from a US perspective because we are, you know, look, there's two, essentially two superpowers now, right? I mean, China's, you know, advancing and we're not the lone superpower on the stage anymore. And so, we are the number one target. And you know, our calculation has to be different. So, we've been going at it and I know everybody, I think it's been pretty well covered. It didn't used to be covered very well, but it's been pretty well covered over the past couple of months. And now what's happening is we've been in these trade negotiations with China and I think unfortunately, I think the current administration, the Trump administration is going to blink. And I think that because Huawei is such a huge issue for the Chinese and the idea that we would prevent our companies from selling into or purchasing from or dealing with and that we would have sanctions on other countries that do, they view that as such a threat to their own interests and their own future that Huawei is front and center with any trade deal. So, they're looking, they're not doing any trade deal unless we make concessions on Huawei. And I have a feeling the Trump administration is going to make those concessions because from a political perspective, they want a trade deal. Right. And so far, they've actually said to Google that Google is going to stop using the Android operating system for the Chinese phones, for Huawei's phones at least. They're going to not let them license out the... So Huawei has actually been at least rumored to be in production of their own operating system, which would mean they would have to have their own, not just operating system, but they'd have to have their own ecosystems. They'd have to have an app store. They'd have to have all the jazz that we have today. When you sign up for... You buy an Android phone, you have access to the Google Play Market, which is this huge resource of applications. And as soon as you take that away, you've got to kind of rebuild that whole thing from scratch. Right. Huawei doesn't lack anything in resources. They'll be fine because the state will provide and ensure that they have the resources they need. They also... We're the outlier here. I mean, we've been working with New Zealand and Canada and the UK to some degree, but the UK has been kind of pushing back a little bit on this idea that we're going to isolate Huawei. I don't think that's going to happen. So they're using Huawei devices? To some degree, yes. They've been slower to adopt and kind of mesh their infrastructure with Huawei's... For people... Gear. For people who don't know what we're talking about, could you please just lay out what's the concern? What do they think that Huawei's doing? Huawei is essentially... The way to put this would be, imagine a communications network that spans the globe. And Huawei builds and provides gear and certainly going into 5G, they're a leading provider and then financially they can offer countries much better deals than other providers. But they are an intricate part of that communications web. So if you imagine that Huawei is a state-sponsored entity and will respond to Chinese authorities requests for information or intelligence that's passing through this communications web around the globe, our business communications, our military communications, intelligence communications that all kind of go through at some point, this interconnected system, that's the problem because they're essentially building backdoors into that system that allow them to suck communications out of that network and use it for their own purposes. That's a great intelligence tool. So if you think about it in a way, basically it's an advancement on the idea that you are wiretapping somebody or you've created an ability to intercept some communications. They link themselves with the EU. Well, what happens? We've got military communications with the EU. Our military talks to the EU military and we've got NATO concerns and everything. So if there's an element in that infrastructure that touches in and has a door that opens to some Huawei gear, then the danger here is, and they've had backdoors discovered in the past and then Huawei puts their hands up and go, oh, well, we didn't know that was there. We'll correct it. And then it turns out they don't correct it. And then, oh, sorry about that. They honestly don't give a shit. When I say how aggressive they are in terms of sucking up information, I can't overstate it. And so that's why it's a problem for us is because if we convince Australia and the Five Eyes Nations, New Zealanders, not to work with Huawei and then say Canada, which is willing to do a deal, well, we've got seamless communications infrastructure with Canada. So all of a sudden, the fact that they're doing business with Huawei, but we're not, we're still at risk. We're still in jeopardy because that information is still flowing to some degree where it's accessible to Huawei and their ability to get out. So I'd, you know, again, I know people listen to that and they go, why is that of any concern? Well, it's a concern because it used to be in the old days, it was us and the Russians, Soviet Union. Russia's, you know, they got the GDP of a small EU nation. China is on the march. They view themselves in a certain fashion. That's why they're pushing out in the South China Sea. They've been building up their military. They've been doing deals all over the world for rare earth minerals to, you know, to labor just access to naval ports. Doesn't matter what it is. They've been busy doing that because they view themselves at the top of the food chain. Now I guess we could say, well, okay, fine. Maybe it's their turn or something, but I, that's not how I view the world, right? I mean, we can either be on top or we can, you know, be sucking wind. So he goes back to that one of those early questions you asked is how much do we spend on defense? How much do we spend on intel? How much do we spend on whatever it may be? And I think the answer is that's where intelligence comes in. You have to know what the hostile nation is doing. You have to know what the competitor is doing. It's like in business. And you have to spend enough to stay ahead of that, right? Even if it's a small amount, you got to stay ahead. And it behooves us not to fall behind. That's never a good thing. I know we don't always do things right, but as a nation, the world is much better off with us sort of at the, and this is going to sound wrong to a lot of people. They're going to think, oh my God, that's terrible. But with us at the top, we're more altruistic. Maybe that is, I don't know if that's the word or not, but I think. It's a good word. Yeah. So anyway, so I, that's my view. A lot of people say bullshit, but you know, everyone's got different experiences, you know. Is there a way to detect like when they release, say if they release a Huawei phone, and which is a really, really interesting that just a few years ago, Huawei was not even a major player by any stretch of the imagination. Now it's the number two cell phone provider in the world, past Apple, which is incredible when you consider the fact that they barely have a foothold in the American market. Very few people buy their phones, and if they do buy their phones, they buy unlocked phones from overseas. It's really kind of crazy. But is there a way where they could detect whether or not there is a backdoor in these phones? I mean, or is it something where they could develop it to the point where you really would have no idea? No, we can, we stay pretty well. You know, yeah, it's a good question, but I would say that as long as we continue what we're doing in terms of counterintelligence and tech advances and efforts in cyberspace and elsewhere, and certainly in communications hardware, to stay ahead of potential hostile activity, I think we're okay. We're good at detecting problems. We're good at identifying weaknesses in these systems. The problem is, again, it's a global community. We can't isolate ourselves in terms of communications infrastructure. It just doesn't work. It's like a chain and a weak link. Yeah, see? I gave that analogy. That's pretty good. Yeah, thank you. I made that up. You are the weakest link. You are. Goodbye. So, yeah, anyway, but that's Huawei, and I do think that the interesting part will be what does the administration do in their desire to get a trade deal? Are they willing to blink on this? Because they put their foot down, right? And now, because we're so dysfunctional here in the States from a political perspective, now you've got people like Chuck Schumer going, well, Trump better not blink on this. This is important. So, suddenly, Chuck Schumer is a hawk on protecting us from Chinese espionage, right? But simply because he sees there's a political opening here. If Trump backtracks on Huawei, now, hey, good, from the Democrat perspective, they can use that to bang on him. Right, right. It all comes down to politics. But this is something that people didn't even understand was an issue nationally. This is something that no one was even aware of until a few months ago. And when I started reading about it, one of the first things that I was reading about was I'm kind of a technology nerd, and so I was fascinated by some of their newest phones, which were really far advanced to what you're getting offered in the United States. Yeah, and a lot of that ability to create in record time comes from... Theft of intellectual property. Theft of intellectual property, yeah. And that's how they, over the years... And again, that was a collective decision by the authorities there that this is how we're going to advance, right? They looked and they'd make a calculation that says we can't afford to wait decades while we do our own research and development. Well, let's just take it. And Huawei is not the only Chinese phone manufacturer. There's quite a few different ones over there, but they're the only one that seems to be banned. What's that other one, Xami? There's quite a few. There are, but Huawei has been, because of their size and their connection to the government, and because of the resources that the government's been willing to provide to them, the advantage that they have, and the speed with which they were able to kind of embed themselves into other nations' telecommunications infrastructure, that's why they're so important. But the general... Are there other companies? Well, of course, yeah. I mean, there's a variety of companies we should be worried about from that perspective. And it's not like, to be fair, I spent some time on China because it's just, they're the number one state-sponsored perpetrator of theft of intellectual property. But there's other countries involved in it. They copy entire cities, which is really insane. Have you seen that? They have a fake Paris over there? Yeah. Yeah, I know. Well, they've got... You go some of these places... And look, in Chinese history, culture is fantastic, right? And I've been over there in times and I've just marveled at how interesting the people are, how friendly they are. I mean, look, there's a lot of wonderful things about China, but I'm just saying the authorities, right, the government policy of no rule of law, of no protection when it comes to intellectual property, all these things in their aggressiveness and stealing information, that's the problem. But China as a country is a fascinating place.