Tuesday, September 20, 2022

How do you spy on China?



Bt watching and reading their motives.  You cannot act without at least opening a window onto motive.

Otherwise China is in deep trouble and they may not pull out of it.  They have certainly launched an alternative WAR on the entire globe which is really crazy.  right now it is also been responded to secretly as we really do not want a hot WAR.

The plandemic is real and may well kill 5,000,000,000 over perhaps 50 years which suggests a possible surplus death rate of 100,000,000 per year.  This suggests that all folks vaccinated are been slowly strangled by coagulants in their blood stream which so far cannot be removed.  This number actually matches what we are already seeing out there.  

.It is also possible that China will make some bad decisions as well.


How do you spy on China? 


Q&A with former CIA agent and investment banker Malcolm Riddell

Foreign Affairs

Malcolm Riddell was an intelligence case officer, and then an investment banker. Now he runs China Debate, an investor advisory service focused on the country he used to spy on.
Jeremy Goldkorn Published September 16, 2022

Illustration by Nadya Yeh


https://thechinaproject.com/2022/09/16/how-do-you-spy-on-china-qa-with-former-cia-agent-and-investment-banker-malcolm-riddell/

Malcolm Riddell was a CIA case officer in China Operations, the part of the CIA that recruits Chinese officials to pass secrets to the U.S. After he left the Agency, he started a China-focused boutique investment bank that negotiates Sino-foreign joint ventures and advises on China market entry for international asset management and insurance firms.

Along the way he got an MBA from Harvard Business School and a master of international affairs from Columbia. He is an Associate at the Harvard Fairbank Center for Chinese Studies, and a life member of the Council on Foreign Relations.



Malcolm also founded CHINADebate which brings together institutional investors and executives and top China experts for small group discussions about the China issues, and publishes the CHINAMacroReporter.

We chatted by video call in late August about his days as a spy and his grim view of the times we live in. This is an abridged, edited transcript of our conversation.



—Jeremy Goldkorn

Why did you join the CIA? And what did you do for them?

Well, I joined the CIA because I had always wanted to be a spy. I don’t know if the inspiration came from seeing Dr. No when I was about 11 years old, but it’s something I’d always wanted to do. And when I had the opportunity, I just dropped everything else — the practice of law — and did it.

What I did at the CIA? I was both a case officer, which is a spy, and a special operations paramilitary officer, meaning I was also a soldier. As a case officer, my assignment was in the East Asia division. I worked in China operations. This was in the late ‘70s, early ‘80s. We had a very tough time even meeting with Chinese officials, let alone recruiting them to be agents.

As a special ops officer, I was like a Green Beret. I was jumping out of airplanes, blowing things up, shooting things, a little more direct.

And that was at a high period of the U.S. doing secret things in foreign countries?

Yeah, it was the Reagan era. Our focus was on Central America at that time. It was Nicaragua and those sorts of things. I spent time with Delta Force in Central America. It was the most interesting time of my special operations work. Between that and being a case officer, I couldn’t think of a better way to spend my youth. I remember being scared to death so many times and so many times that somebody wanted to kill me. But when you’re young, it’s fun.

China is a very difficult country, espionage-wise, isn’t it? How do you spy on China?

I was in human intelligence. That means you look for Chinese officials with access to the secrets the CIA wants. The problem in my day was that you weren’t even able to talk to most of them. I also served as a U.S. Delegate to the UN, a place of endless chatter. Even there it was tough to have conversations with the Chinese.

When we recruited the first Chinese official since 1949, the amount of preparation and training that went into it was extraordinary. And we had a chance…my boss had a chance to get close to another official. He arranged an evening in a hotel room with the official. The evening was to include female companions, and I was sent out to hire them. These had to be particularly classy escorts, and I interviewed them in the lounge at the Four Seasons in Georgetown. It was just one elegant, beautiful, intelligent woman after another, women who you’d take home to your mother and your mother would be thrilled that you found such a wonderful girl. The Chinese official was not recruitable, but it was a fun operation.

I would guess that today it’s substantially easier, even though China’s always had a really excellent counter-intelligence service. But even with great counter-intelligence, you’ve got today, I am sure, a lot more access to Chinese officials and business people who have access to the Party. And besides recruiting officials, we use all sorts of friendly folks, businessmen and journalists who are willing to talk about their experiences, but nothing clandestine. It’s all open source. That’s what’s going on today. It was going on in my day. It’s been going on for as long as there’s been espionage.

How did you transition out of the CIA into business?

After I left the Agency, I went to Harvard Business School and then to Wall Street. Then in ’88, I started my own investment bank in Taiwan, RiddellTseng. When China opened up, I took the show on the road to China.

Can I ask a stupid question? What exactly is an investment bank?

An investment bank can be any number of things. We were a boutique focused on life insurance companies and asset managers trying to enter the China market. In those days, the way into China was through a joint venture. So we found the potential Chinese partners and negotiated the deals for our clients.

I’m a lawyer, so I was able to manage the legal processes, which was tough with Chinese being opaque. I’m also a Mandarin speaker, so I would negotiate the deal, sit in the room with the Chinese counterparties, and then, if all goes well, come to an agreement so that the foreign side has as a good deal as possible, with the most protection possible, and the best risk structure. But not so good that the Chinese side will become dissatisfied, and the venture falls apart.

Because a lot of western management practices are really foreign concepts to the Chinese way of doing business, it takes a long time to explain to the Chinese side and to get their agreement on creating an international-style of company. But an even greater challenge is the Chinese way of negotiating.

I learned the hard way in Taiwan. I was putting together my first joint venture between a UK insurer and a major Taiwanese group. I’d warned my client, the CEO of the UK insurer, that this was going to take a long time, and it was going to be tough. So he flies over, meets the chairman of the Taiwan group, and they agree on everything over lunch. As he walks out of the lunch, the CEO looks at me and says, “I thought you said this is going to be hard.”

Well, eight months later, we finally got something signed…as soon as we got into negotiations, all the Taiwan chairman’s agreements got walked back. And as everybody who’s done anything in China knows, it’s not over just because something’s signed. The negotiations go on and on.

All in all, the thing about negotiating joint ventures that I especially enjoyed is that the outcome has to be fair to both sides, or it won’t last. One of the biggest cross-cultural challenges I can think of.

What does CHINADebate do?

CHINADebate’s first service, the CHINARoundtable, brings together institutional investors and senior executives in small group discussions with leading China experts. The aim is to give the members some insights they didn’t otherwise get. Goldman Sachs and Morgan Stanley have excellent analysts but are focused pretty much on the economy. Here, members get a much broader picture of how China’s politics, economics, and foreign affairs work. We now hold our sessions on Zoom.

CHINADebate now also publishes the CHINAMacroReporter, which highlights interesting research along with my commentaries, plus expert interviews.

You’ve been watching geopolitical and financial competition since the height of the Cold War. How worried should we be about the current state of the world?

I’m not seeing bright spots anywhere. I don’t see great leadership. The international order is not moving in good directions. I see global problems that seem intractable. I don’t have a good feeling now the way I did when I was younger. I don’t see a way out of it.

Yeah, when you were young, but not when… I’m Gen X. We’re the generation of disappointment.

Yeah. We had Ronald Reagan’s shining city on the hill. But we also had the Cold War where we could blow each other up, and we really believed that could happen.

What about Taiwan?

Here’s the thing. Máo Zédōng 毛泽东 told Nixon that they can wait a hundred years to get Taiwan back. Dèng [Xiǎopíng 邓小平] didn’t make it a priority. Jiāng [Zémín 江泽民] didn’t make it a priority. Hú [Jǐntāo 胡锦涛] didn’t make it a priority. It was Xí Jìnpíng 习近平 chose to put Taiwan front and center.

We have to take Xi Jinping at his word and never underestimate his ambition when you’re trying to figure out what he is going to do. But what perplexes me is that he has made peaceful reunification harder and harder. And the Taiwanese don’t seem susceptible to coercion. So what’s left is military force.

Assume that these war games we’ve read about are correct. The U.S. takes a beating, maybe loses, but the devastation to the Chinese military and the Chinese economy will be terrific.

Let’s suppose that the U.S. is weakened the way China is. China has a goal of projecting its hegemony into the Western Pacific. Now, suppose the U.S. is so weakened that it can’t continue to support the Western Pacific, well, China can’t either, but we have all sorts of allies who could continue to confront China, even after a war.

Besides Taiwan, Xi Jinping seems to be making an awful lot of decisions that are going to come back and bite him. And it’s hard to understand why he is making them. It’s heartening to know that I’m not the only one who is perplexed.

Everybody is trying to understand the problem with China and America right now. You’ve been observing this problem for decades. What should people do?

When my Chinese friends blame the U.S. for these bad relations, I say, “Yeah, but for 40 years, didn’t we support your growth? Didn’t we help you with WTO? All these sorts of things. Did we just suddenly decide we didn’t like China, so now we’re trying to stop your growth and your development, or did something else happen? What else could have happened? Oh yeah, Xi Jinping. Xi Jinping happened.”

And we went from maybe China didn’t think we were their best friends, and maybe they didn’t wish us well, but China’s gone to straight-out animosity. It’s all anti-America propaganda, all the time, and that’s a big change – hostility, open hostility and aggression on the Chinese side. Maybe we provoked it, but I can’t see how we did, but in any case, I think it’s part of everything that Xi Jinping is doing.

So, I think the first thing to do is recognize that we’re facing a country that does not wish us well and wants to gain whatever advantages it can. So, what do you do?

I don’t see reproach mode as the answer. I also think some sort of crazy hard line, Pompeo-style regime-change thing is just nuts. But I’m warming up to the idea of Kennan-style containment, and I am shocked that I am. But I’m having a harder and harder time seeing an alternative.

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