February 12, 2025 • 40 mins
In a broad and insightful conversation, Dr. Elizabeth Economy and Dr. Adam Segal discuss the impact of China’s DeepSeek breakthrough, the cyber challenge China poses to the United States, international norms around cyber warfare and how the US can best respond.
Segal provides insight into the “typhoon” cyber attacks from Chinese malign actors, illustrating how China is seeking to embed itself in critical American infrastructure. The two then discuss the tools the US can best use to respond; from more severe sanctions to increased disruption against foreign hackers. And while China poses the most critical cyber threat, Segal also warns of other malign actors, such as Russia and Iran, that seek to undermine the cybersecurity of the United States and their allies. Lastly, the two conclude by discussing Segal’s involvement in leading the United States’ International Cyberspace and Digital Policy Strategy during the Biden administration.
Recorded on January 29, 2025.
ABOUT THE SPEAKERS
Adam Segal is the Ira A. Lipman chair in emerging technologies and national security and director of the Digital and Cyberspace Policy program at the Council on Foreign Relations (CFR). An expert on security issues, technology development, and Chinese domestic and foreign policy, Segal was the project director for the CFR-sponsored Independent Task Force reports Confronting Reality in Cyberspace, Innovation and National Security, Defending an Open, Global, Secure, and Resilient Internet, and Chinese Military Power..
From April 2023 to June 2024, Segal was a senior advisor in the State Department's Bureau of Cyberspace and Digital Policy, where he led the development of the United States International Cyberspace and Digital Policy. Before coming to CFR, Segal was an arms control analyst for the China Project at the Union of Concerned Scientists. There, he wrote about missile defense, nuclear weapons, and Asian security issues. He has been a visiting scholar at the Hoover Institution at Stanford University, the Massachusetts Institute of Technology's Center for International Studies, the Shanghai Academy of Social Sciences, and Tsinghua University in Beijing. He has taught at Vassar College and Columbia University.
Elizabeth Economy is the Hargrove Senior Fellow and co-director of the Program on the US, China, and the World at the Hoover Institution. From 2021-2023, she took leave from Hoover to serve as the senior advisor for China to the US secretary of commerce. Before joining Hoover, she was the C.V. Starr Senior Fellow and director, Asia Studies at the Council on Foreign Relations. She is the author of four books on China, including most recently The World According to China (Polity, 2021), and the co-editor of two volumes. She serves on the boards of the National Endowment for Democracy and the National Committee on U.S.-China Relations. She is a member of the Aspen Strategy Group and Council on Foreign Relations and serves as a book reviewer for Foreign Affairs.
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ABOUT THE SERIES
China Considered with Elizabeth Economy is a Hoover Institution podcast series that features in-depth conversations with leading political figures, scholars, and activists from around the world. The series explores the ideas, events, and forces shaping China’s future and its global relationships, offering high-level expertise, clear-eyed analysis, and valuable insights to demystify China’s evolving dynamics and what they may mean for ordinary citizens and key decision makers across societies, governments, and the private sector.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
[MUSIC]
>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insights and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy Hargrove, Senior Fellowand co director of the U.S China and
the World Program at the HooverInstitution at Stanford University.
Today I have with me Dr Adam Segal.
He's a China expert who alsodirects the Digital and
(00:30):
Cyberspace Policy program atthe Council on Foreign Relations.
He served inthe Biden Administration State Department,
where he authored the administration'sinternational Cyber Strategy, and
he's a world renowned expert onboth China and digital policy.
It's great to have you with us today,Adam.
>> Adam Segal (00:46):
Thanks for having me on, Liz.
>> Elizabeth Economy (00:48):
So let's start with what's going on right now with Deep Seek.
It's captured everybody's attention,caused the US stock market,
Nvidia stock, to plummet.
Explain to us why Deep Seq is soimportant.
Do we need to be as worriedas everybody seems to be?
What is this all about?
>> Adam Segal (01:06):
Yeah, Deep Seq's breakthrough poses kind of three big
questions about how we'reapproaching AI in China.
So the model itself seemsto have been trained
on much fewer chips thansomebody like OpenAI has used.
(01:30):
So much less resource intense.
And we saw with, you know, last week withPresident Trump announcing the initiative
on Stargate, the US is basically assumingthat this was going to be massive.
Our AI future is going to be bothmassively chip and energy dependent.
So Deep Seq seems to question that.
(01:52):
Second, they're an open source model,so not proprietary.
Llama is Meta's open source model,but again, OpenAI,
Anthropic, Google andothers have used a different model.
And once a model has been developed,it can diffuse very quickly.
(02:17):
And so the question is about what kindof controls the US can keep on that.
And then finally,the US has been hoping to slow China down.
And you know, until three weeks ago,
everybody would have told you the USwas far ahead in AI and we were hoping
to slow China down by control overchips through Nvidia and others.
(02:41):
So the fact that this breakthrough stillhappened has made many people question
whether those controlsare actually useful or not.
>> Elizabeth Economy (02:49):
So, I mean, you've worked in this space for a very long time.
Few people know China andtechnology as well as you do.
I mean, are you surprised by this?
Do you think we should be surprised?
What's your sort of assessment?
>> Adam Segal (03:02):
Yeah. So I mean,
I think people are surprised onthe technical and scientific breakthrough.
I think we shouldn't Takeanything away from that.
I am not a artificial intelligencescientist, but reading other people,
they are definitely impressedin what they've accomplished.
I don't think we should be surprised inthe sense that we know that, you know,
(03:25):
China has also identified AI as beingcritical to their national economic and
political security and
they're going to do everything they canto make sure that they are competitive.
And we shouldn't be surprised thatChina seems to have found ways to work
around it.
>> Elizabeth Economy (03:43):
I mean, you know, in, in sort of my mind, you know,
AI was one of China's made inChina 2025 technologies, right,
that they established asa priority back in 2014,
sort of a 10 year,2015 to 2025 timeframe for
them to become like domestic champions andthen global champions.
And we've seen what they've been able todo in a whole host of technologies, right?
(04:06):
In particular new energy vehicles,right, the EVs, clean tech.
I mean, to my mind, this is just yetanother one of those technology
areas where China is goingto demonstrate its prowess.
It's been investing for a long time andas you said, it's a priority.
I guess the question is what shouldwe do about it, if anything?
Does this signal like the need fora change in U.S policy, do you think?
>> Adam Segal (04:31):
So I think the arguments about export controls not
working are premature, right?
I mean, it takes a while forhardware controls to have an impact.
There were loopholes that the Bidenadministration closed at the end there,
so those will have an effect.
(04:53):
And we probably shouldn't takethis narrow breakthrough for
one system to stand in forthe entire ecosystem.
So the chips themselves are incrediblyimportant for diffusion and
how other companies use it.
And that clearly isgoing to have an effect.
And the Chinese themselves,I mean, the, you know,
the founder of Deep Seq keeps on sayingour biggest burden is access to chips.
(05:17):
So they're clearly having a bite.
So I think that's probably premature,a major rethink on there.
I think the big question that is stillopen and we just don't know how the Trump
administration is going to respond is inthe last week the Biden administration
(05:38):
issued an executive order on AI diffusion,which has to do about, you know,
how many chips can be sent to certaincountries and what the hyperscalers,
the cloud companies where theycan build their data centers.
And you know, we didn't really know howthe Trump administration was going to
respond to that.
(05:59):
They have typically said that they thinkregulations on AI have slowed the US down.
So I think we'll have to wait andsee about how they think about that.
>> Elizabeth Economy (06:10):
So it seems like just in the past few weeks,
both with the sort of development or thesort of the whole arrival of Deep Seq and
then the change in administration here,there's going to be a lot of
uncertainty about where this AI race,so to speak, is gonna go.
>> Adam Segal (06:28):
Yeah, I mean, I think the Tumper mission has been very clear in
their first executive order on AI,which came out last week as well,
that a lot of the talk about thatwas very prominent in the Biden
administration about trust andsafety and regulation.
The Trump administration is thinkinga lot about investment in infrastructure,
(06:52):
talking a lot about energy andhow they're gonna supply the energy for
their, as I said before, the regulationthey see is slowing it down.
So that direction I think is pretty clear.
The questions about export controls,I think we're going to
still see a debate insidethe administration where they come out on.
>> Elizabeth Economy (07:12):
Great.
So let's now turn to what Ireally want to talk to you about,
which is all about these cyberattacks that we've experienced here,
Chinese cyber intrusions.
And you had a great piece inForeign affairs last week
talking about Volt Typhoon andSalt Typhoon and Flax Typhoon.
(07:34):
So first of all, who comes up with thesenames and do they actually mean anything
but really like what are the Chinesetrying to accomplish here and
is this all state directed orwhat's, what's the,
what's sort of the purposeof everything here?
>> Adam Segal (07:48):
Yeah, the names are terrible.
Every company comes up withtheir own names and so
often it's hard to figureout who's referring to who.
And there we, when we talk about.
Talk about Russia,we talked about the bears, right?
There was Cozy Bear and others.
So the typhoon refers to China and Asia.
(08:08):
It's a Microsoft usage,but they're not helpful.
So if we think aboutChinese cyber operations,
essentially there's espionage, right?
So that would be the Salt Typhoon andthe Flax Typhoon,
(08:29):
which is collecting information.
And China conducts both political militaryespionage and industrial espionage.
So to steal secrets fromthe private sector,
espionage is against a wholerange of targets, right?
So we know the campaign,the Harris and the Trump campaigns,
(08:52):
State Department, Treasury,Commerce, all of the kind of people
who make decisions that willaffect China's national interests.
But we also know they target journalistswho are writing about issues that China is
concerned about, right.
So when Bloomberg was doing stories aboutthe personal wealth of Chinese leaders,
(09:13):
they went after Bloomberg andreporters and New York Times reporters,
they go after activists in areasthat China's interested in.
So Tibet, Taiwan, Xinjiang,all those people are targets.
And then there's a set ofthe cyber operations attacks,
(09:34):
penetrations that look to be preparing forpossible military conflicts, right?
So that is what Volt Typhoon was.
So in those instances, Chinese operatorswere on critical infrastructure.
What the term of art is pre positioning,Right.
So leaving some malware there in casethere is a conflict in the Taiwan Strait,
(09:59):
so they can cause social disturbances,take some systems down,
slow US Decision making down, andin some ways act as a deterrent.
Right.
Remind the United States leadershipthat any conflict we have is not
going to remain in the Western Pacific.
(10:20):
We can also reach out andtouch you in some way.
>> Elizabeth Economy (10:23):
So. And was this malware spread throughout our
entire country in alldifferent kinds of systems,
could it have affected our water supply,our electricity?
I mean,was it everywhere through everything or.
>> Adam Segal (10:35):
No. I mean, and so Salt Typhoon, which is
the one I wrote about in Foreign Affairs,Salt seems to have been telecoms, right?
So it was taking advantage of somevulnerabilities they discovered in
telecoms.
Vault Typhoon has been found in some
critical infrastructure around ports,
(10:57):
and cranes, and things like that.
The government has been fairly vague aboutwhat type of systems it's founded in,
but we don't know how far andwide it's been.
>> Elizabeth Economy (11:11):
So, you know,
that actually reminds meof that whole discussion.
I mean, it could have been as much asa year ago, I guess, about cranes being,
you know, potentially at riskfrom a Chinese intervention.
And a lot of peoplekind of laugh that off.
But what you're suggesting is thatwas absolutely the case and perhaps
the US Government already knew aboutit but hadn't released the information.
>> Adam Segal (11:34):
Yeah, it could have been, but it also,
the US Government pushes back on Chinesetechnology for the vulnerability and
disruption reason and also forthe data collections reasons.
So I think the argument with the portsas well as airport scanners and
things is what type of data can becollected about movement through
(11:55):
those areas and sent back to China?
>> Elizabeth Economy (11:58):
Not about shutting it all down?
>> Adam Segal (11:59):
Not necessarily, sometimes yes, sometimes no.
>> Elizabeth Economy (12:02):
Okay, so what about where we're at?
I mean, obviously the companies andyou know,
our government discovered theseintrusions and called them out,
called the Chinese andwe think this is all state directed.
Correct.This isn't just sort of independent
actors, you know, hacking, you know, some,one individual Chinese hacker sitting in
(12:22):
a dark room, you know, going after,you know, US Critical infrastructure.
>> Adam Segal (12:27):
Yeah. So it's not,
it's definitely not an individual,it's groups, what.
And in some cases it may be contractors.
So as you said, the US Governmentcalled out Chinese actors.
They also sanction some privatecompanies that they say that
supported the operation.
So we know that the Ministryof State Security, the mss,
(12:52):
contracts with some privatecompanies to do some operations.
We're looking kind of ata growing ecosystem of
private companies thatsupport the state and
are told which targets to go after.
(13:13):
But on industrial espionage,
in some cases they may freelance toraise their own money and things.
>> Elizabeth Economy (13:18):
But I mean, sanctions, honestly,
what are they going toaccomplish actually, right?
I mean, what does the sanction involve?
Saying you can't do businesswith the United States?
Presumably a number of these companiesaren't doing a lot of business with
the United States in any case.
I mean, how effective is a sanctionon a Chinese company that's hacking?
(13:39):
And aren't there justa million more of them?
>> Adam Segal (13:43):
Yeah, I think sanctions,
we probably need to sing with what levelthe sanctions are and who's targeted.
So sanctions at the.
I totally agree.
At the firm level and we've indictedindividuals before, you know,
those are not effective.
Right.As you said,
those companies don't do businesswith the United States or
they can just create a front company,which they do all the time.
(14:05):
If you're an individual hacker,you know, as long as you're not dumb.
Sometimes they are dumb, butas long as you're not dumb and
travel to Thailand or the Czech Republicand then get arrested there,
you're not ever gonna seethe inside of a US court.
So that doesn't seem to do very much.
It doesn't deter it.
(14:28):
It also serves some purpose in kindof letting other countries know
what we think is bad action so they canhopefully also do the same thing and
calls them out andwarns other countries as well.
There could be an argument that maybewe should be sanctioning higher.
(14:48):
Right, at a higher level until we befigure out who's ordering the attacks or
who's immediately benefiting.
And the example that we couldlook at is that if we go back to
the Obama administration wherewe did sign this agreement
with the Chinese aboutcyber enabled espionage.
>> Elizabeth Economy (15:10):
That was economic espionage.
>> Adam Segal (15:13):
Economic espionage.
>> Elizabeth Economy (15:14):
Particular >> Adam Segal
brought the Chinese to the table wasthere were leaks that the US Was
considering sanctioning somebody very,very high up about.
And who's benefiting from these leaks,from these hacks?
In an economic context.
>> Adam Segal (15:36):
In an economic context, right.
>> Elizabeth Economy (15:36):
They're [INAUDIBLE] financially from this.
>> Adam Segal (15:38):
Yes, yeah.
>> Elizabeth Economy (15:40):
Right, that does seem like an easier use case.
>> Adam Segal (15:43):
Yeah.
>> Elizabeth Economy (15:44):
But what about like our own capabilities?
Is there an argument to be made that weshould basically do unto others as others
do unto you, that we should demonstrateour own cyber offensive capabilities and
perhaps that would be a greater det.
Deterrent?
>> Adam Segal (16:00):
So I think we have to distinguish between what types of
operations, because politicalmilitary operations, spying.
The US does that, right?
And so it's hard to call out China forthat when we do it our do it ourselves.
So that's on us todefend ourselves better.
(16:20):
There is possibly a way todisrupt Chinese operations.
And the Biden administration cyberstrategy from the Defense Department,
from the Pentagon talksabout defending forward, so
preventing attacks before theyever get to U.S. networks.
Which means, you know,disrupting them in third countries or
(16:43):
possibly even disrupting them on Chinesenetworks we don't know a lot about.
>> Elizabeth Economy (16:47):
Just so I'm clear, does that require knowing the source of
the attack,the likely source of the attack?
So, we have some sense of whothe bad actors are in China, and
we just get into their system basicallyand disrupt them before they.
>> Adam Segal (17:03):
Essentially, yes, exactly.
So, we're probably sitting on theirsystems and seeing what they're doing and
we choose to disrupt it beforethey can ever launch it.
>> Elizabeth Economy (17:12):
Okay.
>> Adam Segal (17:13):
So the only public examples we have of this are from the.
Against Russia, not against China.
>> Elizabeth Economy (17:22):
Okay.
>> Adam Segal (17:22):
So like we took down the, the Internet Research Agency in St.
Petersburg, which was doing, you know,disinformation operations on,
you know, US platforms,social media platforms.
We took down some oftheir infrastructure and
in some cases we actually knewthe individual operators and
(17:42):
sent them text messages saying,we know you're doing this, stop it.
So,>> Elizabeth Economy: I wonder what they
thought when they got those messages.
They probably thought it was pretty funny.
But there's no public reporting aboutwhat that would mean for China.
So you would want to disrupt itright now on pre positioning and
(18:04):
critical infrastructure,there has been some argument that
maybe we can come to some typesof agreements with the Chinese.
Right, about what types ofattacks are considered valid.
And the Chinese did sign off.
There's a, there's discussions in the U.N.
It's, it's through a group calledthe Group of Government Experts.
(18:26):
And they came up with a certain set ofnorms about how states should behave in
cyberspace andChina signed that agreement.
But the norm is not very constraining.
The norm around critical infrastructuresays non-interference on
critical infrastructure during peace time.
>> Elizabeth Economy (18:45):
Okay?
>> Adam Segal (18:46):
Right, so interference is a pretty high bar.
So the Chinese mightbe able to argue that.
Well, yeah, we were on it, butwe didn't interfere with it.
And in fact, you can see, you can see whenUS government officials call China out for
assault typhoon, sorry for Volt typhoon,they say it's escalatory and dangerous.
(19:07):
They don't say it broke any norms.
>> Elizabeth Economy (19:09):
Got it, okay?
>> Adam Segal (19:10):
So? >> Elizabeth Economy
like a zone activity in the digital space.
Exactly.
And so again, there may be some,there have been attempts before
trying to talk to the Chineseabout can we talk about some types
of critical infrastructure thatshould be off limits or, or.
(19:32):
But there's no doubt thatthe US does the same thing and
lets the, andlets the Chinese know in, in some way.
>> Elizabeth Economy (19:42):
Okay, the Chinese just don't publicize it the way
that we do.
Okay, so you mentioned Russia,and I'm really interested.
You know, we've heard, you know,Russia is a bad actor in this space.
Iran, North Korea, you know,
are they all the same in termsof how they approach this?
Are they different?
Do they work together?
You think they'relearning from each other?
>> Adam Segal (20:03):
Yeah, so there's a great quote from Rob Joyce,
who used to be at the NSA,and he used to say that
Russia is like a hurricane andChina is climate change.
Right, so we see lot, you know,especially around Ukraine, we see,
(20:26):
see lots of destructive,disruptive attacks from Russia.
We've seen Russia use it in a militaryconflict which we've never, you know,
which we haven't seen before.
We see lots of Russian basedransomware gangs, right?
That, you know, do attacks against, youknow, US Hospitals and schools and things.
(20:46):
But those are criminal gangs thatthe Russians turn a blind eye to, to.
And China is kind of more disciplined andalso has a longer game, right?
Because China has global technologies and
Russia no longer hasany global technology.
Iranians less sophisticated, butalso more willing to take risks.
(21:13):
North Koreans have still considered,still continue doing espionage,
and you know, trying to collectinformation, but have really focused on
theft of cryptocurrencies to fund theregime and to fund the missile programs.
So the North Koreans are really,really focused on raising money.
(21:36):
Now there, there doesn't seem to be,there's definitely interaction,
but they don't do operations together,right?
In the sense of we have to remember thatthese are usually the spy agencies that
conduct these operations andspy agencies don't trust each other.
And also it's good to remember that evenafter China and Russia signed what was,
(22:00):
many people said wasa no hacking agreement,
that neither side would hack each other.
Weeks later, both sides reported thatthe other side was hacking each other.
>> Elizabeth Economy (22:09):
That's hilarious.
>> Adam Segal (22:11):
So that there's probably not a lot of cooperation on that level.
They do seem to be learning fromeach other around disinformation and
online operations.
So the Chinese,what the Chinese do on Facebook and X, and
other things looks more like whatthe Russians do than it used to, right?
(22:35):
Before, the Chinese were mostlyabout trumpeting, you know,
CCP success and what Xi Jinping did.
And now they're much more willing to presson socially divisive issues and try to,
you know, get Americans to yell at eachother like the Russians do, right?
>> Elizabeth Economy (22:51):
We saw some of that on January 6th, I think, right?
>> Adam Segal (22:54):
Exactly.
>> Elizabeth Economy (22:54):
And the Chinese were in the mix during that time.
>> Adam Segal (22:58):
Yeah, and there's definitely technological cooperation.
So, you know, Huawei in particularhas done a lot of work in Russia that
the Russians learned and lot a lot oftechnologies to help control the Internet.
So that also has some defensive,and security perspective.
(23:18):
North Korean actors sometimesoperate from inside of China.
There was probably some training inthe early days, but probably not anymore.
So there's probably a littlebit on the margins, but
not all that importantto anybody's practices.
>> Elizabeth Economy (23:38):
Okay, so it's not a collective effort on the part of these
sort of four disruptive actors and,you know, coordinated and not.
>> Adam Segal (23:45):
On cyberattacks.
>> Elizabeth Economy (23:46):
How are we going to go after the United States?
And it's.
>> Adam Segal (23:49):
I mean, just to use other example from just this area about
not wanting to share, like,it took the US A long time.
To give NATO some sense of itscapabilities in this space.
They were so tightly held that NATOused to complain all the time, like,
we have no idea what you're capable of andwhat you're doing.
(24:13):
We probably shared more closely with GCHQand the Brits, but It s because it's so
tightly controlled, intelligencecountries don't like to share it.
>> Elizabeth Economy (24:24):
Right.
And besides, some of it we probablyare using to learn about even what our
allies and partners are doing sometimes.
Okay, so let's tie this up and talka little bit about the strategy that you
wrote for sort of State Department,for the Biden administration
that does deal with our allies andpartners and how we should work together.
(24:48):
Because presumably we are not the onlyones facing these kinds of attacks
from China.
Others are as well.
So what is your strategy?
What is it that you are seekingto accomplish with the strategy?
Did you bring allies andpartners in even as you were drafting it?
A little bit about whatthis was all about.
>> Adam Segal (25:10):
Yeah, so the policy was broader than just the cyber things we were
talking about.
It was both cyber and digital.
We had this big framingidea of digital solidarity,
which is the idea thatthe US Cannot go it alone.
We're made better off cooperatingwith our allies very closely on
(25:32):
a whole range of issues.
And in fact, we're made better offwhen their economies are innovative.
So it's not great if the top 10AI companies are all American and
nobody has anything else.
We want the French, we want the Brits,
we want the Australians to alsohave really robust AI systems.
(25:54):
So that was kind of the bigoverall framing of it.
As you mentioned, alliances and
partnerships were a hugepart of the strategy.
When I was writing the strategy,
I socialized early versionsof it with once in Singapore,
(26:16):
so with kind of East Asian,Southeast Asian friends and partners,
and then once in Europe to get kindof their input and feedback on it.
And for the most part, not surprisingly,they were pretty receptive to it.
You know, the digital solidarity framingwas in contrast to digital sovereignty.
(26:42):
Right.And cyber sovereignty,
which are the views that the Russians andChinese promote about, you know,
you have to localize data,you have to control the Internet.
And so we were arguing against that,that, you know,
we're all made better off by flows,trusted flows between our partners.
And then, of course,we were affirming the.
(27:04):
The rights, respecting democraticusage of these technologies as opposed
to strengthening surveillance andrepression of minority groups.
>> Elizabeth Economy (27:17):
And so once the strategy was written, just so
that everybody listening can understand,what then happens with that?
Is that then, you know, do other countriessign on to it or is it's not a treaty or
an agreement, but how do you moveforward with something like this?
>> Adam Segal (27:33):
Yeah, I mean, it's really right.
If you think of any strategy,it has three audiences, as you said,
international, so other countriescan know what we're going to do.
And we tried to highlightwhat our priorities were.
And then after I left there was animplementation strategy that was kind of
put in place that signaled some ofthe things that were most important
(27:55):
to Ambassador Fick and the Bureau.
And there were, there were, you know,
publicly they discussed two or threethings had to do about AI governance,
had to do about trusted infrastructureand, and some developing partners.
There's the internal audience.
Right.So just the US government, because there
hadn't been a US government widecyber strategy for over 12 years.
(28:21):
And so this was just an attemptto get everybody kind of agree to
what do we think we're accomplishing and
make sure we're all kind ofgoing in the same direction.
So, you know,the DoD had a cyber strategy.
After I left USAID released one.
CISA, the Cybersecurity and InfrastructureSecurity Agency, didn't have a strategy,
(28:45):
but they had a framework.
It was international.
So this was an attempt to try to geteverybody on the same page about it.
And then, finally,kind of the domestic audiences so
people will know what it isthe US is trying to accomplish.
So really after the strategy came out,the hope was, yeah,
(29:05):
we're all going to pushon these broad ideas.
And as I said, there were three orfour priorities for
the last strategy cameout in June of 2024.
So there was really only six monthsto kind of to push it forward.
But as I said,there was a lot of push on AI governance.
(29:27):
There had been some great work that hadhappened around counter ransomware and
helping our partners in Costa Ricain particular respond to that.
And could we build on that andhelp other countries?
And then a lot of work aroundtrusted infrastructure.
>> Elizabeth Economy (29:45):
Yeah, and hopefully some of that at least on the trusted
infrastructure and maybe eventhe counter ransomware type of work
can continue in the Trump administration,even if on the AI governance
there may be some differences of,of, of opinion and outlook.
>> Adam Segal (30:03):
Look, they're not gonna keep digital solidarity and
the AI governance stuff definitelythey're not going to keep.
But yes, I think kind ofcounter ransomware initiative
they definitely should keep.
In fact,
it's also a success story because othercountries have kind of taken the lead.
So there's like four differentverticals about, you know,
law enforcement international andother countries have taken the lead there.
(30:26):
So it's become an increasinglykind of lighter lift for NSC and
then state to direct it, and so,
we definitely should continueparticipating and supporting.
I think the language around trustedinfrastructure in particular.
I mean, we'll have to wait to seeafter the 90 day review of all foreign
financial aid.
(30:47):
But the, the last year I was there,in the last year of the Bureau,
they received $50 millionfrom Congress for
a cyber and digital andrelated technologies fund.
So that was being used to supportcountries that were attacked.
It was being supported, used to makearguments about why you shouldn't use
(31:10):
Chinese infrastructure andthings like that.
And sorry, [COUGH] my senseis that Secretary Rubio is
totally onboard with that andwill want to use that.
>> Elizabeth Economy (31:22):
Yeah, and
even if you think back tothe first Trump administration,
I mean they really did start the work onthe clean networks, trusted networks,
which was I think continued andbuilt up by the Biden administration.
But at least in the first Trumpadministration, I think there was,
you know, definitely an effort to get out,especially through,
(31:44):
you know, our allies and partners, butother emerging middle income economies and
talk to them andtry to persuade them, you know,
not to use Chinese technologyin their infrastructure.
So hopefully that element will,you know, continue.
Okay, so always finish upwith five quick questions.
So here we go.
(32:05):
What is your must read book orarticle on China?
>> Adam Segal (32:10):
So the article is so very cyber focused,
but it's called From Vegas to Chengdu and
it's all about kind of hacking contests.
And how China is very much tappinginto the energy of what used
to be kind of information securityresearchers, private hackers,
(32:36):
and funneling that into China'soffensive capabilities.
It comes out of Zurich,the Center for Security Studies.
The author is Eugenio Ben Benicassa.
It's a really great study of,
at a very kind of low in the weeds level,but lots of insight.
>> Elizabeth Economy (32:55):
Sounds really interesting and
also somewhat terrifying, okay.
[LAUGll H] all right what you spent,
your time in Washingtonat the State Department.
What do you miss most andleast about your time there?
>> Adam Segal (33:10):
So, I mean, it was a very exciting time to be in State.
The Cyber and Digital Bureau wasa year old when I joined, so
there was just a huge amount of energy andexcitement about what we were doing.
You could tell, other people in thebuilding wanted to be at the Bureau and
work in the Bureau.
(33:32):
Ambassador Fick, was a new leader andhad a great energy about it.
And I know we're at a time where, there'sall this questioning about the competency
of federal government officials.
But the people I worked with were someof them were political appointees,
some of them were short term, some of themhad been in the Bureau for 15, 20 years.
But working on undersea cables for15 years and
(33:55):
just were so incredibly knowledgeable anddedicated to the mission.
And so I missed the colleagues andpeople working with that.
>> Elizabeth Economy (34:07):
And what don't you miss?
>> Adam Segal (34:09):
Yeah, I don't miss the bureaucracy [LAUGH].
So, both on the kind of I went toDC once a month because I was still
living in New York.
Just trying to travel is for anorganization that does foreign policy and
travels everywhere it's justmind-numbingly complicated and
(34:29):
just blows your mind.
And I had to produce a document forthe interagency.
So, dealing with 18 other agencies andthen inside the agencies,
15 or20 other people giving me their comments.
And at some point I justcouldn't even remember why we
were arguing about a word that nolonger had any meaningful difference.
(34:51):
But I don't miss that.
>> Elizabeth Economy (34:53):
I can relate to that.
Anything you wish,
that the US had done differently withregard to China when you were in office.
So basically looking at Bidenadministration policy and thinking I wish
we would have done this, and for whateverreason, we just didn't get that done.
>> Adam Segal (35:12):
So I think it's a critique of the strategy as well.
And it started to happen at the end, but
I think it's actually engagementwith China on these issues, right?
We didn't after certainlyafter the spy balloon.
But even before then, there was a lotof kind of questioning about, well,
what do we gain from talking withthe Chinese about these things?
(35:32):
And cyber conversationshave never gone well.
And there are definitely reasons whywe want to think about what we're
getting out of it.
But we definitely stepped back forthe majority of my time there and
certainly for the Biden administrationof saying we're not going to directly
engage with the Chinese on cyber things,we're gonna do it other ways.
(35:53):
And I think if we were to do it again,we probably should have started earlier.
>> Elizabeth Economy (35:58):
Started earlier with the strategy.
>> Adam Segal (36:01):
Well, certainly should have started earlier with the strategy, but
should it also because as I.
>> Elizabeth Economy (36:06):
Sort of communicating with.
>> Adam Segal (36:07):
Communicating after I left.
Yeah, so, there was that discussion on AIgovernance with the Chinese that happened
and there were Ambassador Blinken broughtup cyber in one of his last meetings.
And Ambassador Fick accompaniedSecretary Blinken on that trip.
(36:27):
And there were discussions thatwere supposed to go forward, so
that would have probablybeen better to do earlier.
>> Elizabeth Economy (36:34):
Right, yes I think the overall, the Biden administration
spent close to three yearson the competition side and
really only on the last year or so beganto do the managing of the competition.
What China issue do you thinkwe don't know enough about?
Maybe it's your own.
>> Adam Segal (36:55):
Yeah, I mean, so I was thinking kind of in my own field, but
I think it's true,across the board, which is,
we just have such bad understandingof how information flows.
And how different partsof the organization,
different parts of the Chinesegovernment speak to each other and
(37:15):
understand what the other side is doing.
And so when I read the documentsfrom the Chinese Foreign Ministry
about what they're trying to accomplishin cyber, I don't have any idea about.
Did the PLA have any input into this?
Did they talk to the PLA?
And so I know with the internationalstrategy, I know the DOD had it input.
(37:39):
I went to the DoD threetimes to talk to them and
they commented on the document and just.
And that would help understand whatChina's which Chinese positions we
should take more seriously andwhich ones, are kind of.
But I think that's a problem acrossthe field for all of us is between
(38:00):
limited access, centralization of control,and all the other things.
Just don't have much insight into that.
>> Elizabeth Economy (38:08):
Okay, last one.
On a scale of 1 to 10,how likely do you think we are to see
a breakthrough in US Chinarelations in the next.
Let's just say in the courseof the Trump administration.
>> Adam Segal (38:21):
And so one being very likely or?
>> Elizabeth Economy (38:25):
Ten being very likely one being.
>> Adam Segal (38:27):
Very likely and a breakthrough means [LAUGH].
>> Elizabeth Economy (38:31):
I would say, breakthrough.
>> Adam Segal (38:32):
Yeah. >> Elizabeth Economy
the sake of argument, we don't mean abreakthrough in terms of a war on Taiwan,
a breakthrough in terms of a positivestabilization improvement in
the relationship that benefits U.S.interests.
Yeah, I'm gonna say pretty low.
I'm gonna say three.
>> Elizabeth Economy (38:52):
Great,
I think you've come in the highestof anybody I know [LAUGH].
So, okay.
>> Adam Segal (39:00):
Trying to be the less pessimistic least pessimistic.
>> Elizabeth Economy (39:04):
[LAUGH] okay, so on that note of subdued optimism,
let me thank you, Adam,for a great conversation
on a often very complex,complicated topic.
I think you all helped all ofus to understand it better.
I know the US Government is poor fornot having you in it,
(39:26):
but the outside world is richer.
And thank you forsharing your insights with us.
>> Adam Segal (39:33):
Thanks so much for having me on.
>> Elizabeth Economy (39:35):
So if you enjoyed this podcast and want to hear more recent
discourse and debate on China, I encourageyou to subscribe to China Considered via
The Hoover Institution, YouTube channel orpodcast platform of your choice.
In our next program, we'll be talkingabout what the Chinese economy is looking
like on the ground with Leland Miller,founder and CEO of China Beige Book.
(39:55):
[MUSIC]
[MUSIC]
>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insights and informed discussion to one ofthe most consequential issues of our time,
how China is changing andchanging the world.
I'm Liz Economy Hargrove, Senior Fellowand co director of the U.S China and
the World Program at the HooverInstitution at Stanford University.
Today I have with me Dr Adam Segal.
He's a China expert who alsodirects the Digital and
(00:30):
Cyberspace Policy program atthe Council on Foreign Relations.
He served inthe Biden Administration State Department,
where he authored the administration'sinternational Cyber Strategy, and
he's a world renowned expert onboth China and digital policy.
It's great to have you with us today,Adam.
>> Adam Segal (00:46):
Thanks for having me on, Liz.
>> Elizabeth Economy (00:48):
So let's start with what's going on right now with Deep Seek.
It's captured everybody's attention,caused the US stock market,
Nvidia stock, to plummet.
Explain to us why Deep Seq is soimportant.
Do we need to be as worriedas everybody seems to be?
What is this all about?
>> Adam Segal (01:06):
Yeah, Deep Seq's breakthrough poses kind of three big
questions about how we'reapproaching AI in China.
So the model itself seemsto have been trained
on much fewer chips thansomebody like OpenAI has used.
(01:30):
So much less resource intense.
And we saw with, you know, last week withPresident Trump announcing the initiative
on Stargate, the US is basically assumingthat this was going to be massive.
Our AI future is going to be bothmassively chip and energy dependent.
So Deep Seq seems to question that.
(01:52):
Second, they're an open source model,so not proprietary.
Llama is Meta's open source model,but again, OpenAI,
Anthropic, Google andothers have used a different model.
And once a model has been developed,it can diffuse very quickly.
(02:17):
And so the question is about what kindof controls the US can keep on that.
And then finally,the US has been hoping to slow China down.
And you know, until three weeks ago,
everybody would have told you the USwas far ahead in AI and we were hoping
to slow China down by control overchips through Nvidia and others.
(02:41):
So the fact that this breakthrough stillhappened has made many people question
whether those controlsare actually useful or not.
>> Elizabeth Economy (02:49):
So, I mean, you've worked in this space for a very long time.
Few people know China andtechnology as well as you do.
I mean, are you surprised by this?
Do you think we should be surprised?
What's your sort of assessment?
>> Adam Segal (03:02):
Yeah. So I mean,
I think people are surprised onthe technical and scientific breakthrough.
I think we shouldn't Takeanything away from that.
I am not a artificial intelligencescientist, but reading other people,
they are definitely impressedin what they've accomplished.
I don't think we should be surprised inthe sense that we know that, you know,
(03:25):
China has also identified AI as beingcritical to their national economic and
political security and
they're going to do everything they canto make sure that they are competitive.
And we shouldn't be surprised thatChina seems to have found ways to work
around it.
>> Elizabeth Economy (03:43):
I mean, you know, in, in sort of my mind, you know,
AI was one of China's made inChina 2025 technologies, right,
that they established asa priority back in 2014,
sort of a 10 year,2015 to 2025 timeframe for
them to become like domestic champions andthen global champions.
And we've seen what they've been able todo in a whole host of technologies, right?
(04:06):
In particular new energy vehicles,right, the EVs, clean tech.
I mean, to my mind, this is just yetanother one of those technology
areas where China is goingto demonstrate its prowess.
It's been investing for a long time andas you said, it's a priority.
I guess the question is what shouldwe do about it, if anything?
Does this signal like the need fora change in U.S policy, do you think?
>> Adam Segal (04:31):
So I think the arguments about export controls not
working are premature, right?
I mean, it takes a while forhardware controls to have an impact.
There were loopholes that the Bidenadministration closed at the end there,
so those will have an effect.
(04:53):
And we probably shouldn't takethis narrow breakthrough for
one system to stand in forthe entire ecosystem.
So the chips themselves are incrediblyimportant for diffusion and
how other companies use it.
And that clearly isgoing to have an effect.
And the Chinese themselves,I mean, the, you know,
the founder of Deep Seq keeps on sayingour biggest burden is access to chips.
(05:17):
So they're clearly having a bite.
So I think that's probably premature,a major rethink on there.
I think the big question that is stillopen and we just don't know how the Trump
administration is going to respond is inthe last week the Biden administration
(05:38):
issued an executive order on AI diffusion,which has to do about, you know,
how many chips can be sent to certaincountries and what the hyperscalers,
the cloud companies where theycan build their data centers.
And you know, we didn't really know howthe Trump administration was going to
respond to that.
(05:59):
They have typically said that they thinkregulations on AI have slowed the US down.
So I think we'll have to wait andsee about how they think about that.
>> Elizabeth Economy (06:10):
So it seems like just in the past few weeks,
both with the sort of development or thesort of the whole arrival of Deep Seq and
then the change in administration here,there's going to be a lot of
uncertainty about where this AI race,so to speak, is gonna go.
>> Adam Segal (06:28):
Yeah, I mean, I think the Tumper mission has been very clear in
their first executive order on AI,which came out last week as well,
that a lot of the talk about thatwas very prominent in the Biden
administration about trust andsafety and regulation.
The Trump administration is thinkinga lot about investment in infrastructure,
(06:52):
talking a lot about energy andhow they're gonna supply the energy for
their, as I said before, the regulationthey see is slowing it down.
So that direction I think is pretty clear.
The questions about export controls,I think we're going to
still see a debate insidethe administration where they come out on.
>> Elizabeth Economy (07:12):
Great.
So let's now turn to what Ireally want to talk to you about,
which is all about these cyberattacks that we've experienced here,
Chinese cyber intrusions.
And you had a great piece inForeign affairs last week
talking about Volt Typhoon andSalt Typhoon and Flax Typhoon.
(07:34):
So first of all, who comes up with thesenames and do they actually mean anything
but really like what are the Chinesetrying to accomplish here and
is this all state directed orwhat's, what's the,
what's sort of the purposeof everything here?
>> Adam Segal (07:48):
Yeah, the names are terrible.
Every company comes up withtheir own names and so
often it's hard to figureout who's referring to who.
And there we, when we talk about.
Talk about Russia,we talked about the bears, right?
There was Cozy Bear and others.
So the typhoon refers to China and Asia.
(08:08):
It's a Microsoft usage,but they're not helpful.
So if we think aboutChinese cyber operations,
essentially there's espionage, right?
So that would be the Salt Typhoon andthe Flax Typhoon,
(08:29):
which is collecting information.
And China conducts both political militaryespionage and industrial espionage.
So to steal secrets fromthe private sector,
espionage is against a wholerange of targets, right?
So we know the campaign,the Harris and the Trump campaigns,
(08:52):
State Department, Treasury,Commerce, all of the kind of people
who make decisions that willaffect China's national interests.
But we also know they target journalistswho are writing about issues that China is
concerned about, right.
So when Bloomberg was doing stories aboutthe personal wealth of Chinese leaders,
(09:13):
they went after Bloomberg andreporters and New York Times reporters,
they go after activists in areasthat China's interested in.
So Tibet, Taiwan, Xinjiang,all those people are targets.
And then there's a set ofthe cyber operations attacks,
(09:34):
penetrations that look to be preparing forpossible military conflicts, right?
So that is what Volt Typhoon was.
So in those instances, Chinese operatorswere on critical infrastructure.
What the term of art is pre positioning,Right.
So leaving some malware there in casethere is a conflict in the Taiwan Strait,
(09:59):
so they can cause social disturbances,take some systems down,
slow US Decision making down, andin some ways act as a deterrent.
Right.
Remind the United States leadershipthat any conflict we have is not
going to remain in the Western Pacific.
(10:20):
We can also reach out andtouch you in some way.
>> Elizabeth Economy (10:23):
So. And was this malware spread throughout our
entire country in alldifferent kinds of systems,
could it have affected our water supply,our electricity?
I mean,was it everywhere through everything or.
>> Adam Segal (10:35):
No. I mean, and so Salt Typhoon, which is
the one I wrote about in Foreign Affairs,Salt seems to have been telecoms, right?
So it was taking advantage of somevulnerabilities they discovered in
telecoms.
Vault Typhoon has been found in some
critical infrastructure around ports,
(10:57):
and cranes, and things like that.
The government has been fairly vague aboutwhat type of systems it's founded in,
but we don't know how far andwide it's been.
>> Elizabeth Economy (11:11):
So, you know,
that actually reminds meof that whole discussion.
I mean, it could have been as much asa year ago, I guess, about cranes being,
you know, potentially at riskfrom a Chinese intervention.
And a lot of peoplekind of laugh that off.
But what you're suggesting is thatwas absolutely the case and perhaps
the US Government already knew aboutit but hadn't released the information.
>> Adam Segal (11:34):
Yeah, it could have been, but it also,
the US Government pushes back on Chinesetechnology for the vulnerability and
disruption reason and also forthe data collections reasons.
So I think the argument with the portsas well as airport scanners and
things is what type of data can becollected about movement through
(11:55):
those areas and sent back to China?
>> Elizabeth Economy (11:58):
Not about shutting it all down?
>> Adam Segal (11:59):
Not necessarily, sometimes yes, sometimes no.
>> Elizabeth Economy (12:02):
Okay, so what about where we're at?
I mean, obviously the companies andyou know,
our government discovered theseintrusions and called them out,
called the Chinese andwe think this is all state directed.
Correct.This isn't just sort of independent
actors, you know, hacking, you know, some,one individual Chinese hacker sitting in
(12:22):
a dark room, you know, going after,you know, US Critical infrastructure.
>> Adam Segal (12:27):
Yeah. So it's not,
it's definitely not an individual,it's groups, what.
And in some cases it may be contractors.
So as you said, the US Governmentcalled out Chinese actors.
They also sanction some privatecompanies that they say that
supported the operation.
So we know that the Ministryof State Security, the mss,
(12:52):
contracts with some privatecompanies to do some operations.
We're looking kind of ata growing ecosystem of
private companies thatsupport the state and
are told which targets to go after.
(13:13):
But on industrial espionage,
in some cases they may freelance toraise their own money and things.
>> Elizabeth Economy (13:18):
But I mean, sanctions, honestly,
what are they going toaccomplish actually, right?
I mean, what does the sanction involve?
Saying you can't do businesswith the United States?
Presumably a number of these companiesaren't doing a lot of business with
the United States in any case.
I mean, how effective is a sanctionon a Chinese company that's hacking?
(13:39):
And aren't there justa million more of them?
>> Adam Segal (13:43):
Yeah, I think sanctions,
we probably need to sing with what levelthe sanctions are and who's targeted.
So sanctions at the.
I totally agree.
At the firm level and we've indictedindividuals before, you know,
those are not effective.
Right.As you said,
those companies don't do businesswith the United States or
they can just create a front company,which they do all the time.
(14:05):
If you're an individual hacker,you know, as long as you're not dumb.
Sometimes they are dumb, butas long as you're not dumb and
travel to Thailand or the Czech Republicand then get arrested there,
you're not ever gonna seethe inside of a US court.
So that doesn't seem to do very much.
It doesn't deter it.
(14:28):
It also serves some purpose in kindof letting other countries know
what we think is bad action so they canhopefully also do the same thing and
calls them out andwarns other countries as well.
There could be an argument that maybewe should be sanctioning higher.
(14:48):
Right, at a higher level until we befigure out who's ordering the attacks or
who's immediately benefiting.
And the example that we couldlook at is that if we go back to
the Obama administration wherewe did sign this agreement
with the Chinese aboutcyber enabled espionage.
>> Elizabeth Economy (15:10):
That was economic espionage.
>> Adam Segal (15:13):
Economic espionage.
>> Elizabeth Economy (15:14):
Particular >> Adam Segal
brought the Chinese to the table wasthere were leaks that the US Was
considering sanctioning somebody very,very high up about.
And who's benefiting from these leaks,from these hacks?
In an economic context.
>> Adam Segal (15:36):
In an economic context, right.
>> Elizabeth Economy (15:36):
They're [INAUDIBLE] financially from this.
>> Adam Segal (15:38):
Yes, yeah.
>> Elizabeth Economy (15:40):
Right, that does seem like an easier use case.
>> Adam Segal (15:43):
Yeah.
>> Elizabeth Economy (15:44):
But what about like our own capabilities?
Is there an argument to be made that weshould basically do unto others as others
do unto you, that we should demonstrateour own cyber offensive capabilities and
perhaps that would be a greater det.
Deterrent?
>> Adam Segal (16:00):
So I think we have to distinguish between what types of
operations, because politicalmilitary operations, spying.
The US does that, right?
And so it's hard to call out China forthat when we do it our do it ourselves.
So that's on us todefend ourselves better.
(16:20):
There is possibly a way todisrupt Chinese operations.
And the Biden administration cyberstrategy from the Defense Department,
from the Pentagon talksabout defending forward, so
preventing attacks before theyever get to U.S. networks.
Which means, you know,disrupting them in third countries or
(16:43):
possibly even disrupting them on Chinesenetworks we don't know a lot about.
>> Elizabeth Economy (16:47):
Just so I'm clear, does that require knowing the source of
the attack,the likely source of the attack?
So, we have some sense of whothe bad actors are in China, and
we just get into their system basicallyand disrupt them before they.
>> Adam Segal (17:03):
Essentially, yes, exactly.
So, we're probably sitting on theirsystems and seeing what they're doing and
we choose to disrupt it beforethey can ever launch it.
>> Elizabeth Economy (17:12):
Okay.
>> Adam Segal (17:13):
So the only public examples we have of this are from the.
Against Russia, not against China.
>> Elizabeth Economy (17:22):
Okay.
>> Adam Segal (17:22):
So like we took down the, the Internet Research Agency in St.
Petersburg, which was doing, you know,disinformation operations on,
you know, US platforms,social media platforms.
We took down some oftheir infrastructure and
in some cases we actually knewthe individual operators and
(17:42):
sent them text messages saying,we know you're doing this, stop it.
So,>> Elizabeth Economy: I wonder what they
thought when they got those messages.
They probably thought it was pretty funny.
But there's no public reporting aboutwhat that would mean for China.
So you would want to disrupt itright now on pre positioning and
(18:04):
critical infrastructure,there has been some argument that
maybe we can come to some typesof agreements with the Chinese.
Right, about what types ofattacks are considered valid.
And the Chinese did sign off.
There's a, there's discussions in the U.N.
It's, it's through a group calledthe Group of Government Experts.
(18:26):
And they came up with a certain set ofnorms about how states should behave in
cyberspace andChina signed that agreement.
But the norm is not very constraining.
The norm around critical infrastructuresays non-interference on
critical infrastructure during peace time.
>> Elizabeth Economy (18:45):
Okay?
>> Adam Segal (18:46):
Right, so interference is a pretty high bar.
So the Chinese mightbe able to argue that.
Well, yeah, we were on it, butwe didn't interfere with it.
And in fact, you can see, you can see whenUS government officials call China out for
assault typhoon, sorry for Volt typhoon,they say it's escalatory and dangerous.
(19:07):
They don't say it broke any norms.
>> Elizabeth Economy (19:09):
Got it, okay?
>> Adam Segal (19:10):
So? >> Elizabeth Economy
like a zone activity in the digital space.
Exactly.
And so again, there may be some,there have been attempts before
trying to talk to the Chineseabout can we talk about some types
of critical infrastructure thatshould be off limits or, or.
(19:32):
But there's no doubt thatthe US does the same thing and
lets the, andlets the Chinese know in, in some way.
>> Elizabeth Economy (19:42):
Okay, the Chinese just don't publicize it the way
that we do.
Okay, so you mentioned Russia,and I'm really interested.
You know, we've heard, you know,Russia is a bad actor in this space.
Iran, North Korea, you know,
are they all the same in termsof how they approach this?
Are they different?
Do they work together?
You think they'relearning from each other?
>> Adam Segal (20:03):
Yeah, so there's a great quote from Rob Joyce,
who used to be at the NSA,and he used to say that
Russia is like a hurricane andChina is climate change.
Right, so we see lot, you know,especially around Ukraine, we see,
(20:26):
see lots of destructive,disruptive attacks from Russia.
We've seen Russia use it in a militaryconflict which we've never, you know,
which we haven't seen before.
We see lots of Russian basedransomware gangs, right?
That, you know, do attacks against, youknow, US Hospitals and schools and things.
(20:46):
But those are criminal gangs thatthe Russians turn a blind eye to, to.
And China is kind of more disciplined andalso has a longer game, right?
Because China has global technologies and
Russia no longer hasany global technology.
Iranians less sophisticated, butalso more willing to take risks.
(21:13):
North Koreans have still considered,still continue doing espionage,
and you know, trying to collectinformation, but have really focused on
theft of cryptocurrencies to fund theregime and to fund the missile programs.
So the North Koreans are really,really focused on raising money.
(21:36):
Now there, there doesn't seem to be,there's definitely interaction,
but they don't do operations together,right?
In the sense of we have to remember thatthese are usually the spy agencies that
conduct these operations andspy agencies don't trust each other.
And also it's good to remember that evenafter China and Russia signed what was,
(22:00):
many people said wasa no hacking agreement,
that neither side would hack each other.
Weeks later, both sides reported thatthe other side was hacking each other.
>> Elizabeth Economy (22:09):
That's hilarious.
>> Adam Segal (22:11):
So that there's probably not a lot of cooperation on that level.
They do seem to be learning fromeach other around disinformation and
online operations.
So the Chinese,what the Chinese do on Facebook and X, and
other things looks more like whatthe Russians do than it used to, right?
(22:35):
Before, the Chinese were mostlyabout trumpeting, you know,
CCP success and what Xi Jinping did.
And now they're much more willing to presson socially divisive issues and try to,
you know, get Americans to yell at eachother like the Russians do, right?
>> Elizabeth Economy (22:51):
We saw some of that on January 6th, I think, right?
>> Adam Segal (22:54):
Exactly.
>> Elizabeth Economy (22:54):
And the Chinese were in the mix during that time.
>> Adam Segal (22:58):
Yeah, and there's definitely technological cooperation.
So, you know, Huawei in particularhas done a lot of work in Russia that
the Russians learned and lot a lot oftechnologies to help control the Internet.
So that also has some defensive,and security perspective.
(23:18):
North Korean actors sometimesoperate from inside of China.
There was probably some training inthe early days, but probably not anymore.
So there's probably a littlebit on the margins, but
not all that importantto anybody's practices.
>> Elizabeth Economy (23:38):
Okay, so it's not a collective effort on the part of these
sort of four disruptive actors and,you know, coordinated and not.
>> Adam Segal (23:45):
On cyberattacks.
>> Elizabeth Economy (23:46):
How are we going to go after the United States?
And it's.
>> Adam Segal (23:49):
I mean, just to use other example from just this area about
not wanting to share, like,it took the US A long time.
To give NATO some sense of itscapabilities in this space.
They were so tightly held that NATOused to complain all the time, like,
we have no idea what you're capable of andwhat you're doing.
(24:13):
We probably shared more closely with GCHQand the Brits, but It s because it's so
tightly controlled, intelligencecountries don't like to share it.
>> Elizabeth Economy (24:24):
Right.
And besides, some of it we probablyare using to learn about even what our
allies and partners are doing sometimes.
Okay, so let's tie this up and talka little bit about the strategy that you
wrote for sort of State Department,for the Biden administration
that does deal with our allies andpartners and how we should work together.
(24:48):
Because presumably we are not the onlyones facing these kinds of attacks
from China.
Others are as well.
So what is your strategy?
What is it that you are seekingto accomplish with the strategy?
Did you bring allies andpartners in even as you were drafting it?
A little bit about whatthis was all about.
>> Adam Segal (25:10):
Yeah, so the policy was broader than just the cyber things we were
talking about.
It was both cyber and digital.
We had this big framingidea of digital solidarity,
which is the idea thatthe US Cannot go it alone.
We're made better off cooperatingwith our allies very closely on
(25:32):
a whole range of issues.
And in fact, we're made better offwhen their economies are innovative.
So it's not great if the top 10AI companies are all American and
nobody has anything else.
We want the French, we want the Brits,
we want the Australians to alsohave really robust AI systems.
(25:54):
So that was kind of the bigoverall framing of it.
As you mentioned, alliances and
partnerships were a hugepart of the strategy.
When I was writing the strategy,
I socialized early versionsof it with once in Singapore,
(26:16):
so with kind of East Asian,Southeast Asian friends and partners,
and then once in Europe to get kindof their input and feedback on it.
And for the most part, not surprisingly,they were pretty receptive to it.
You know, the digital solidarity framingwas in contrast to digital sovereignty.
(26:42):
Right.And cyber sovereignty,
which are the views that the Russians andChinese promote about, you know,
you have to localize data,you have to control the Internet.
And so we were arguing against that,that, you know,
we're all made better off by flows,trusted flows between our partners.
And then, of course,we were affirming the.
(27:04):
The rights, respecting democraticusage of these technologies as opposed
to strengthening surveillance andrepression of minority groups.
>> Elizabeth Economy (27:17):
And so once the strategy was written, just so
that everybody listening can understand,what then happens with that?
Is that then, you know, do other countriessign on to it or is it's not a treaty or
an agreement, but how do you moveforward with something like this?
>> Adam Segal (27:33):
Yeah, I mean, it's really right.
If you think of any strategy,it has three audiences, as you said,
international, so other countriescan know what we're going to do.
And we tried to highlightwhat our priorities were.
And then after I left there was animplementation strategy that was kind of
put in place that signaled some ofthe things that were most important
(27:55):
to Ambassador Fick and the Bureau.
And there were, there were, you know,
publicly they discussed two or threethings had to do about AI governance,
had to do about trusted infrastructureand, and some developing partners.
There's the internal audience.
Right.So just the US government, because there
hadn't been a US government widecyber strategy for over 12 years.
(28:21):
And so this was just an attemptto get everybody kind of agree to
what do we think we're accomplishing and
make sure we're all kind ofgoing in the same direction.
So, you know,the DoD had a cyber strategy.
After I left USAID released one.
CISA, the Cybersecurity and InfrastructureSecurity Agency, didn't have a strategy,
(28:45):
but they had a framework.
It was international.
So this was an attempt to try to geteverybody on the same page about it.
And then, finally,kind of the domestic audiences so
people will know what it isthe US is trying to accomplish.
So really after the strategy came out,the hope was, yeah,
(29:05):
we're all going to pushon these broad ideas.
And as I said, there were three orfour priorities for
the last strategy cameout in June of 2024.
So there was really only six monthsto kind of to push it forward.
But as I said,there was a lot of push on AI governance.
(29:27):
There had been some great work that hadhappened around counter ransomware and
helping our partners in Costa Ricain particular respond to that.
And could we build on that andhelp other countries?
And then a lot of work aroundtrusted infrastructure.
>> Elizabeth Economy (29:45):
Yeah, and hopefully some of that at least on the trusted
infrastructure and maybe eventhe counter ransomware type of work
can continue in the Trump administration,even if on the AI governance
there may be some differences of,of, of opinion and outlook.
>> Adam Segal (30:03):
Look, they're not gonna keep digital solidarity and
the AI governance stuff definitelythey're not going to keep.
But yes, I think kind ofcounter ransomware initiative
they definitely should keep.
In fact,
it's also a success story because othercountries have kind of taken the lead.
So there's like four differentverticals about, you know,
law enforcement international andother countries have taken the lead there.
(30:26):
So it's become an increasinglykind of lighter lift for NSC and
then state to direct it, and so,
we definitely should continueparticipating and supporting.
I think the language around trustedinfrastructure in particular.
I mean, we'll have to wait to seeafter the 90 day review of all foreign
financial aid.
(30:47):
But the, the last year I was there,in the last year of the Bureau,
they received $50 millionfrom Congress for
a cyber and digital andrelated technologies fund.
So that was being used to supportcountries that were attacked.
It was being supported, used to makearguments about why you shouldn't use
(31:10):
Chinese infrastructure andthings like that.
And sorry, [COUGH] my senseis that Secretary Rubio is
totally onboard with that andwill want to use that.
>> Elizabeth Economy (31:22):
Yeah, and
even if you think back tothe first Trump administration,
I mean they really did start the work onthe clean networks, trusted networks,
which was I think continued andbuilt up by the Biden administration.
But at least in the first Trumpadministration, I think there was,
you know, definitely an effort to get out,especially through,
(31:44):
you know, our allies and partners, butother emerging middle income economies and
talk to them andtry to persuade them, you know,
not to use Chinese technologyin their infrastructure.
So hopefully that element will,you know, continue.
Okay, so always finish upwith five quick questions.
So here we go.
(32:05):
What is your must read book orarticle on China?
>> Adam Segal (32:10):
So the article is so very cyber focused,
but it's called From Vegas to Chengdu and
it's all about kind of hacking contests.
And how China is very much tappinginto the energy of what used
to be kind of information securityresearchers, private hackers,
(32:36):
and funneling that into China'soffensive capabilities.
It comes out of Zurich,the Center for Security Studies.
The author is Eugenio Ben Benicassa.
It's a really great study of,
at a very kind of low in the weeds level,but lots of insight.
>> Elizabeth Economy (32:55):
Sounds really interesting and
also somewhat terrifying, okay.
[LAUGll H] all right what you spent,
your time in Washingtonat the State Department.
What do you miss most andleast about your time there?
>> Adam Segal (33:10):
So, I mean, it was a very exciting time to be in State.
The Cyber and Digital Bureau wasa year old when I joined, so
there was just a huge amount of energy andexcitement about what we were doing.
You could tell, other people in thebuilding wanted to be at the Bureau and
work in the Bureau.
(33:32):
Ambassador Fick, was a new leader andhad a great energy about it.
And I know we're at a time where, there'sall this questioning about the competency
of federal government officials.
But the people I worked with were someof them were political appointees,
some of them were short term, some of themhad been in the Bureau for 15, 20 years.
But working on undersea cables for15 years and
(33:55):
just were so incredibly knowledgeable anddedicated to the mission.
And so I missed the colleagues andpeople working with that.
>> Elizabeth Economy (34:07):
And what don't you miss?
>> Adam Segal (34:09):
Yeah, I don't miss the bureaucracy [LAUGH].
So, both on the kind of I went toDC once a month because I was still
living in New York.
Just trying to travel is for anorganization that does foreign policy and
travels everywhere it's justmind-numbingly complicated and
(34:29):
just blows your mind.
And I had to produce a document forthe interagency.
So, dealing with 18 other agencies andthen inside the agencies,
15 or20 other people giving me their comments.
And at some point I justcouldn't even remember why we
were arguing about a word that nolonger had any meaningful difference.
(34:51):
But I don't miss that.
>> Elizabeth Economy (34:53):
I can relate to that.
Anything you wish,
that the US had done differently withregard to China when you were in office.
So basically looking at Bidenadministration policy and thinking I wish
we would have done this, and for whateverreason, we just didn't get that done.
>> Adam Segal (35:12):
So I think it's a critique of the strategy as well.
And it started to happen at the end, but
I think it's actually engagementwith China on these issues, right?
We didn't after certainlyafter the spy balloon.
But even before then, there was a lotof kind of questioning about, well,
what do we gain from talking withthe Chinese about these things?
(35:32):
And cyber conversationshave never gone well.
And there are definitely reasons whywe want to think about what we're
getting out of it.
But we definitely stepped back forthe majority of my time there and
certainly for the Biden administrationof saying we're not going to directly
engage with the Chinese on cyber things,we're gonna do it other ways.
(35:53):
And I think if we were to do it again,we probably should have started earlier.
>> Elizabeth Economy (35:58):
Started earlier with the strategy.
>> Adam Segal (36:01):
Well, certainly should have started earlier with the strategy, but
should it also because as I.
>> Elizabeth Economy (36:06):
Sort of communicating with.
>> Adam Segal (36:07):
Communicating after I left.
Yeah, so, there was that discussion on AIgovernance with the Chinese that happened
and there were Ambassador Blinken broughtup cyber in one of his last meetings.
And Ambassador Fick accompaniedSecretary Blinken on that trip.
(36:27):
And there were discussions thatwere supposed to go forward, so
that would have probablybeen better to do earlier.
>> Elizabeth Economy (36:34):
Right, yes I think the overall, the Biden administration
spent close to three yearson the competition side and
really only on the last year or so beganto do the managing of the competition.
What China issue do you thinkwe don't know enough about?
Maybe it's your own.
>> Adam Segal (36:55):
Yeah, I mean, so I was thinking kind of in my own field, but
I think it's true,across the board, which is,
we just have such bad understandingof how information flows.
And how different partsof the organization,
different parts of the Chinesegovernment speak to each other and
(37:15):
understand what the other side is doing.
And so when I read the documentsfrom the Chinese Foreign Ministry
about what they're trying to accomplishin cyber, I don't have any idea about.
Did the PLA have any input into this?
Did they talk to the PLA?
And so I know with the internationalstrategy, I know the DOD had it input.
(37:39):
I went to the DoD threetimes to talk to them and
they commented on the document and just.
And that would help understand whatChina's which Chinese positions we
should take more seriously andwhich ones, are kind of.
But I think that's a problem acrossthe field for all of us is between
(38:00):
limited access, centralization of control,and all the other things.
Just don't have much insight into that.
>> Elizabeth Economy (38:08):
Okay, last one.
On a scale of 1 to 10,how likely do you think we are to see
a breakthrough in US Chinarelations in the next.
Let's just say in the courseof the Trump administration.
>> Adam Segal (38:21):
And so one being very likely or?
>> Elizabeth Economy (38:25):
Ten being very likely one being.
>> Adam Segal (38:27):
Very likely and a breakthrough means [LAUGH].
>> Elizabeth Economy (38:31):
I would say, breakthrough.
>> Adam Segal (38:32):
Yeah. >> Elizabeth Economy
the sake of argument, we don't mean abreakthrough in terms of a war on Taiwan,
a breakthrough in terms of a positivestabilization improvement in
the relationship that benefits U.S.interests.
Yeah, I'm gonna say pretty low.
I'm gonna say three.
>> Elizabeth Economy (38:52):
Great,
I think you've come in the highestof anybody I know [LAUGH].
So, okay.
>> Adam Segal (39:00):
Trying to be the less pessimistic least pessimistic.
>> Elizabeth Economy (39:04):
[LAUGH] okay, so on that note of subdued optimism,
let me thank you, Adam,for a great conversation
on a often very complex,complicated topic.
I think you all helped all ofus to understand it better.
I know the US Government is poor fornot having you in it,
(39:26):
but the outside world is richer.
And thank you forsharing your insights with us.
>> Adam Segal (39:33):
Thanks so much for having me on.
>> Elizabeth Economy (39:35):
So if you enjoyed this podcast and want to hear more recent
discourse and debate on China, I encourageyou to subscribe to China Considered via
The Hoover Institution, YouTube channel orpodcast platform of your choice.
In our next program, we'll be talkingabout what the Chinese economy is looking
like on the ground with Leland Miller,founder and CEO of China Beige Book.
(39:55):
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