“The Chinese government’s $75B in subsidies to Huawei isn’t out of charity… It’s because for them there are real benefits to other countries throughout the world using Huawei. A lot of those benefits entail controlling everything that runs atop that Internet infrastructure.”

Available on: YouTube | Apple | Spotify | Google | Stitcher

Author Jacob Helberg discusses his new book The Wires of War in which he details the existential threat a rising China poses to the United States and the world. Helberg describes the US-China relationship as a gray war and explains how it affects every political decision, from military to commercial. He analyzes China’s President Xi Jinping and details where we’re starting to see internal cracks in the CCP.

From 2016 to 2020, Jacob Helberg led Google’s global internal product policy efforts to combat disinformation and foreign interference. During this time, he found himself in the midst of what can only be described as a quickly escalating two-front technology cold war between democracy and autocracy.

On the front-end, we’re fighting to control the software—applications, news information, social media platforms, and more—of what we see on the screens of our computers, tablets, and phones, a clash which started out primarily with Russia but now increasingly includes China and Iran. Even more ominously, we’re also engaged in a hidden back-end battle—largely with China—to control the Internet’s hardware, which includes devices like cellular phones, satellites, fiber-optic cables, and 5G networks.

This tech-fueled war will shape the world’s balance of power for the coming century as autocracies exploit twenty-first-century methods to re-divide the world into twentieth century-style spheres of influence. Helberg cautions that the spoils of this fight are power over every meaningful aspect of our lives, including our economy, our infrastructure, our national security, and ultimately, our national sovereignty. Without a firm partnership with the government, Silicon Valley is unable to protect democracy from the autocrats looking to sabotage it from Beijing to Moscow and Tehran. The stakes of the ongoing cyberwar are no less than our nation’s capacity to chart its own future, the freedom of our democratic allies, and even the ability of each of us to control our own fates, Helberg says. And time is quickly running out.

SPEAKER

Jacob Helberg

Author

The Wires of War

FULL BIO

MODERATOR

CHAPTERS

0:00 – Intro

3:00 – US-China

9:36 – China’s threat

12:54 – Xi Jinping

15:50 – Bipartisan agreement towards China

18:20 – New conceptions of sovereignty

21:01 – Internal tension inside China

24:15 – Western alliances

28:15 – Xi Jinping’s image

31:21 – Chinese culture and cracks in the CCP system

38:36 – Domestic manufacturing and winning the war

47:30 – Combatting disinformation

TRANSCRIPT

Rev.com

John Darsie: (00:07)
Hello, everyone, and welcome back to Salt Talks. My name is John Darsie. I'm the managing director of Salt, which is a global Thought Leadership Forum and a networking platform at the intersection of finance, technology, and public policy. Salt Talks are a digital interview series that we launched in 2020 with leading investors, creators, and thinkers. And our goal on these Salt Talks is the same as our goal at our Salt Conferences which we were excited to resume in September, a few weeks ago, in New York City. But our goal is to provide a window into the mind of subject matter experts as well as provide a platform for what we think are big ideas that are shaping the future.

John Darsie: (00:49)
We're very excited today to welcome Jacob Helberg to Salt Talks. Jacob is a senior advisor at Stanford University, their center of Geopolitics and Technology, and an adjunct fellow at the Center for Strategic and International Studies, CSIS. He's also an entrepreneur, and the co-chair of the Brookings Institution China Strategy initiative. From 2016 to 2020, Jacob was in the trenches studying a lot of the information warfare that's taking place. He was Google's internal global product policy, head of their internal global product policy efforts to combat disinformation and foreign interference including policy and enforcement processes that can state back foreign interference, misinformation, and actors undermining election integrity. Jacob studied International Affairs at George Washington University and received his Master of Science in cybersecurity risk and strategy from New York University. He's also the author of a fantastic book recently published called The Wires of War: Technology and the Global Struggle for Power, which we're going to talk a lot about today. I know Anthony has read the book and was fascinated by it hence our invitation for Jacob to come on the show.

John Darsie: (01:58)
The Anthony I referred to, of course, is Anthony Scaramucci, who's the founder of SkyBridge Capital, which is a global alternative investment firm. Anthony is also the chairman of Salt.

Anthony Scaramucci: (02:06)
He's being nice right now, Jacob. He gets meaner as this thing goes on. All right. Keep going, Darsie.

John Darsie: (02:10)
Yeah. I wasn't going to mention your 11 day stint in politics.

Anthony Scaramucci: (02:15)
And I mention that I got fired from the White House? Is how we're going to start?

John Darsie: (02:18)
I wasn't going to use the F word.

Anthony Scaramucci: (02:22)
Well, there's a lot of different F words. My least favorite F word is the firing one, Jacob. But by the way, this is a phenomenal book. I would love to send this to every member of Congress. Unfortunately, the Congress likely doesn't read, some of them are probably illiterate. But this book is a phenomenal treatise because it explains what's going on and it also recommends a path forward, which I think is frankly an optimistic path. But I want to start with China. We're in the White House Situation Room, I'm new to the job and he president united states ... You were briefing me on China. Go ahead.

Jacob Helberg: (02:59)
Well, China is engaged in a gray war against the United States. A lot of people in the foreign policy community have called it a Cold War. And there's a whole quibble about whether or not the word Cold War is appropriate. I think taking a step back, it's important to look at what was the definition of the word and the expression, Cold War, when it was originally came up with. And George Orwell actually helped define it back in the '40s and '50s and he called it a peace that is no peace. And by every people's plain understanding of English, the US and China are not in authentic peace today.

Jacob Helberg: (03:37)
I like the expression gray war because today, the way that this struggle is playing out is through gray-zone conflict and the murky gray-zone between war and peace. The reason is because the weapons of war have changed, because technology has changed so much. The reason I think that this is so important is because the gray war has become a defining feature of international politics. It basically drives every commercial deal that's taking place, every military deal, it drives the agenda in Europe, in the United States, and in the Asia Pacific. And at the end of the day, these conversations are not limited to just grand UN halls and conference rooms. They're really about what people can and can't do in their living rooms. They're about the jobs that people have at home.

Jacob Helberg: (04:24)
We've seen 66,000 manufacturing plants in the United States evaporate between 2000 in 2010. I know you've passionately talked about growing up in a blue collar neighborhood in New York, if I'm not mistaken. My grandfather actually worked at a Jeep factory back in the '50s. I think for a long time, there was kind of ... A lot of people took it for granted that it's almost like a part of a natural process that these jobs would either get shut down or shipped overseas. And I think now you're seeing a healthy debate with people double clicking on that assumption and asking, "Why is it that we can't make things in this country anymore? And is it the right thing for the future of the American worker, and American families, and for the national security of the country that so much of our supply chains are reliant on a single country that ultimately is very, very abrasive to everything that we stand for?"

Anthony Scaramucci: (05:19)
I think it's very well said. In reading your book, I actually took some notes. I want to test the theory on you and tell me what I've gotten right and wrong. So we had a situation with China. They were deeply impoverished. They were also an adversary of the Soviet Union even though they were both communists. Richard Nixon goes over there to try to create an opening there, he recognizes how poor they are. So he's like, "Not a big threat to the US, Soviet Union is." He allows them to have some economic benefits and trade agreements and it creates an opening for the Chinese. And then almost in a Trojan horse kind of a way, they start to build their system, but they cry poverty to the US and the West, "We need your help. We need you to help us urbanize and bring all of these people out of poverty. Please bring us into the World Trade organization. This is a peaceful rise of China." And as they get more power, as you and I both know, with power comes levels of hubris. And they start to centralize more, they started to control more, take more liberties away from their people. They've got these concentration camps with the Uyghurs, they've got the issue with Tibet, and now all of a sudden, we're seeing the ugly gnashing teeth of what looks like a polite puppy 25 years ago. What did I get wrong?

Jacob Helberg: (06:44)
I think you hit the nail on the head. The last 40 years, we have been very used to studying history, the history of American foreign policy of the last 40 to 50 years through a very American centric lens, but I think an interesting part of the story that is now coming more to the forefront as more attention and public scrutiny is being brought to the US Chinese relationship is the Chinese side of that lens. China very astutely reproached itself to the United States when its tensions with the Soviet Union were escalating because the Soviet Union was very nervous about a rising China. And now it's doing the inverse. It's coming up on the heels of the United States and it's really trying to basically use the modern day Russia to try to avoid having a two front great power struggle on its hands. At the end of the day, China ... You pointed out China's whitewashing of history. And China is a country ... For a long time, it's tried to solve this idea of a peaceful rise and so many other narratives that are cognitively contradictory, like the fact that we don't have to worry about them because they're poor, but at the same time, we can't stop ... we shouldn't even try to stop them because they're unstoppable, their rise is unstoppable.

Jacob Helberg: (08:09)
China and the CCP is a regime that has more border disputes. It has border disputes with 17 countries than the number of countries that it actually shares a border with, which is 14. So the notion that they're such a peaceful country is really fundamentally at odds with the reality on the ground of all the various disputes that the Chinese government has on its hands. And if you look at the fact that they've built the largest fleet in the world with over 350 ships, it kind of ... it raises a lot of questions as to why a peaceful country would need so many warships.

Anthony Scaramucci: (08:46)
Yeah. And so I want to keep going because this is important because you write about their long-term philosophy, and they're viewing the world in 100 year units of time that being minutes. Unfortunately, our Congress is viewing things in the cable news fights. We have a two four-year election cycle or six-year election cycle, they're thinking about 100 years. The China Plan 2049 is an example on the 100th anniversary of their takeover of the mainland. It's important to point out to people, the Chinese had 30% of the GDP in 1830 of the global GDP. They went to 2% in 1960. They're coming back to 30% of the GDP. How big is the threat?

Jacob Helberg: (09:33)
For democracy, it's enormous. And the reason is that I don't think you can separate habit ... Behavior habits of the Chinese political system at home will ultimately mirror China's behavior habits abroad. And if you look at what they're doing at home, whether it's cracking down on private enterprise, vanishing dozens of billionaires now that have basically gone missing or have gone silent.

Anthony Scaramucci: (10:06)
Why do you think they're doing that, Jacob? The billionaires are vanishing, they're abrogating things like Didi taking them off of their listings, taking apps away from the ecosystem of the app sites.

Jacob Helberg: (10:19)
Well, so the interesting thing is that there actually isn't anyone that I've spoken to in the United States, even those that have incredible sources of information that really knows Xi Jinping's motives because a fundamental attribute of an autocratic system is that it really just depends on one person, which is Xi Jinping. We can't read into his heart, but what we can see is the effect of what he's doing, which we can see in plain sight. It's a massive consolidation of power. And so I think most people's interpretation of the disappearance of billionaires and the crackdown on a lot of modern day tech companies is that he felt threatened that a lot of these individuals were starting to represent an alternative power base to his political party and control. And so I think for him, you're seeing an autocratic leader that is just like so many of his predecessors throughout history stepping into a new phase of his rule which is a phase that's increasingly paranoid, increasingly autocratic and repressive. He's now mirroring some of the darkest parallels in history shaving ... You alluded to Uighurs earlier. Uighur women are seeing their heads shaved and put on trains and sent off to so-called reeducation camps.

Jacob Helberg: (11:42)
It's really, really terrifying when you see the practices that he's engaging at home. And I think for a lot of people abroad, it raises the question. He's doing this to his own people, who's to say what he'll do to people of other countries? You kind of see the way that he's attacked Australia, the largest cyber attack in Australian history. He has invaded parts of the Indian border and killed 20 Indian soldiers. And in response, when India responded, he did a cyber attack on an Indian city which took out power on over 20 million people including hospitals in the middle of a pandemic. It's really, really scary the length at which he's been assertive. I think when you look at his big picture of wanting to dominate industries, dominate politically, dominate the internet infrastructure of our Information Infrastructure through $75 billion in subsidies in Huawei. The last thing I think any American should conclude from that is that this is the guy that should have more power than he already has.

Anthony Scaramucci: (12:54)
So let's go to him for a second because I think his life story is fascinating. His father was a general NALs army. His father had a falling out with NAL like it often happens with these paranoid autocrats. He was sent into a camp himself. The young president, Xi, grew up on the outs, but he was a princeling as it related to the Chinese Communist rule. He worked his way back. How do you think that life experience has affected his judgment and his leadership principles and strategy?

Jacob Helberg: (13:30)
Well, I think his experience shows how incredibly politically astute he is. And one of the facts that I always find so striking about his political philosophy is the fact that he started his tenure when he took control of the CCP by spending a lot of time talking about the fall of the Soviet Union and analyzing the sources and the reasons for why the Soviet Union fell. Basically kind of creating a sort of mini-lecture series inside of the CCP as to lessons learned from the fall of the Soviet Union and how the CCP should avoid the same fate. And I think that says so much about the fact that this is a highly analytical individual that spends a lot of time reading history and analyzing history. This is someone that understands that today with modern technology, control is power and Internet information infrastructure is control.

Jacob Helberg: (14:36)
So the Chinese government's subsidies of $75 billion in Huawei isn't because ... it's not out of charity or because they want to bring the internet to the world, it's because for them, there's some real benefits to other countries throughout the world using Huawei. As I wrote in the book, a lot of those benefits basically entail controlling everything that runs on top of that internet infrastructure, including every company's IP, the deepest secrets of every politician on a given country, their sexual escapades, their corrupt dealings, their personal communications. This was corroborated by 2012 assessment carried out by a Dutch telecom called KPN, which actually showed that Huawei had access to everything that ran on top of its network. And those revelations were only made public earlier this year. So it's really where somebody kind of redefines our traditional conceptions of sovereignty.

Anthony Scaramucci: (15:40)
It seems like both sides of the aisle are consolidated on this issue at this moment. Is that fair to say?

Jacob Helberg: (15:48)
I think that's fair to say. I think it's actually a true cause for optimism in the United States that for all the talk and media focus on hyperpartisanship and there's a lot of political polarity, there actually is some degree of convergence, of political convergence in the US between people that are very liberal and people that are very conservative because an interesting thing that's happened over the last 20 years is that China has actually offended so comprehensively so many aspects of American society from manufacturing, to human rights. If you care about the environment, China is the worst polluter in the world. If you're a big tech company, China has probably hacked you more times than you care to disclose. So it's actually unified people from very different political strands in the United States.

Jacob Helberg: (16:40)
What worries me more is that China has civil military fusion and we have civil military confusion. And there is a real cultural gap that often leads to a disconnect between our technology community and our policymaking community. As I write in the book, part of that it's ... I think the source of that is really cultural. The average age of the members of the Senate is 63, the average age of an employee at Google or Apple is 32, 31. So these are people that came of age in very, very different life experiences. And a lot of the times it leads to a lot of disconnect. But I do think that it's possible to bridge those two communities. I think it's incredibly important for the future of the country that you have some of the best engineers working on the hardest engineering problems, have a better appreciation for very important national security priorities and vice versa. People doing national security understanding better their inner workings of our technology community.

Anthony Scaramucci: (17:51)
I think there's so many great parts of the book. I'm probably not going to be able to get to all of it, but what you're talking about is odd to see reasons to be optimistic, but you also talk about a changing landscape for the definition of sovereignty. And basically, sovereignty is evolving as a result of the technological ecosystem that's being overlaid on these governments. Could you describe that to our viewers and listeners?

Jacob Helberg: (18:19)
Absolutely. So for most of our lifetimes and for most of history, sovereignty, a lot of the times really boil down to troops on the ground. Countries having armies being able to defend their borders in a certain political system within a geographic area through force, if needed. And the interesting thing is that today, because of technology, political sovereignty is no longer just determined by boots on the ground, it's determined by wires in the ground. And those wires are fiber optic cable. Wires that are basically the physical backbone of the Internet. The reason that these wires have an enormous impact on a country's political sovereignty is that if you have a foreign country that makes no distinction between its public and private sector like China, that has access and control over all the information in another country, the journalists in that country, the politicians in that country, the judges, it can basically pull levers in that third party country and turn that country effectively into a puppet satellite state.

Jacob Helberg: (19:41)
We get occasional slight glimpses of that in the US through the fact that there hasn't been a Hollywood movie produced here in over 20 years or when the NFL has to go on an apology tour. Imagine if our information infrastructure was controlled by the Chinese and the Chinese actually had all of the medical history or the personal details of the lives of all of our reporters and all of our judges. They could pull the strings of our country in surreptitious ways that we've never even dreamed of. And to some extent, that's probably why they are so aggressively pushing this infrastructure in parts of the world that people don't pay attention to, like Africa, for example.

Anthony Scaramucci: (20:32)
Okay. I get all that. It makes a lot of sense to me. I want to be Chinese now. I want to be a member of the Chinese Communist Party. I want you to explain to our viewers and listeners why they're taking this approach, what they're thinking about it, and then I want to be a Chinese citizen. Let's say that I'm a wealthy business person that likes individual liberty. What's my concern? And then therefore, what's the tension inside of China?

Jacob Helberg: (21:02)
Well, I'm happy you bring this up because I think that this debate, approaching this debate, it's really important to draw the distinction that a lot of the criticism that I direct at China in the book is really directed at the CCP and not of the Chinese people. And the Chinese people are the first victims of a lot of the oppressive policies of the CCP. And we're incredibly fortunate the US to have a very, very dynamic Chinese diaspora. But ultimately the basic bargain that the Chinese government has had is we're an autocratic system. We rule with an iron fist, but we're going to provide you a better standard of living and we're going to provide you with 6%, 5%, once upon a time, it was up to 14% GDP growth. And today, you're kind of seeing cracks in that basic bargain. As the economy is slowing, you're seeing the government really tightening the grip.

Jacob Helberg: (22:00)
To answer your question, if you're a wealthy Chinese business person or even if you're a Chinese founder, I think what's really scary is that once upon a time ... 10 years ago if you were a Chinese founder, you could actually hope and aspire to pursue what Xi Jinping ironically call the Chinese dream, starting Tencent, Didi. A company that's super successful that's widely used by millions and in some cases, hundreds of millions of Chinese users. Today, you're basically seeing a lot of these iconic Chinese entrepreneurs being locked up and silenced. So it's really changed. It's turning the Chinese dream into a Chinese nightmare for a lot of successful people in China. It's going to have long-term repercussions because if you're young, and bright, and ambitious, you're going to think twice about starting a tech company because what success looks like is surely changing in China. If you're really successful, you may end up in the crosshairs of the CCP and that may not look very good for you. So I think that is definitely a long-term impact that's being caused by this crackdown.

Anthony Scaramucci: (23:06)
It's interesting because intelligence authorities, people in our intelligence agencies that I'm close to, including people that are not there anymore. HR McMaster would say that she looked at what happened to Donald Trump as a result of Zuckerberg, and Dorsey, and social media. He made a decision that they heard his presidential campaign in his retention of power. And that was another reason why he cracked down so hard on some of these billionaires. Before I turn over to John Darsie who has another series, an additional layer of questions, I want to ask you about the Alliance, the Western Alliance. The French, the Germans, the British. What is the Western Alliance conjoin with America's view of China, and where are we going? One thing the Chinese are doing with the Belt and Road system is they're giving a lot of money out to a lot of these people.

Jacob Helberg: (24:14)
Absolutely. And I think that one of the most important message that can come out of Washington ... First of all, let me just preface this with I think an interesting dynamic that we're seeing today is our traditional definition of what counts as Western. What we mean by Western countries is changing a bit. It's no longer just Western Europe. It's also including democratic countries like Australia. Some academics use the word Western to even include Japan and South Korea. And so that's just a reflection. That change in nomenclature is a reflection of the fact that the world is changing politically and a lot of the political action is going on in East Asia. To dial back to the initial point that I was going to make, I think in light of this new dynamic, one of the most important messages that Washington can bring to our traditionally traditional Western allies like France and Germany is that the US isn't turning away from Europe, but it's turning with Europe to this new center stage of this new political theater in East Asia. Obviously, the recent August deal, the rollout caused a little bit of friction with our oldest ally, France. But I think it's important to stress that grand strategic moves are always going to be a little bit rocky. There's no question that this could have been better handled, but this deal is absolutely not positive.

Jacob Helberg: (25:55)
I write a lot in the book about the main set of topic. My book is the gray war, which talks about underwater submarine fiber optic cables and semiconductors. You can't protect Taiwan, which is the hub, the global hub of semiconductor production, if you don't have submarines, and you can't protect the integrity of our of submarine internet cables without submarines because the Russians and the Chinese send submarines underwater to basically tap cables, the routers of cables in various parts of the world. And actually, a big job of the US military is the protection of those cables.

Jacob Helberg: (26:33)
So having our allies beefing up the capacity of our allies to have submarines and take part in this regional defense is actually incredibly useful. It's really regrettable that things played out the way that they did with France, but that story is still unfinished and there might be a little bit of trade bargaining going on to see if the US and France can kiss and makeup. And ultimately reminding each other that what unites the France and the US isn't just called a transactional relationship of interest, but it's really shared values. And France's political destiny is very much aligned with America's. And that's the rule of law, democracy. French companies being able to compete on a level playing field, being able to take someone that breaks laws to court and rely on a fair judgment. And also Europe has been a very underdiscussed victim of deindustrialization just like the United States. So there's a lot in common there for those allies to find a common ground.

Anthony Scaramucci: (27:48)
Well, that's my hope. Last quick question and I'm going to turn it over to John. 2017, President Xi gave a speech at the World Economic Forum. I was there for that actually. I was part of Trump's transition team representing the administration at that forum. He sounded like Abraham Lincoln in the speech. He was talking about freedoms, and civil liberties, and the individual. Do you think he could make that speech today?

Jacob Helberg: (28:16)
I don't think so. A common pattern, as Zbigniew Brzezinski once pointed out, of autocratic leaders is to say one thing and do another. Zbigniew Brzezinski says that a very pervasive feature in autocratic leaders is to appeal for peace while doing everything to extinguish peace. The high level lesson is that they basically ... it's very common for dictators to say one thing and talk a great game while doing things that don't match at all what they say, and that was exactly what he was doing with that speech. He was talking about globalization, he was talking about all these different lofty ideas that get a lot of applause by the press, and by a lot of our business leaders. Our business community has been left at the altar and bruised many, many times by the CCP. And unfortunately, the reality now is becoming hard to ignore with just how incredibly repressive the regime is.

Anthony Scaramucci: (29:25)
John Darsie, I know you have questions, but I want to hold the book up one more time. The Wires of War: Technology and the Global Struggle for Power. Jacob, you wrote a brilliant book, okay. And I'm not just saying [inaudible 00:29:38] decided to Salt Talks, but I love the book. It's made me smarter and it's made me more conversant in what's going on around the world, specifically with China. So I want to thank you for the book and I want people to go out and buy and actually read the book. With that, I'll turn it over to John Darsie.

John Darsie: (29:55)
All right. It's [crosstalk 00:29:56]-

Anthony Scaramucci: (29:56)
Don't be saying great question and stuff like that. It'll drive me crazy. Okay?

John Darsie: (30:02)
Thank you, Anthony, for that great opening of questions, but I have a few follow ups for you, Jacob. And one of the big questions I have is anybody who studies Chinese culture, which you obviously have, and I would assume, members of our foreign policy establishment and people in Washington who understand Chinese culture, one of the great axioms from the Art of War is that you appear weak when you are strong and appear strong when you're weak. And China, like Anthony mentioned, was this docile puppy that's now gnashing its teeth. And you write in the book about how Washington in general has gone from denial now to despair, meaning they said, "China is not a threat. We don't have to worry about it. We're going to let them into the World Trade Organization. We're going to let them violate many of the statutes of the WTO." And now they're saying, "Oh, now it's too late. There's nothing we can do about it. They've become too powerful." Why did so many people in Washington miss it? And is it too late to do something about it?

Jacob Helberg: (30:58)
Well, I'm not going to say that's a great question, but it's an important one. I think that-

Anthony Scaramucci: (31:03)
You can say it's a great question. I'm just teasing. Okay. The guy gets fan mail, Jacob. Okay.

Jacob Helberg: (31:10)
That is a great question that almost rises to the level of Anthony's questions.

Anthony Scaramucci: (31:16)
For me [inaudible 00:31:17] at this point. But go ahead.

Jacob Helberg: (31:28)
The central argument for why so many people just feel like we don't even stand a fighting chance with the Chinese is the central argument always comes back to that they have 1.6 billion people. And if all those people have the same average income as in United States, they're basically unstoppable because their economy will be so much bigger than ours. That's a compelling argument, but at the end of the day, what that argument really misses is the power of ideas and the fact that what you're seeing today with this crackdown across Chinese society is the fact that you have authoritarian leader that boasts himself in front of the world surrounded by armed men, cannons, tanks, and airplanes, but that is terrified of words and thoughts. Of words spoken at home, of words spoken abroad, and thoughts during at home. And at the end of the day, you're really seeing the cracks in that system. And I think that's a huge cause for optimism in United States. That there is so much more to this competition than just a raw number of people and GDP.

Jacob Helberg: (32:41)
The entire Chinese system, as Xi Jinping warned all the members of the CCP when he took power, could completely unravel and fall apart if people lose faith in that system and if people start asking for legitimate demands for personal liberties and personal and civil liberties. The CCP has gone through extraordinary lengths to brand individual freedom as an American concept. I think there's a lot of examples throughout the world whether it's in Japan, and Taiwan, and South Korea where you actually have countries that come from very different cultures that operate in a democratic system. And democracy isn't inherently American. It's reflective of instincts, human instincts that are universal, which is our ability to disagree on issues without getting killed for it, our ability to express ideas and pursue your dreams. If you want to be an artist, if you want to be a merchant, whatever that may be. And I think a lot of people in China, the power of the question and questioning authority is a very compelling thing. And I think you're seeing a dictator that's really, really afraid of that.

John Darsie: (34:00)
Right. Are those cracks starting to show? You mentioned that in your conversation with Anthony about GDP growth is falling. They're now trying to appease people potentially sort of commoners in the country by cracking down on billionaires who have obviously extracted a lot of value. We know several strategists, [inaudible 00:34:20], being one that Anthony referenced when we were doing our prep call, who says that there is more balkanization and division among the provinces within the population than China will obviously allow to leak out of the country. Part of the reason why they're so strict with the internet domestically, but do you see, based on your research, crack starting to show, and how could that manifest itself?

Jacob Helberg: (34:44)
Absolutely. And the biggest manifestation of it is that a lot of the things that Xi Jinping has done at home and abroad has won him a lot of enemies. A lot of people in China don't like the fact that he's locking up so many people left and right, whether it's billionaires, or Uyghurs, and Tibetans, and just working family dissidents that have different ideas in him. Abroad he's basically the whole concept of warrior wolf diplomacy has won him the antagonism of Australia of Japan, South Korea. Even Europe which was really, really determined to have a good relationship with China just a few years ago is now revisiting a lot of its relationship with China. And so for the US, that is an enormous opportunity to seize on this window that we have. I think it's a window of about a decade to really determine the course of the next century.

Jacob Helberg: (35:55)
I think, for demographic reasons and for secular growth cycle reasons, China has about 10 years before it either reaches escape velocity or starts stagnating because of its demographic trends, its aging of the population, so forth. And I think that what we do now is going to have a huge impact on whether or not they actually do reach escape velocity or not. And unfortunately, unless we're honest about the fact that this is an existential competition for us ... I use the word, war, because we have to treat it with the urgency, and determination, and the clear sightedness that there's going to be a winner and a loser. Unless we acknowledge all of that, we're probably not going to come out on top. And ultimately, our goal should be to win this thing.

John Darsie: (36:49)
Right. And even in places like Africa, Anthony referenced Belt and Road. You're starting to see some of these leaders question deals that have been made for the Chinese to get access to raw materials and things like that because they're also shipping in Chinese workers rather than really accruing the value locally that they promised as part of those deals. But I want to shift gears a little bit to how as a country, we can fix this. Sort of fix our own house, if you will. We have ignored our own high-tech infrastructure manufacturing needs for a long time. And now, the supply chain issues that sort of reared their head beginning as a result of the pandemic, but have extended well beyond that, are starting to get uglier and we're starting to become more aware of them.

John Darsie: (37:33)
We had Ro Khanna, the representative from Silicon Valley, as well as Jeb Bush, former governor of Florida, in our recent Salt Conference for a conversation about that topic, about maintaining our competitiveness and rebuilding US high-tech infrastructure. Ro Khanna was the sponsor of the Endless Frontier Act that turned into the US Competition and Innovation Act which is a piece of legislation that was recently passed five years. 250 billion to invest in US high-tech infrastructure and infrastructure manufacturing. What can we do? That sounds like a big number, but it really isn't in the scope of what China is doing and the things we need to do to catch up on things like AI. But what do we need to do as a country from a private sector perspective, from a public sector perspective to catch up to China and get our house in order from a high-tech infrastructure perspective?

Anthony Scaramucci: (38:22)
These are really good questions, by the way. I have to admit that.

Jacob Helberg: (38:26)
They're great questions.

Anthony Scaramucci: (38:27)
They're really good questions.

Jacob Helberg: (38:28)
I didn't want to say it.

Anthony Scaramucci: (38:30)
You can say it. And I'm dying to get the answer to that actually. That's a good question, John Darsie.

John Darsie: (38:36)
Thank you.

Jacob Helberg: (38:37)
Ro Khanna actually has been a leader in this space, a thought leader in the space, and as you pointed out, one of the architects of the Endless Frontiers Act, and really gets it. And in fact, he actually wrote an incredible short review of the book, which was so exciting, but I think one of the things that ... I'll talk about high level principles and then more tactical things that we can do as a country. At a very high level from first principle standpoint, it's really important that we change our nomenclature and that we acknowledge that it's a Cold War or a gray war, but that it's a war. Wars have never been binary. It's a word that a lot of people are afraid, but the reason that I think it's so important that we use that word over competition is because we're competitors with Germany and Japan, but we're fundamentally not at war. We're economic competitors, we compete.

Jacob Helberg: (39:34)
Competition implies that you're competing on a level playing field following rules that all parties observe and agree to. With China, there are no rules. They have thrown the rule book out the window. When your existential life is on the line, when the survival of your political system is online, it's not a competition, it's a war. And when the outcome of this struggle is going to be one of the two players completely politically ... political domination, it's very much a war. It's not a competition. It's not just about economics. What we're talking about is really politics.

Jacob Helberg: (40:14)
The reason that I think it's important for us to shift this nomenclature is because there actually might be ... We need to be united and we need to ... This needs to be the prison that organizes everything that we do abroad and at home to mobilize the resources and the will to actually be successful just like any other war. When we fought World War II, everything that we did at home and abroad was reorganized towards winning the war. And arguably, for vast stretches of the Cold War, a lot of the things that we did, whether it's the military buildup that Reagan did or a lot of initiatives, domestic and foreign, were designed with a view of winning the Cold War. And I think that we've kind of reached a similar juncture at this point in saying that it's just the competition and I don't think we'll ever mobilize a sense of urgency to galvanize members of the private sector as well as members of the policymaking community to do what's needed to be successful. So that's from a high-level principle standpoint.

Jacob Helberg: (41:22)
At a tactical level, one of the most important things that we can do abroad is we need to deglobalize what I call China's Eye of Sauron. And it's a bit of a dramatic turn, but if you have if you've seen Lord of the Rings, in Lord of the Rings, there's this concept of the Eye of Sauron that is all-seeing, all-knowing, in all places at all times. And here, what's kind of both funny and scary at the same time is that China is basically sort of building a very similar thing with over 400 million CCTV cameras that have facial recognition. It's basically de-anonymizing the internet. And through risk control of internet infrastructure, it's basically building a centrally controlled system that allows the CCP to see all things at all times in all places. And if we want to protect democracy, if we want to protect the sovereignty of our allies and of other countries that we do business with, we have to deglobalize China's plans to expand its autocratic internet. So that's one of the most important things that we can do abroad.

Jacob Helberg: (42:29)
In the book, I talk about a series of steps that we can do to do that for whether it's foreign aid or trade partnerships with Europe because Ericsson and Nokia are obviously European companies that are competitors to Huawei. At home, as you pointed out in your question, engaging in efforts to reindustrialize is incredibly important because the deindustrialization of the United States has been a great war environment, [inaudible 00:42:54] that we've been very disarmed. And as I talked about in the book and I wrote a foreign policy article, I think that in this new geopolitical struggle, deindustrialization is disarmament. It's effectively makes our country incredibly vulnerable and exposed to coercion, to blackmail. If you take, for example, Apple, which is an iconic American company that has a market cap of on some days of the week two trillion dollars, it's incredibly vulnerable to a scenario that's really scary which is what would happen if the CCP told Apple, "Why don't you take down these applications?" Or, "Give us the cell phone numbers of these dissidents or all of the production of your iPhones are going to get delayed?" And the Apple executive team would have a really thorny decision on their hands about whether or not to go public with it, about whether to just comply quietly with it.

Jacob Helberg: (43:58)
So reindustrializing at home and key sectors should absolutely be a top priority. And that doesn't necessarily mean that everything has to be made in United States. That means that there should be key sectors that should gravitate towards markets, maybe part of the United States, maybe pardon allied countries, but in a space that we trust, where we're going to trust the integrity of the equipment that's being built.

Jacob Helberg: (44:25)
When I supported Pete Buttigieg, him and some of his foreign policy advisors at the time during the primary campaign, we were talking about this concept of an allied industrial base. And that's a concept that I think has a lot of legs because at the end of the day, we want some things to be manufactured here, but not all things can. That's not going to be economically feasible for all things, but there's going to be a bucket of things where we don't care where it comes from, there's going to be a bucket of things that are so critical that they have to be manufactured in the United States, and there's a bucket of things that can come from an allied space where it just can't be manufactured in China, but it can be manufactured in India and South Korea. Samsung makes a lot of advanced electronics in South Korea. So there's there's going to be a lot of legwork that's going to have to go into classifying the universe of products that are critical or non-critical to national security, and how the policy regime approaches all of that.

John Darsie: (45:28)
Well, if that was a good question, that was a fantastic answer. And obviously, it's something that you've studied in great depth. I hope that people Ro Khanna and yourself continue to have more of the ear of policymakers in Washington to get that done because it seems like an absolute no-brainer. You talked about Apple. There was a recent New York Times the daily podcast about this exact topic about how ... I'm an Apple user. I've had the new iPhone 13 here, but they have done a lot of kowtowing to China. That doesn't make it into the press a lot because Apple are very powerful, very shrewd, but they have done some things that would probably make a lot of Americans blush if they truly understood the compromises they've made. So you think as a company, they would try to de-risk themselves on that front. But staying in sort of the high-tech conglomerate, so you were at Google like I mentioned in the open. Part of your job was combating disinformation related to election integrity and just general disinformation that it was being perpetuated through the US internet.

John Darsie: (46:32)
This will be my last question. My last Lao Tzu quote from Art of War is that the supreme art of war is to subdue your enemy without actually fighting. And so the Russians realized that they can't match our economic might or our military might, frankly. So they're using disinformation, the Chinese are doing the same thing. They're using social media to create these echo chambers to sow division. How prevalent is that and what can we do to combat it and eliminate that echo chamber effect?

Anthony Scaramucci: (46:59)
Before you answer that, again, and I'm not being cheeky, so Lao Tzu you is the eastern philosopher of Tao, but you're actually quoting Sun Tzu from The Art of War.

John Darsie: (47:09)
Sun Tzu. Sorry.

Anthony Scaramucci: (47:10)
Okay. Please help me out there. Okay. But you're doing-

John Darsie: (47:13)
We'll rerecord that so I don't look dumb.

Anthony Scaramucci: (47:14)
Yeah. Of course, they're going to delete that, but you're doing a beautiful job. All right. Go ahead, Jacob. The guy does ask great questions and I'm actually listening very carefully.

Jacob Helberg: (47:25)
Incredible.

Anthony Scaramucci: (47:26)
Yeah. Go ahead. Keep going. Go ahead.

Jacob Helberg: (47:30)
One of the things that I noticed when I worked at Google was ... So I was the point person for their internal global news policies. In the late stages of 2016, that quickly turned into what do we do about stayed back for interference, misinformation, a lot of these new and emerging trends that had never really been that big of an issue in the technology ecosystem. And one of the things that became incredibly apparent in the following 24 months was the tech industry as a whole was really being caught in the crosshairs of a new geopolitical environment where companies were ... where countries and governments were starting to view technology companies as both proxies and targets of their political power. So Putin, for example, gave this very dramatic speech where he noted in his speech that the country that controls the AI is going to dominate the world in the future, and Xi Jinping basically alluded to the same thing. And so it was interesting because you saw these autocratic regimes that were at the same time trying to hack companies to get all their secret sauce, and IP, and treated companies like targets, but at the same time, were also using them as proxies by trying to use these platforms to extend their influence abroad. To answer your question, it was something that was incredibly apparent in 2016 and has become only more prevalent since.

Jacob Helberg: (49:16)
Back in 2016, the main player in this game was Russia. But since then, we've seen a whole slew of other players enter the space from Saudi Arabia, Iran, obviously China is now probably the lead player in all spaces. On the front-end, on the back-end. They have state-sponsored media and bots and trolls all over the internet on platforms that ... on American platforms that they have banned in China. And obviously on the back-end, they are copying our technology. Whether it's Xiaomi that makes an Apple ... an iPhone imitation device or Huawei that basically receives massive subsidies to build fiber optic internet cables. They're very active in all theaters of the gray war.

John Darsie: (50:15)
Well, it's fascinating stuff. I'm sure we could go on for a couple more hours around all the different high level thoughts and tactics that we need to initiate to try to maintain our competitiveness and to counter some of the anti-democratic forces around the world. But Jacob, it's been a pleasure to have you on. Anthony, do your thing and hold up the book again and give it another [inaudible 00:50:36].

Anthony Scaramucci: (50:36)
I got to tell you, I read a lot, Jacob. And this was the best non-fiction treatise on what is going on with China, but also an explanation and overlay of the technology. The hardware, you mentioned the Huawei situation, but also the software, the social media presence, the hacking. You included it all. You're a terrific writer. Again, the title of the book, The Wires of War: Technology and the Global Struggle for Power by Jacob Helberg. Congratulations on the book. And I'm very proud to have you on Salt Talks with us today.

Jacob Helberg: (51:13)
Thank you so much. I really enjoyed the conversation. Thanks for having me on.

John Darsie: (51:17)
Thank you again, Jacob. And thank you, everybody, for tuning into today's Salt Talk with Jacob Helberg. Just a reminder, if you missed any part of this talk or any of our previous Salt Talks, they're all available on demand for free on our website, which is salt.org/talks, or on our YouTube channel which is called Salt Tube. We're also active on social media. At Salt Conference is where we are most active. We're also posting all the panels and conversations from our recent Salt Conference there. So definitely subscribe to our YouTube channel and follow us on Twitter, but we're also on LinkedIn, Instagram, and Facebook as well. For better for worse, in terms of Facebook obviously going through some recent struggles, but please spread the word about these Salt Talks. Again, I think it's very important that people are educated about all these challenges that Jacob spoke about. On behalf of Anthony and the entire Salt team, this is John Darsie signing off from Salt Talks for today. We hope to see you back here again soon.