1 00:00:09,200 --> 00:00:12,040 He's a leader like no other, 2 00:00:12,040 --> 00:00:15,080 commander of a formidable military, 3 00:00:15,080 --> 00:00:17,320 president of a rising superpower. 4 00:00:22,240 --> 00:00:26,280 This series tells the story of Chinese President Xi Jinping's 5 00:00:26,280 --> 00:00:27,480 six-year rule. 6 00:00:28,760 --> 00:00:33,200 He heads an economy that is now crucial to all of us. 7 00:00:33,200 --> 00:00:37,400 Hundreds of millions of people have been lifted out of poverty. 8 00:00:37,400 --> 00:00:41,120 China was clearly going to be the great source of growth 9 00:00:41,120 --> 00:00:45,160 in the global economy, and we want a part of that. 10 00:00:45,160 --> 00:00:49,680 For years, world leaders have sought to work with him to solve some 11 00:00:49,680 --> 00:00:51,960 of the most pressing issues of our time. 12 00:00:51,960 --> 00:00:55,000 When we work together, it's good for the United States, 13 00:00:55,000 --> 00:00:58,200 it's good for China, and it is good for the world. 14 00:00:58,200 --> 00:01:03,280 But in the West, there's growing anxiety about how President Xi's 15 00:01:03,280 --> 00:01:05,480 China is extending its power. 16 00:01:06,600 --> 00:01:10,400 Now, media reports have suggested that the Chinese Communist Party 17 00:01:10,400 --> 00:01:13,160 has been working covertly to interfere with the decisions 18 00:01:13,160 --> 00:01:14,640 of elected representatives. 19 00:01:14,640 --> 00:01:18,440 So I think Australia is in many ways the canary in the coal mine. 20 00:01:18,440 --> 00:01:23,600 The Chinese state stands accused of stealing the West's technology 21 00:01:23,600 --> 00:01:28,440 and business secrets through hacking and industrial espionage. 22 00:01:28,440 --> 00:01:30,920 You watch billions and billions of dollars, 23 00:01:30,920 --> 00:01:33,520 trade secrets, trade negotiation strategies, 24 00:01:33,520 --> 00:01:35,320 pour out of the United States. 25 00:01:35,320 --> 00:01:39,440 It's been called the largest transfer of wealth in human history. 26 00:01:39,440 --> 00:01:43,880 This includes stopping China's outrageous theft 27 00:01:43,880 --> 00:01:45,920 of intellectual property. 28 00:01:45,920 --> 00:01:50,400 There's now serious concern about allowing Chinese companies 29 00:01:50,400 --> 00:01:54,240 to invest in sensitive parts of Britain's infrastructure. 30 00:01:54,240 --> 00:01:59,840 Do you want companies from authoritarian one-party states 31 00:01:59,840 --> 00:02:03,480 involved in your critical national infrastructure? 32 00:02:03,480 --> 00:02:05,040 No, of course you don't. 33 00:02:05,040 --> 00:02:11,360 If Huawei's branch in the UK does not do harm to the UK's interests, 34 00:02:11,360 --> 00:02:14,520 then it will be counterproductive if you block Huawei. 35 00:02:15,960 --> 00:02:18,240 Xi Jinping has transformed his country. 36 00:02:19,640 --> 00:02:23,320 He could be president for the rest of his life. 37 00:02:23,320 --> 00:02:27,760 So what does that mean for China and the rest of the world? 38 00:02:27,760 --> 00:02:31,840 Xi Jinping is a very ambitious nationalist, 39 00:02:31,840 --> 00:02:36,520 and he thinks that, with the rise of Chinese high technology, 40 00:02:36,520 --> 00:02:41,960 it is possible for China to challenge the American position 41 00:02:41,960 --> 00:02:44,240 as the sole superpower in the world. 42 00:02:44,240 --> 00:02:48,840 We don't actually know how China's going to evolve in the next decade. 43 00:02:48,840 --> 00:02:51,920 We could look back in ten years' time and say, you know, 44 00:02:51,920 --> 00:02:54,360 we made the wrong call. 45 00:03:11,880 --> 00:03:15,880 It's not every day the number two official from a foreign country gets 46 00:03:15,880 --> 00:03:17,720 the full red carpet treatment. 47 00:03:17,720 --> 00:03:19,160 But today, someone did. 48 00:03:19,160 --> 00:03:23,520 And the reason here is he is next in line to be the leader of China. 49 00:03:30,560 --> 00:03:33,080 This is a unique opportunity for Iowa. 50 00:03:33,080 --> 00:03:36,240 And we're very hopeful that Vice President Xi will find it 51 00:03:36,240 --> 00:03:40,640 to be friendly and accommodating and enjoyable. 52 00:03:46,480 --> 00:03:49,600 I got a call saying, "He's coming. 53 00:03:49,600 --> 00:03:51,240 "Can we come to your home?" 54 00:03:51,240 --> 00:03:52,880 And I said, "Sure." 55 00:03:56,120 --> 00:03:58,360 He was light-hearted, 56 00:03:58,360 --> 00:04:03,400 always had a smile - a smile and a warm handshake. 57 00:04:03,400 --> 00:04:05,480 Always curious. 58 00:04:05,480 --> 00:04:10,560 In 2012, the Vice President of China made a special trip to a small town 59 00:04:10,560 --> 00:04:15,280 in Iowa to see some friends he'd known for 27 years. 60 00:04:15,280 --> 00:04:19,480 In 1985, Sarah Lande and a small group of others made quite 61 00:04:19,480 --> 00:04:23,360 an impression on Xi, then a young Chinese official. 62 00:04:23,360 --> 00:04:26,480 He spent three days in Muscatine, learning ways of agriculture 63 00:04:26,480 --> 00:04:28,600 in the US. 64 00:04:28,600 --> 00:04:31,200 We liked him right off the bat. 65 00:04:31,200 --> 00:04:33,720 When we were bringing people to town, "Oh, yeah, 66 00:04:33,720 --> 00:04:35,560 "you're bringing these communists to town!" 67 00:04:35,560 --> 00:04:38,880 Well, once they met him, you know, it's sort of like 68 00:04:38,880 --> 00:04:42,040 people around the world - they liked him. 69 00:04:43,440 --> 00:04:46,480 Sarah Lande helped look after Xi Jingping 70 00:04:46,480 --> 00:04:48,760 and other Chinese officials. 71 00:04:48,760 --> 00:04:52,160 They'd come to learn how they could use US technology 72 00:04:52,160 --> 00:04:55,040 to boost food production in China. 73 00:04:55,040 --> 00:04:58,720 This region is called the corn belt of the United States. 74 00:04:58,720 --> 00:05:02,760 In few places has agriculture been raised to so high a level. 75 00:05:02,760 --> 00:05:05,760 Iowa has been famous for its cutting-edge agriculture 76 00:05:05,760 --> 00:05:07,880 for more than 100 years. 77 00:05:07,880 --> 00:05:11,360 Three factors make its great productivity possible. 78 00:05:11,360 --> 00:05:13,480 The first of these is technology. 79 00:05:13,480 --> 00:05:16,960 At that time, that was a real challenge to China - 80 00:05:16,960 --> 00:05:19,240 how to feed their people better. 81 00:05:19,240 --> 00:05:24,280 They needed food and they weren't very efficient, as we understand. 82 00:05:24,280 --> 00:05:28,920 The people came to see about the processes 83 00:05:28,920 --> 00:05:32,160 as well as how to grow crops better. 84 00:05:33,480 --> 00:05:35,240 He was just real happy to be here. 85 00:05:35,240 --> 00:05:37,200 As he said to us, 86 00:05:37,200 --> 00:05:40,120 "This is my first time in America. 87 00:05:40,120 --> 00:05:42,960 "You know, to me, you are America." 88 00:05:44,200 --> 00:05:48,080 Now, Xi was one of the most powerful men in China. 89 00:05:49,440 --> 00:05:53,280 During his visit, his country signed agricultural deals with the US 90 00:05:53,280 --> 00:05:56,360 worth more than $4 billion. 91 00:05:56,360 --> 00:05:58,240 Good evening, ladies and gentlemen, 92 00:05:58,240 --> 00:06:00,640 and welcome to this evening's historic gala dinner. 93 00:06:05,160 --> 00:06:08,560 Iowa's governor hosted a banquet in Xi's honour. 94 00:06:10,400 --> 00:06:12,680 APPLAUSE 95 00:06:14,080 --> 00:06:21,160 I am truly honoured to formally welcome Vice President Xi Jingping 96 00:06:21,160 --> 00:06:25,680 from the People's Republic of China to Iowa. 97 00:06:39,240 --> 00:06:42,080 Among those listening to Xi's speech that night was 98 00:06:42,080 --> 00:06:45,360 a Chinese seed company executive. 99 00:06:45,360 --> 00:06:50,440 Mo Hailong was a director for the Beijing Dabeinong Technology Group, 100 00:06:50,440 --> 00:06:53,440 and he was under investigation by the FBI. 101 00:07:02,000 --> 00:07:06,080 It's almost entirely agriculture-based out here. 102 00:07:06,080 --> 00:07:09,560 As you can see, there's just an occasional farmhouse 103 00:07:09,560 --> 00:07:11,520 and the rest is all farmland. 104 00:07:13,160 --> 00:07:16,600 Nine months earlier, the FBI had got a tip-off 105 00:07:16,600 --> 00:07:20,160 from a local seed company called Pioneer. 106 00:07:20,160 --> 00:07:25,120 One of their Pioneer field managers was out near one of their fields 107 00:07:25,120 --> 00:07:30,280 near a town called Tama, Iowa, and he saw two Asian individuals. 108 00:07:30,280 --> 00:07:34,080 One Asian male was in the field, on his hands and knees, and appeared 109 00:07:34,080 --> 00:07:36,720 to be digging something up. 110 00:07:36,720 --> 00:07:40,000 And the field had just been planted a couple of days before. 111 00:07:40,000 --> 00:07:43,640 The field had been planted with a newly-developed seed. 112 00:07:43,640 --> 00:07:47,720 The manager from Pioneer confronted the man. 113 00:07:47,720 --> 00:07:51,960 The Asian male kind of left quickly, at a quick rate, and got in a car 114 00:07:51,960 --> 00:07:55,080 that was sitting along the side of the road 115 00:07:55,080 --> 00:07:57,800 and with another Asian male in it. 116 00:07:57,800 --> 00:08:00,880 And the two of them drove out of there very quickly. 117 00:08:02,520 --> 00:08:06,400 Pioneer security folks tracked the licence plate and they found out 118 00:08:06,400 --> 00:08:09,360 that it was rented by an individual named Mo Hailong. 119 00:08:11,240 --> 00:08:13,080 I couldn't believe it. 120 00:08:13,080 --> 00:08:15,920 I still can't believe it to this day, that a guy digging 121 00:08:15,920 --> 00:08:19,200 in a remote field in Iowa - in Tama, Iowa - 122 00:08:19,200 --> 00:08:22,200 he's a Chinese seed executive over in Beijing. 123 00:08:25,280 --> 00:08:27,440 Agent Betten put him under surveillance. 124 00:08:29,720 --> 00:08:32,200 Corn is big business in Iowa. 125 00:08:32,200 --> 00:08:35,440 Companies like Pioneer invest millions of dollars, 126 00:08:35,440 --> 00:08:39,480 developing new strains of seeds to deliver high yields. 127 00:08:41,680 --> 00:08:45,200 If a foreign company can short-circuit that, 128 00:08:45,200 --> 00:08:49,240 they can continue to use that in their breeding programme for years. 129 00:08:49,240 --> 00:08:52,080 So that's why it's so valuable to them. 130 00:08:52,080 --> 00:08:55,720 You're talking about technology worth hundreds of millions 131 00:08:55,720 --> 00:08:57,160 of dollars in these fields. 132 00:08:59,200 --> 00:09:02,800 On the day of the state banquet in honour of Xi, 133 00:09:02,800 --> 00:09:05,720 agents had Mo under tight surveillance. 134 00:09:05,720 --> 00:09:08,720 I was on the surveillance team that night. 135 00:09:08,720 --> 00:09:12,000 So when he came down here and pulled up to the Capitol, 136 00:09:12,000 --> 00:09:14,000 we were quite surprised. 137 00:09:14,000 --> 00:09:18,160 He used a false name to try to get into the banquet. 138 00:09:18,160 --> 00:09:20,320 Initially, he was denied entry. 139 00:09:20,320 --> 00:09:25,000 And then he placed a call to someone that was already inside the event, 140 00:09:25,000 --> 00:09:28,680 who came out and vouched for him, and he was able to get in the event. 141 00:09:28,680 --> 00:09:31,280 There's no other plausible explanation that the person 142 00:09:31,280 --> 00:09:37,200 that came and got him knew he was using an alias. 143 00:09:37,200 --> 00:09:41,400 That really raised the eyebrows of and caused a significant amount 144 00:09:41,400 --> 00:09:45,320 a concern of a lot of people in the US government, 145 00:09:45,320 --> 00:09:49,400 particularly at our FBI headquarters and, again, 146 00:09:49,400 --> 00:09:53,640 trying to establish what level of involvement did 147 00:09:53,640 --> 00:09:57,440 the Chinese government have in assisting Mo Hailong? 148 00:09:57,440 --> 00:10:01,160 Betten didn't have enough evidence to arrest him, 149 00:10:01,160 --> 00:10:05,000 so he got permission to bug a car used by the gang. 150 00:10:05,000 --> 00:10:10,400 And that listening device was blockbuster evidence. 151 00:10:10,400 --> 00:10:14,640 It was the smoking gun. Ye Jian claimed to have studied the law 152 00:10:14,640 --> 00:10:18,480 and knew US law well enough to know that what they were doing 153 00:10:18,480 --> 00:10:22,280 was not only theft, trespassing, larceny. 154 00:10:22,280 --> 00:10:27,040 It's no different than secrets by the military or Defense. 155 00:10:27,040 --> 00:10:30,920 And if they caught us, they will consider us spies without doubt, 156 00:10:30,920 --> 00:10:34,680 cos what we're doing, really, is spying. 157 00:10:34,680 --> 00:10:37,280 NEWSREADER: A man faces prison time after pleading guilty 158 00:10:37,280 --> 00:10:39,080 to stealing corn seeds from... 159 00:10:39,080 --> 00:10:41,960 Mo Hailong. Authorities say he's one of six Chinese nationals who... 160 00:10:41,960 --> 00:10:46,440 Pleaded guilty to conspiracy to steal trade secrets yesterday... 161 00:10:46,440 --> 00:10:50,120 The seeds that we could identify that he had stolen, 162 00:10:50,120 --> 00:10:53,880 we had the value at over $2 billion. 163 00:10:53,880 --> 00:10:58,040 I don't think we ever came across any evidence Xi Jinping 164 00:10:58,040 --> 00:11:03,840 or his close advisers had any direct contact with Mo Hailong. 165 00:11:03,840 --> 00:11:08,760 I think any large Chinese company in China 166 00:11:08,760 --> 00:11:11,200 operates with a certain level of... 167 00:11:12,400 --> 00:11:16,080 ..encouragement or direction by the Chinese government 168 00:11:16,080 --> 00:11:17,760 to a certain extent. 169 00:11:17,760 --> 00:11:21,000 We utilised some techniques that are unique to the intelligence world 170 00:11:21,000 --> 00:11:24,720 that I really can't discuss, but... 171 00:11:26,120 --> 00:11:29,160 ..yeah, I do think that there was some level of 172 00:11:29,160 --> 00:11:32,960 Chinese government involvement in the case. 173 00:11:37,160 --> 00:11:40,480 There's evidence that China has been stealing the West's 174 00:11:40,480 --> 00:11:45,040 business secrets and intellectual property for decades. 175 00:11:45,040 --> 00:11:48,200 NEWSREADER: A bitter trade war breaks out between America and China 176 00:11:48,200 --> 00:11:50,920 as Washington loses patience over industrial power. 177 00:11:50,920 --> 00:11:54,920 We cannot stand by while the interests of our fastest-growing, 178 00:11:54,920 --> 00:11:57,840 most competitive industries are sacrificed in China. 179 00:11:57,840 --> 00:12:01,200 The United States and China are attempting to head off a damaging 180 00:12:01,200 --> 00:12:04,880 trade war over the protection of intellectual property rights. 181 00:12:04,880 --> 00:12:09,160 Initially, really, what we were talking about was low-level piracy. 182 00:12:09,160 --> 00:12:13,400 Pirate CDs or whatever consumer goods that you were producing, 183 00:12:13,400 --> 00:12:16,680 and all of a sudden, there'd be a Chinese knock-off. 184 00:12:16,680 --> 00:12:18,520 As China modernised very rapidly... 185 00:12:19,960 --> 00:12:23,320 ..its ambitions grew proportionately. 186 00:12:23,320 --> 00:12:28,080 Beijing government has a learning process in doing this. 187 00:12:28,080 --> 00:12:30,280 At the very beginning, when China just opened up, 188 00:12:30,280 --> 00:12:33,520 they did not even realise this kind of, you know... 189 00:12:33,520 --> 00:12:36,760 ..that violation of intellectual property rights is a crime. 190 00:12:36,760 --> 00:12:39,160 They said, "Well, look, everybody's doing that." 191 00:12:50,520 --> 00:12:53,800 So this is the model factory of SolarWorld. 192 00:12:56,600 --> 00:13:02,360 It's still the most advanced solar manufacturing plant in Europe 193 00:13:02,360 --> 00:13:06,200 and in the Western world. And the reason why it is not producing 194 00:13:06,200 --> 00:13:10,640 is because the company, SolarWorld, went bankrupt. 195 00:13:12,000 --> 00:13:16,960 When Milan Nitzschke joined SolarWorld, it was flourishing. 196 00:13:16,960 --> 00:13:21,640 We had, at that time, a real boom for renewable energies. 197 00:13:21,640 --> 00:13:24,080 People were using the technology. 198 00:13:24,080 --> 00:13:27,080 It was normal to think about, "Whoa! I have a rooftop. 199 00:13:27,080 --> 00:13:28,960 "Why not investing in solar?" 200 00:13:28,960 --> 00:13:33,040 SolarWorld was one of the pioneers of the solar industry and, 201 00:13:33,040 --> 00:13:37,400 at the end, it was the largest solar manufacturer in the Western world. 202 00:13:38,720 --> 00:13:42,400 In the past, it was always about the oil. The oil... 203 00:13:42,400 --> 00:13:46,840 It was the biggest producer of solar panels in the United States. 204 00:13:46,840 --> 00:13:50,760 Too dirty. I quit it years ago. 205 00:13:50,760 --> 00:13:53,080 But I'm still in the energy business. 206 00:13:53,080 --> 00:13:55,320 There's always a better alternative. 207 00:13:55,320 --> 00:13:57,160 Shine, baby, shine! 208 00:13:57,160 --> 00:13:59,160 HE LAUGHS 209 00:14:00,400 --> 00:14:03,240 But SolarWorld had a problem. 210 00:14:03,240 --> 00:14:05,840 The Chinese government wanted China to lead the world 211 00:14:05,840 --> 00:14:07,960 in solar technology, 212 00:14:07,960 --> 00:14:11,000 so it poured billions of dollars into the industry 213 00:14:11,000 --> 00:14:15,080 in what SolarWorld said were illegal subsidies. 214 00:14:15,080 --> 00:14:19,560 So in only five years, they build up a capacity double as big 215 00:14:19,560 --> 00:14:22,800 as the whole global demand, so they could have supplied 216 00:14:22,800 --> 00:14:27,800 the whole global solar demand two times, only from China. 217 00:14:27,800 --> 00:14:31,840 We understood that we would all vanish from the market... 218 00:14:33,280 --> 00:14:37,320 ..if we would not act against that unfair competition 219 00:14:37,320 --> 00:14:42,080 and unfair trade, because what China did was illegal from the beginning. 220 00:14:44,400 --> 00:14:47,320 NEWSREADER: American solar panel makers accuse the Chinese 221 00:14:47,320 --> 00:14:49,760 of using billions of dollars in government subsidies 222 00:14:49,760 --> 00:14:52,240 to gain control of the US market. 223 00:14:52,240 --> 00:14:56,880 SolarWorld launched legal action against the Chinese government 224 00:14:56,880 --> 00:14:59,760 in Europe and the United States. 225 00:14:59,760 --> 00:15:04,040 The illegal subsidies that China's putting out into the solar industry 226 00:15:04,040 --> 00:15:08,320 is no different than giving an athlete a bucketful of steroids. 227 00:15:08,320 --> 00:15:13,560 But within months, SolarWorld had another problem. 228 00:15:13,560 --> 00:15:20,880 Some officers of the LA Department of the FBI came to our offices 229 00:15:20,880 --> 00:15:23,080 in Hillsboro in Oregon... 230 00:15:24,160 --> 00:15:29,000 ..told us that our company has been hacked. 231 00:15:29,000 --> 00:15:33,480 So the hackers took all the information about the ongoing 232 00:15:33,480 --> 00:15:39,040 anti-dumping case and they took all - simply all - information 233 00:15:39,040 --> 00:15:42,160 about the company, especially... 234 00:15:42,160 --> 00:15:44,200 ..everything related to technology. 235 00:15:55,560 --> 00:15:58,200 So who hacked SolarWorld? 236 00:16:01,720 --> 00:16:05,880 Kevin Mandia runs a cyber security company that have been tracking 237 00:16:05,880 --> 00:16:10,080 a group of Chinese hackers for more than seven years. 238 00:16:10,080 --> 00:16:12,840 We were always seeing between 60 to 80 new companies compromised 239 00:16:12,840 --> 00:16:14,480 every single month. 240 00:16:14,480 --> 00:16:18,080 We saw most in the United States but, you know, 241 00:16:18,080 --> 00:16:21,800 we responded to breaches in the Netherlands and Germany and the UK. 242 00:16:21,800 --> 00:16:23,600 It was universities, pharmaceuticals, 243 00:16:23,600 --> 00:16:25,640 military, non-military. 244 00:16:27,840 --> 00:16:31,160 They knew the hackers were based in Shanghai, 245 00:16:31,160 --> 00:16:34,200 and then they made a startling discovery. 246 00:16:34,200 --> 00:16:36,680 You know, we found a document at a university in China. 247 00:16:36,680 --> 00:16:38,720 And when we translated that document, 248 00:16:38,720 --> 00:16:41,720 it was like a student that says, "I want to do network operations." 249 00:16:41,720 --> 00:16:44,800 We translate that phrase into they want to do... 250 00:16:44,800 --> 00:16:46,600 You know, they want to do network attack. 251 00:16:46,600 --> 00:16:50,640 And they'd mentioned PLA Unit 61398 as one of the places 252 00:16:50,640 --> 00:16:51,800 they used to work. 253 00:16:51,800 --> 00:16:54,880 So we're like, "Oh, they did attack, network attack from this unit." 254 00:16:56,760 --> 00:16:59,800 Kevin Mandia went public with his discovery 255 00:16:59,800 --> 00:17:04,680 that a unit of the Chinese army was hacking Western businesses. 256 00:17:04,680 --> 00:17:08,400 REPORTER: This is our crew being chased by Chinese security officers. 257 00:17:08,400 --> 00:17:10,760 We got the building right. 258 00:17:10,760 --> 00:17:12,600 We got the purpose of the building right. 259 00:17:12,600 --> 00:17:14,360 We got that they are, 260 00:17:14,360 --> 00:17:17,240 you know, military folks hacking the private sector. 261 00:17:19,320 --> 00:17:24,440 It was this Chinese military unit that had hacked SolarWorld. 262 00:17:26,640 --> 00:17:32,680 The Chinese government and the Chinese army is employing hackers 263 00:17:32,680 --> 00:17:37,960 to steal IP of manufacturing companies. 264 00:17:37,960 --> 00:17:40,240 This was completely new to us. 265 00:17:40,240 --> 00:17:44,920 You know, if a foreign nation sent troops in to rob a bank, 266 00:17:44,920 --> 00:17:47,120 the US military would respond in kind. 267 00:17:47,120 --> 00:17:50,200 You know, we would actually defend the bank, and we don't expect banks 268 00:17:50,200 --> 00:17:53,880 to withstand bank robbers that are parachuting out of helicopters. 269 00:17:53,880 --> 00:17:57,120 I don't think we do. So why do we expect the private sector 270 00:17:57,120 --> 00:17:59,440 to withstand cyber military attacks? 271 00:18:01,760 --> 00:18:05,800 China says the US is short on delivering solid evidence 272 00:18:05,800 --> 00:18:08,480 of Chinese stealing of IP, 273 00:18:08,480 --> 00:18:11,400 and China has not achieved its technological development 274 00:18:11,400 --> 00:18:13,720 through theft. 275 00:18:13,720 --> 00:18:17,880 China says it is serious in respecting and protecting IP rights, 276 00:18:17,880 --> 00:18:21,720 and its payment of licensing fees and royalties for the use 277 00:18:21,720 --> 00:18:26,480 of foreign technology has increased fourfold over the last decade. 278 00:18:30,400 --> 00:18:34,560 But FireEye's discovery was part of a growing alarm in the US 279 00:18:34,560 --> 00:18:37,680 about Chinese hacking attacks on businesses. 280 00:18:39,160 --> 00:18:41,840 Google says hackers accessed the e-mail accounts of 281 00:18:41,840 --> 00:18:43,520 Chinese human rights activists... 282 00:18:43,520 --> 00:18:46,640 ..tampered with, and that the attacks originated in China. 283 00:18:46,640 --> 00:18:50,120 Not only was Google itself targeted by the cyber spies, 284 00:18:50,120 --> 00:18:54,240 but so were at least 20 other major corporations. 285 00:18:54,240 --> 00:18:57,640 That signalled to us that we had a much bigger problem 286 00:18:57,640 --> 00:18:59,800 than we had anticipated. 287 00:18:59,800 --> 00:19:05,120 It was recognition that the Chinese were a lot better at hacking 288 00:19:05,120 --> 00:19:08,200 and cyber-enabled activities than we had anticipated, 289 00:19:08,200 --> 00:19:12,920 but also that there may be an economic dimension to this. 290 00:19:12,920 --> 00:19:17,800 Barack Obama knew about Chinese cyber espionage all too well. 291 00:19:17,800 --> 00:19:21,560 They hacked into the Obama campaign and compromised, I think, 292 00:19:21,560 --> 00:19:23,440 you know, all of our e-mails 293 00:19:23,440 --> 00:19:26,160 even before I walked in the door at the White House. 294 00:19:26,160 --> 00:19:31,120 Well, that's a little disconcerting that the Chinese would do that. 295 00:19:31,120 --> 00:19:34,600 I know how it feels to have privacy violated, 296 00:19:34,600 --> 00:19:39,640 because it has happened to me and the people around me. 297 00:19:39,640 --> 00:19:44,960 You begin to realise that it's not an isolated set of occurrences. 298 00:19:44,960 --> 00:19:48,200 It's Chinese state policy to essentially 299 00:19:48,200 --> 00:19:51,600 steal intellectual property and to spread it around... 300 00:19:52,760 --> 00:19:56,800 ..to Chinese companies that are direct competitors with US 301 00:19:56,800 --> 00:19:59,360 and other Western businesses. 302 00:19:59,360 --> 00:20:03,040 We had three years of constantly raising with the Chinese 303 00:20:03,040 --> 00:20:06,160 and, to be frank, not making a lot of progress. 304 00:20:06,160 --> 00:20:09,280 So, by 2013, we were getting very concerned 305 00:20:09,280 --> 00:20:11,560 because they didn't seem to be... 306 00:20:12,800 --> 00:20:17,000 ..changing their practices that much, and frustration in the US 307 00:20:17,000 --> 00:20:19,320 was growing pretty substantially. 308 00:20:20,480 --> 00:20:25,360 America must also face the rapidly growing threat from cyber attacks. 309 00:20:25,360 --> 00:20:29,840 Now, we know hackers steal people's identities 310 00:20:29,840 --> 00:20:33,280 and infiltrate private e-mails. 311 00:20:33,280 --> 00:20:35,320 We know foreign countries and companies 312 00:20:35,320 --> 00:20:37,760 swipe our corporate secrets. 313 00:20:37,760 --> 00:20:42,120 President Obama wanted to find a way to stop Chinese hacking. 314 00:20:46,720 --> 00:20:50,200 REPORTER: In the heart of Chinese power, a new era... 315 00:20:51,480 --> 00:20:56,240 ..as a billion people waited to hear from their new leaders. 316 00:20:56,240 --> 00:20:58,680 Xi Jinping took the stage. 317 00:20:58,680 --> 00:21:02,840 China's new president spoke of his Chinese dream. 318 00:21:02,840 --> 00:21:05,760 He thought the appointment of Xi Jinping presented 319 00:21:05,760 --> 00:21:07,200 an ideal opportunity. 320 00:21:08,440 --> 00:21:13,520 We wanted to signal at the beginning of a new Chinese leadership, 321 00:21:13,520 --> 00:21:16,440 "OK, this is now... This is now front and centre for us. 322 00:21:16,440 --> 00:21:18,400 "This is a core interest for the United States." 323 00:21:18,400 --> 00:21:21,200 We didn't have any illusions that Xi Jinping was sort of 324 00:21:21,200 --> 00:21:23,040 a secret democrat. 325 00:21:23,040 --> 00:21:24,960 But we needed to get to know him, 326 00:21:24,960 --> 00:21:28,920 and we needed to do it as quickly and early as possible. 327 00:21:28,920 --> 00:21:31,640 So that was the idea behind Sunnylands. 328 00:21:41,400 --> 00:21:45,120 It's a beautiful estate in Southern California - 329 00:21:45,120 --> 00:21:48,400 very, very arid, relatively flat - 330 00:21:48,400 --> 00:21:52,120 but it's all done in this striking mid-century modern architecture. 331 00:21:53,720 --> 00:21:57,800 You couldn't imagine a more unexpected place for 332 00:21:57,800 --> 00:22:01,240 an American democratic leader and the President of China 333 00:22:01,240 --> 00:22:03,080 to be meeting. 334 00:22:03,080 --> 00:22:07,320 But days before the meeting between Presidents Obama and Xi, 335 00:22:07,320 --> 00:22:12,160 details of the US government's own computer hacking began to leak out. 336 00:22:12,160 --> 00:22:14,520 A new bombshell that could be devastating 337 00:22:14,520 --> 00:22:17,640 for the Obama administration has also surfaced this morning. 338 00:22:17,640 --> 00:22:20,720 You guessed it right. Big Brother is keeping files. 339 00:22:20,720 --> 00:22:22,360 The National Security Agency 340 00:22:22,360 --> 00:22:24,720 is keeping track of the telephone records 341 00:22:24,720 --> 00:22:26,400 of millions of Americans. 342 00:22:26,400 --> 00:22:28,080 Britain's Guardian newspaper... 343 00:22:28,080 --> 00:22:30,200 The absurdity of this whole situation is that... 344 00:22:30,200 --> 00:22:32,360 ..like, on the way to that summit, 345 00:22:32,360 --> 00:22:35,040 the first disclosures come out from Edward Snowden. 346 00:22:35,040 --> 00:22:38,440 It just fuelled this sort of sense by China that we were applying 347 00:22:38,440 --> 00:22:42,680 a double standard, that we engage in behaviour against China 348 00:22:42,680 --> 00:22:45,720 but now we're criticising China for engaging in that behaviour. 349 00:22:45,720 --> 00:22:47,640 I think that was part of Xi's response, 350 00:22:47,640 --> 00:22:49,600 was, "Whoa, we're just learning all these things 351 00:22:49,600 --> 00:22:51,240 "that you guys have been doing." 352 00:22:51,240 --> 00:22:54,880 And what we were trying to do was sensitise China to the distinction 353 00:22:54,880 --> 00:22:59,240 between cyber activities for the purposes of economic espionage - 354 00:22:59,240 --> 00:23:02,080 which the US does not do - 355 00:23:02,080 --> 00:23:05,440 and cyber activities for the purposes of international espionage, 356 00:23:05,440 --> 00:23:08,120 which most major cyber powers conduct. 357 00:23:08,120 --> 00:23:11,080 We provided specific instances where Chinese actors 358 00:23:11,080 --> 00:23:13,920 had stolen intellectual property, 359 00:23:13,920 --> 00:23:17,320 confidential business information, from American companies, 360 00:23:17,320 --> 00:23:20,040 and the damage that it had done to them. 361 00:23:20,040 --> 00:23:23,360 It was not clear to us at that time that Xi Jinping 362 00:23:23,360 --> 00:23:26,760 knew exactly what was going on within his own government. 363 00:23:26,760 --> 00:23:32,200 Obama leaned in. He said, "Mr President, this is a serious issue. 364 00:23:32,200 --> 00:23:34,880 "I need you to pay attention to it. 365 00:23:34,880 --> 00:23:39,320 "I need you to look into what your government is doing, 366 00:23:39,320 --> 00:23:41,160 "and it needs to stop." 367 00:23:44,240 --> 00:23:47,880 But the US authorities say China's cyber espionage 368 00:23:47,880 --> 00:23:50,720 against its companies did not stop. 369 00:23:54,880 --> 00:23:57,840 They decided to take on the hackers directly. 370 00:23:57,840 --> 00:23:59,480 For the first time, 371 00:23:59,480 --> 00:24:04,120 we are exposing the faces and names behind the keyboards in Shanghai 372 00:24:04,120 --> 00:24:08,000 used to steal from American businesses. 373 00:24:08,000 --> 00:24:10,800 The United States is making an unprecedented charge 374 00:24:10,800 --> 00:24:13,040 against another country - the Chinese. 375 00:24:15,040 --> 00:24:17,520 In May 2014, the US indicted 376 00:24:17,520 --> 00:24:19,360 five of the Chinese hackers 377 00:24:19,360 --> 00:24:22,240 who'd targeted SolarWorld. 378 00:24:22,240 --> 00:24:25,680 This is the second largest military in the world, 379 00:24:25,680 --> 00:24:30,680 and their day job, when they put on their uniform and go to work, 380 00:24:30,680 --> 00:24:33,240 was to hack private companies. 381 00:24:33,240 --> 00:24:36,200 There's nothing that a private company can do 382 00:24:36,200 --> 00:24:38,680 to keep out the second largest military in the world. 383 00:24:38,680 --> 00:24:41,880 This has to be an issue where the government helps. 384 00:24:44,760 --> 00:24:49,400 John Carlin had first seen the extent of Chinese cyber espionage 385 00:24:49,400 --> 00:24:51,840 at the FBI seven years before. 386 00:24:53,280 --> 00:24:58,560 A giant screen displaying cyber intrusions across the United States. 387 00:24:58,560 --> 00:25:03,040 I watched in real time as Chinese state actors would hop into 388 00:25:03,040 --> 00:25:06,960 places like universities, they'd go from the universities into business, 389 00:25:06,960 --> 00:25:11,040 and then you'd watch billions and billions of dollars, trade secrets, 390 00:25:11,040 --> 00:25:14,440 trade negotiation strategies, pour out of the United States. 391 00:25:14,440 --> 00:25:17,480 It's what the former director of the National Security Agency 392 00:25:17,480 --> 00:25:20,880 called "the largest transfer of wealth in human history". 393 00:25:22,160 --> 00:25:24,960 The Chinese government says China itself 394 00:25:24,960 --> 00:25:27,480 is a victim of hacking and cyber theft, 395 00:25:27,480 --> 00:25:31,440 and that China, as a staunch defender of cyber security, 396 00:25:31,440 --> 00:25:33,720 has always been firmly opposing 397 00:25:33,720 --> 00:25:36,560 and cracking down on all kinds of hacking. 398 00:25:36,560 --> 00:25:41,680 But for US officials, China's ability to hack any US target 399 00:25:41,680 --> 00:25:44,160 was about to become very clear. 400 00:25:49,920 --> 00:25:52,600 Officials say this could be the biggest cyber attack 401 00:25:52,600 --> 00:25:54,000 in American history. 402 00:25:54,000 --> 00:25:55,960 The culprit, they say - China. 403 00:25:55,960 --> 00:25:59,440 As many as four million current and former government employees 404 00:25:59,440 --> 00:26:01,600 have been told their personal information 405 00:26:01,600 --> 00:26:05,120 could have been hacked from the Office of Personnel Management. 406 00:26:05,120 --> 00:26:08,040 It was a big intelligence coup for China, 407 00:26:08,040 --> 00:26:10,920 a huge loss for the United States. 408 00:26:10,920 --> 00:26:13,320 Officials say that the hackers accessed a database 409 00:26:13,320 --> 00:26:17,040 storing government forms used for security clearances. 410 00:26:17,040 --> 00:26:19,920 I don't like it. I'm one of those people. 411 00:26:19,920 --> 00:26:22,880 I don't feel great about the possibility that the Chinese 412 00:26:22,880 --> 00:26:25,680 are sitting here with all my paperwork. But... 413 00:26:25,680 --> 00:26:28,360 ..to be fair, I mean, 414 00:26:28,360 --> 00:26:31,240 that's kind of what states do. 415 00:26:31,240 --> 00:26:32,840 You know, people were very upset 416 00:26:32,840 --> 00:26:35,120 about their records being leaked, et cetera, 417 00:26:35,120 --> 00:26:38,000 and that's when, really, I think... 418 00:26:38,000 --> 00:26:40,600 ..sort of the tolerance level went off the charts, 419 00:26:40,600 --> 00:26:43,880 and they said, "We've got to do something about this." 420 00:26:43,880 --> 00:26:47,680 President Xi was due to travel to the US three months later 421 00:26:47,680 --> 00:26:49,680 for a state visit. 422 00:26:49,680 --> 00:26:52,880 President Obama decided to seek an agreement from him 423 00:26:52,880 --> 00:26:54,960 that the hacking would stop. 424 00:26:54,960 --> 00:26:59,240 Susan Thornton was one of the top US diplomats for East Asia 425 00:26:59,240 --> 00:27:04,320 and helped lead the team negotiating with China ahead of Xi's visit. 426 00:27:04,320 --> 00:27:06,880 It became clear that cyber was going to be a make-or-break issue 427 00:27:06,880 --> 00:27:08,320 for the summit. 428 00:27:08,320 --> 00:27:10,800 We basically told them, if we don't have an outcome in this area, 429 00:27:10,800 --> 00:27:12,440 it's not going to be a success. 430 00:27:12,440 --> 00:27:14,880 In the weeks running up to the visit, 431 00:27:14,880 --> 00:27:17,720 the negotiators made little progress. 432 00:27:17,720 --> 00:27:21,120 Then there was a carefully timed leak. 433 00:27:21,120 --> 00:27:24,280 The White House has threatened sanctions against China. 434 00:27:24,280 --> 00:27:25,840 A little harsh? 435 00:27:25,840 --> 00:27:29,240 Well, some say they've been a long time coming. 436 00:27:29,240 --> 00:27:34,240 So they sent a very high-ranking level Politburo member over 437 00:27:34,240 --> 00:27:37,640 to do this negotiation, and when they did that, we thought, "Aha!" 438 00:27:37,640 --> 00:27:40,680 You know, they're not kidding around because it's unprecedented 439 00:27:40,680 --> 00:27:44,040 that they would send someone at that level to do the negotiations. 440 00:27:44,040 --> 00:27:47,560 Countries should not be using their intelligence services 441 00:27:47,560 --> 00:27:50,240 to conduct economic espionage 442 00:27:50,240 --> 00:27:54,080 or steal trade secrets for the benefit of their companies. 443 00:27:54,080 --> 00:27:57,240 So I think that it had become clear to the Chinese government 444 00:27:57,240 --> 00:28:01,440 that this issue had become a real irritant and a problem, 445 00:28:01,440 --> 00:28:05,440 and they wanted very much the visit between President Xi 446 00:28:05,440 --> 00:28:07,360 and President Obama to go well. 447 00:28:07,360 --> 00:28:10,440 It was pretty clear that, in the Chinese system, 448 00:28:10,440 --> 00:28:14,240 things were a bit in disarray on this front, as in, 449 00:28:14,240 --> 00:28:17,080 the central government probably wasn't aware 450 00:28:17,080 --> 00:28:21,000 of a lot of the entrepreneurial stuff that was going on 451 00:28:21,000 --> 00:28:24,920 in various parts of the bureaucracy on hacking. 452 00:28:27,280 --> 00:28:30,840 At the end of the summit, President Xi and President Obama 453 00:28:30,840 --> 00:28:33,000 made a major announcement. 454 00:28:33,000 --> 00:28:36,360 We've agreed that neither the US or the Chinese government 455 00:28:36,360 --> 00:28:40,640 will conduct or knowingly support cyber-enabled theft 456 00:28:40,640 --> 00:28:44,720 of intellectual property, including trade secrets or other confidential 457 00:28:44,720 --> 00:28:47,080 business information for commercial advantage. 458 00:28:56,400 --> 00:28:58,600 It was an extraordinary moment. 459 00:28:58,600 --> 00:29:01,080 The two most powerful countries in the world 460 00:29:01,080 --> 00:29:03,320 agreeing a ceasefire in cyberspace. 461 00:29:04,280 --> 00:29:06,560 The question now is, 462 00:29:06,560 --> 00:29:08,800 are words followed by actions? 463 00:29:08,800 --> 00:29:12,280 While the US was confronting the threats posed by China, 464 00:29:12,280 --> 00:29:15,280 the UK was taking a very different approach. 465 00:29:25,880 --> 00:29:28,520 State visits are important. There's a lot of ceremony in them. 466 00:29:30,160 --> 00:29:32,600 Pomp and circumstance, but they're also a moment 467 00:29:32,600 --> 00:29:34,800 to cement a relationship with a country. 468 00:29:41,720 --> 00:29:45,160 We made it more informal, with visits to football stadiums. 469 00:29:47,040 --> 00:29:49,840 The selfie with Sergio Aguero, I think it was, 470 00:29:49,840 --> 00:29:51,680 was pretty effective. 471 00:29:54,000 --> 00:29:56,120 Visits to the pub. 472 00:29:58,400 --> 00:30:02,440 China was clearly going to be the great source of growth 473 00:30:02,440 --> 00:30:04,280 in the global economy. 474 00:30:04,280 --> 00:30:07,720 It contributes around 30% of all global growth 475 00:30:07,720 --> 00:30:09,880 in our economy, going forward. 476 00:30:09,880 --> 00:30:11,680 And we want a part of that. 477 00:30:11,680 --> 00:30:13,400 JOURNALIST: How were the fish and chips? 478 00:30:13,400 --> 00:30:15,280 Very good, excellent. 479 00:30:15,280 --> 00:30:18,680 The British government wanted to boost trade with China 480 00:30:18,680 --> 00:30:22,200 and attract Chinese investment to the UK. 481 00:30:22,200 --> 00:30:25,600 It included a deal to bring China into the heart of Britain's 482 00:30:25,600 --> 00:30:27,160 civil nuclear programme. 483 00:30:28,640 --> 00:30:31,560 The British government declared a golden decade 484 00:30:31,560 --> 00:30:33,920 of Chinese-British relations. 485 00:30:33,920 --> 00:30:36,360 It was so over the top. 486 00:30:36,360 --> 00:30:38,640 There was nothing else left. 487 00:30:38,640 --> 00:30:42,080 If you're trying to send a message to the Chinese 488 00:30:42,080 --> 00:30:46,800 that we're going to bend over backwards and do anything you want, 489 00:30:46,800 --> 00:30:50,880 then I think the message was sent very clearly. 490 00:30:50,880 --> 00:30:53,040 The question is, 491 00:30:53,040 --> 00:30:57,000 is that strategy most likely to result in 492 00:30:57,000 --> 00:31:00,120 getting what you want from China in the way you want it? 493 00:31:03,360 --> 00:31:05,000 CHEERING 494 00:31:07,440 --> 00:31:09,680 George Osborne took President Xi 495 00:31:09,680 --> 00:31:12,920 to the National Graphene Institute in Manchester. 496 00:31:12,920 --> 00:31:16,520 Graphene is an incredible new substance 497 00:31:16,520 --> 00:31:20,440 that has been discovered by two Russian scientists 498 00:31:20,440 --> 00:31:22,440 working in Britain, who won the Nobel Prize. 499 00:31:24,080 --> 00:31:27,360 I wanted to show Xi Jinping 500 00:31:27,360 --> 00:31:31,440 what we were capable of in Britain, and, of course, make sure that 501 00:31:31,440 --> 00:31:34,600 potentially the largest market in the world for graphene 502 00:31:34,600 --> 00:31:37,920 was open to us, so that things discovered in Britain 503 00:31:37,920 --> 00:31:40,960 could be made in Britain and then sold around the world. 504 00:31:40,960 --> 00:31:44,640 Among those showing off the Institute's work to Xi Jinping 505 00:31:44,640 --> 00:31:48,280 that day was this man - Huang Xianjun. 506 00:31:48,280 --> 00:31:51,520 He'd come to Manchester to study graphene, 507 00:31:51,520 --> 00:31:53,960 but he was no ordinary student. 508 00:31:53,960 --> 00:31:55,680 He was sent by the Chinese military 509 00:31:55,680 --> 00:31:59,240 to study at the University of Manchester as a PhD student, 510 00:31:59,240 --> 00:32:03,600 where he made some breakthroughs on graphene technology. 511 00:32:03,600 --> 00:32:05,880 And that's particularly concerning, I think, 512 00:32:05,880 --> 00:32:08,960 because graphene technology has clear military applications. 513 00:32:17,360 --> 00:32:19,560 When Huang returned to China, 514 00:32:19,560 --> 00:32:22,000 he worked to apply the knowledge and skills 515 00:32:22,000 --> 00:32:25,280 he'd gained overseas in the UK to Chinese military technology, 516 00:32:25,280 --> 00:32:27,880 and that includes things like military intelligence. 517 00:32:35,600 --> 00:32:38,880 Alex Joske has researched how the Chinese military 518 00:32:38,880 --> 00:32:42,480 has sent thousands of students to study new technologies 519 00:32:42,480 --> 00:32:45,360 at Western universities over ten years. 520 00:32:45,360 --> 00:32:47,720 And it's a phenomenon that the Chinese military 521 00:32:47,720 --> 00:32:50,440 has described as picking flowers in foreign lands 522 00:32:50,440 --> 00:32:52,080 to make honey in China. 523 00:32:52,080 --> 00:32:54,840 I think the UK is probably the primary destination 524 00:32:54,840 --> 00:32:57,720 for Chinese military scientists studying abroad. 525 00:32:57,720 --> 00:33:00,200 About 500 of them have been to the UK, 526 00:33:00,200 --> 00:33:03,640 which I think really represents a significant contribution 527 00:33:03,640 --> 00:33:06,120 to Chinese military technology. 528 00:33:06,120 --> 00:33:09,520 The Graphene Institute refuses to say if Huang Xianjun 529 00:33:09,520 --> 00:33:13,600 told them about his links to the Chinese military. 530 00:33:13,600 --> 00:33:15,760 I think it's a concern because it raises some 531 00:33:15,760 --> 00:33:19,520 pretty substantial questions. Was this a grey area 532 00:33:19,520 --> 00:33:23,120 that this PLA representative was operating in? 533 00:33:23,120 --> 00:33:24,640 We're not quite sure. 534 00:33:24,640 --> 00:33:27,760 But what we do know is that this technology is now... 535 00:33:27,760 --> 00:33:29,880 UK technology is now being developed in China 536 00:33:29,880 --> 00:33:31,440 for military purposes. 537 00:33:33,840 --> 00:33:35,960 There's nothing secret about graphene. 538 00:33:35,960 --> 00:33:38,200 So you don't need to go to the Graphene Institute 539 00:33:38,200 --> 00:33:40,640 to find out about that - you can look it up online. 540 00:33:40,640 --> 00:33:43,480 What we needed to do was make sure that there's a market 541 00:33:43,480 --> 00:33:47,080 for something that Britain had participated in the discovery of. 542 00:33:47,080 --> 00:33:49,280 And one of those biggest markets, 543 00:33:49,280 --> 00:33:51,360 one of the biggest parts of that market, was China. 544 00:33:53,400 --> 00:33:57,480 I think that the approach in 2015, 545 00:33:57,480 --> 00:34:00,120 to my mind, smacked of naivete. 546 00:34:01,160 --> 00:34:04,200 The golden era of cooperation 547 00:34:04,200 --> 00:34:08,640 appeared to be based on the presumption 548 00:34:08,640 --> 00:34:11,520 that you could have an economic relationship with China 549 00:34:11,520 --> 00:34:14,120 without having to worry about the politics. 550 00:34:14,120 --> 00:34:16,960 And in a country... In respect of a country like China, 551 00:34:16,960 --> 00:34:20,160 where everything is politicised to the nth degree, 552 00:34:20,160 --> 00:34:23,880 that is simply not a realistic approach to adopt. 553 00:34:33,640 --> 00:34:36,320 THERESA MAY: I have just been to Buckingham Palace, 554 00:34:36,320 --> 00:34:40,880 where Her Majesty the Queen has asked me to form a new government 555 00:34:40,880 --> 00:34:42,880 and I accepted. 556 00:34:42,880 --> 00:34:45,440 When Theresa May became Prime Minister, 557 00:34:45,440 --> 00:34:49,080 it looked like Britain would take a very different approach to China. 558 00:34:49,080 --> 00:34:52,240 One of her first announcements cast doubt 559 00:34:52,240 --> 00:34:56,640 over one of China's most significant investments in the UK - 560 00:34:56,640 --> 00:35:01,240 the deal that let it into the heart of Britain's nuclear power industry. 561 00:35:03,200 --> 00:35:05,720 NEWSREADER: The government has pulled back from a deal 562 00:35:05,720 --> 00:35:09,000 to build Britain's first nuclear power station in a generation. 563 00:35:09,000 --> 00:35:10,600 But now the government says 564 00:35:10,600 --> 00:35:13,240 it wants to have a bit of a think about it for a few weeks. 565 00:35:13,240 --> 00:35:15,040 So why the change in heart? 566 00:35:15,040 --> 00:35:17,120 China has a stake in Hinkley, 567 00:35:17,120 --> 00:35:20,560 and the promise of building its reactors in Britain in the future. 568 00:35:20,560 --> 00:35:24,040 Did that raise fresh security concerns? 569 00:35:24,040 --> 00:35:26,440 The deal to allow Chinese involvement 570 00:35:26,440 --> 00:35:28,640 in Britain's nuclear industry 571 00:35:28,640 --> 00:35:33,080 had been done when relations between China and the West were warm. 572 00:35:33,080 --> 00:35:35,560 But the temperature was rapidly dropping. 573 00:35:55,440 --> 00:36:00,360 I work counterintelligence and this was a major case. 574 00:36:02,000 --> 00:36:04,240 As we started looking into it, we realised 575 00:36:04,240 --> 00:36:08,880 that the nuclear industry was clearly defined as a target 576 00:36:08,880 --> 00:36:11,040 by China, as the nation. 577 00:36:11,040 --> 00:36:16,200 Three years earlier, FBI agent Bill Leckrone had begun to investigate 578 00:36:16,200 --> 00:36:20,400 a group of US nuclear power experts working as consultants 579 00:36:20,400 --> 00:36:23,080 for this man - Dr Allen Ho. 580 00:36:23,080 --> 00:36:24,960 So Dr Ho clearly targeted 581 00:36:24,960 --> 00:36:30,240 individuals newly retired or ready to retire from the nuclear field. 582 00:36:30,240 --> 00:36:33,480 He had a sales pitch that sounded similar to, you know, 583 00:36:33,480 --> 00:36:36,720 "Travel to China twice a year for a week at a time. 584 00:36:36,720 --> 00:36:41,160 "Work from home the rest of the time and we can correspond via e-mail." 585 00:36:41,160 --> 00:36:44,640 And this was really appealing to an individual who wants 586 00:36:44,640 --> 00:36:48,080 to continue to utilise the expertise that he had. 587 00:36:51,240 --> 00:36:55,240 Dr Ho was working for a Chinese state-owned company - 588 00:36:55,240 --> 00:36:58,480 China General Nuclear, or CGN - 589 00:36:58,480 --> 00:37:02,800 the same company that was involved in Hinkley Point. 590 00:37:02,800 --> 00:37:05,760 We proceeded forward in our investigation 591 00:37:05,760 --> 00:37:07,920 more into Dr Ho and his network, 592 00:37:07,920 --> 00:37:11,600 what we would uncover as a network of subject matter experts 593 00:37:11,600 --> 00:37:14,640 that were providing nuclear technology to China 594 00:37:14,640 --> 00:37:16,320 without the proper authorisations. 595 00:37:17,560 --> 00:37:22,440 Agent Leckrone discovered that Ho was helping CGN steal US secrets 596 00:37:22,440 --> 00:37:26,560 that could enable it to build cutting-edge nuclear reactors. 597 00:37:26,560 --> 00:37:30,560 We identified nearly 50 individuals or corporations 598 00:37:30,560 --> 00:37:35,600 that Dr Ho had attempted to bring into his consulting firm. 599 00:37:39,320 --> 00:37:43,160 In 2016, Agent Leckrone tracked down Dr Ho 600 00:37:43,160 --> 00:37:46,000 as he travelled to a nuclear conference. 601 00:37:46,000 --> 00:37:48,800 Dr Ho got off the elevator, at which point 602 00:37:48,800 --> 00:37:51,280 I met him and asked him to come into the conference room 603 00:37:51,280 --> 00:37:54,200 and explained that he was under arrest. 604 00:37:54,200 --> 00:37:59,080 So in January 2017, Dr Ho pled guilty to a violation 605 00:37:59,080 --> 00:38:00,960 of the Atomic Energy Act. 606 00:38:02,440 --> 00:38:06,640 The company China General Nuclear Power has been charged in the US 607 00:38:06,640 --> 00:38:10,560 with trying to steal nuclear technology. The company says... 608 00:38:10,560 --> 00:38:12,800 CGN and Allen Ho were prosecuted 609 00:38:12,800 --> 00:38:15,520 under a law passed in the Cold War era. 610 00:38:15,520 --> 00:38:19,080 For some, that raised fears of a witch hunt. 611 00:38:20,120 --> 00:38:22,520 There have been accusations that 612 00:38:22,520 --> 00:38:27,040 the US government has succumbed to some form of McCarthyism 613 00:38:27,040 --> 00:38:33,680 of the 1950s. Suddenly, the descriptions of a "red scare"... 614 00:38:35,160 --> 00:38:38,360 ..are not necessarily overdrawn or exaggerated. 615 00:38:39,840 --> 00:38:42,880 But the rules of the game had changed. 616 00:38:42,880 --> 00:38:47,320 For some in the US, China was now an adversary. 617 00:38:47,320 --> 00:38:49,960 He's a naturalised US citizen. 618 00:38:49,960 --> 00:38:52,800 But his heart is in the PRC. 619 00:38:52,800 --> 00:38:54,440 And that's apparent. 620 00:38:54,440 --> 00:38:58,520 We had evidence that his actions were state-directed. 621 00:38:58,520 --> 00:39:01,560 We felt comfortable that we could prove that 622 00:39:01,560 --> 00:39:07,640 and that, while he was employed with CGN, he was being directed 623 00:39:07,640 --> 00:39:13,360 on behalf of the Chinese government as a whole - tasked, if you will. 624 00:39:16,800 --> 00:39:19,960 The main story for The Times is that Britain's Chinese partner 625 00:39:19,960 --> 00:39:23,560 in the Hinkley Point power station deal is facing nuclear espionage 626 00:39:23,560 --> 00:39:25,520 charges in the United States. 627 00:39:25,520 --> 00:39:28,920 Last month, Theresa May postponed a final decision on whether to 628 00:39:28,920 --> 00:39:32,000 go ahead with Hinkley Point. While all aspects... 629 00:39:32,000 --> 00:39:36,080 When the news of Allen Ho's prosecution broke, many in the UK 630 00:39:36,080 --> 00:39:40,160 doubted that the nuclear deal with China would go ahead. 631 00:39:40,160 --> 00:39:45,680 In September 2016, after Theresa May visited China and met Xi Jinping, 632 00:39:45,680 --> 00:39:48,160 the Government announced its decision. 633 00:39:48,160 --> 00:39:51,840 I can announce today that the government has decided to proceed 634 00:39:51,840 --> 00:39:54,960 with the first new nuclear power station for a generation. 635 00:39:56,200 --> 00:40:00,040 Theresa May has been very careful to make sure that 636 00:40:00,040 --> 00:40:01,480 we protect national security. 637 00:40:01,480 --> 00:40:04,720 Particularly when it comes to our critical national infrastructure, 638 00:40:04,720 --> 00:40:07,600 we need to make sure that we do proper checks 639 00:40:07,600 --> 00:40:11,160 about whether companies are appropriate to invest, 640 00:40:11,160 --> 00:40:12,720 and that's what we do. 641 00:40:13,920 --> 00:40:16,320 It seems to me that there's a track record in spying 642 00:40:16,320 --> 00:40:19,600 for the Chinese state, so clearly we shouldn't be doing this. 643 00:40:19,600 --> 00:40:21,800 Do you want companies... 644 00:40:23,040 --> 00:40:26,880 ..from authoritarian one-party states involved 645 00:40:26,880 --> 00:40:29,800 in your critical national infrastructure? 646 00:40:29,800 --> 00:40:31,520 No. Of course you don't. 647 00:40:31,520 --> 00:40:32,960 So we shouldn't be doing it. 648 00:40:32,960 --> 00:40:39,800 The UK administration has been seen, I think, correctly, as being too lax 649 00:40:39,800 --> 00:40:45,040 and relaxed in its control of 650 00:40:45,040 --> 00:40:50,200 operations of state-owned enterprises from China in the UK. 651 00:40:51,680 --> 00:40:56,440 But this is perhaps due to London's anxiety to absorb Chinese... 652 00:40:56,440 --> 00:40:59,320 ..as much Chinese investment as possible. 653 00:41:02,640 --> 00:41:04,040 China. China. 654 00:41:04,040 --> 00:41:06,080 But remember I talk about China for a reason. 655 00:41:06,080 --> 00:41:08,360 China. I've done a lot of business with China. 656 00:41:08,360 --> 00:41:09,680 Well, China... 657 00:41:09,680 --> 00:41:11,760 China doesn't even like us. 658 00:41:11,760 --> 00:41:16,240 We can't continue to allow China to rape our country. 659 00:41:16,240 --> 00:41:17,880 And that's what they're doing. 660 00:41:17,880 --> 00:41:21,880 This includes stopping China's outrageous theft 661 00:41:21,880 --> 00:41:24,000 of intellectual property. 662 00:41:25,320 --> 00:41:29,240 Donald Trump's election campaign had turbo-charged anxiety 663 00:41:29,240 --> 00:41:31,680 about the threat posed by China. 664 00:41:33,440 --> 00:41:36,400 His victory paved the way for a trade war. 665 00:41:38,800 --> 00:41:43,480 President Trump has adopted a much more aggressive policy 666 00:41:43,480 --> 00:41:46,040 to make sure that the... 667 00:41:47,320 --> 00:41:52,160 ..American deficits in trade would shrink and also in stopping 668 00:41:52,160 --> 00:41:55,320 intellectual property rights theft. 669 00:41:55,320 --> 00:41:56,680 This President says, 670 00:41:56,680 --> 00:41:59,320 "I don't believe the Chinese are treating us fairly. 671 00:41:59,320 --> 00:42:02,800 "Why can they cheat and we have to abide by the rules and they win? 672 00:42:02,800 --> 00:42:06,400 "We're going to call them out on fundamental unfair behaviour." 673 00:42:06,400 --> 00:42:10,360 The first is the theft of intellectual property that's almost 674 00:42:10,360 --> 00:42:13,480 entirely cyber-enabled theft of intellectual property. 675 00:42:16,360 --> 00:42:20,880 The US authorities honed in on a particular target. 676 00:42:20,880 --> 00:42:25,280 Officials had been secretly tracking the activities of these men - 677 00:42:25,280 --> 00:42:28,160 Zhu Hua and Zhang Shilong - 678 00:42:28,160 --> 00:42:31,240 who said they worked for a technology company in China. 679 00:42:32,600 --> 00:42:34,840 Officials called them APT10. 680 00:42:45,840 --> 00:42:49,080 If I start with this series of numbers and digits, 681 00:42:49,080 --> 00:42:52,120 that's the digital fingerprint of a specific bit of malware 682 00:42:52,120 --> 00:42:55,320 used by APT10 that they've probably used to compromise 683 00:42:55,320 --> 00:42:57,160 or target an organisation. 684 00:42:57,160 --> 00:43:01,120 In London, cyber security expert Kris McConkey 685 00:43:01,120 --> 00:43:03,480 was also tracking the men. 686 00:43:03,480 --> 00:43:07,360 He uncovered a huge network of servers and websites dedicated 687 00:43:07,360 --> 00:43:09,360 to hacking into Western companies. 688 00:43:11,200 --> 00:43:13,840 So those are actual systems on the internet, 689 00:43:13,840 --> 00:43:16,720 and if the domain's pointing to that IP address, 690 00:43:16,720 --> 00:43:20,000 it's likely that's an IP address under the control of APT10, 691 00:43:20,000 --> 00:43:23,080 so a server physically sitting somewhere that they're using 692 00:43:23,080 --> 00:43:24,920 to conduct these types of attacks. 693 00:43:24,920 --> 00:43:28,480 If I take the IP address on the screen and I ask our system, 694 00:43:28,480 --> 00:43:32,560 "What other domains have you seen associated with that?" we can see 695 00:43:32,560 --> 00:43:35,760 pretty quickly we have this huge set of probably 696 00:43:35,760 --> 00:43:37,760 a couple of hundred domains. 697 00:43:37,760 --> 00:43:40,240 So we've now gone from one piece of malware, 698 00:43:40,240 --> 00:43:42,320 to the domain that it connects to, 699 00:43:42,320 --> 00:43:44,320 to the IP address that it points to, 700 00:43:44,320 --> 00:43:48,160 back out to all of the other domains that point to that IP address. 701 00:43:48,160 --> 00:43:51,120 And so we happen to know from our research, all of these domains 702 00:43:51,120 --> 00:43:52,760 all belong to APT10. 703 00:43:58,320 --> 00:44:02,080 APT10 had developed a new and sophisticated way of stealing 704 00:44:02,080 --> 00:44:04,160 the West's business secrets. 705 00:44:05,440 --> 00:44:08,840 It was targeting the firms that manage IT services 706 00:44:08,840 --> 00:44:13,280 for other companies - known as managed service providers or MSPs. 707 00:44:14,760 --> 00:44:16,560 If I'm staying in a hotel, 708 00:44:16,560 --> 00:44:18,240 if you pickpocket me and get my room key, 709 00:44:18,240 --> 00:44:19,960 you're going to just get into my room. 710 00:44:19,960 --> 00:44:22,000 That's not going to get you into any other room 711 00:44:22,000 --> 00:44:24,920 but if you get a copy of the master key, you have the ability to wander 712 00:44:24,920 --> 00:44:27,200 round and access any room you want. 713 00:44:27,200 --> 00:44:32,080 That's the equivalent to why APT10 are actively targeting MSPs, 714 00:44:32,080 --> 00:44:35,920 because once you breach one of them, you in theory have an easy 715 00:44:35,920 --> 00:44:39,160 route into all of their customers, which can number in the thousands. 716 00:44:40,600 --> 00:44:45,040 The hackers reportedly targeted some of the world's biggest companies, 717 00:44:45,040 --> 00:44:48,040 including IBM, Ericsson and Hewlett Packard. 718 00:44:49,520 --> 00:44:54,000 Whether it's media and advertising, whether it's industrial machinery, 719 00:44:54,000 --> 00:44:57,600 whether it's professional services firms, whether it's banks, 720 00:44:57,600 --> 00:44:59,680 we are talking extremely large companies. 721 00:44:59,680 --> 00:45:01,520 It's affecting the UK economy 722 00:45:01,520 --> 00:45:03,920 every bit as much as it is other countries. 723 00:45:06,800 --> 00:45:10,840 Cyber experts believed the men were working for the Chinese state. 724 00:45:12,840 --> 00:45:15,560 Concerned about growing economic losses, 725 00:45:15,560 --> 00:45:19,800 the authorities in the UK and US decided to take action. 726 00:45:19,800 --> 00:45:23,160 The United States and the UK have accused China of carrying out 727 00:45:23,160 --> 00:45:26,280 a global campaign of state-sponsored espionage. 728 00:45:26,280 --> 00:45:30,160 The US indictment says Chinese hackers obtained unauthorised access 729 00:45:30,160 --> 00:45:32,760 to computers of at least 45 entities, 730 00:45:32,760 --> 00:45:36,800 including commercial and defence technology companies. 731 00:45:36,800 --> 00:45:41,080 Despite China's long history of hacking, it was the first time 732 00:45:41,080 --> 00:45:44,760 the UK government had publicly blamed the Chinese state. 733 00:45:46,280 --> 00:45:51,640 We were very clearly able to attribute this espionage to APT10, 734 00:45:51,640 --> 00:45:54,720 which is part of the Chinese state. 735 00:45:54,720 --> 00:45:58,800 And so we thought the best way that we can do this, in a way 736 00:45:58,800 --> 00:46:03,520 that we hope does not do enormous damage to bilateral relations, 737 00:46:03,520 --> 00:46:05,120 is to publicly attribute it, 738 00:46:05,120 --> 00:46:08,360 so the Chinese understand that we know what they're doing 739 00:46:08,360 --> 00:46:10,960 and we hope the result of that will be they stop. 740 00:46:13,360 --> 00:46:16,880 Today the Department of Justice is announcing a criminal indictment 741 00:46:16,880 --> 00:46:20,880 of two hackers associated with the Chinese government. 742 00:46:20,880 --> 00:46:24,680 The indictment alleges that the defendants worked for a group 743 00:46:24,680 --> 00:46:27,200 known to cyber security experts as APT10. 744 00:46:28,840 --> 00:46:32,520 What we did when we indicted the APT10 case was demonstrate 745 00:46:32,520 --> 00:46:36,600 that the Chinese continue to engage in computer intrusions 746 00:46:36,600 --> 00:46:40,640 for the purpose of commercial benefit of their companies. 747 00:46:40,640 --> 00:46:43,920 What we're saying when we put something in an indictment is 748 00:46:43,920 --> 00:46:47,480 we can prove this beyond a reasonable doubt in court 749 00:46:47,480 --> 00:46:48,960 with admissible evidence. 750 00:46:48,960 --> 00:46:51,160 We're not relying on classified information. 751 00:46:51,160 --> 00:46:52,840 We're not asking you to trust us. 752 00:46:52,840 --> 00:46:56,760 We're saying, I can go to court and prove these allegations to a jury. 753 00:46:58,360 --> 00:47:00,920 Compared to his predecessors, 754 00:47:00,920 --> 00:47:06,280 President Trump has been much more conscientious, if not aggressive, 755 00:47:06,280 --> 00:47:10,760 in using the judiciary to penalise 756 00:47:10,760 --> 00:47:14,240 Chinese companies for alleged offences in 757 00:47:14,240 --> 00:47:17,360 intellectual property rights theft. 758 00:47:17,360 --> 00:47:20,040 We are now making it clear to China... 759 00:47:21,640 --> 00:47:25,520 ..that after years of targeting our industries 760 00:47:25,520 --> 00:47:28,720 and stealing our intellectual property, 761 00:47:28,720 --> 00:47:30,960 the theft of American jobs and wealth... 762 00:47:32,120 --> 00:47:34,240 ..has come to an end. 763 00:47:34,240 --> 00:47:39,800 Some fear the legal action in the US may be politically motivated. 764 00:47:39,800 --> 00:47:44,240 Others say it's unclear if China was hacking to uncover business secrets 765 00:47:44,240 --> 00:47:46,480 or for more traditional espionage. 766 00:47:47,560 --> 00:47:50,320 We don't know which part is so-called intelligence, 767 00:47:50,320 --> 00:47:53,800 which part is a violation of property rights. 768 00:47:53,800 --> 00:47:56,000 Even if they're caught red-handed, 769 00:47:56,000 --> 00:48:01,680 it's more complex than what people see or people imagine. 770 00:48:05,960 --> 00:48:09,200 But senior US officials say that much of the hacking 771 00:48:09,200 --> 00:48:13,280 targets technologies identified in a Chinese economic plan 772 00:48:13,280 --> 00:48:17,360 drawn up under Xi Jinping, called Made in China 2025. 773 00:48:18,760 --> 00:48:22,880 It's a ten-year plan to have significant domestic development 774 00:48:22,880 --> 00:48:25,920 in ten areas of technology 775 00:48:25,920 --> 00:48:27,880 that the Chinese believe will be 776 00:48:27,880 --> 00:48:31,520 at the forefront of technological advance in this century. 777 00:48:31,520 --> 00:48:35,560 There's nothing organic about economic espionage coming 778 00:48:35,560 --> 00:48:38,880 out of China, whether it's sponsored by the government directly or not. 779 00:48:38,880 --> 00:48:43,520 It follows very closely this plan and the objectives of this plan. 780 00:48:47,800 --> 00:48:51,840 President Xi's focus on the technologies of the future 781 00:48:51,840 --> 00:48:55,360 and China's long campaign of stealing business secrets 782 00:48:55,360 --> 00:48:57,240 appear to be paying off. 783 00:48:59,520 --> 00:49:01,320 China is now challenging 784 00:49:01,320 --> 00:49:04,320 the technological superiority of the West. 785 00:49:05,680 --> 00:49:11,480 They understand that the future of our economic growth is technology. 786 00:49:11,480 --> 00:49:13,960 And they have dedicated their time and resources 787 00:49:13,960 --> 00:49:16,280 to doing something we don't - 788 00:49:16,280 --> 00:49:21,480 putting their centralised government money behind their front leaders. 789 00:49:21,480 --> 00:49:26,000 No doubt about it, Xi Jinping is a very ambitious nationalist. 790 00:49:26,000 --> 00:49:29,880 And he thinks that with the rise of the Chinese economy, 791 00:49:29,880 --> 00:49:34,120 with the rise of Chinese high technology, 792 00:49:34,120 --> 00:49:39,360 it is possible for China to challenge the American position 793 00:49:39,360 --> 00:49:42,200 as the sole superpower in the world. 794 00:49:43,640 --> 00:49:48,080 The mobile industry makes an evolutionary leap every ten years. 795 00:49:48,080 --> 00:49:53,000 In 2020, the 5G era will be upon us... 796 00:49:53,000 --> 00:49:56,240 And nowhere is this clearer than in the race to develop 797 00:49:56,240 --> 00:50:00,720 the next generation of mobile phone technology, known as 5G. 798 00:50:00,720 --> 00:50:04,240 Data and information is power, 799 00:50:04,240 --> 00:50:08,640 and that is going to be even more true in the 21st century 800 00:50:08,640 --> 00:50:10,640 than it has been in the past, 801 00:50:10,640 --> 00:50:13,560 and so 5G is going to become part 802 00:50:13,560 --> 00:50:15,720 of our critical national infrastructure. 803 00:50:23,240 --> 00:50:27,320 The world leader in 5G is the Chinese company Huawei. 804 00:50:31,160 --> 00:50:34,240 We serve 170 countries - 805 00:50:34,240 --> 00:50:37,080 nearly one third of the world population... 806 00:50:40,960 --> 00:50:44,200 President Trump has declared a national emergency... 807 00:50:44,200 --> 00:50:46,120 ..to protect US communication networks 808 00:50:46,120 --> 00:50:48,480 from what he calls "foreign adversaries". 809 00:50:48,480 --> 00:50:50,680 Washington has effectively blocked the company 810 00:50:50,680 --> 00:50:52,320 doing business in the US. 811 00:50:53,920 --> 00:50:57,160 President Trump has blacklisted Huawei over concerns 812 00:50:57,160 --> 00:50:59,640 about national security. 813 00:50:59,640 --> 00:51:01,040 So what is Huawei? 814 00:51:01,040 --> 00:51:05,400 They're a company based in China subject to authoritarian rule. 815 00:51:05,400 --> 00:51:08,760 They're still subject to the whim of a Chinese leader 816 00:51:08,760 --> 00:51:12,200 who might come in at a later date and say, "I'd like you to turn over 817 00:51:12,200 --> 00:51:15,440 "all the data that you've gleaned from all of your users." 818 00:51:15,440 --> 00:51:17,000 That is terrifying. 819 00:51:17,000 --> 00:51:19,640 So the question is about trust in the Chinese system, 820 00:51:19,640 --> 00:51:21,920 not just in that company. 821 00:51:21,920 --> 00:51:26,000 It is pretty obvious that if you are a Chinese company, you have to do 822 00:51:26,000 --> 00:51:28,280 what the Chinese government tells you to do. 823 00:51:28,280 --> 00:51:29,840 Like, it's not optional. 824 00:51:29,840 --> 00:51:32,320 So if they tell you to undertake an activity, 825 00:51:32,320 --> 00:51:35,400 they're going to have to do it, under Chinese law. 826 00:51:35,400 --> 00:51:37,760 That is, they're required to do that. 827 00:51:39,800 --> 00:51:42,880 Critics accuse the US of hypocrisy. 828 00:51:42,880 --> 00:51:46,320 They say that US companies cooperate with the US government 829 00:51:46,320 --> 00:51:49,200 when it comes to national security. 830 00:51:49,200 --> 00:51:53,040 The grand jury in Seattle has returned an indictment that alleges 831 00:51:53,040 --> 00:51:58,520 ten federal crimes by two affiliates of telecommunications corporation 832 00:51:58,520 --> 00:52:00,680 Huawei Technologies. 833 00:52:00,680 --> 00:52:04,040 US officials also accuse Huawei of stealing 834 00:52:04,040 --> 00:52:06,440 a rival company's business secrets. 835 00:52:07,880 --> 00:52:10,120 This was Huawei's MO. 836 00:52:10,120 --> 00:52:12,760 During the time period of the alleged crimes, 837 00:52:12,760 --> 00:52:17,600 Huawei announced a bonus programme for its employees worldwide - 838 00:52:17,600 --> 00:52:20,480 that it would pay cash to employees 839 00:52:20,480 --> 00:52:24,080 for stealing confidential information from competitors. 840 00:52:25,280 --> 00:52:29,400 The US now alleges Huawei set out to secretly copy this robot, 841 00:52:29,400 --> 00:52:34,080 known as Tappy, which is used by T-Mobile USA to test smartphones. 842 00:52:38,760 --> 00:52:43,080 In the US, Huawei has pleaded not guilty to the charges. 843 00:52:43,080 --> 00:52:47,040 Some think Trump is ramping up concerns about the company 844 00:52:47,040 --> 00:52:50,680 to provide leverage in his trade war with China. 845 00:52:50,680 --> 00:52:53,760 It's much simpler not to do any business with Huawei 846 00:52:53,760 --> 00:52:55,680 so we're not doing business with Huawei. 847 00:52:55,680 --> 00:52:59,240 That doesn't mean we won't agree to something if and when 848 00:52:59,240 --> 00:53:00,720 we make a trade deal, 849 00:53:00,720 --> 00:53:04,200 but we're not going to be doing business with Huawei. 850 00:53:04,200 --> 00:53:07,240 Donald Trump wants Britain to ban the company from parts 851 00:53:07,240 --> 00:53:09,240 of its 5G network. 852 00:53:09,240 --> 00:53:13,960 But China warns there'll be serious consequences if it does. 853 00:53:13,960 --> 00:53:15,960 It's become a high-stakes debate. 854 00:53:17,440 --> 00:53:21,640 Are we comfortable that, if push comes to shove, 855 00:53:21,640 --> 00:53:25,160 our basic infrastructure network 5G... 856 00:53:26,280 --> 00:53:30,200 ..can be controlled by the Chinese Communist Party? 857 00:53:30,200 --> 00:53:33,400 If we are comfortable with that, there is no problem. 858 00:53:33,400 --> 00:53:37,440 If the idea is that we should not allow our basic infrastructure 859 00:53:37,440 --> 00:53:43,520 being controlled by a party that does not believe in our basic values 860 00:53:43,520 --> 00:53:46,400 then we have a clear problem there. 861 00:53:46,400 --> 00:53:50,440 This is a state that has invested a great amount of time and effort 862 00:53:50,440 --> 00:53:52,520 in intellectual property theft. 863 00:53:52,520 --> 00:53:55,960 It's a bit like saying, even if your safe is secure, 864 00:53:55,960 --> 00:54:00,280 do you really want to give a known burglar the keys to your house 865 00:54:00,280 --> 00:54:02,400 if the burglar says, "Don't worry, 866 00:54:02,400 --> 00:54:04,480 "I'm not going to burgle you any more"? 867 00:54:04,480 --> 00:54:10,320 Do we have any kind of findings that Huawei has deliberately 868 00:54:10,320 --> 00:54:12,680 undermined the UK interests, 869 00:54:12,680 --> 00:54:15,480 and, moreover, undermined UK interests 870 00:54:15,480 --> 00:54:17,920 on behalf of Chinese government? 871 00:54:17,920 --> 00:54:20,880 If you have that kind of evidence, that kind of finding, 872 00:54:20,880 --> 00:54:23,600 absolutely, cut Huawei immediately. 873 00:54:23,600 --> 00:54:26,040 But if that's not the case, 874 00:54:26,040 --> 00:54:31,400 if Huawei's branch in the UK does not do harm to the UK's interests, 875 00:54:31,400 --> 00:54:34,880 then it'll be counterproductive if you block Huawei. 876 00:54:34,880 --> 00:54:37,960 Huawei was a purely private company 877 00:54:37,960 --> 00:54:40,440 and it's been amazingly successful. 878 00:54:40,440 --> 00:54:43,480 It has... There's almost no competitor when it comes to 879 00:54:43,480 --> 00:54:45,560 some of the technologies it's able to provide. 880 00:54:45,560 --> 00:54:50,280 If the UK thinks that it can control various aspects of it, 881 00:54:50,280 --> 00:54:55,440 can have an open kind of discussion about the practices and standards 882 00:54:55,440 --> 00:54:57,480 and rules, then why not? 883 00:54:57,480 --> 00:54:58,960 I think it is... 884 00:55:00,120 --> 00:55:01,840 ..a difficult decision. 885 00:55:01,840 --> 00:55:04,240 How do you make sure that 886 00:55:04,240 --> 00:55:07,440 you're not putting in your communications infrastructure 887 00:55:07,440 --> 00:55:11,320 a back door that, at some stage in the future, could allow 888 00:55:11,320 --> 00:55:15,640 a foreign country access to critical data paths? 889 00:55:17,400 --> 00:55:20,280 But there's also a strategic consideration, 890 00:55:20,280 --> 00:55:23,640 which is how we make sure that we're not, as a country, 891 00:55:23,640 --> 00:55:25,920 dependent on other countries 892 00:55:25,920 --> 00:55:30,400 for critical parts of our national security infrastructure. 893 00:55:30,400 --> 00:55:34,680 We don't actually know how China's going to evolve in the next decade. 894 00:55:34,680 --> 00:55:38,480 It could be that it evolves in a way that is totally reassuring. 895 00:55:38,480 --> 00:55:40,120 Or it could be different, 896 00:55:40,120 --> 00:55:43,080 and we could look back in ten years' time and say, you know, 897 00:55:43,080 --> 00:55:44,840 we made the wrong call. 898 00:55:46,040 --> 00:55:50,120 The Chinese government says that Chinese laws and regulations 899 00:55:50,120 --> 00:55:53,560 do not authorise any firm, including Huawei, 900 00:55:53,560 --> 00:55:56,600 to build back doors to network systems. 901 00:55:56,600 --> 00:56:00,320 And British government reports on Huawei's operations 902 00:56:00,320 --> 00:56:04,520 show no evidence of any problem involving back doors. 903 00:56:04,520 --> 00:56:09,320 It says banning Huawei would imperil the rules-based international order, 904 00:56:09,320 --> 00:56:13,920 undermine business confidence, and take its toll on the global 905 00:56:13,920 --> 00:56:18,160 investment environment, incurring heavy costs on all countries. 906 00:56:24,760 --> 00:56:27,080 Xi Jingping has disappointed those 907 00:56:27,080 --> 00:56:30,000 who hoped he'd make China more free and open. 908 00:56:31,160 --> 00:56:32,560 Under his rule, 909 00:56:32,560 --> 00:56:36,080 China has become a state where loyalty to the Communist Party 910 00:56:36,080 --> 00:56:39,360 appears to be valued above everything else. 911 00:56:39,360 --> 00:56:42,720 A state President Xi could rule for life. 912 00:56:57,360 --> 00:57:01,560 He has a high level of popularity among the people and we can see 913 00:57:01,560 --> 00:57:04,040 that President Xi has been an effective leader 914 00:57:04,040 --> 00:57:07,120 because he has been standing by the Chinese people, 915 00:57:07,120 --> 00:57:09,360 thinking about the Chinese people. 916 00:57:09,360 --> 00:57:12,560 I don't know that there's a single adjective 917 00:57:12,560 --> 00:57:16,640 to describe Xi Jinping's tenure 918 00:57:16,640 --> 00:57:19,880 other than...brutal. 919 00:57:19,880 --> 00:57:22,760 This is somebody who will do whatever it takes... 920 00:57:24,360 --> 00:57:29,720 ..to achieve whatever his particular policy outcome or goal is. 921 00:57:31,240 --> 00:57:33,640 There is absolutely no shadow of a doubt 922 00:57:33,640 --> 00:57:36,080 that he is a hardcore dictator. 923 00:57:36,080 --> 00:57:39,000 He still craves more and more power. 924 00:57:40,200 --> 00:57:45,280 I think Xi Jinping has taken China down a much more assertive route 925 00:57:45,280 --> 00:57:47,920 than it's been on previously and that, of course, 926 00:57:47,920 --> 00:57:51,280 is making the rest of the world wonder what's in store. 927 00:57:51,280 --> 00:57:56,320 Xi Jinping's foreign policy is to make China great again. 928 00:57:56,320 --> 00:58:00,120 And what Xi Jinping essentially would like is that China 929 00:58:00,120 --> 00:58:03,000 would be modern, rich, 930 00:58:03,000 --> 00:58:05,760 powerful and second to none. 931 00:58:09,040 --> 00:58:13,960 We know that China's rising is quite different from the previous powers. 932 00:58:13,960 --> 00:58:21,640 Xi Jinping wants China to play a positive role in global affairs. 933 00:58:21,640 --> 00:58:24,480 China wants to maintain the international order. 934 00:58:24,480 --> 00:58:28,360 China does not want to establish a new order. 935 00:58:28,360 --> 00:58:32,680 The United States has to show a real presence 936 00:58:32,680 --> 00:58:35,840 in order to compete with China. 937 00:58:35,840 --> 00:58:39,920 If we aren't there to keep that restraint on China, 938 00:58:39,920 --> 00:58:46,800 then, without question, the 21st century will be dominated by China.