What if espionage wasn’t hidden in the shadows, but embedded in everyday life?

Welcome to the Australian Institute of Insider Threat. Hi, I'm Boaz Fischer, the founder and CEO. Today I'm joined by Nicholas Efthymidis, a veteran intelligence expert and author of the newly released second edition of The Chinese Espionage Operations and Tactics. With decades of experience across US intelligence, defense, and academia, Nicholas offers unmatched insights into one of the most underestimated threats of our time. We dive into China's espionage engine, from mass recruitment and weaponized platforms like LinkedIn and TikTok to bold influence campaigns embedded in universities, research labs, and even agriculture. This conversation isn't about fear. It's about clarity and awareness. If you want to understand the scale, strategy, and boldness behind China's global espionage machine, you're in the right place. So let's get into it. Nicholas, welcome.

Thank you very much for having me.

So before we dive into your book, which I very much enjoyed, can you tell us a little bit about who you are and what got you into being so interested in Chinese espionage?

Well, I actually got my degrees in East Asian studies and did part of my undergraduate and graduate research in Taiwan and mainland China. And after that time, actually came— coming back from that experience, joined the CIA and spent 34 years of my life, well, initially in CIA, and then I went to the State Department as what we call a special agent. or Diplomatic Security Service, and then ultimately the Defense Intelligence Agency, where I spent the bulk of my career, all that time working on China and very often Chinese intelligence, working to counter, working against Chinese intelligence. So it's been a long career. I retired in 2017 and became a professor of Homeland Security at Penn State University.

Great. Excellent. So you've released this second edition. My question is, Why? Why this book? What are you hoping to get? What are you trying to inform the audience, the readers, the global, about your book and about the threat that's taking place?

Well, I actually wrote on this subject in the 1990s on Chinese intelligence operations, and it wound up with 4 congressional hearings in the United States, wound up with Over 100 Chinese intelligence officers being sent home worldwide, and me being declared in the Chinese press as an enemy of the people. So it was important at that time, and yet again now, to raise awareness and education. Actually, it's an education campaign for not only— I mean, not the intelligence community, because they see this all the time internally. Right? They know what's happening. It is for the policymakers. It is for companies. It's for just individuals who really have to have an understanding of what threat is, because what you find, whether it's Australia, the United States, or anyone else, government doesn't tell people.

That's true.

They circle the wagons. They hide their secrets and say, trust us, we know everything that's going on. Well, guess what? If you're a company and you're doing business in China and your intellectual property or your trade secrets are vulnerable, that's a huge deal for you. You really need to know what the threat level is.

Correct.

And so you can address it correctly. So that's really what I wrote the book for, for that, those businesses and those individuals outside actually of government circles so that they can understand the threat that they're facing.

Cool, cool. So I want to get into the sort of core model. What's the real strategic driver behind China's Communist Party espionage model? Is it about the regime's survival? Is it about global dominance? Is it about ideological control or all of the above?

Well, it's a big all of the above, but it is, you know, You're talking to Chinese, the first thing they'll tell you, and the first thing they'll tell you in China is we have 5,000 years of history.

Yes.

Or as a People's Liberation Army officer once told me, Nick, we've had wars that lasted longer than your country has been a country. And in that time, what we find from the very, very beginning of the Qin Dynasty all the way onward is China has a very internal focus, right? It's very focused on threats to the regime. You could call them dynasties in previous days. Now it's the CCP. another dynasty.

Yep.

But they're very, very focused on what they perceive as threats to themselves. You know, I'm always— I note the fact that if you look at the period of around 1100 AD to, you know, 2000 or so, in that time period, Europe had about 1,100 wars, every one of them externally. China had about the same number of wars, every one of them internally.

Very interesting.

So they're very— and it wasn't until early 1600s, but really the 1800s, that they had that big association with the West. So they're very, very focused on internal security. Internal security is everything for them. And it does make up a strong component of their overseas espionage, diaspora communities, covert influence against other, not only diplomats, but foreign governments. and companies, right? All this is really to project— to protect the regime and to advance China's interests. So that's the way they strategically look at the world.

Okay. Um, in your book, um, you mentioned that one of the key motives is for them to transfer information and wealth over from Western countries to China. On top of it, having control of its diaspora as well.

Right. So, and as it's been called, the greatest transfer of wealth in history.

Yeah.

So what we find is unlike, and this is that whole difference in the intelligence mindset. In the West, basically, we grew up with this mindset of intel agency versus intel agency is focused on national security and policy issues. And that's what intel agencies have been very, very useful, used to. for decades, for more than half a century, since the Cold— you know, through the Cold War. Not so in the case of China.

Yeah.

The focus has been— and we see this in cyber, you know, a greater cyber threat capability than the rest of the world. And we see this in their actual insider threats directed against companies, the transfer of wealth, the transfer of knowledge and technology to China. So it is a huge focus of their intelligence activities.

Great, Nick. So you've given sort of a baseline of why they do it. Let me sort of now dig into the sort of operation model of what you term as whole-of-society model. What does it really mean in practice, and how does it change the way we should think about espionage threats today?

Well, it actually leverages Chinese society and And one of the examples that, that's, that's sort of historic at this point that the FBI mentioned many decades ago was what they call a grain of sand approach.

Yeah, I was gonna mention that. Yeah.

Right. And, and what they say is that, you know, if the, if Russians were stealing a pail of sand from a beach, they would send in a submarine at night, a bunch of commandos would emerge from the submarine, they paddle in and set up perimeter security, and one guy would come with a bucket of sand, and they would get back in the boat and paddle away and then get in the sub and disappear. here below the waves. China would send 10,000 bathers the next day, and everyone would bring back a little bit of sand.

I know, it's such a good metaphor. Such a good metaphor.

It really was. And how do you deal with 10,000 bathers, you know, each getting a little sand? They have what's known as plausible deniability. They're not doing anything, you know, shady or illegal in that sense. And we see the same type of activities that China leverages its entire society. And the way it does this, it's extraordinary what the CCP does. They actually make it sort of in the interests of people to do this. They reward them for doing it. So you have a host of people who go, in examples that we've seen, stealing solar panel technology.

Yeah.

Stealing all types of technologies and then having the Chinese government turn around and support those industries. and subsidize those industries so that they can derail their competitors in the West. So this is something our intel services, whether it's Australia, the Brits, the UK, France, they're not used to. They're used to playing spy versus spy, not this type of integrated societal approach.

Yeah. So that's another thing I wanted to touch base on, is this idea that Any Chinese anywhere around the world can be asked to provide or collect or collaborate to get specific information to the CCP, for example. I think a lot of organizations don't really understand that.

Right. And, you know, and they can. And China's National Intelligence Law from 2017 and their implementing regulations of the same year and their National Security Law in 2020 all make it mandatory that Chinese citizens comply and businesses that they comply, right? Doesn't matter if you think you're a private business or just a private citizen, it's mandatory that you comply. So truth be told, you know, it's amazing how the West doesn't see this because we actually have seen it before. We saw it in the old Soviet Union. Yes.

So why do you think there is a lack of understanding or is it just a lack of We just don't have the resources, or we just, just, it's not a priority.

Well, there are a couple of things. I mean, I laugh about the fact that when I came out of the intelligence community, when I retired, 6 months or so later, my phone was ringing off the hook with people wanting me to come in and consult and train on Chinese intel. And I thought, yeah, I said to people, first I thought God's a comedian, you know, because it waits till after I retire before anyone gets anyone's interested. But, um, and as you know, people had— it was the Soviet Union that was a big threat, and after that terrorism was a big threat for 20 years.

Yes.

And there's a lot, um, there's a lot acting against, uh, seeing China as a threat, right? People are making money, companies make a fortune in China, you know, politicians were making money because companies were donating to politicians. So it's very difficult in the face of that To then turn around and say, well, you're making money here. You need to start to think about back, you know, putting that on the back end because our national security is at stake. That becomes a conflict in society. Yeah. You know, it's also, so I call it ignorance, arrogance, and greed. Ignorance because we didn't know what the CCP was up to, or at least many in the policy ranks say they didn't understand what the CCP was up to. Arrogance, because at least on the part of the United States, they had this mentality that, oh, inside every Chinese person is a freedom-loving American dying to get out. And once they make money and taste freedom, you know, they'll push the CCP towards democracy. No,

it didn't happen. No, no, obviously not.

Ignorance, arrogance, and the last is the greed component of it. So we have had over decades, and I've seen this now for more than 30 years, I've been waging this battle, if you will. For over 30 years, we've had this argument in society. You can almost call it haves and have-nots, the people who are making money from this and the citizens who may pay the price for it.

Yeah. I want to sort of step into sort of the machinations of their espionage model. So, you know, they've got patriotic students, and they could have state-backed hackers to tourists with commercial instruction. But how does China operationalize such a wide recruitment base? And I'd be interested to also get your idea, how exposed are countries like Australia to these sort of recruitment efforts?

Yeah, unfortunately, any free and open society is very exposed to these types of recruitment efforts. And I actually am amazed by it sometimes. It's just extraordinary that I've seen people who are Chinese, ethnic Chinese in a cybersecurity firm in London, casually pulling me aside, telling me, the MSS came to my parents' house and asked, when's the next time I'm coming back? Was I home? How did they know I was even in cybersecurity? I keep a very low profile. So there's that work that that goes on inside China to identify people. I will tell you that LinkedIn, social media is a huge component of that. The ability now to search through artificial intelligence is another gigantic— because you can take a look at a person on LinkedIn and just in regular marketing software and pull together all their contacts with an assessment of who's a closer contact and less closer contact. And from an intelligence perspective, as a targeting tool, That's pretty fantastic.

Yeah. What does it say about their boldness, or is that just trying to— whether the, the right word called survival, like whether they just, you know, it's part of their innate to do it, to— because they need to gather information because their masters are calling it?

Well, that, that is the case. If you take a look, actually, I've seen a lot of emails going back and forth, and truth be told, those MSS officers at the provincial levels are under relentless pressure from their leadership for results. It's why I contend that they cut corners all the time, and it leads to what we see as poor operational tradecraft. That said, because they moved to online recruitment and even running assets, which is what we call them, running assets or agents online, it's a no-risk factor for China. Yeah. It is absolutely no risk. It's not like a case officer is going to get grabbed and arrested servicing a dead drop. in Brisbane or something like that. That's not happening. They're doing things in-country and online, which protects them.

Okay, talk to me a little bit about universities because universities are very open societies. How easy is it for them to recruit research people, scientists, and so forth for that?

Well, what China does, In fact, Purdue University, one of our universities, produced a study on students, Chinese students, and their opinions of the United States. And what they found was that as the students were doing their undergraduate, their opinions stayed generally the same about the US. Yeah. Until they graduated. For those that stayed on in the US, a shocking rise in their opinions once they got out past the university. Once they got out past the Chinese Scholars and Students Association and the controlled groups of people who were watching them.

Yeah.

And the Party control, once they were living on their own, they were shocked at the way society actually is. And what this shows us, it's one of the many, many examples of the control that the PRC executes over its scholars and students abroad. That's the fundamental problem.

Yeah.

So, so long as they have that, it's gonna be pretty tough to break that control.

Yeah. Now, you also mentioned in the book, and it was quite interesting from the statistics that around 50% of their enterprise are, I wouldn't say keen, but they're there to basically collect economic espionage and so forth. So that And I also would like to sort of gain an understanding about the MSS compared to its businesses that do collection of information. I mean, both have the same, I suppose, goal, but it would be interesting to see your point of view.

Right. If you leave out cyber espionage, if you put that aside, what you find out is that the MSS is responsible for less than 10% of the economic espionage. Okay. And the vast majority of it is done by individuals or individual companies. My latest calculation was 58%. Yeah. I'll tell you how I get that too. I have a database now of 900 cases of Chinese espionage, economic espionage, illegal technology exports, and covert action, covert influence operations, diaspora operations. So when you're looking at 900 cases, this isn't picking off 1 or 2 cases. I know. real data to work with. And that's, to be frank, one of the differences that that book highlights is that you're actually working on hundreds and hundreds of cases and looking at all the tradecraft that was in each type of case. So what you find in economic espionage is that the mass part of it is done by Chinese companies. And the reason, the motivations they're doing it is to further their business in China. About 25, 20, 30% of it, 25 to 30% is done by the state-owned enterprises. Okay, and those are the companies that are owned, which are 300,000 or so, the companies that are owned primarily by the Chinese government. And a very, very small percentage is actually done by the government as a whole. And this is also what I mean by a whole-of-society approach, right?

Yes.

Hundreds and hundreds of cases on this I have. The majority of it is done by companies or by state-owned enterprises with the support Of the Chinese government.

Yeah, yeah, yeah. I want to talk, uh, something which is— I think it's been a sort of a bugbear in so many different cases, which is their covert activity. Uh, some would say, you know, uh, general, when you do covert, it's rare or elite, but China's covert tactics are embedded into, for example, solar panels, mobile apps like TikTok, including maybe, uh, Zoom. Cameras, CCTV cameras, hotel rooms, which you mentioned quite a bit in your book. Is this strategic brilliance or just exploitation of a system that never imagined this kind of threat?

I don't know if it's— it's certainly exploitation of a system, a system of systems. And China just sets into law and into rules to ensure that they continue have continual access to that and are able to exploit those systems as they're rolled out. Right? So it's apps. And there are dozens of apps now that I've seen publications coming out that apps which show that they've been reporting to China, back to the Chinese government taking user data. Zoom was a case. We had a criminal case against Zoom in 2021 for actually giving undercover accounts to Ministry of Public Security officers. And allowing them into discussions that happened that centered around the Tiananmen anniversaries. So they were actually— and Zoom had agreed to give China data on 1 million users that were discussing China or engaging in from Hong Kong and from the US and other places as well, I'm sure. So we see active participation. With companies to support China, and they have no choice. And that's what people have to understand. Zoom, for example, when Zoom was just slow in replying to the Ministry of State Security, they hadn't said no. They were just slow in their reply. China shut them out. They shut off Zoom completely in mainland China for a month. Zoom had no idea what happened. And then they went to the Ministry of Public Security, finally said to them, you're not getting back on until we get an agreement from you. So yeah, so these are the types of things TikTok faces this and every business, every app that collects data, you know, faces the same conditions.

Yeah, look, it's interesting to see where, you know, the latest AI engine when they came out was Deep Insight. Yeah. How long, you know, there was, I don't know if this was blown by media, You know, the greatest download app seen in the last 3 months, 6 months, whatever it is. And I got the feeling that really no one really cared where it sort of originated from. And then I look at, you know, massive enterprises like Huawei and their, you know, telephones or the mobile devices. And again, a lot of the Western countries are sort of debating whether to have them or not to have them. There isn't a clear-cut understanding of what the threat is.

Right. And what you hit upon is the central point of it all. Tell you a little story. There was a firm, I forgot the name of it now, sorry, in Kansas City, mid part of the United States. And what they figured out once was that, and they were trading in stocks. And to do that, they used AI. So firm in the Benevolent Group or something like that in the United States, in Kansas City, they're trading stocks and using artificial intelligence to do it. And what one of their engineers figures out is that in the milliseconds, milliseconds it takes to receive a signal from Wall Street to Benevolent Group, whatever it was, and then to send that back, They lose hundreds of dollars because it's slow in them getting the information. Yeah. Milliseconds slow in providing it and getting it back. So they actually move their headquarters to right near the World Trade Center, or, you know, what was the World Trade Center across the, across the river there, just so that they can compete because they can't compete, you know, being in the middle of Kansas. Now, when you start thinking of that from Huawei, and, uh, and what they could potentially do. It doesn't have— it's listening in is the least of my concerns with something like that. You know, that just starts an encryption war. Okay, we'll use this encryption or that encryption. Yeah, right. And then, you know, that's, that's a thing that you can mitigate for the next couple of years easily until you get into quantum issues. But the ability to slow down a signal or to stop a signal can play with utilities. Can allow China to capture the entire stock exchange. I mean, by slowing down signals that go everywhere except to their companies, yes, they could theoretically capture everything. So I mean, it's a pretty complex situation that you have. And when you start introducing stuff which is basically like from Huawei, which has proven to be working for a hostile government, I mean, you know, this is what our leadership. Is contending with, and most of the leadership isn't standing up to it. They're just trying to avoid the issue.

Correct. And this is the other challenge that you read in the news, especially in the last probably 12 months, is around critical infrastructure. And the question then is, how much does China control our own critical infrastructure? Do they have listening devices? Are they able to shut down these critical infrastructure like utilities, energies, you know, and so forth? In Australia, we've developed a standard about, you know, it's called SOCI, S-O-C-I, which is the whole idea is about securing of these critical infrastructures and these standard level that, you know, water, gas, electricity, you know, communication, transport, you know, you would have those, those similar ones, that they have to achieve a certain cybersecurity standard. But for example, insider threat is not one of those requirements for them to, to do anything about. And insider threat has so many different platforms. It's not just about a person doing something bad, but it could be as like those, you know, um, solar panels, you know, having discovered there's a, there's a sensor there that they can transmit, send information. I gather that it's not taken seriously at all.

It's not. The Internet of Things is the Wild West as far as surveillance goes. And I was on a task force for the Defense Department and the Biden administration when they came in and shut it down. But that was the focus of it because, you know, we have billions of items coming on internet as part of the Internet of Things, actuators they're called, or sensor systems or robotics or something that exists in the internet. And right now the regulations on them globally are just nonexistent.

Yeah.

Right? So even if you're the Defense Department and you say, hey, we don't want these things on, well, they typically just don't turn them on, but they're still embedded in the systems.

Yeah, they are.

Yeah. Light bulbs. I mean, we're even at the point where light bulbs are are all hooked up to that. Your washing machine, your refrigerators. In the next 10 years, it'll just intensify like that. Yeah. I think what this really shows, which is kind of an extraordinary look towards it, is that Australia, the United States, the same thing. And this is the problem, is our reaction to these types of advances from China. I mean, China's penetrated our critical infrastructure by the thousands and thousands of companies that's come out in the US. Right? Again, even to the point where they say they can't remove all the Chinese penetrations. Right? So, I mean, why do you penetrate someone else's critical infrastructure? You do that to shut it off. Correct. If you need to. Right? But the problem is that even as you build greater security walls and say, oh, well, you have to meet this standard, Well, companies now have to meet X standard to do that. Who pays for this? Who gets to pay for the companies adding more and more into cybersecurity? The consumer pays, right? When the government does it, who pays? The taxpayer pays.

Correct.

China's not paying. No, the keyboard, you know, assaulting away there, you know, and the cost differential while China is spending millions, We're spending hundreds of millions to try and protect. So there's no incentive for China to stop.

Yes.

Every bit of advantage is in their hands, right? So there is no— unless the governments start to change the way they're approaching the situation, unless they start to say, hey, look, you know what? Next time we catch a cyberattack like this, we're kicking you off the stock exchange. Period. We're kicking your state-owned enterprises off the stock exchange. We're gonna have every foreign dollar withdrawn from them and we're kicking them off.

Yeah, ramifications. Yeah,

right, exactly. They have to face some type of consequences for this, otherwise it's ridiculous. And that's where we are now.

Yeah. I wanted to sidestep slightly about the balloon case that happened over the US. What's your take of it, of why it took so long for the US to decide to take it down?

Well, I think there were a lot of concerns, but I don't think there were concerns from the military's point of view. You know, they, and they said publicly, you know, we're not losing anything, meaning that even as this was sitting over bases, they shut down emissions, right? So What an event like that— it could be doing a number of things, not the least of which is sitting over military bases, because you got to sit between the base and the satellite if you're going to get the communications line, right?

Right.

You have to be right in the middle there. So they could have been collecting that. They could have been collecting longwave, you know, that goes over a great distance, how we communicate with the ships. But what the military didn't consider is they also could be collecting against critical infrastructure.

Yes.

Right. You know, high-intensity, high-definition photos and, and picking up emanations from the Lockheed Martin and, you know, and water facilities and things like that. So they could have been collecting in, in those civil components as well, which never came out. You know, the military was very focused on interests. Um, but it's a state of confusion at first. It took a while for everyone to figure out who was in charge. And, you know, and there was a risk. Do we want to bring this down on land? I understand that. Uh, you know, if you bring it down on land, what are the potential risks with it? So, I mean, what I don't think is correct is that, of course, none of this was shared with the American people.

No.

Right? What happened? I mean, it was just because the people noticed it that it got any press play at all, that people found out about it. But the government turned around and subsequently covered it up.

It did.

Whose interests are you— were you voted in to protect? You're voted in to protect me, the citizen, the taxpayer. Okay. You're voted in to tell me what was going on. You're not voted in to pay— to protect Beijing.

Correct.

Right. Well, we're not going to discuss this and let it blow over. Excuse me. My security is threatened. I kind of figure like I have a right to know about it.

Yes. Yes.

Unfortunately, when you lack leadership in a government, you try and hem and haw and you try and find the easiest way out for partners. Well, sometimes the right things to do aren't the easiest.

Yeah. Moving on. So I wanted to touch on a sensitive subject called the Confucius Institute. I sort of picture as a cultural program. So what intelligence and functions do you think they're performing and how do they fit into the China global influence architecture?

Okay, well, for the Confucius Institutes, I would say they fit more into the influence architecture than they do the espionage architecture. And, you know, we've had one case out of Belgium where a guy with the director of the Confucius Institute was actually accused of espionage operations. Outside of that, there hasn't been one prosecution globally on that. Yeah. There's been a lot of manipulating, trying to manipulate universities, trying to manipulate elections or individuals, trying to change the status of discussion. No mention of Taiwan, no mention of Tibet, trying to put forth basically Beijing's line on the world and how the world is. So you can accuse them of that. The fact that all their contracts with universities are kept in secret doesn't help the confidence level of anyone on the outside of that. Because globally, these are secret agreements. Well, I think particularly in nations where the taxpayer is paying for universities, they're probably entitled to know what type of agreement you're making with foreign government.

Yeah.

Yeah. So it's a component, one of many, many components, which, by the way, exists down at the grad— at the grade school level, all the way up through, through the university level on what you might call a watered-down version of patriotic education that the Chinese like to

push. Okay. Okay. A question, more of a high-level thinking Question that came to me yesterday. What if espionage is no longer about stealing secrets, but about shaping reality, controlling how societies think, vote, and trust? So have we underestimated the psychological sort of front of modern espionage that maybe China is trying to push?

Yes. I mean, I would agree with that 100%. Covert action, as it's called, is part of the work of any intelligence agency. And that is everywhere from military operations to political operations, supporting candidates, supporting people in the press, degrading people in the press, all those types of things. Right. And the United States is no stranger to that. Did it in the '60s a lot, you know, with South American regimes, things like that. However, nobody understood or prepared for the onslaught that we've received out of China, the billions that they've spent in doing this in multiple channels globally. It's not just directed against Five Eyes. It's not just directed against those premier states. It's directed globally. And I mean, it goes everywhere from Nepal to countries in Africa to— China is just extraordinary in how they allocate their money and turn their whole system into this advocacy campaign overtly and covertly.

Yeah, and sort of taking to that next channel, I just wanted to see your take of the recent story about Facebook. Should I mention that a recent whistleblower report suggests that Facebook, under Mark Zuckerberg's leadership, was actively cooperating with the Chinese interests? even helping them suppress content of, you know, of critical about CCP. What is your take about that story if you came across it?

Well, yeah, there's also Facebook, which has taken down hundreds and hundreds of sites that were put up, you know, by China, dissident sites actually that China put up that would lead to another webpage that would download viruses into the computers of individuals, so surveillance viruses and such. So I do— I don't know because I don't know the answers, you know, the true answers. I know what the whistleblower said, but we've seen Facebook and even things like YouTube. YouTube has undergone— I don't think they know it yet, but they're undergoing investigation for suppressing content on behalf of the CCP. So that's going to be a big issue coming up in the next couple of months.

Yeah.

Which maybe I shouldn't say that, but no, but they, you know, unexplained how people can lose tens of thousands of followers, you know, who are basically anti-CCP sites. Yeah. Just, you know, you wake up next day and you have 100,000 followers less, you know, so there's a lot of questions that really have to be answered.

Oh, for sure. I want to take the espionage to another level. So I think it was only about a month ago, maybe a little bit more, 2 Chinese nationals were caught trying to smuggle a high-contagious, uh, corn pathogen into the US. Um, from what I gather, had the pathogen been released into American agriculture, could of course massive economic and ecological damage. Isn't that an act of aggression? I believe even a form of biological warfare. I was amazed.

It is a form of biological warfare. It certainly is. The individuals involved actually lied to the principal investigator at University of Michigan as to what they actually had, the type of pathogen that using. Um, I— and I actually looked up in my database, there are at least half a dozen other cases with University of Michigan that, uh, yeah, espionage activities from drone. You know, just one of those cases had 5 Chinese nationals who were collecting against military sites and such. So it's, uh, no stranger to there. But yeah, I, I think you see this. Um, we also saw a similar case out of Canada, uh, in Winnipeg. And I think it's just an arrogance. It's a lack of, you know, lack of any idea of following the law. I don't know if it was— Totally. Yeah, I mean, clearly. But, you know, to be frank, in many ways, that's sort of Chinese because the law is not, you know, the law is something that you can use against people, but it's not something that anyone takes seriously.

So, yeah. Yeah. What's amazing to me is there's no ramifications to it. I mean, to me, that's like you could consider this as an act of war. You're trying to destroy a whole entire agriculture.

Right. And, you know, the interesting part is that University of Michigan has no agriculture program. So that's a question that needs to be answered as to exactly why they had this pathogen that they were using and what their intent was. You know, this all comes down to intent. What was their intent in bringing it in and using it? And I'm sure that's where the federal investigation is focusing on, you know, what was their actual intent in doing it? It's, um, but, but stuff like that you find is just a complete disregard to law and to doing whatever, you know, whatever they want is a sort of very Confucian as well. You know, it's a humanistic society, not a legalistic society. So, um,

very true,

you know, and we're a legalistic society, very much so in the US. So yeah, I think we need to answer a lot more questions about You know, who they were and what their intent was and, you know, what the CCP knew about it beforehand. Um, and, you know, what was the overall goal? Why are you studying something in University of, uh, Michigan which has no agriculture program? There's an interesting point. So

yeah, but it's, it's, it's very easy to deflect. Uh, oh, sorry, the CCP can easily deflect and say, well, we, we had no knowledge, we're not involved, and so forth. So And that seems to be the common thing, uh, their proclamation that they never do any form of espionage. Um, it's very easy to, to, to say, you know, we're not at fault, and yet—

Yeah, yeah, it is.

Yeah, which is my next question. Yeah, my next question is, how are Western legal and political systems designed for such openness? And just, are they equipped to confront such a threat that—

No.

And that's the problem.

Fundamentally, they're not. They don't know how to address it. Our intelligence, our security apparatus, our law enforcement, our intelligence, and our legal system is not designed for this type of threat, right? We're designed for a very clear threat that we can codify, we can put into law, we can say 1, 2, 3 threat. But in an open society where you encourage people to talk and you encourage people to to make their views known to their political leadership, where you want that engagement, you want that type of engagement from the citizens into a political— you have no way of weeding out the political warfare that's waged against you. And China happens to be very expert in this field.

Yeah. A side question regarding Chinese students. I see that Obviously, the US is now clamping down on getting Chinese students, maybe in Australia too. Is there a sort of a balance in terms of getting students but also in the form of vigilance, striking a balance in between? Is there such a thing?

There, there is, and we should do a better job at that. And, and we don't. We, you know, when you're applying for a US visa, question 26 on the visa application asks you, are you coming to the US to spy, to commit sabotage, or to steal technology? I mean, it literally says that. So I, I think we need to be a little clearer with those people who apply. And say, look, this is the United States. These are the things you can't do. And this is why. This is our society and the discussions you'll hear and the arguments that you'll hear because we live in a democracy and everybody fights about what they believe is right or wrong at national and at state levels. I think we could do a better job explaining to people incoming instead of them just leaving them off to the CCP propaganda apparatus. Which is telling them, you know, so we need to engage those students who do come here more. Yeah. You know, in the summer, I'll just say in the summer of 2020, I guess it was, we kicked out, we apprehended 4 PLA officers, People's Liberation Army officers, who were, had lied on their visas saying they had no association with the military and were doing graduate work, PhD work in the United States. We grabbed them. And, you know, ultimately we let them go, you know, for an exchange for diplomatic concessions or, you know, meetings on their part. Not a good change. But, but what didn't go to the press is that after we let those 4 individuals— after we grabbed those 4 individuals over the summer, over 1,000 students left, 1,000 PLA students left. Right?

That's interesting.

They said, uh-oh, let's get out of here. and they left the United States. So there were 1,000 literally that, uh, that fled, you know, based on those actions. So yeah, so it's, it's pretty pervasive.

Yeah, from the looks of it. Uh, which leads me to the next question. So in the line between sort of espionage, influence, and investment, they sort of keep on blurring. I'm sort of a little curious how democracies should adapt without becoming the very thing they fear. So yeah, I suppose the question is, what do we do? Or what should democracies do?

Well, I think a couple of things are really important. Number one is partnerships. I mean, between— let's just start with the Five Eyes, right? US, Australia, Canada, New Zealand, and I think that's it, 5, yeah. You know, we have to be committed to if a person is caught for stealing technology in the US or in Canada, they don't come to any of our countries. They don't publish their papers here. They don't get on board a flight anywhere. Same rules that we have for terrorism.

Correct.

Correct. We need to approach this as a uniform group. And, you know, really, We're just trying to push China into accepting norms, global norms, behaving in a fashion that addresses global norms. And we're not going to do that. No one's powerful enough to do that by themselves. Correct. We really have to work together and say, look, these are our norms, what we expect of society. There's cutthroat competitions between companies, but we expect everyone not to be stealing intellectual property. We expect people not to be doing cyberattacks against others. So we need to hold China to those same standards. Number one, we need to understand that we have to do this in a partnership. Number two, we need a strategy. I look at senior US political figures and I say, where do you want us to be with China in 10 years from now or 15 years?

Yeah, exactly.

And you'd be looking at it at, well, our expression is a deer in the headlights. So no one's thought about this. Well, you need to think where that relationship is and let's get a strategy we can all work on to guide China into a course of behavior that's acceptable globally.

Yeah, which, which then leads me to, to the next question. So if China sort of sees a wide range of people as sort of like employees or suppliers, researchers, as potential assets, how should we rethink insider threat in the West?

How should we respond?

Yeah, or yeah, yeah, that, that too. Yep.

Yeah, the, the, well, here's one thing we can't do, which is give up our values, right? We, you know, we're still gonna be open democracies and we have to not get pushed into a point where we're being draconian in response. Part of this is our ability to reach out to those groups. As I said, sort of in the visa questions,

Yeah.

You don't want to get involved with this, folks. Don't do anything like this because we take it very seriously here in our country.

Yeah.

And, you know, we have to, we have to kind of present that. So they're going back to their own, um, CCP apparatus saying, look, I, I, I'm going to get in a lot of trouble if I do this in Australia or the US. I don't want to take a risk. So we have to bring consequences to them so that they understand that. At an absolute minimum.

Yeah. Where do you see espionage moving in the next 5 years, specifically around China? You know, what new fronts do you think there will open up?

Well, I think I would tell you that, you know, as we— the Brits reported something like 20,000 approaches and actual cases from Chinese intelligence on LinkedIn. Okay. The French reported 9,000. The Germans reported 10,000.

Yeah. Amazing numbers.

Yeah. Amazing numbers. And the US isn't reporting, but I can only imagine what it is here. I will tell you in the next 5 to 10 years, all that will be through AI. You won't even have a person in the loop. You'll have the purchase made through LinkedIn. You'll have the money moved through other online platforms. You'll have the tasking done. Everything will be done completely without a person in the loop. So, which espionage is very personal business, right? You're, you're, you know, you got to get a person to trust you that you're going to take care of them and not risk their life and, and things like that. And, but, but they'll build that into artificial intelligence. So it'll be a complete, you know, and then it's, we won't have cases in the tens of thousands. We'll have them in the hundreds of thousands.

Yeah, interesting. So it'll be like an AI versus AI because, you know, we will use AI to protect ourselves, but they will, yeah. We're coming to the end of our discussion. Nick, I just want to ask you a question. Is there a question that I should have asked you, but I haven't asked you yet? Is there, or is there something that you want to relate to the viewers? That makes them stand up and say, oh, I didn't realize that.

Yeah, I think you— look, I tell police groups this, right? Because they actually face the threat with the Chinese diaspora. So, and I say, you know, it doesn't matter what you think, what you think is important or not important. It doesn't matter because it's coming your way. I mean, it's period. And you can either decide to do something about it or leave it to the next generation of law enforcement or security officers or insider threat specialists or CEOs and C-suite executives. You can just say, I'll leave it to them to handle it. But it is coming. It's here. China's already made that very, very clear. I mean, you have to be a person living under a rock not to see what's You know, what's going on globally in this.

Yes, that's true.

I mean, we've had over 2 dozen arrests of Chinese worldwide in 2025 alone, right? Today, as we're filming this, 2 Air Force officers in Taiwan were arrested for espionage for China. We've had at least half a dozen arrested in economic espionage in the last month. So it's massive, it's global, it's not stopping. So the only question is, you know, your standard of living and whether your businesses will thrive and how they'll thrive in this type of world, whether we have the will to marshal ourselves to be able to respond to this.

Yeah. Last but not least then, Nick, how do people grab hold of your book? I mean, I very much enjoyed reading. It was very illuminating. So how can viewers get the book? And if they were to, how would they reach you? Is there a way?

There is. The book is available through Amazon or Barnes& Noble. And in fact, I have a website which is Shinobi Enterprises. Okay. Shinobi is the ancient Japanese word for ninja. Actually, ninja didn't come about until the 1950s. So Shinobi Enterprises, and they can go there. You know, also, I have posted there interviews. I have posted lectures. I have posted papers that I've done in academic journals, all free. So if a person wants to really spin up on this subject and really wants to understand it, that's the library for you.

Okay, great. So what we'll do is when we'll publish the video, we'll actually create some links to Shinobi and then, you know, I encourage people, those who are in the risk security operation side, to actually check it out because it's such useful information. I mean, for me to be able to get ready for this interview, I mean, not only did I read the book, I also watched quite a few of your videos that are circulating around. So I very much enjoyed that. So Nick, look, again, pleasure. I very much enjoyed your discussion and what you had to say. Thank you. As again, I want to thank you very much for the opportunity and the time that you are sharing with us. And hopefully this, this message about being better prepared or understanding that it's coming is, is, is important.

Yeah, that's— it's important that the word get out.

Yeah. Nick, thank you again, and I hope to chat with you soon or meet with you soon.

Yes, thank you very much for having me, and I would look forward to that.

Okay, thank you.