6. Nothing Is Holy

To all the financial advisors listening, let's talk bonds for a minute.

“Capturing value and fixed income is not easy.”

Bond markets are massive, murky, and let's be real. Lots of firms throw a couple flashy funds your way and call it a day. But on Vanguard, a Vanguard institutional quality isn't a tagline. It's a commitment to your clients. We're talking top grade products across the board of over 80 bond funds,

actively managed by a 200-person global squad of sector specialists, analysts, and traders. These folks live in breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com/audio. That's Vanguard.com/audio, all investing in subject to risk Vanguard marketing corporation distributor.

Hello, I'm Stephen Carroll. I'm in Brussels for many of Europe's biggest decisions that made.

And I'm Caroline Hepkin in London, with the hosts of the Bluebeck day-back Europe podcast.

We're a barely every week day keeping an eye on what's happening across Europe and around the world. We do it early so the news is fresh, not recycled, and so you know what actually matters as the day gets going.

“From Brussels, I'm following the politics, policy, and the people shaping the European Union right now.”

And from London, I'm looking at what all that means for markets, money, and the wider economy. We've got reporters across Europe and around the globe feeding in as stories break. So whether it's geopolitics, energy, tackle markets, you're hearing it while it happens. It's smart, calm, and to the point. And it fits into your morning.

You can find new episodes of the Bloomberg Daybreak Europe podcast by 7 a.m. in Dublin or 8 a.m. in Brussels, Berlin, and Paris. On Apple Spotify, YouTube, or wherever you get your podcasts. Hello, gorgeous, it's Lala Kent, post of untraditionally Lala. My days of filling up cups at Sir may be over, but I'm still loving life in the valley. Life on the other side of the hill is giving grown-up vibes, but over here, on my podcast, untraditionally Lala.

I'm still that Lala, you either love or love to hate. It's unruly, it's unifraid, it's untraditionally Lala. Listen to untraditionally Lala on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts. Bloomberg audio studios, podcasts, radio news. Hey everybody, this is the last episode of our show.

If you haven't listened to the first five, you probably want to go back and start from the beginning.

If you are up to speed, thank you so much for listening. We really hope you're enjoying it. We've had such a blast working on this series. That's actually true. And if you like the show, tell your friends about it.

“Share it. That's how the show will continue to grow.”

And of course, rating and reviewing it helps too. So again, thanks. Here's the final act. Okay, let me just last tree engine. Is it mine to actually be this one?

One, three times. One, two, three, yep, this one. That's tree engine. [Phone ringing] Just they have butterflies a little bit.

[Phone ringing] [Phone ringing] This is an empty number. [Phone ringing] Jordan and I are in Bloomberg's New York headquarters.

It's late. Late enough that it's mid-morning in Nanjing. We're here because we're trying to call Xu Yan Jun. And we're with our producer and Amanda and speaking colleague to help us with translation. [Phone ringing]

We have a bunch of phone numbers we found in the court documents for Xu and all his aliases. As well as a bunch of associates. Three, eight, two, three, one, six. We've been going down the list making these calls and getting nowhere for over an hour. And then something funny happens with one of the Xu numbers.

Instead of getting a recording that says the line's been disconnected, this number does something different. It rings a few times and then nothing. Almost as if someone's picked up and is just sitting there without saying anything. It's just blank space. Silence.

[Phone ringing] That's weird. That's weird. Yeah, that's weird. [Phone ringing]

That's weird. Yeah, that's weird. Yeah, yeah. Then the call ends. Whoever's on the other end hangs up.

So we call again. [Phone ringing] And the same thing happens. A few rings. Then nothing.

There's 26 seconds of silence.

"Nihal, Xu." [Phone ringing] [Phone ringing] [Phone ringing] [Phone ringing]

I'm a member of the group.

“We're sitting in a room with a group of students in the room.”

Can you ask them? [Phone ringing] [Phone ringing] [Phone ringing] So we're just a call number that is associated with Xu and Jhin.

Somebody pick up the phone and I asked him if he's Xu and Jhin. He said, "Who are you?" I repeated, "I'm looking for Xu and Jhin." And he said again, "Who are you?" Then I said, "I'm a reporter from Boombang News."

He hung up on me. [Phone ringing] What? [Phone ringing] [Phone ringing]

I'll tell you what he didn't say. Because I'm not Xu and Jhin. [Phone ringing] [Phone ringing]

From Bloomberg News and I Heart Podcasts,

this is the sixth bureau. I'm Jordan Robertson. And I'm Drake Bennett. [Phone ringing] It did not expect that at all.

I didn't say anything. I don't think any of us knew. I don't think any of us knew.

“We don't know that that was Xu on the phone.”

But it was his number and it sounded like him. We've heard Xu's voice. You have two. Plus, taking a call from an unknown US number, which was actually attached to a burner phone,

Bloomberg gave us solely for the purpose of making these calls, seems a little like something he do. And our colleague mentioned another thing. He has a little bit of local accent. I assume from Jiangsu area.

Jiangsu province is where Xu's from. He's a little bit guarded. Like he didn't confirm. Neither deny or confirm who he is. Just ask to repeat in the question.

Who are you?

Of course, this wasn't the first time we tried to reach him.

We'd written him two letters while he was incarcerated. And he responded by telling his lawyers to tell us that he didn't want to talk to us or ever hear from us again. But by the time we called his number from our offices, Xu wasn't in an American prison anymore.

He wasn't even in America. We'll get back to that.

“First, we need to catch you up on the fallout from his arrest,”

which profoundly shook the MSS. One place we can trace the ripple effects of Xu's arrest is Chicago, with Xu Chao Chun. Engineer and grad student who still texted his parents for grocery shopping tips. That is good sea cucumber available now.

The boy spy, who texted pictures of his MSS cash to his friends. Fucker, are you even there to photograph this? photograph it sneakily. Delete after you see it. And he worked as a spotter for Xu Yanjun.

Are you there? I have a favor to ask. I'm here. Please go ahead brother Xu. Which is why an undercover FBI agent approached him on the street in Chicago

after Xu was arrested. Parker. Did you talk to him? Yeah. The undercover told Xu that with Xu arrested,

he was his new MSS handler. And she believed him. The two of them met three times in that same hired hotel room. Each time, the FBI learned more about what Xu was doing. Until they decided, they'd learned enough.

On September 25th, 2018, Ji and the undercover's final meeting ended abruptly. Two FBI agents, very much not undercover, burst into the hotel room. That panic voice, killing. Wait, wait.

That's actually the undercover. Still in characters, an MSS handler getting busted. As part of the plan, he's handcuffed and led out of the room. And then the two FBI agents turned to their real target. Ji.

So, what's your unit? Coconut. Chocolate. Yes. Okay.

So, you want a lawyer? Am I in trouble? Well, that's what we talked about. Yeah. He was.

He was arrested. And went on trial in the fall of 2022, roughly a year after Xu, and was convicted of acting as an agent of a foreign government and making a material false statement to the Army.

He was sentenced to eight years in prison. Ji wasn't the only one in this roundup. There were other arrests and prosecutions of people connected to Xu. A Chinese hacker who worked with the six bureau was apprehended as he arrived in Los Angeles for a cyber security conference.

was arrested in charge with theft of trade secrets.

He was one of the engineers Xu and Ji had done a background check on. Xu's boss, Jaurong, and other MSS colleagues were indicted in absentia for a series of cyber attacks on aviation companies. And Arthur Gap, the Honeywell Engineer, who Xu secretly recorded when he came to give a talk in Nanjing, he was indicted too.

He pled guilty to export control violations and testified at Xu's trial. These cases were like tracers, marking the outlines of networks that had previously been hidden. But innocent people would also get caught up in that hunt. A few weeks after Xu's extradition in late 2018,

then attorney general Jeff Sessions announced what he called the China Initiative.

“A Justice Department campaign to counter trade secret theft.”

We are here today to say enough is enough.

We're not going to take it any more. It's unacceptable. It's time for China to join the community of lawful missions. International trade has been good for China. But cheating must stop.

That led to a wave of aggressive controversial prosecutions. Most of the defendants were ethnically Chinese academics working at American research institutions. And in most instances, there was no evidence that anyone was actually sharing trade secrets. As a result, many of the charges were for paperwork violations like failing to report ties to Chinese universities. Some of the cases were so weak that prosecutors would end up dropping the charges.

It all looked to a lot of people like ethnic profiling. And the Biden administration would formally end the program. We have heard concerns from the civil rights community that the China Initiative has fueled a narrative of intolerance and bias.

“To many that narrative suggests that the Justice Department treats people from China or of Chinese descent differently.”

The rise in anti-mirror. But as we know, she was an actual spy. And when he was taken off the chessboard, it had ramifications. Perhaps the most striking one was what stopped happening. Right after shoes arrest, the FBI noticed that the MSS industrial espionage machine essentially shut down.

The arrest of Jew scared them into stopping what they were doing essentially.

Where they had to basically make it this large country-wide operational pause to try and figure out where or how is you got caught.

Alan Kohler. The FBI's former head of counterintelligence. They didn't want to put any other sources at risk. They didn't want to put any more intelligence officers at risk. So they just stopped to try and figure out what was happening.

And that was incredibly beneficial to us because China wasn't luring Americans out of the US to meet them overseas anymore. At the time, that was our biggest unknown risk. We just didn't know how much and how often this was happening. But we knew it stopped in the aftermath of shoe.

“From the US government's perspective, what was China doing in those moments of pause?”

What actually happens? They're probably doing exactly the same thing that we would do whenever we experience a compromise. And I can tell you, I've been in the room when that's happened a lot. Where, let's say you have 10 operations that you launch throughout the US and overseas. And one of them dramatically goes south.

We would stop what we're doing for fear of putting those other operations at risk until we figured out what the heck happened in this one operation that blew up in our faces. And China was absolutely doing that. They didn't know where the whole was. And so therefore they had a pause until they could try and figure it out. Allen says the MSS hit pause for roughly three years.

As it struggled to pinpoint what exactly had gone wrong, that's a really long time to shut out an intelligence effort. And it stayed that way until shoe trial. The United States government had to show everything that they did in the case. And China is able to understand, okay, here's our weak spots. Here is the person that lure him to Belgium. We see how that happens.

Okay, you shouldn't have recorded yourself. And you shouldn't have put all this personal information into the device that you took that the FBI got access to. Note to self, do not record secrets by stuff on iPhone that you get arrested with. Hello. This is where we know this case went sideways.

We're just not going to make those mistakes again. So they learn from the trial too. China learns from the trial as well. Oh, sure. And they may drag the process out to find out exactly what the US government has. How they got it, who what the sourcing is, et cetera. And in this case, it was just that on steroids.

So the pause ended and the machine started back up. You know, green light go back out of again. They learned. They understood exactly what was happening. And they did what we do, right? You get smart. You understand what the adversaries are doing. You adapt and you get better.

Yeah, we did.

But even after the story came out, we couldn't stop thinking about it.

We're talking about it or reporting on it. And we kept finding more and more great stuff. Like G chao tunes, not in the print story at all. Right. We learned about him after the fact. Yeah, and shoes phone calls, we had transcripts of the recordings when we wrote the print story. But it wasn't until after that that we got the actual audio.

Which, of course, sparked the idea for this podcast. Right. And while we were working on the pitch for the pod, like late 2024, you got a tip. Yeah, it was quite a tip. So I get a call one day kind of late November from a source. We suggested that I look at the Bureau of Prison's website.

“And they said, "You should look up shoe engine there."”

And like, so many of these calls, it was like unnecessarily cryptic. I'm like, "What am I gonna see? This man got sentenced to 20 years." Like, "I don't need to see it again." I know what happened. And so I go and look and like, he's gone.

shoe engine was not there. He was not in the system.

And at first I was like, "Did you escape?"

Did he break out of prison? It wouldn't be the first time he tried that. Yeah, I thought maybe this time he'd actually succeeded. So I called the source back, and the person was like, "No." He didn't escape. He's been swamped.

Today's show is brought to you by Vanguard. To all the financial advisors listening, let's talk bonds for a minute. Capturing value and fixed income is not easy.

“Bond markets are massive, murky, and let's be real.”

Lots of firms throw a couple flashy funds your way and call it a day. But on Vanguard, a Vanguard institutional quality isn't a tagline. It's a commitment to your clients. We're talking top grade products across the board of over 80 bond funds. Actively managed by a 200-person global squad of sector specialists, analysts, and traders.

These folks live and breathe fixed income. So if you're looking to give your clients consistent results year in and year out, go see the record for yourself at Vanguard.com/audio. That's Vanguard.com/audio. All investing in subject to risk Vanguard marketing corporation distributor.

When a birthday party in suburban San Jose turns deadly, 18-year-old identical twins are arrested for suspected murder. One of them spends nearly two years in jail before the truth comes out. Authorities locked up the wrong twin. How could one brother let his twin take the fall?

“And why would the other give up his freedom for a crime he didn't commit?”

Blood will tell is a modern-day Shakespearean saga about what we're willing to sacrifice for the people we love, and whether our most tragic mistakes are worthy of redemption. Listen to blood will tell, a new series from audible and campsite media, wherever you get your podcasts. You know Rolldahl. He thought a bully wonka in the BFG,

but does you know he was a spy? In the new podcast, the secret world of Rolldahl. I'll tell you that story, and much, much more. What? You probably won't believe it either. Was this before he wrote his stories?

I'd must have been. Okay, I don't think that's true. I'm telling you. Okay, I was a spy. Listen to the secret world of Rolldahl on the I-Hart Radio App, Apple Podcasts, or wherever you get your podcasts.

Shuyan Jun had been swapped. Pardoned by President Biden, released from prison, and sent back to China. So had G Chao Jun, and a third Chinese man convicted on unrelated charges. In exchange, three American citizens in Chinese prisons had been released and sent home to the US. It was a prisoner swap, and it's how real-life spy stories often end.

It was bound to happen. It's part of the deal-making. Federal prosecutor Tim Mangan. Even if we hadn't gotten a chance to indict him, and we just caught a spy, this is what happened to a spies. I don't think anyone on our team was shocked.

Federal prosecutor Emily Gladfelter.

You're always surprised to hear it at that moment, but it wasn't a shock that overall,

to think that this was something that might occur, because he was such a valuable asset to the Chinese government. I always thought it was inevitable that he was going to be traded, and it's just a matter of when. Alan Kohler again. What the case team did is they gave the United States a chip that we could play in the world stage. We put you in jail. We arrested his network. We learned a whole lot about how China targets Americans.

We were able to tell the world how it happens. And then we actually had this intelligence officer in prison that we gave our president the opportunity to bargain with someone inside China to get Americans back.

But not everyone feels that way, even other spies.

“I was disappointed. Now I was more than disappointed. I was angry.”

James Olson, former CIA clandestine officer in counter intelligence chief. By releasing shoe and his co-opty G, I felt that much of their work was for not. By letting him go free, this trial, all that hard work, this brilliant operation that Bradley whole pulled off, had no less impact. And some people aren't sure exactly what to think. Yeah, I was unhappy with that.

Art Cummings, former head of security at GE. Yeah, it was very unhappy with that. Marisa. I just think it's such a wrong message again. You know, but again, I'm contradicting myself a little bit because he was actually a representative of their government.

So, I don't like the fact that it was kind of a paper tiger moment. Yeah, he made all that effort. Now, bye-bye. He's back. Kind of like, wow, really.

“But at the same time, is it a loyal Chinese citizen?”

I mean, yeah.

I always draw the equivalence.

The CIA officer is lured to Europe and then extradited to a country and then put in prison. We would be out of our minds. Art saying, if the situation was reversed, we would do everything we could to get that CIA officer back. And that's basically what China says they did. In a press conference at the time, right after the swap, a spokesperson for the Chinese Ministry of Foreign Affairs made their message clear.

Through the unremitting efforts of the Chinese government, three Chinese citizens wrongfully detained by the US have returned safely to China. In once again, shows that never ever will China give up on its citizens. The motherland will always have their back. So, once you're back in the motherland, what does that actually look like? Well, when it comes to G, we know a little.

He had a life in the US. He made personal connections. And he hasn't totally abandoned them. He just told me about how he was, quote-unquote, rescued from the China US prisoner swap. Naomi Lyman met G Chauchoo in Chicago when he joined the Church of Jesus Christ of Latter-day Saints.

This isn't something he seems to have discussed much with either his real or fake MSS handlers.

“But it became a very important part of his American life.”

And so is Naomi. I only ever saw him being gentle and kind. He would sit next to people on the train who just looked lonely. And he would just talk to them. Just in a loving way, just how's your day going?

Where are you headed to? They were really close friends. She was at Naomi's wedding and was the only person she invited into the Mormon Temple for the ceremony. My best friends weren't there. I had nobody in there with me that I chose except for Chauchoo.

A month after the wedding, Naomi got a message from a reporter asking for comment on Jesus' rest. That's how she found out about it. I got this message asking to be interviewed because they could see that I knew him really well based off of Facebook. And I was just shocked and really confused. I went on to Google and I just typed in his name and then aroused and started reading article after article that had been published about him

and watching all the videos. And I honestly was so devastated. She put those feelings into a long letter and sent it to G while he was in jail, a waiting trial. And they did not let him read it because I didn't write it on white paper. And so they sent it back to me.

And this was like a 10-page letter that I poured my heart out to him and I was so distraught. I didn't even rewrite it and resented to him. But she kept wondering how he was doing. Every once in a while, I don't know maybe every other two or three months. I would go and Google his name.

And then six years later, still doing her Googler. Something new finally pops up. I saw that he had been released and a prisoner exchange program. And it was really just a week later that he messaged me saying hi and that he knew that I sent him a letter.

But he never got to see it because it wasn't on that white paper.

And thank you for writing me a letter.

He also told her a little bit about what he was up to.

Let's see. I'll look at his messages right now. He said, I'm doing great.

“I'm in China now, just enjoying my time with my family.”

Dot, dot, dot, dot, dot. We'll go to work in July, which we know where he's going to be working at because we know who rescued him. So I did ask. I did ask. I was like, where are you going to be working at?

This is to see if I could get an answer, but there is no response. As for shoe, we know even less. He didn't live in the US. He didn't make friends here. And there's really no way of knowing what happened to him when he went back to China.

But we can speculate. I don't know. On the one hand, he was loyal. He could have come knocking on our door and saying, hey, I'll tell you everything I know. He didn't form our federal prosecutor Matt McKenzie.

On the other hand, he was a catastrophic failure. An epic, epic failure for them. The amount of information that we were able to gather about how China actually operates is mind-boggling. And it's all because he was sloppy and greedy. And we were able to catch him.

And now, the whole world can see how they operate because we put it all out in a trial.

“So I think you have to put him in a back room, give him a decent paying job,”

but don't trust him with anything because he can't be trusted. He's kind of incompetent. No, I suppose. Right. It's easy to laugh if you use carelessness in his mistakes.

But we all do stupid stuff, don't we? We all cut corners. Most of the time, we get away with it. And most of the time, she did too. Spies are people and people are lazy.

It's absolutely a truth throughout all S.B.N.S. cases. And I've got this little thing that I keep on me. At this point in our interview with Alan, he pulls out a piece of paper. I don't know if you're a George Smiley fan. It's a quote from Smiley's people, a John Licarre novel,

that's part of the same trilogy as Tinker Taylor's soldier spy. Alan keeps this quote with him, the way someone else might keep a scrap of scripture or a pocket constitution. For the longest time, I would have a copy of the book, which is behind me on my shelf.

Doggeard, and I was just in a Marriott one point, and I took a piece of Marriott stationary, and I wrote this quote down. This is the kind of a counterintelligence geek that I am. He keeps it close as a kind of reminder, a warning.

So this is a quote from Smiley's people. It's referring about a truth throughout all S.B.N.H. cases. Is it okay if I just share this part with you? Yeah, absolutely. He knew that sometimes old spies, even the best of them,

were a little like old lovers. So the 1020s knew Peach. As the age crept up on them, they began to cheat at a fear that their powers were discerning them.

Peach, you can go, maybe you can head back first.

Thank you so much. They pretended they had it all in the memory,

“but in secret, they were hang on to their virility.”

In secret, they wrote it down, often in some homemade code, which if they had only known it, could be unbuttoned in hours or minutes by anyone who knew the game. June 22nd, through to Paris. Names and addresses of contacts, sub-agents.

June 11th, met G. Charterings. Nothing was holy. Routines, times and places of meetings. Let's try our best to meeting Europe. Work names, phone numbers.

John reject a meal receipt today. I don't where I have my revenge. Even safe combinations, written out as silciestory numbers and birthdays. Send me the name of the coffee shop.

We're here. In his time, Smiley had seen entire networks put it risk that way, because one agent no longer dared to trust his head. I put a USB drive in the eyeglass box in the middle of the bookcase.

If something happens, someone will come to you and tell you the password. To me, that is exactly what S.B. Nage is. The people execute flawless tradecraft.

They will never be caught.

But because their people, they will always be caught. Your honor, I'm just an ordinary Chinese citizen who knows nothing about politics. No, do I know anything about secrets. I stand by my innocence.

Thank you. The news doesn't stop on the weekends. Context changes constantly. And now Bloomberg is the place to stay on top of it all. Hi. I'm David Gurra. Join us every Saturday

and Sunday for the new Bloomberg this weekend. I'm Christina Rafini. We'll bring you the latest headlines

All the stories that hit home on your days off.

And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful and lightning conversations about business, lifestyle, people and culture. On Saturday mornings, we put the past week's events into context,

examining what happened in the markets and the world. That on Sunday as we speak with journalists,

“columnists and key political figures to prepare you for the week ahead.”

Join us as soon as you wake up and bring us with you, wherever you're weekend plans take you. Watch us on Bloomberg Television. Listen on Bloomberg Radio. Stream the show live on the Bloomberg Business App

or listen to the podcast. That's Bloomberg this weekend. Saturdays and Sundays starting at 7am Eastern. Make us part of your weekend routine on Bloomberg Television,

Radio and wherever you get your podcasts.

You know Roll Doll. He thought a bully Wonka in the BFG. But does you know he was a spy? In the new podcast, the secret world of Roll Doll. I'll tell you that story and much, much more. What?

You probably won't believe it either. Was this before you wrote his stories? I'd must have been. Okay, I don't think that's true. I'm telling you.

I think I was a spy. Listen to the secret world of Roll Doll. On the I-Hart Radio App, Apple Podcasts, or wherever you get your podcasts. I'm Anna Navarro and on my new podcast,

Bleep with Anna Navarro. I'm talking to the people closest to the biggest issues happening in your community and around the world. Because I know deep down inside right now, we are all cursing and asking.

What the bleep is going on? I'm talking to people at Julie Cape Brown, who broke the explosive story on Jeffrey Epstein in 2018. These victims have been let down time and time again. For decades and decades and decades,

by local law enforcement, by federal law enforcement, by administration after administration. They're just a department through,

“I think we count it for presidential administrations,”

failed these victims. Listen to Bleep with Anna Navarro as part of the Michael Duda podcast network. Available on the I-Hart Radio App, Apple Podcasts, or wherever you get your podcasts.

China is still behind the U.S. when it comes to aviation technology. GE's Jet Engine is still the most advanced out there. China's engines are 5 or 10 or 15 years behind. But they're probably not going to stay there.

I mean, they used to be similar gaps in other sectors, like electric vehicles, but not anymore. Yes, 20 years ago things were very different for China. This is Julianna Lou, a global business colonist for Bloomberg opinion. She's been covering China for over two decades.

20 years ago, nobody expected Chinese EVs to be the world beaters that they are today. I think it wasn't even that long ago. With Elon Musk was laughing, and as you're familiar with BYD, the ramping up production of their electric vehicle,

Warren Buffett owns 10% stake in that. Why do you laugh? Nearly. Trying to compete. Why do you laugh? Have you seen their car?

I have seen their car. Like literally laughing at BYD, during a Bloomberg TV interview. Well, they're on a different scale. They're on a different scale.

Tell me why you're laughing.

“You don't see them at all as a competitor.”

No. Why is that? I mean, they offer a lower price point. I don't think they have a great product. Elon Musk may have considered the Chinese electric car maker BYD,

something to laugh about back in 2011 when he gave that interview. But BYD is now one of the fastest growing car companies in history and ranks among the biggest automakers in the world. They're not a joke. They're a threat.

Which is why the US government has made it basically impossible to sell them in the US. The Biden administration slapped a 100% tariff on Chinese EVs.

So most Americans have never even seen one in person.

Yeah, I mean, I haven't. And I have, but that's because I live in London, where their plenty of BYD is driving around. China's getting so good at so many things. Quickly, EVs, AI, drones.

That they're starting to have their own fears that their tech will get poached. In the case of BYD, it had kind of long expressed a desire to open up a factory in Mexico. And about a year ago, the reports that that permission was being delayed

by the Chinese side, because Beijing was concerned that this technology would be kind of diffused out of Mexico and into the US into the so-called wrong hands. Recently, the Chinese government has started taking steps to guard intellectual property in other realms, like AI.

The government now discourages top Chinese AI researchers from traveling abroad, warning that they might potentially be targeted in some way. It's also recently launched an investigation into a deal

for potentially putting Chinese tech secrets at risk.

“Maybe for the first time in kind of modern history,”

the shoes on the other foot. It's not a very comfortable position to be in, but at least US officials are being pretty honest with you about how they see the current situation. Good morning.

Today, the Select Committee on China meets to examine the rise of China's auto industry. And what it means for America's economy and national security. The release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need

to be laser-focused on competing to win, because we have... In just five years, China has gone from a minor exporter to the world's largest auto exporter at below market prices that US and allied automakers cannot match.

They've already exceeded our military capabilities.

They have more planes, more ships, more submarines, more missiles, more bombs, more soldiers. They have the ability to build ships 230 times faster than we do. They have an Air Force that outnumbers ours. Previously, it was a technological gap that we were able to depend on. The technology gap has evaporated.

“And I would imagine the rationale is not that different from the Chinese side.”

The rationale that kind of supported the kinds of acts that you're reporting about. It's a mirror. It's a place as a mirror to what China has allegedly been doing and what the West may be willing to do. What is the West willing to do?

Everyone who interviewed for this series has insisted over and over again that we don't do what China does. The US government does not steal trade secrets. Companies might spy on other companies, but our intelligence services do not spy on foreign firms to steal their tech.

Governments spy on other governments. Our governments should not be stealing using the state apparatus to steal trade secrets for commercial purposes. And it's just outside the boundaries. Can I just ask why?

It's kind of like Omar and the wire. You got to have a code. Or trifle them basically. Kill every day working man and all. I mean, don't get it twisted.

I do some dirt too.

But I never put my gun on nobody wasn't in the game.

But man must have a code. I don't know doubt. In the code is, we don't steal trade secrets for commercial purposes. We're here to spy on each other for the needs of our state.

Everyone has our state purposes that we're going to be conducting espionage. But there are certain lines we don't cross. You don't see the NSA out there stealing secrets to help coke or Pepsi. It's just not how we do things. The Chinese just blur all those lines.

We need to see I do not do industrial espionage. We do not steal foreign technologies. That's not our job. We don't do that. So that is a major distinction.

In fact, many, many foreign intelligence services. Trending for a life. Do you have that responsibility of acquiring a technology that they cannot get in any other way? But no, we don't do that.

At least, not since we became the world's dominant superpower. But if that changed, would we? What lines would we blur? Well, we're already blurring plenty of them. The government is taking ownership stakes in different companies,

inserting itself into the private sector in ways it hasn't before. The leader of Venezuela was taken from his capital city and is now sitting in a Brooklyn prison. The FBI and DOJ are being used to investigate the president's perceived political enemies.

“So, honestly, what's so precious about trade secrets?”

Why wouldn't the US start sending out spies to try to steal them? Especially if it had a new motive. To catch up. And let's not forget. The US has done it before.

Earlier in the series, we mentioned how the United States, back when it was a very young nation, paid people to smuggle loom designs out of Great Britain. The global industrial power of that age.

The question is, would we do something like that again today? We wanted to ask our espionage expert James Olson, who spent three decades in the CIA. The one who took the stand against you, who was crushed by the news of the swap,

who you just heard say, "We need to see how I do not do industrial espionage." We wanted to know what James thought about this. About whether the US is official approach, it's code, if you will, could change.

The last thing I want to ask is just whether this insistence on our spying being sort of defensive, rather than offensive is a luxury of the fact that we're sort of preeminence of a power on the world. Do you think there's any evidence or likelihood

whether there's any possibility we'd change that stance,

whether we would resort to more offensive spying in the way that China and other countries do?

“I think it's receivable that if the United States lost its”

premen of position in the world, that we would be more offensive in our intelligence efforts, to strengthen ourselves, that the expense of our adversaries, rather than the primarily defensive mode that I think we're in now,

that's conceivable to me.

I hope that day never comes.

A huge thanks to everyone who made this possible. Our production team, editors, engineers, composers, translators, voice actors, voice coaches, fact checkers, the many people we interviewed on and off the record, and everyone at Bloomberg and beyond who contributed to

and supported this project with their advice, suggestions, and time. And again, please share rate and review our show if you liked it.

“If you're still listening, then you should also check out our homepage,”

where we have two print pieces, and a video documentary that we made about the boy spy, G. Chachoon. That's at Bloomberg.com/v6biro. Thanks so much for listening.

Bye. I'm Francine Lacquat, an award-winning journalist, and I've got a new podcast. Leaders with Francine Lacquat from Bloomberg podcasts. I've interviewed everyone from heads of state

to fashion icons about the news of the moment,

but I've always been curious who are these people as leaders.

I don't think there's one right way to be a leader. Make decisions. A poor decision is always better than no decision. Listen to new episodes every other Monday. Follow leaders with Francine Lacquat,

wherever you get your podcasts. Hello, gorgeous. It's Lala Kent. Host of untraditionally Lala. My days of filling up cups at Sir may be over, but I'm still loving life in the valley.

Life on the other side of the hill is giving grown-up vibes, but over here on my podcast, untraditionally Lala. I'm still that Lala, you either love or love to hate. It's unruly, it's un Afraid, it's untraditionally Lala. Listen to untraditionally Lala on the iHeart Radio app,

Apple podcasts, or wherever you get your podcast. You know Roll Doll. He thought a bully Wonka in the BFG, but does you know he was a spy?

“In the new podcast, The Secret World of Roll Doll.”

I'll tell you that story, and much, much more. What? You probably won't believe it either. Was this before he wrote his stories? I must have been.

Okay, I don't think that's true. I'm telling you, it was a spy. Listen to The Secret World of Roll Doll. On the iHeart Radio app, Apple podcasts, podcast or wherever you get your podcast.