Tech CEO: China Real Cyber Threat, Not Russia

Man typing on a laptop computer. Science Photo Library / ABO
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Americans are in a war with China — just not one involving bombs, Jim Phillips, Chairman and CEO of NanoMech said on Friday’s edition of SiriusXM’s Breitbart News Tonight with Rebecca Mansour and guest co-host Rick Manning of Americans for Limited Government. 

“We’ve got to wake up to the fact that we’re in a war. It’s one of the biggest wars that have ever been fought, and it’s cyber warfare. … It’s not dropping bombs, that’s why people haven’t noticed it,” Phillips said.

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Instead, he said, people are fixated on Russia. Phillips testified Thursday to the House Intelligence Committee at a hearing meant to focus on China’s threat to the American private sector. During the hearing, Democrats unsuccessfully tried to subpoena a U.S. interpreter that translated for President Donald Trump during his meeting with Russian President Vladimir Putin.

“Russia means nothing … If you measure countries by their GDP, they’re not even in the top ten — they’re a trillion and a half,” Phillips told Breitbart News Tonight. “It’s Mexico with nukes. Otherwise, it’s not even a player. And we need to stop all this stuff. Russia is not a threat. They really aren’t.”

Meanwhile, he said, China has openly stated its goal to become the world’s superpower and surpass the U.S. and is using technology theft and cyber crimes against the U.S. and American companies to achieve it.

“America invents. China manufactures, steals, monetizes, and that’s why they’re outgrowing us,” he said. “When they pass us in GDP in a big way, the world is going to change like never before. And when this happens, America loses like never before.”

Phillips explained that all solutions in manufacturing today are happening at the nanoscale and are behind emerging technologies such as autonomous vehicles, artificial intelligence, and big data.

He said the world is at an unprecedented inflection point where there will be more inventions in the next five years than the past 30 or 40 years. Phillips said China is engaged in cyber warfare to steal whatever technologies it can from the U.S.

“They have [a cyber] outfit that has 25,000 soldiers,” he said. “They are doing more cyber warfare, to the tune of somewhere between stealing $400 to 600 billion.”

Phillips said he learned firsthand what the Chinese were doing when the FBI showed up “in force” to NanoMech and told him, “Your firewall is the most hit firewall in the southern U.S. — millions of hits a day from China.”

He was told that the Chinese were so good at stealing secrets he should keep his best science “off the grid” — in logbooks like in the 1900s.

Phillips added that what the Chinese were not stealing, the U.S. was just giving away to them, due to underfunded technology transfer commercialization programs.

The programs are meant to get new technology to commercial markets but are run by people who do not understand business or marketing. As a result, many new technologies go nowhere and end up on the internet, free for the Chinese to take.

“At the end of the day, one out of 10 patents see the light of day … Next thing you know, we have it up on the internet … We’re giving away all of that,” he said.

He warned that China could become the dominant power in the world as soon as in five to ten years, all without using its military. At that point, China would call the shots around the globe, he said.

“At that point, China will be the new leader of the world, and all decisions between the countries on peace trade environment, borders, laws, will defer to China,” he said.

But he argued it was not a foregone conclusion, and Americans cannot be complacent. During the hearing on Thursday, he laid out what the U.S. could do, including revamping its tech transfer programs, growing and retaining top talent, and investing more in scientific research and development.

“Our future’s going to be made great or not great by our GDP — do we have good jobs, are we producing great jobs?” he said. “We’re in a moon race right now.”

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