'How do you spy on China?'

My interview with The China Project

Many of you have asked about my own take on the issues I analyze in these pages and about my background. Today is some of both.I am honored to have been interviewed by the terrific Jeremy Goldkorn, editor-in-chief of The China Project. Below is part of that interview.


September 18, 2022
'How do you spy on China?'
Illustration by Nadya Yeh (from The China Project)

Many of you have asked about my own take on the issues I analyze in these pages and about my background.

  • Today is some of both.

I am honored to have been interviewed by the terrific Jeremy Goldkorn, editor-in-chief of The China Project.

  • Below is part of that interview.

You can read the entire interview on The China Project website:


1 | The current state of the world

Q: 'You’ve been watching geopolitical and financial competition since the height of the Cold War. How worried should we be about the current state of the world?'

'I don’t have a good feeling about the world now the way I did when I was younger.'

  • 'When I was young, we had Ronald Reagan’s shining city on the hill.'
  • 'But we also had the Cold War where the Soviet Union and America could blow each other up, and we really believed that could happen.'

'Today, though, I’m not seeing bright spots anywhere.'

  • 'I don’t see great leadership. The international order is not moving in good directions. I watch global problems that seem intractable. And I don’t see a way forward.'

2 | Taiwan

Q: 'What about Taiwan?'

'Here’s the thing. Máo Zédōng told Nixon that they can wait a hundred years to get Taiwan back. Dèng didn’t make it a priority. Jiāng didn’t make it a priority. Hú didn’t make it a priority.'

  • 'It was Xí Jìnpíng who chose to put Taiwan front and center.'

'We have to take Xi Jinping at his word and never underestimate his ambition when you’re trying to figure out what he is going to do.'

  • 'And that is to resolve the Taiwan issue during his reign.'

'But what perplexes me is that he has made peaceful reunification harder and harder. And the Taiwanese don’t seem susceptible to coercion.'

  • 'So what’s left is military force.'

'Assume that these war games regarding a Chinese invasion of Taiwan and a U.S. defense we’ve read about are correct.'

  • 'The U.S. takes a beating, maybe loses, but the devastation to the Chinese military and the Chinese economy will also be terrific.'

'Let’s suppose that the U.S. is weakened the way China is.'

  • 'China has a goal of projecting its hegemony into the Western Pacific.'
  • 'Now, suppose the U.S. is so weakened that it can’t continue to support the Western Pacific. Well, China can’t project power there either.'

'But we have allies who could continue to confront China, even after a war.'

  • 'Xi may achieve reunification with Taiwan. But that's the end of his dream of hegemony in the Western Pacific.'

'Besides Taiwan, Xi Jinping seems to be making an awful lot of decisions that are going to come back and bite him.'

  • 'And it’s hard to understand why he is making them.'
  • It’s heartening to know that I’m not the only one who is perplexed.'

3 | U.S.-China relations

Q: 'Everybody is trying to understand the problem with China and America right now. You’ve been observing this problem for decades. What should people do?'

'When my Chinese friends blame the U.S. for these bad relations, I say:'

  • “Yeah, but for 40 years, didn’t we support your growth? Didn’t we help you with WTO? All these sorts of things."
  • "Did we just suddenly decide we didn’t like China, so now we’re trying to stop your growth and your development? Or did something else happen? What else could have happened?"
  • "Oh yeah, Xi Jinping. Xi Jinping happened.”

'During Xi's reign we went from maybe China didn’t think we were their best friends, and maybe they didn’t wish us well, to straight-out animosity.'

  • 'It’s all anti-America propaganda, all the time, and that’s a big change – hostility, open hostility and aggression on the Chinese side.'

'Maybe we provoked it, but I can’t see how we did.'

  • 'But in any case, I think it’s part of everything that Xi Jinping is doing.'

'So, I think the first thing to do is recognize that we’re facing a country that does not wish us well and wants to gain whatever advantages it can. What do you do?'

  • 'I don’t see "reproach mode" as the answer.'
  • 'I also think some sort of crazy hard line, Pompeo-style, regime-change thing is just nuts.'

'But I’m warming up to the idea of Kennan-style containment, and I am shocked that I am.'

  • 'Still, I’m having a harder and harder time seeing an alternative.'


1 | CIA

Q: 'Why did you join the CIA? And what did you do for them?'

'Well, I joined the CIA because I had always wanted to be a spy.'

  • 'And when I had the opportunity, I just dropped everything else — the practice of law — and did it.'

'What did I do at the CIA?'

  • 'I was both a case officer - a spy - and a Special Operations Group paramilitary officer, meaning I was also a soldier.'

'As a case officer, my assignment was in the East Asia division. I worked in China operations, spying on China.'

  • 'This was in the ‘70s and ‘80s.'
  • 'We had a very tough time even meeting with Chinese officials, let alone recruiting them to be agents.'

'I would guess that today it's substantially easier, even though China's always had a really excellent counter-intelligence service.'

  • 'But even with great counter-intelligence, you've got today a lot more access to Chinese officials and business people who have access to the Party to recruit.'

'As a Special Ops officer, I was like a Green Beret.'

  • 'Jumping out of airplanes, blowing things up, shooting things, a little more direct.'
  • 'It was the Reagan era. Our focus was on Central America at that time. and I spent some time with Delta Force there.'

'Between that and being a case officer, I couldn’t think of a better way to spend my youth.'

2 | RiddellTseng

Q: 'How did you transition out of the CIA into business?''

After I left the Agency, I went to Harvard Business School and then to Wall Street.'

  • 'Then in ’88, I started my own investment bank in Taiwan, RiddellTseng.'

'When China opened up, I took the show on the road to China.'Q: 'What do you do at RiddellTseng?''RiddellTseng is a China-focused boutique with life insurance, asset management, real estate, and corporate clients.''In the early days, the only way into China for life insurers and asset managers was through a joint venture.'

  • 'So we found potential Chinese partners, did the due diligence, and negotiated the deals for our clients.'

'I’m a lawyer, so I'm able to manage the legal processes, which is tough with Chinese law being so opaque.'

  • 'I’m also a Mandarin speaker, so I negotiate the deal with the Chinese counterparties.'

'If all goes well, we come to an agreement so that the foreign side has as good a deal as possible, with the most protection possible, and the best risk structure.'

  • 'But, with joint ventures anyway, not so good that the Chinese side will become dissatisfied, and the venture falls later apart.'

'Today, we work on all sorts of complex Sino-foreign deals.'Q: 'What makes doing deals with the Chinese difficult?''Because a lot of western management practices are really foreign concepts to the Chinese way of doing business, it takes a long time to explain to the Chinese side and to get their agreement on creating an international-style of company.'

  • 'But an even greater challenge is the Chinese way of negotiating.'

'I learned the hard way in Taiwan. I was putting together my first joint venture between a UK insurer and a major Taiwanese group.'

  • 'I’d warned my client, the CEO of the UK insurer, that this was going to take a long time, and it was going to be tough.'
  • 'So he flies over, meets the chairman of the Taiwan group, and they agree on everything over lunch.'
  • 'As he walks out of the lunch, the CEO looks at me and says, “I thought you said this is going to be hard.” '

'Well, eight months later, we finally got something signed.'

  • 'As soon as we got into negotiations, all the Taiwan chairman’s agreements got walked back.'
  • 'And as everybody who’s done anything in China knows, it’s not over just because something’s signed. The negotiations go on and on.'

'All in all, the thing about negotiating joint ventures that I especially enjoy is that the outcome has to be fair to both sides, or it won’t last.'

  • 'One of the biggest cross-cultural challenges I can think of.'

3 | CHINADebate

Q: 'You have another business. What does CHINADebate do?'

'CHINADebate’s first service, the CHINARoundtable, brings together institutional investors and senior executives in small group discussions with leading China experts.'

  • 'The aim is to give the members some insights they won't otherwise get.'

'Goldman Sachs and Morgan Stanley, for example, have excellent analysts but are focused pretty much on specific industries and companies and the Chinese economy.'

  • 'At the CHINRoundtable, members get a much broader picture of how China’s politics, economics, and foreign affairs work and interact.'

'We used to meet in New York.'

  • 'Now we hold our monthly sessions on Zoom.'

'CHINADebate now also publishes the CHINAMacroReporter, which highlights interesting research along with my commentaries, plus expert interviews.'

  • 'We have well over 10,000 readers - investors, executives, government officials, and Fortune 500 CEOs, as well as academics and think tank analysts'



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December 7, 2021
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December 7, 2021
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September 27, 2021
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August 15, 2021
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August 1, 2021
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