American Thought Leaders - How Communist China Outsmarted Hollywood, the NBA, and US Businesses: Chris Fenton

Episode Date: July 19, 2024

Sponsor special: Up to $2,500 of FREE silver AND a FREE safe on qualifying orders - Call 855-862-3377 or text “AMERICAN” to 6-5-5-3-2These days, Hollywood blockbusters aren’t making much money in the Chinese market anymore, even when they do make it past the regime’s censors. How come? And does that mean Hollywood self-censorship will stop?In this episode, we sit down with Hollywood veteran and producer Chris Fenton, author of “Feeding the Dragon: Inside the Trillion Dollar Dilemma Facing Hollywood, the NBA & American Business.”In this episode, he breaks down how the Chinese regime exploited American companies eager to access the Chinese market.Views expressed in this video are opinions of the host and the guest and do not necessarily reflect the views of The Epoch Times.

There is a non-traditional kind of weaponry war going on between the U.S. and China, whether it's financial or technological or informational. Some of our biggest competitors, not just in the PRC, but in the global market, are now Chinese competitors. It's not going to stop. In this episode, I sit down with Chris Fenton, a Hollywood veteran and insider, and author of Feeding the Dragon, Inside the Trillion-Dollar Dilemma Facing Hollywood, the NBA, and American Business. We have to protect the foundation of what makes our country as great as it is. Washington, D.C. just needs to make sure that businesses are aware that there are major ramifications for them not thinking about the welfare and health of this country and our allies

first before they sell their products and services there. This is American Thought Leaders, and I'm Jan Jekielek. Before we start, I'd like to take a moment to thank the sponsor of our podcast, American Hartford Gold. As you all know, inflation is getting worse. The Fed raised rates for the fifth time this year, and Fed Chairman Jerome Powell is telling Americans to brace themselves for potentially more pain ahead. But there is one way to hedge against inflation. American Hartford Gold makes it simple and easy to diversify your savings and retirement accounts with physical gold and silver. With one short phone call, they can have physical gold and silver. With one short phone call,

they can have physical gold and silver delivered right to your door or inside your IRA or 401k. American Hartford Gold is one of the highest rated firms in the country, with an A-plus rating with a Better Business Bureau and thousands of satisfied clients. If you call them right now, they'll give you up to $2,500 of free silver and a free safe on qualifying orders. Call 855-862-3377. That's 855-862-3377. Or text American to 65532. Again, that's 855-862-3377 or text American to 65532. Chris Fenton, such a pleasure to have you back on American Thought Leaders. Jan, it's always a pleasure.

I think it's number three, right? It is number three, but the topic is kind of perennial, isn't it? I mean, you wrote, of course, this book, which I found to be incredibly important. And you saw from the inside how the Chinese regime has been co-opting Hollywood, how it was pulling various intellectual properties and methodologies. This is the kind of stuff we talked about in our past interviews. I want to figure out where are we today? Well, it's interesting because so I wrote the book Feeding the Dragon inside the trillion dollarillion Dollar Dilemma, Facing Hollywood, the NBA, and American Business.

And if you look at when that came out, which was roughly about four years ago, late summer 2020, number one is no one wanted to talk about issues with China. It was seen as something that was a little taboo. Industries were nervous about it because it could affect their businesses there. Politicians were scared about it in terms could affect their businesses there. Politicians were scared about it in terms of it looking like some sort of an Asian hate message. So it was a very difficult time to talk about constructive ways to try to fix some of the problems that we had and sort of the course that was really to the detriment of the long-term health of the United

States of America and our Western allies. Cut to today, I think people are much more open about talking about it. So you have the NBA and you have Hollywood. Both of those were areas that we were really prolific when it came to exploiting and monetizing that Chinese market. The problem was what we didn't see is that they were trying to duplicate the same process, the same tech, the IP, the various other sort of areas that we were best in the world in. They were trying to learn from us and learn from us as quickly as possible. On the commercial side, American business faced the same thing. Whether you were in industries from engineering to automobiles to cosmetics, et cetera. We started to see them start to duplicate what we were doing so well on a world-class level here in the United States

as we penetrated that market. And they learned more and more about what we were doing to create best-in-class products and services. So then you cut to today, some of our biggest competitors in that market, not just in the PRC, but in the global market, are now Chinese competitors. Yeah. And I mean, this was a very deliberate activity as well. And this is an issue we've covered a lot on this show and in various of these sectors that you mentioned. Before we continue, some of our viewers will have known know who you are. Of course, you're in our most recent documentary, Hollywood Takeover. You're an important character in that film. But why don't you just give us a picture of how how

much of a Hollywood insider you are and frankly, how much of a Hollywood in China insider you are? Yeah, I'm sort of the way I look at myself is I came up through the entertainment business. I actually started in the mailroom at the William Morris Agency, sort of that wax on, wax off, learning of how the ecosystem of Hollywood works. And I rose up pretty quickly, became an agent in the motion picture and TV businesses at an agency called the William Morris Agency, which was the largest in the world at the time. It's since been taken over by a company called Endeavor, and it's now called William Morris Endeavor. After about a decade of working there, I started my own company with another friend who became the head of DC Films over at Warner

Brothers, and we created essentially a boutique version of what we were doing at the William Morris Agency. And then over time, I came across a small company in China that was actually making English language movies, utilizing RMB or Yuan to finance them. And Hollywood is one of those industries that's always looking for other people's money. And in fact, at the time, we had gone through Wall Street money, we had gone through Silicon Valley money, we had gone through German tax funds, we had gone through Middle Eastern money, and China suddenly represented a new place that could bankroll making content. So when I had this opportunity to get to know a Chinese company that was bankrolling English

language movies, I dove in headfirst and got to know them really well and started to help them put together films. And as I did that, I got to know them more and more and they started using me for all kinds of different business activities between the US and China. And eventually they bought my company. So I became, as I like to refer to, and if some of your audience might know the old movie, Gung Ho, that starred Michael Keaton. Michael Keaton was a guy who worked in middle America. He worked at an automobile factory,

didn't know anything about Japan, and suddenly Japan buys the auto company that he worked for, and he suddenly got thrust into the culture and the corporate dynamic that is Japanese, right? And he was a fish out of water. The same thing happened to me. China, I never really thought all that much about until I started working with them. And then suddenly I worked for them. And it was an amazing 20-year ride that I wrote a book about because it was so colorful and crazy and chaotic. But at the same time, it became what I did 24-7. And simply through practical experience, simply through what I was doing on a daily basis, I became what I like to refer to as a layman expert on U.S.-China relationship and on China itself.

In fact, I went back and forth to China 39 times. I had to figure that out recently through looking at my old passports. So that's my background, and that's sort of where I find myself today. And, you know, somewhere along the way, I mean, you were one of the great many people who saw the opportunity in the market that was basically promoted by the entire U.S. business ecosystem for quite some time. It was the Kissinger Doctrine. First of all, it was sort of the end of history time. We're going to turn everybody into a liberal democracy if we work there. And why not become financially very successful in the process, right? But somewhere along the way, as you were doing this, you realized

something wasn't on, right? Something was off. Something was problematic. So just kind of catalog that for me very briefly, what happened. Yeah, I would say, well, I always tell this when I speak in engagements, like this idea that it was a bunch of greedy capitalists looking to sell the soul of America by doing whatever it took to sell products and services in China wasn't really the case. I think there are definitely those type of people. But I think a lot of people, the majority of them were sort of like me, where I saw a business opportunity and it looked really smart to dive into it. And then on top of it, I think you bring up Kissinger and you bring up Square and said, we want to help you build a global economy, an economy that competes on the global scale. Well, just for the record, Clinton started it, but it was really Bush that

sort of green-lighted that. Yeah. Well, there's, I mean, I'm sort of glossing over a lot of history, but. Well, I'm just saying it was a bipartisan effort. That's what I'm trying to say. Very bipartisan and not just bipartisan, it was public and private, too. I mean, everybody in the private sector industry wanted to do it, too. There was just way too much opportunity to not do it. And then even more so, I think we felt, especially those of us in the cultural business, we felt like the more culture we got from the West into that market, a very closed off market, a market that was firewalled from the global internet, a country that's controlled by the Ministry of Propaganda in terms of all the news and information that they're able to have access to and digest.

We saw our ability to get our culture in there, a way to allow them to feel what it's like to be Western, to feel a little bit of what it's like to have that freedom that democracies give you, and have them aspire to not be communist anymore, and to actually become another member of the Western democracies. That's what we felt was the higher calling and what we were doing, even though there was a lot of money to make, too. You know, something as you're describing this, I can't help but think about the thing that we didn't realize, which if we really tried or wanted to know, it would have been pretty easy to do. And frankly, there were many people, especially Chinese dissidents, that were trying to explain this to Americans, people that had come over for the freedom America offered. It's just the idea that internally, the propaganda was so strong that America is this aggressor, that America has taken China's correct position as the top dog in the world. Aggressively, it did all these horrible things.

And this was going on for 40 years, this propaganda. But externally, they would say, we'd love to, we want to learn from you. And I wonder if this isn't how it worked. Like the people that were actually kind of working, they had been sufficiently brainwashed, right, so to speak, to realize or sufficiently indoctrinated, so to believe that we're working with an enemy, we're going to pretend, they're pretending to be nice. We'll pretend to be nice, but we're going to take them for everything they got. Right. I mean, as you get older, you start to doubt this idea that people really have these long-term visions of how they're going to strategize some big major chess play, right? So part of it is that they do play a long game in Beijing. They've been around, what, 5,000 years plus. They tend to look at 50,

100-year sort of like outlooks on where they want to go. And because of that, they are able to strategize on how they want to navigate where they're going in the future much better than we do on 24-hour news cycles and two- to four-year election cycles, etc. So I would say there was a premeditated plan through the secessions of the different leaders of that country over the last four years. Well, there's a name for the doctrine, too. It's hide your strength, bide your time. I'm sure you're very familiar with that. Yeah. And I don't think any of us really paid attention to that the way we should have. We were in a certain place in 2020. And actually, that's changed. And so just tell me how this has progressed and how this

works into this kind of, I guess, the CCP model for this. If it played out exactly as the leaders wanted it to do over the last 40 years, it certainly seems to validate where we are today. I mean, in 2019, we had films that were still dominating the market. If you go back to 2012, we were dominating the market as much as 80 cents on the dollar as far as where theatrical films from Hollywood were doing compared to domestic films there. In fact, it got so bad that the government had to tax, overtax theaters that were making more than 50 cents for every dollar that was coming into their theaters from foreign movies. They really wanted to try to sort of stymie the growth of Hollywood so that their

own domestic industry could sort of take hold and start to engage their own consumer. If you get to 2019, the biggest hit we've ever had in that market was the last Avengers movie, and that did over $700 million just in the PRC. Keep in mind, there's not a lot of movies that have done $700 million globally, including the United States. And that particular movie did $700 million just in China. Then cut to today, we have various films in their market in theaters right now,

whether it's the Furioso Mad Max movie, or the new Quiet Place or the new what else is Garfield movie all these films are not even gonna make I mean I think at best they'll make 30 million dollars 40 million dollars some won't even break 10 million dollars That's a big difference from $700 million, right? So now you have a market that used to be well over 50% coming from Hollywood on a market that was roughly $10 billion a year, so $5 billion coming from Hollywood films.

Now we won't even do half a billion dollars, right? So it's cut completely down and that's because they've learned from us they learned how to make best-in-class films that cater directly to their consumer well and so here's the question right we've had these you know very high profile examples of censorship like for example with the you know the new Top Gun film, right, the Taiwan flag disappearing from the jacket. There were all sorts of censorship requirements. And then to the point, and I actually, I want to get you to kind of flesh out how this kind of worked, because you saw it from the inside, right? But then I want to get through to the other end. So what is it today?

Is it just that they're not allowing some of the films that would perform best in, or are these films just not performing because they figured out how to give the audiences what they want out of their own studios? Yeah, there's a bunch of, I would say, nefarious or pernicious kinds of things that were happening over the last 20 years. I mean, if you go to censorship or premeditated censorship issues, I mean, Hollywood saw the country as a golden goose opportunity to make extra revenue. So they were doing everything possible to make Beijing excited about movies

that were coming into the market. When we initially started bringing films in, we would try to create relevancy around the films, you know, try to put in a Chinese actor or utilize Chinese crews, maybe Chinese locations, things like that. But then slowly you would start to incorporate other sort of PRC Beijing pushed narratives, right? In the movie Looper, the narrative in that particular film was 40 years in the future. Beijing really wanted to showcase their country as the place everybody wanted to be. It was the utopian society. It's where people wanted to retire. It was the perfect sort of country among a lot of sort of misfit countries around the rest of the world.

And what was interesting about it is the original script for the movie was supposed to use France as that utopian country. But when we went to the Chinese government and said, this is a movie we want to get in, it stars Bruce Willis and Joseph Gordon-Levitt, and it's directed by the Star Wars director, Rian Johnson, et cetera, they said, well, we need you to do a little more with this film to get it in. In fact, we don't really want France to be seen as the best country in the world. In 40 years, we want China to be seen as the best country in the world. And 40 years we want China to be seen as the best country in the world. And we placated them by doing that.

And what a propaganda coup, right? It was a huge propaganda coup. In fact, we did it so well on a creative level that if you watched the film and didn't know what we were doing with that, you thought the movie was great. The movie was extremely successful. It made about $200 million worldwide. It was a $30 million film, hugely profitable. Beijing liked it because it showcased China's where you wanna go in the future.

So how is it that today these films are performing so poorly? Are there still films that don't get in? Are there still studios that don't get in? Are there still studios that are bending over backwards to make changes to make sure that the film will be acceptable to the Chinese censors? So it's a great question because there's a great answer to it, but it's not the answer typically where people that are China hawks are looking to sort of thrust the stake in somebody who's placating Beijing.

Because even with the movie Hollywood Takeover, by the time we did that doc, Hollywood has lost its foothold in that market pretty great and at a pretty big level. And because of that, the opportunity to make revenue there has dropped so much that studios have realized it's not worth over-placating or kowtowing to Beijing by putting Chinese plots or characters or whatever into films. They've stopped that. Now where studios aren't going is making a movie about Tiananmen Square or making a movie that's sensitive about Taiwan or Tibet or Hong Kong or whatever it is.

They're avoiding that stuff. Now, you could argue, too, maybe they're avoiding it because there's just not a lot of money to make in those kind of films either. But if you look at a place where you could make money, and it's really relevant in terms of a plot point, you could argue the next James Bond movie should have a Chinese villain. You know, why not have James Bond go up against another superpowers spy, especially with Taiwan being front and center of the next potential geopolitical conflict?

Why do we keep going back to these Cold War day villains that probably don't even exist anymore? I mean, let's make it more realistic. But a studio won't tread there, because if they do, they might get banned for a long time, if not forever. And even though the market doesn't mean that much, studios do want to make sure they have an opportunity

to get films in there and make some money because now when they make money it's actually gravy to them because the market's gotten so tricky and so difficult that when you green light a film you know you do projections around the world and what it's going to make in you know the domestic market and what's going to make on streaming and cable and broadcast and all that kind of stuff in order to come up with the budget that makes sense so you can make a profit. In the days of old with China in 2015-2016, hey, how much money is this going to make in China? Okay, we project this. That means we can add this much more to the budget and make it that much more of a big scale film. Now, they don't even put a number in for China anymore.

It's always a zero, which is very different. That's only happened over the last few years. So China represents a way to get extra gravy revenue rather than a proactive attempt to make money out of that market. There's films like, I don't know, one comes to mind, The Meg, you know, like these giant shark films and i i mean i i watched one and frankly it's hard for me to actually sit through it i don't really like these films very

much but apparently they do well here and those are these are chinese productions right i don't at least at least one of them was because i remember looking at the credits because it had this kind of weird feel to it i said where's, where's this film from? And it turned out it's a Chinese production. So have the roles reversed? And now there's Chinese studios making Hollywood-like film blockbusters for America as well? Well, the Meg came from, I mean, there was originally something that came from the U.S. And it's IP that was co-owned by a studio in China and that was a collaboration between English filmmakers and studios and the financing and all

that kind of stuff but it was done just enough Chinese in order to have a lot of Chinese credits on there and also get the wind to its back from Beijing, making them believe that they're supporting a film that's domestic or Chinese. But it was obviously English language and it had a lot of the characteristics that Hollywood brought to the table. If you're looking at just the Chinese film where you could go, this is purely Chinese and the roles are reversed and now the Chinese movie is going to make all this money around the world, etc. I'd argue that is very few and far between, if ever. or you look at various other films. They have their sort of Wolf Warrior, sort of Rambo-style film franchise that's come out over the past few years.

And those are movies that are very much duplicating or imitating the Hollywood way of making films. They apply every process that we've taught them. The hire the crews that we've taught them and they've, you know, the higher the crews that we've trained and all that kind of stuff. So they're making best-in-class versions of these very high-profile Chinese films that have big budgets, but they are sort of a repetitive type of plot that we've all seen here for a long time. On top of it, it's essentially Rambo, but the villains, you know, sort of the Western world and the people that are the heroes are from China.

Wandering Earth is another one where China seems to be sort of the savior of the day. So are those going to resonate around the world? Probably not as much, nor do they really feel completely original to the rest of the world. So those films much, nor do they really feel completely original to the rest of the world. So those films aren't going to really make the type of revenue that, say, Hollywood does around the world because they just don't have quite the relevancy factor that Hollywood's been

able to tap into for multiple markets worldwide. But if you want to go to why our films aren't working there, that goes along the lines of the strategy, that long-term strategy that you talked about, the strategy that's been in the sort of the essence of the Chinese Communist Party when they opened up. And they came up with this very smart plan, and I think we were doing the same thing in the 1800s to Europe. If you want to sell fish in the Chinese market, you've got to teach them how to fish. And if you teach them how to fish, you're going to sell your fish there. But eventually they're going to learn how to fish and then they're going to catch their own fish. And then the government's only going to want the fish they catch to be sold to their people. And that's essentially where we are. In order to make movies that made a lot of money in China,

to get the wind to the back from Beijing to support the film, to get the film approved, to get the film a day and date release, which means it's released around the world all at the same time, so it mitigates the amount of piracy that's done. A movie that gets a long release date, so it's in theaters for a long time. It gets a good timing as far as the release date. In order to do that, we had to bring over mentors to do a mentor-protege sort of relationship on these sets to teach the Chinese how to be gaffers, how to be the electricians, how to be the cameraman, the assistant cameraman, how to develop the scripts, how to build the sound stages. When we did shooting for Iron Man 3, China Film Group made us have to shoot in their brand new studios outside of Beijing,

way outside of Beijing, outside the outermost ring road at the time. And by the end of the day, every day we shot in there, you couldn't even see from one end of the soundstage to the other. Why? Because they built the floors with like this clay brick that when you had the dollies and all the people walking on it and all the different equipment moving around all day long, it essentially created these bricks into dust clouds. And the clouds would rise up through the set. And by the end of the day, it looked like you were shooting in fog. And it was purely because they didn't understand how to build a soundstage.

They didn't understand how to put in the racks like we see here with the lights and everything that's hooked up in a very sort of technically savvy kind of way they didn't know how to do that so we had to teach them that and when you teach them that they start to get good at it and that's where we see these movies like wandering earth these movies like wolf warrior that are done in a best-in-class type of process a best-in-class kind of way with three-act structures that have that beginning middle and end that low point that draws the emotional core of the audience into the film and want to see that crescendo of our hero save the day by the end of the film. They learned all that

Hollywood process from us and they mastered it. They're not making relevant films knowing all that but they're making, I mean globally, but they're making making relevant films knowing all that, but they're making, I mean, globally, but they're making very relevant films for their own audience. And their own audience is 1.3 or 1.4 billion people. That's a lot of people. Right. You know, as you're describing all this, I'm thinking of a process that happened in almost every other industry, basically. It's a rinse and repeat, 100%. What's up with the NBA? Well, the NBA is another one, right?

You have this incredible sort of league. I mean, whether you're a fan of the NBA or not, it's a world-class league, just like the Premier League to the NFL to the NHL, etc. And China loves basketball. They've loved it forever. And on top of it was the missionaries that were bringing in basketball back in the early 20th century. And then the different leaders of the Chinese Communist Party started to embrace this sport because people of the st leaders of the Chinese Communist Party started to embrace this sport because, you know, people of the stature of the majority of Chinese could play it. If I can just jump in, you know, famously, Pierre Trudeau, the father of the current Canadian prime minister, of course, you know, where I'm from, famously beat Nixon to China.

Nixon was extremely unhappy with this. And he went there when some pretty terrible things were happening in China but he got to play basketball right this was this was the thing because you know it was known as a originally a Canadian sport so let's do this we'll play we'll play basketball and and he came back and that was his memory of the visit you know we were oftentimes trying to figure out how to get the NHL in there but But the NHL has complicated rules. Ice skating wasn't a big thing that a lot of people do in China. In fact, most of China doesn't have ice. The top half does. It's not quite as populated up there.

So getting people embracing hockey was difficult. But basketball, you can play that anywhere. There's a blacktop or a hard ground or whatever it is. It only takes a ball and a hoop, and it's just an easy game to create camaraderie in this culture of sport around. And then really it took off when Michael Jordan and David Stern got over there in the late 80s, early 90s, and really wanted to bring the NBA into that market. And part of the deal, like all of this, is these forced JVs, right? So NBA, you can come in here, but we want you to create a China version of what you're doing called the CBA, China Basketball Association. And we want you to put a couple of your players on these teams. We want you to learn the process of how you built each team, how you

organize the central part of like the governing body over these teams, like how you do the attendance and how you market and how you create star players and all that kind of stuff. And then over time, that CBA started to grow. And in fact, it grew so much that you started seeing NBA players want to play over there, not only because they could make good money and maybe they weren't a star here in the NBA, so they had an opportunity to work in the CBA. They could be sort of a king of their own fiefdom over there, and they could take advantage of that massive sponsorship marketing

market right and and create revenues that they weren't able to do in the u.s or say europe or anywhere else the nba was carried so that that cba started to take off and then what was interesting is that at the point where you started to see the cba come up and the nba was still like sort of rising too. I mean, great television rights with Alibaba Sports and all that kind of stuff. And big partners from the Nikes to the Li Nings to the Antas or whatever. The Daryl Morey tweet, which is the tweet that rocked me, right? It was that fight for freedom, stand with Hong Kong tweet from Daryl Morey, the GM of

the Houston Rockets. The Houston Rockets was the team that had Yao Ming, right? The Houston Rockets was the biggest branded team in China out of the NBA. And when that tweet came out, not from inside China, because you don't have Twitter or don't have X in China. He did that, I believe, in Japan, another democracy or another Western country. That tweet, which was very simple, it was only a handful of words, about supporting the democratic freedoms of Hong Kong, which even though there was a handover, that handover wasn't supposed to take place for another 27 years. But that tweet was not liked by Beijing. And Beijing immediately banned the Houston rockets from China. Then it banned the NBA from being seen in China.

And it banned all partners of the NBA in China. It banned stores from carrying NBA products. And while NBA was trying to figure out the best way to solve a really difficult problem, not only one where they need to support the free speech rights of one of their own, Daryl Morey, but also figure out how to support that, yet also support Beijing and kowtow to whatever is going to fix the problem, CPA started to rise, right? Because huge vacuum. What needs to get into that open space? The CBA. Well, I would say more than a vacuum because, you know, you control the entire information ecosystem. So if you're, it's not just a vacuum. It's like, hey, we've got the CBA. Let's put that everywhere. Exactly. Right. And it's kind of a matter of national policy, not just kind of an attempt by a large studio or a league or something like that.

Right? I mean, the term industrial policy comes to mind, except I hear, I suppose, relating to culture. Yeah. So they were taken off the air for a long time. And then COVID comes. So not only did the NBA stay or get less and less relevant just simply from exposure over television screens, but then on top of it, the athletes couldn't go over there anymore, right? It was shut down. In fact, those athletes just started going back in the last maybe year year and a half so the relevancy of these NBA

athletes these NBA athletes that have massive partnerships and sponsorship deals and all that kind of stuff started to wane along with the NBA the NBA cut to today is in there but it's not like it used to be the NBA players are going over there they're getting marketing dollars they're selling some shoes but not like what I used to and it's sort of rinse and repeating the same exact trajectory that we've seen with hollywood same exact trajectory we're starting to see with say some of these sports apparel brands involved in nba like nike um same kind of situation we're seeing with what alan musk is dealing with with tesla what Musk is dealing with, with Tesla,

what Intel is dealing with, which, by the way, has been in that market since 1984 and essentially built Chengdu. It's getting repeated often, and it's not going to stop. What comes to my mind is huge AI R&D operations in China by Western companies. Actually, I think all of them have it, all of the biggest ones, which is really kind of deeply troubling because this is supposed to be the technology that could be incredibly dangerous. It's not supposed to be. It is a technology which could be incredibly dangerous. It's not supposed to be. It is a technology which could be incredibly dangerous. Why would we be doing that? It's nuts. Well, AI, I mean, I've done, in fact, I'm in Washington, DC now because I'm still an

informal advisor to the Select Committee on the CCP or the select committee on China for Congress. And then I'm also still a trustee member at the U.S. Asian Institute. So we do panels and we do hearings on the Hill. In fact, the last hearing on the Hill that I did was last summer on AI, or actually maybe it was in October. AI is obviously an extremely beneficial to society technology, but it's also got a lot of really potentially harmful and possibly world-ending capabilities, too, if fallen in the wrong hands. And part of those hearings have to do with, like, well, what's the U.S. going to do about guardrails around that development? How is investment going to work? How is it going to cooperate with other countries, et cetera? But then at the same time, how do we deal with what China's doing, which is this rampant sort of version of invention and innovation and subsidy and pushing, pushing, pushing the envelope on AI?

How do we stay competitive with them without breaking through guardrails that are going to make it dangerous here? And how do we even know whether they even have guardrails in China? So it's a very difficult issue. And you're seeing obviously the USTR and commerce and the administration and Congress trying to mitigate the amount of technology that we're still sharing with China that can help push the envelope in what they're trying to mitigate the amount of technology that we're still sharing with China that can help push the envelope in what they're trying to do AI capability-wise. And we're also trying to mitigate the kinds of stuff that's getting into our country that might actually create data that can be used in their version of AI. for instance, LIDAR technology from companies, whether it's like

a HSI or whatever that are here mapping, geomapping essentially every city in the country, how we're trying to mitigate sort of what might be national security issues there. So the AI sort of frontier, I think to me, is probably one of the more dangerous versions of what we've seen in terms of the competitive between the two superpowers, because we didn't start ahead of them, right? Whereas Hollywood, NBA, Tesla, EVs, whatever it is, Intel, we had a head start. They were trying to catch up to us. But in the AI world, it's hard to say who started ahead and how far ahead the other is getting. But to use your, you know, everything we've talked about just now, you know, we have a number of the cutting edge, the biggest companies with the biggest research budgets who are, you know, in their own arms race, let's call it, around AI with each other, that have at least, I mean, they all have some level of R&D, some massive R&D operations there.

In the context of what you described, if you're going to work here, you have to teach us everything, right? And this is even in the context where I know at least one of these companies would kind of refuse to share its development with the U.S. military for ethical reasons while doing R&D in China. It's kind of a... Actually, I had a conversation on the train just a couple of days ago with a gentleman. He said, I like your watch. That's how the conversation started. Real estate investor, worked in China extensively. And he told me he was talking and we're just, you know, he found out who I work for, we were talking. And he said, I got this impression through several conversations I had, when these people, obviously, you know, super elite people that he was doing deals with, and so forth, the way they treat a lot of the population of the country

is sort of like a resource, like we would treat iron ore, or something like that, like without a moral valence, like it's like, sure, we lose a whole bunch of people because of this not really that big a deal, right? It's just kind of how it works. And I was like, I can't, you know, you, it's astonishing what you're telling me, because this is something I understand deeply, having, you know, worked on China, human rights, having worked at the Epoch Times for years, but they don't usually admit that to Westerners, right? That this is the mentality, there's this sort of amorality around human life, especially if you're not part of the elite system. And he said, you know what, you know, Jan, actually, because that's because I'm not

really Western. They see me as Indian. So I fit into a different category. So he felt open to talking to me about these things. It's astonishing. But my point is, thinking about that in the context of AI development in China, on the one hand, we have massive R&D dollars there. And the second point is, we're teaching all our best methods, it would seem, to follow the model that you just described. And third, but there are no guardrails. Yeah, which is what makes it most scary. Well, first of all, human resources are expendable over there. I mean, I've witnessed it myself. If you're walking down the street, you might see a shop owner berating an employee or worse.

So you definitely have this expendable situation that allows them sort of this freedom without regulation to keep pushing the envelope on certain things. I mean, I think you could argue that that's maybe how the COVID virus started at the Wuhan Institute and why we didn't have something like that here in the U.S. We had it over there and how things got out of control, right? So with AI, I just think we're going to see a real competition along with space. Space is another one where we're seeing that competition. Obviously, military overall weapon design and innovation is going to be massive too. And I think when it comes to Western companies, U.S. companies, they're going to have to take this tactic that reckless capitalism to generate revenues, no matter how you do it, just has to end. I mean, we've been doing that for a long time. And if we want to take seriously what we've built as the best form of the United States of America since 1776 and prior, we have to protect that.

We have to protect the morals and values of what makes our republic the best version of which it stands. And we have to protect the foundation of what makes our country as great as it is. We have to protect national security interests. So in a lot of sort of speeches I give, I always talk about this idea of patriotism before capitalism, right? Like there's nothing wrong with Americans both loving being a patriot

and loving being capitalistic, right? But in order to have our form of capitalism, we have to protect the foundation of what our country is about. And there is a bipartisan effort, including the bipartisan committee, which I work with on Congress to address issues that we now see are problems to the health and welfare of the United States of America coming from Beijing and that's new. That really didn't exist to any sort of extent where it had some leverage and some power and some influence until just very recently. I like where we've progressed in terms of getting smart about China. I also like where we've progressed towards this idea of maybe not trying to constantly

think we're going to make them a democracy, because I think that is sort of a fool's errand. I mean, I'd like to believe that would happen, but it's also very difficult to imagine that happening soon. But I also like this idea of not going to war with them because the world is not large enough to have something in Connecticut, in a kinetic conflict to break out. Yet, I think we're also smart enough to know that there is a non-weapon or a non-traditional kind of weaponry war going on between the U.S. and China, whether it's financial or technological or informational. And that's why you see TikTok getting not banned, but being forced to sale,

which would probably not happen. So it will eventually be banned. But you're seeing that that's informational. You're seeing technological where we're now banning certain things that can be sold over there, certain collaborations that can be done, certain investment coming from China that can be put into very high sort of national priority technologies. And you're seeing financial, too. I mean, we're seeing them raid offices of diligence firms that are looking at Chinese investments over there, trying to decide whether they're smart or not. We're looking at certain companies that can't list here in the U.S. because we feel like they're Chinese in a way that, say, whether it's a Xi'an or delisting some of these

other companies or whether a LIDAR company wants to go public here, we're not allowing it. So we're waking up. The fire alarm has been pulled. We're not fully getting the classes out of the building yet, but we're getting a handful of people out. And we're on our way in a way that makes me feel a little hopeful that we're going to steer the ship into a place where we can coexist with China and also be tough on them in ways that keep them within a certain sandbox. As we finish up, what in your mind would be the single most important policy update to shift things in a positive direction? I think I think it's really about getting people clear-minded and understanding what is going on which is you can't just be reckless with the way that we operate with that country just to make money.

There's a lot of things that are very strategic, moves in a chessboard, that Beijing is doing to try to, I think, not necessarily take over the world. And I know I'm going to disagree with you and a lot of your audience. I think they have major scarcity issues, which is causing them to create this massive outreach, whether it's through the Belt and Road Initiative, whether it's through influence campaigns in Africa, setting up infrastructure where they can put their people and mine different rare earths and whatever it is around the world. I mean, they have commodity scarcity issues. They have water scarcity issues. They have energy scarcity issues. They have food scarcity issues. If Xi Jinping and the Communist Party don't take care of those so that their 1.4 billion people

have all of what they need, he's got a real problem. So that's where that outreach is happening. And that's where all that influence is going. And that's why you see the fishing boats off of Chile and the fishing boats off of the Maldives and why you see all kinds of different sort of really bad environmentally polluting infrastructure things going on inside deep Africa. I mean, they need a lot of resources that they don't have internally as their country is concerned. And I don't think they mind drafting off of somebody else that's worrying about being the world leader because they know that's sort of a losing proposition for them and probably for the world leader, too. As we see, you get mired in a lot of things. But for me, policy issue, Washington, D.C. just needs to make sure that businesses that are essentially the ones

that are connecting the two countries are aware that there are major ramifications for them not thinking about the welfare and health of this country and our allies first before they sell their products and services there. That is key. And the more CEOs that understand that, the more shareholders that understand that, the more boards that understand that, and the more that they believe that, the better off we're going to be. And that's where I'd like to see that type of education outreach occurring and that influence actually making an impact. And we're seeing that today. Well, Chris Fenton, it's such a pleasure to have had you on again. I love it. Number three is the magical one. And then number four is going to be a great one because that's not a great lucky number in China, but it'll be a great lucky number for us.

So I look forward to coming back. Thank you all for joining Chris Fenton and me on this episode of American Thought Leaders. I'm your host, Janja Kellek. There's something magical about the movies that I just love. Hollywood invented America to the world in the old days. As a medium, it's really powerful. But for some, that power isn't used for good. Our way of life is being censored by the Chinese Communist Party. They said, we get a lot of our money out of China.

Is there any way you could make this movie a little bit more attractive to the Chinese? Is it really just about money? Are there other parts at stake? I had friends in Hollywood who said, this will kill your career. You won't get funding. They're afraid of even mentioning one line. Chinese influence was playing into what we see in U.S. films. China said, you can't have that in there. And Hollywood listened. This is insane. This is a joke, right?

We raised our hand and we dove right into it. But over time, all of us have been punched in the nose. The Chinese Communist Party followed no rules. What's at stake? The soul of the nation is at stake. We want indoctrination access to America. They could basically take over America without firing a shot because they control access to our minds. And we all know that their goal is global domination. People have been brainwashed without knowing it.