China’s technological rise has been one of the United States’ biggest preoccupations for nearly a decade, across both Democratic and Republican administrations. In their new book, The Great Heist, David Shedd and Andrew Badger—former officials at the Defense Intelligence Agency—detail the years of espionage that enabled that rise. Through court documents, interviews, and even fictional scenarios, the pair outline the scale of China’s theft of U.S. intellectual property, aiming to galvanize the national conversation and warn Washington to act before it’s too late.

The problem, however, is that the current Trump administration appears to be moving largely in the opposite direction—allowing the sale of some advanced semiconductor chips to China, removing key officials at the Commerce Department dedicated to combating the threats posed by Chinese technology, dismantling much of the U.S. cyber posture against Chinese hacking, and publishing a national defense strategy that downplays the China threat.

Foreign Policy spoke to Shedd and Badger about their motivation for highlighting China’s espionage, what to do about it, and the gaps that still exist. The conversation below has been edited for length and clarity.

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Foreign Policy: Can you talk about why you felt the need to write this book?

David Shedd: I was indelibly marked by Chinese hackers’ stealing our security files in 2015—the Office of Personnel and Management heist of 22 million to 23 million security files. Were we to have that kind of information on an adversary, it would be a treasure trove of enormous value. So my kickoff for all of this was less about the technology, but the data: how they were collecting the data, amassing the data, and setting the stage for being able to exploit that data.

Andrew Badger: Really, the central question we’re trying to answer is: How did China rise so quickly? If you look back within David’s lifetime, they were an agrarian, third-world power. When I was growing up, they were basically cheap manufacturers. Now they’re commanding the heights of modern technological and economic innovation. China now dominates a great proportion of emerging technologies, from biopharma to aerospace to batteries for electric vehicles.

When we step back, you could see that espionage conducted by China has played a key role in shifting the global balance of power in real time, with China becoming a superpower with one of the most advanced militaries in the world and what I would argue is the most powerful intelligence agency in the world, the Ministry of State Security (MSS).

FP: A lot of the book is backward looking, but we’re now in a moment where China is leading and innovating in many sectors. How does espionage play a role now that it seems like China may not need it?

DS: Well, I would never say that China doesn’t need it. [Chinese President] Xi Jinping has taken a $1.3 trillion nominal GDP economy in 2001 to well over $17 trillion; ours, by comparison, is about $27 trillion. China has fallen short, interestingly enough, in areas like aerospace, and they are committed to advancing where they fall short. The idea of quantum is another area that I think they’re going to pursue very aggressively.

The FBI puts the amount of intellectual property theft [by China] in the United States somewhere around $600 billion per year, and so the magnitude does not seem to be diminishing.

AB: China has an asymmetric advantage. What that means is that they don’t have any sorts of legal or moral constraints. Contrary to what some people believe, Western governments have quite the rule book thrown at them in terms of how they can conduct espionage.

The other kind of key point there is that over the last 20 or 30 years, China went from this kind of backwater intelligence service—their case officers, their spies, they were very rough. They looked like they were in the military. They didn’t speak English. Now, they’re very suave. They know how to blend in. They’ve mastered foreign languages. The MSS has evolved into this powerhouse—they’ve developed the foundations now to conduct espionage more effectively than they did before, especially on the cyber front.

AI is going to be this critical frontier for them, where we also shouldn’t sell the United States and the West short—we’re still leading innovation on a lot of key areas, and so those are going to continue to be a big target.

FP: Cyber is a big focus area for both of you, but we’ve seen a dismantling of a lot of U.S. cyber capabilities against China under this administration, from cuts to several agencies to a reported halt on sanctions against the MSS for cyber activity. How do you reconcile that given the scale of the threat you outline? Are we moving backwards?

DS: It’s a difficult question to address without the kind of access that Andrew and I at one time had in terms of the classified world, so I’m reluctant to jump on the critical bandwagon of the administration or any part of the U.S. government vis-à-vis their commitment to cyber security. That said, the fact that some of this might get swept up in the deregulation mantra of this particular White House might result in a sort of cutting off your nose to spite your face, given that we’ve seen China and Russia and other nonstate actors come on par with the United States’ capabilities in cyber.

AB: One of the big wake-up calls, which really underscored that the United States wasn’t taking this threat seriously, was ProPublica’s report, I believe in July, on Microsoft using Chinese-based engineers to do the coding for the Department of Defense’s cloud systems. It’s really underscoring that at least until July 2025, we haven’t really taken this threat seriously.

We need to kind of go from this passive defensive mindset to more of an offensive mindset. To be fair to the Trump administration, they have been emphasizing that.

FP: I’m curious about two aspects of the book—one is the absence in the book of your own lived experience looking at China from an intelligence perspective, and the other is the decision to include two chapters of fiction at the end, with a fictional White House and corporate boardroom dealing with the China threat. Can you explain those choices?

DS: On the personal side, I’m far more embedded in the story perhaps than the reader will recognize. In the 1990s, I worked these issues pretty aggressively, only to see that the commitment by the Clinton administration to have China enter the World Trade Organization was the preeminent goal in not only a bilateral, but in a multilateral, sense.

On the two fictional chapters, after more than three decades in government, I got so tired of reading government reports telling a story; the fictional lens was just using little creativity. The story was to try and get the average reader interested in what it looks like inside a National Security Council meeting that’s briefed to the president, because a number of those items that are raised in the fictional NSC meeting are covered in the House select committee on the Chinese Communist Party that Reps. Mike Gallagher (who resigned in April 2024) and John Moolenaar now have.

But [the government version is] kind of dry to read. And then the corporate board, having been about 10 years outside from government work, this just seemed to be another way to convey through an illustrative case of one company being taken down. So it’s having a little fun, but at the same time, trying to convey a very serious message.

AB: The other key point is, David and I interviewed the best minds on this China threat, especially from the FBI, from [the] CIA, from the private sector, from professors, and I think what we tried to do is really bring together their insights.

FP: You mentioned the average reader. That average reader might look at what’s happening now and see Nvidia being allowed to sell advanced chips to China, as well as national security and defense strategies that advocate more coexistence than conflict with Beijing—all of which run counter to your book’s recommendations. How do you reconcile that, and who are you hoping to reach with this book?

DS: I’ll start with the end of your question. The intended audience is everyone from Main Street to Wall Street to the public sector, to help shape an understanding of the nature of the threat and the urgency to address it. But backing into the first part of your question, to be honest, there’s a lot of mixed messages. It looks and feels like, unlike the first Trump term, that the transactional piece of working with China, and giving them that kind of access to those very high-end chips, takes precedence.

AB: One of the things we wanted to do was shift the national conversation.

A kind of parallel that we hope to [aspire to] is the book Chip War by Chris Miller. I think he did a great job of really shifting the national conversation on the importance of semiconductor chips. And I think the strategic arc is that you build that public pressure on this issue, and that kind of then filters up to the top. My view from a few conversations with Trump people is that they have to recognize that we’re no longer in this unipolar world.

There is a great movie by Robert Redford and Brad Pitt, Spy Game. And at the end—this takes place in the early ’90s—they go in and they rescue Brad Pitt, and they do this kind of helicopter maneuver into China, shut down the electric grid, rescue the CIA operative, and fly them out. In the ’90s, that seemed feasible. But today, you know, that would be a joke, right?

And so we live in this new reality, and the Trump administration’s thinking is we have to come to this modus operandi with China in terms of finding a way to live in this world with them without going at each other’s throats in existential conflict 24/7.

One of the reasons why China has been able to ascend to this multi-polar world, why they’ve been able to shift this entire strategic chess board, is because of the effectiveness of what we call the “Great Heist”—this 20-year, 30-year covert campaign to steal our secrets. What they’ve done is they’ve shifted the whole global chessboard. They have critical leverage over us on the rare earths, right, which for some reason we still haven’t woken up to. So we are at a little bit of a weak position where we have to be willing to trade some of these strategic assets.

David and I don’t argue for a complete decoupling, but a kind of strategic decoupling. Matt Pottinger, the former NSC official, said it best—not only do we need to build these high fences and small yards; we need to build high fences with barbed wire, guarded by .50 caliber machine guns. So it’s about identifying those crown jewels and really protecting them.

The Chinese view this as an existential struggle, and they’re willing to do whatever it takes to steal these secrets, to steal this [intellectual property]. In the United States, we’re still kind of in this mindset of playing at half speed. Really, we hope with the book to build that public pressure.

FP: A quick observation on your point about driving the national conversation toward the Chinese threat—the national conversation was already there through the first Trump and then the Biden administrations, but now it seems as if we’re rapidly moving away from it on many fronts.

DS: I would be a little more cautious than how you describe it. The investments in the Indo-Pacific—I was just in Washington talking to DoD officials—are enormous. There isn’t within the Department of War any naiveté about China. In terms of the threat militarily that China presents and poses vis-à-vis the Taiwan Strait, I don’t think there’s a decrement in that aspect of it from a DoD standpoint or from the intelligence community. Now, that’s different than the political rhetoric, I guess.

FP: And the economic, for that matter. The point your book makes is that you need a holistic approach. And to your earlier point about mixed messaging—if you’re handing Beijing Nvidia chips through the front door, that kind of undercuts this, right?

DS: Yeah, yeah.

AB: I think one key point is this has definitely been a bipartisan issue, not taking this threat seriously. Definitely the private sector has woken up to the threat. We spoke with a leading security company, and they mentioned that basically every Fortune 500 company has been touched by this issue. They are aware of it.

FP: You mentioned giving the private sector more of a seat at the table. We’ve seen Silicon Valley get plenty of seats in this administration, but that’s what has led to Nvidia being allowed to sell chips to China. How do you ensure that these companies aren’t dictating policy?

DS: It’s going to sound old-fashioned, but it’s an appeal to patriotism. If we can better educate the private sector about the nature of the threats, it’s really about the appeal to patriotism. I believe that’s an innate aspect in all of us, and I think that goes to the heart of why this is a bipartisan issue. We don’t like being robbed. That’s anybody’s sentiment, regardless of political inclinations.

AB: Corporate leaders need to adopt this operational security mindset, which in military intelligence is protecting your secrets. In the Tesla chapter, it’s a classic case of Elon Musk playing cowboy, fast and loose. And because Tesla didn’t have some of these foundations of security, it made it very difficult to prosecute some of these insider theft cases.

It isn’t just patriotic appeal—it is your own core interests. Tesla didn’t take this threat seriously. Elon Musk—we had this great quote—says: “Look, they might steal our IP, if we set up this factory here or work in China, but we’ll innovate faster than them.” Actually, [Chinese EV manufacturer] BYD is innovating faster than Tesla. They’re rolling out new models, new technology all the time, and Tesla’s grand ambitions to dominate the EV market are in part evaporated because they didn’t take this threat seriously.

FP: Given the scale of China’s advances that you lay out and the sheer number of sectors it cuts across, isn’t it too late to put the genie back in the bottle?

AB: I think unfortunately, yeah—a lot of it is already outside the bottle. But the nature of innovation is that everything is always changing. Today’s power is not necessarily tomorrow’s.

DS: I completely agree with Andrew on that. I think the genie is out of the bottle, but I’ve always been glass half full. You don’t give up just because so much damage has already been done—you keep at it.