Ex-Spy On What His CIA Experience Taught Him About China

Randy Phillips spent 28 years with the CIA, most recently serving as the chief CIA representative in China. He talks about what leverage the U.S. has when it comes to managing China's ambitions.

STEVE INSKEEP, HOST:

The other day, we stood on a concrete plaza, looking at some of the new buildings that spread for many miles here in China's capital.

So what is this place called?

ISABELLE LI: This is the Global Trade Center.

INSKEEP: Two huge glass office towers...

LI: Actually, four towers.

INSKEEP: Oh, there's two behind it.

That's our Chinese colleague Isabelle Li. An American had told us to meet him in the lobby of one of those buildings near the fountain.

Are you Mr. Phillips?

RANDAL PHILLIPS: Yeah.

INSKEEP: Hey, Steve Inskeep - how are you?

PHILLIPS: Steve, it's a pleasure to meet you.

INSKEEP: Randy Phillips - he'd come to the office to meet us on a weekend, so he was dressed casually in a gray sweatshirt. He works in this office tower, advising American business clients. He's active in the American Chamber of Commerce in China. And this year, he's met with congressional leaders to talk of how to manage China's economic rivalry with the United States.

Phillips brings a distinctive resume to that work. For 28 years, he served in the Central Intelligence Agency, focusing on Asia. For a time, he was the CIA station chief at the embassy in Beijing - in other words, the head spy. So our talk with Phillips ranges from trade practices to spycraft.

How would you describe the game?

PHILLIPS: You know, I think there is - I use that term professional respect, or otherwise, honor among thieves, maybe - of having respect for your counterparts, that they, too, are trying to serve their country. And you try to find the maximum number of areas that you could possibly cooperate on issues because frankly, just like in the fight against terrorism worldwide, the U.S. or no single service can do it alone. You need partners. You need the ability to have a force multiplying effect to reach out through these partners to help you.

INSKEEP: Are you saying that you might simultaneously reach out to a Chinese intelligence official, looking for assistance with some world problem, even though you both know that you're spying on each other?

PHILLIPS: That's basically it.

INSKEEP: Which country is better at the game?

PHILLIPS: China is very good, no doubt about it. They have very deep wells of folks in both the military and the civilian side, and they also have a history of turning to Chinese citizens abroad that are also a wellspring in - whether it's in industry or in government or just in terms of understanding what's going on in a given country - to be able to turn to. We're also quite good at what we do.

INSKEEP: OK, I'm just going to tell you a story, and you're going to tell me how you respond. I've been here a week. I've nearly always taken my laptop around with me, but on one occasion or two occasions, not. And the laptop broke, and I had to open it up, and the hard drive had been knocked aside. And there was a screw that was supposed to be holding it in there that was no longer inside the computer. What do you make of that?

PHILLIPS: (Laughter) Either you're very clumsy in an exceptional way, which I highly doubt, or somebody went into image your hard drive and wasn't particularly careful about putting it back.

INSKEEP: Do you tell people when they come to this country, just assume that whatever you bring is an open book?

PHILLIPS: Absolutely. And it's not just here.

INSKEEP: Did you enjoy all those years of going back and forth with...

PHILLIPS: Loved it.

INSKEEP: ...Chinese spies?

PHILLIPS: Well, I - it's - you know, again, this place really matters. It's important to, you know, do the needful to make sure that your leadership is as well-advised as possible. There's such a wide area of cross interest between China and the U.S. that it's never boring in that regard. And just personally, it's fascinating.

INSKEEP: If forced to boil it down to a word or phrase, what is the right word or phrase for Americans to use when thinking of China - adversary, friend, ally, enemy, rival?

PHILLIPS: Frenemy.

INSKEEP: Frenemy.

PHILLIPS: Right. I think it's - I don't think anybody on either side wants to have conflict. But there - it's just the nature of the size of the respective economies, the differences in the political systems that are not going away. We're going to have to manage some conflicts, and if we don't manage them well, we're going to have some problems.

INSKEEP: So if Americans think or should think of China as a frenemy, what is a word or phrase that you believe China's elite would use to describe America?

PHILLIPS: I'd say, less friend, more enemy.

INSKEEP: Really?

PHILLIPS: Absolutely. The discussion amongst that elite is really, the U.S., of course, is trying to hold China down because the U.S. is - they see has been the No. 1 position. Why wouldn't you try to hold down somebody else who's rising? Now, all that being said, the sons and daughters of this same elite stand outside the U.S. Embassy and get visas to go to school, for work. And there's a - I think a great affection on the part of most Chinese people for the United States.

INSKEEP: What was your last meeting with people in Washington, and what did you have to say to them about China?

PHILLIPS: Well, that - those meetings took place in May, and there's been dialogue back and forth. There're a number of times that congressional delegations come through Beijing or their leading staffers come through Beijing, and we sit down with them.

There's actually been great interest in this - in particularly, what do we need to do, if anything, to take a harder look at the kind of investments that are going on at early-stage companies in the U.S. and beyond that might affect the competitiveness of U.S. companies?

INSKEEP: You're saying, is China buying innovative companies in the United States?

PHILLIPS: Absolutely.

INSKEEP: ...As a way of gaining competitive advantage in the future.

PHILLIPS: A hundred percent. They're doing that in semiconductors in a big way - robotics, AI. For example, Baidu, the leading - basically, the Google of China - they have, for several years now, significant research facilities in Silicon Valley. U.S. companies can't do that here. And that's just a microcosm of the broader issue of - Chinese firms can utilize the open systems of the U.S. and the EU and elsewhere, whereas getting the access here to do the same is either totally blocked off or is, for all intents and purposes, blocked off because of regulatory action that keeps them out.

INSKEEP: So President Trump is arriving in China. He's indicated in many ways that he's concerned about China and concerned about trade. It sounds like you agree with him that far.

PHILLIPS: Yes.

INSKEEP: Do you think he understands what to do?

PHILLIPS: No. That's my opinion. That's my opinion. There still seems to be some debate going on of what this China strategy ought to be, and that's - good chunk of that is certainly understandable. But we're almost a year in now. Certain aspects of the approach really should be in place by now, one would think.

Hopeful that, you know, we'll see some of that this week when he's here - he's bringing a great team with him. I just - you know, from everything I've seen, it's not quite sure that there is a lot of listening going on.

INSKEEP: Mr. Philips, thanks very much.

PHILLIPS: Thank you very much, Steve.

INSKEEP: Randy Phillips, who's now a business consultant was, for years, the CIA station chief here in Beijing, where we are reporting during this week of President Trump's visit.

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