This is a rush transcript from "Life, Liberty & Levin," August 12, 2018. This copy may not be in its final form and may be updated.

MARK LEVIN, HOST: Hello America, I'm Mark Levin, this is "Life, Liberty & Levin." We have a wonderful guest, Dr. Michael Pillsbury. how are you sir?

MICHAEL PILLSBURY, DIRECTOR OF THE CENTER ON CHINESE STRATEGY, HUDSON INSTITUTE: Fine, thank you.

LEVIN: It's a pleasure. Now you wrote an amazing book, "The Hundred Year Marathon," that grabbed my attention because of its incredible relevance -- China's Secret Strategy To Replace America as the Global Superpower." This book has taken off in Asia, the Chinese have the book, although they keep it under glass.

You're a senior fellow, Director of Chinese Strategy at the Hudson Institute, a distinguished defense policy adviser, former high-ranking governmental official. You've written many books and reports on China. You're educated at Stanford, BA in History, with honors in Social Thought, Columbia University; MA, PhD.

During the Reagan administration, you were the Assistant Undersecretary for Defense for policy planning and responsible for implementation the program of covert aid known as the Reagan Doctrine, but you worked for Nixon, George H.W. Bush, Reagan, somewhat Obama, anyone else that I missed? That pretty much covers it?

PILLSBURY: Yes.

LEVIN: So you've spent your entire career, your professional career, really, focused on China, and I want to read you just a couple of sentences out of your book to elaborate on this for me.

"China's marathon strategy depends heavily on goodwill from other countries, especially the United States. That goodwill translates into massive foreign investment, the acceptance of Chinese exports, indulgences when the government or state affiliated organizations are caught stealing technology or violating WTO rules, and looking the other way on human rights abuses. Western countries offer such concessions, primarily because their leaders are convinced that overall, China is moving in the right direction toward freer markets, productive international cooperation and political liberalization." What do you mean by all that?

PILLSBURY: Well, China enjoys enormous goodwill inside our government, inside a number of governments around the world. They've worked very hard to earn that goodwill because frankly, it pays off for them. If they had not had our market for their exports over the last 40 years, if they had not had our direct investment, and our scientific exchange programs, the help of our companies, they wouldn't be the great power they are today.

They're number two in the world. By some statistics, they are already number one in overall size of their economy. So they've done this quite consciously, that they got advice from Nobel Prize winning economists from the World Bank, 40 years ago. How do we do this? How do we become number one in the world?

And they realized it was not through hostility or demonizing other countries, it was going to be by getting inside the government of these other countries to extract what you might call the way to become the number one power in the world, and they've succeeded in doing that.

Now there's a pushback against it recently, but I would say their strategy has worked brilliantly over the last 40 years.

LEVIN: They've gotten inside our government. They've gotten inside our businesses. They've gotten our technology. How did this happen?

PILLSBURY: Well, Americans have dreams about our own system inspiring other countries, city on the hill, things like that and the Chinese played to that. They were actually quite an extreme communist-dominated nation, but in their ancient thinking, they know that to get the resources, a country needs to pander, if you will, to the values and wishful thinking of other countries. They did this a lot 2,500 years ago in what they called the warring states period.

So they held out the notion to American leaders successfully, "If you help us, someday, we're going to be just like you," and it worked. I remember Deng Xiaoping visiting here, his sole visit to America in 1979. He wore a huge white cowboy hat and went to a rodeo, as though he was a fellow Texan.

I joke with Senator Ted Cruz about this that he was pandering right to the instincts of Texas. This was a good-old boy, comes to a rodeo, wears a white hat. Take that times a hundred. I hate to use the word "insinuate," but they got into our companies in pretty much the same way, that we have a market of 600 million in the world in the bourgeois middle class, you can market your products to that class, but you're going to have to have some sharing attitudes towards your technology ...

LEVIN: In other words hours, we are towards them.

PILLSBURY: Yes. And it worked ...

LEVIN: Let's jump into that.

PILLSBURY: It's a kind of wishful thinking that was played to.

LEVIN: So we're naive?

PILLSBURY: I would prefer to say optimistic.

LEVIN: Optimistic?

PILLSBURY: Inspired by the founding fathers that surely China wants democracy and a free market. Now, 40 years later, we know that's not true. The crackdown, we have even less democracy than we had in the '80s. The free market, they clearly have stopped at about a 50% total of their economy, and they want the commanding heights, as socialists would say, to be under control of the Communist Party.

So our wishful thinking was wrong, but now it's pretty hard to undo all that. You have a whole generation trained in Washington, DC to think of China as at least a friend and partner, if not an ally, and you throw into that what the book is really about is our secret cooperation with China, through CIA and the Pentagon, a lot of things we did together during the Cold War, that in many ways taught our intelligence community and our military not to see China as an enemy, and they've exploited that wishful thinking as well even as they do things that only an enemy would do, they keep denying it, and we keep believing them. This is, I think, the dilemma President Trump faces today.

LEVIN: Let's break this down. Technology -- whether it's economic or military or they overlap. How are they pilfering our technology?

PILLSBURY: Well, they began with a statement 40 years ago that the key source of economic growth is science and technology. So they zeroed in on science and technology as the single most important national security goal they could have. Once you do that, and you ask your own Chinese scientists, "Tell me the future." The scientists can come back and say there's something called nanotechnology manufacturing that no one ever heard of at the time or artificial intelligence, or any one of a range of almost 100 high-tech processes.

Then the next step is, well, which companies in America have those processes? And then they would go through the front door and try to get some of it, what they couldn't get through the front door, they would steal through the back door. And frankly, one of the first things they did is wake up Jimmy Carter at 3:00 in the morning, his science adviser was in Beijing, and the Chinese made clear, "We want an agreement, that all of our students who want to go America in science can go, and the National Science Foundation will share all American scientific discoveries quickly with China."

Mr. Frank Press was his name. He was so moved by this that he called Jimmy Carter from Beijing, "Can I agree to this?" Carter said, "Yes." And that became the foundation for our own government sharing a great deal of science and technology with China. So it's the scale of what they've tried to do that's important. It's not just nickel and dime, grab one little patent here. It's a comprehensive approach that to become number one in the world, we've got to get hold of what they call the innovation technology base.

Find out the most dramatic profit-making technologies in the world and get them by one means or another. And as I say, we mostly help them, our government did, through the front door, and our companies did as well under the illusion that someday the Chinese market would open up and these companies would enjoy massive profits, only a few companies have succeeded at that, most have not.

LEVIN: What happens to these companies that go to China, like Apple and so forth? They're forced to give up significant proprietary information, are they not, in order to do business in that market?

PILLSBURY: Yes, it's a variety of techniques, sometimes they will insist on a joint venture where the Chinese partner can demand technology transfer take place. Sometimes, they focus on an individual in the company who has the trade secrets of the company and they will, in some sense recruit him not necessarily as an espionage asset, but as somebody who they simply offer a salary of $2 million, that you leave, in this case, I'm of thinking General Motors, "You leave your company and come to work to for us and show us how to make cars."

And so they created -- they are now the number one seller of automobiles in the world. Of course, they didn't tell General Motors and Jeep or Volkswagen at the time. They had a kind of stealthy approach to all this, and if asked, "Are you trying to get hold of the world's technology to become the number one power?" They would laugh and say, "Of course not, China has no such ambitions. What a silly thing."

LEVIN: Do they think we're dupes?

PILLSBURY: I think they praise their own strategy that as they say they have ...

LEVIN: Are we dupes?

PILLSBURY: I think our presidents, and including myself at the time as an adviser to these presidents, we did not understand the scale of China's ambitions, so any particular example that would be detected, the FBI would just arrest the person committing economic espionage, we put them in jail for six months or a year, and assume this was a one-off thing.

So the scale was just not in our philosophy. I hate to say we were dupes, we didn't understand the consequences of building up another power to surpass us. I don't think even President Reagan thought that China would amount to what it has turned into today.

PILLSBURY: Are we dupes now?

PILLSBURY: Well, a lot of people want to call an end to all this and want better terms of trade. There's still a community that says, "China will collapse, don't worry about it." There's still the community that says, "They just want to be our partner in the world," but as they ignore United Nations resolutions, as they're caught with more and more technology theft, it becomes harder to explain this away.

So I think we're in a period now, which I think will go on for many more years of waking up, but being a little uncertain what to do when China and China's friends are already deep inside our system. We never faced this with the Soviets in the Cold War, they were always over there, and there weren't huge Soviet companies and Soviet investments inside America, and it was considered treason to help the Soviet Union.

But with China, it's the opposite. They're considered our friends and it's considered a little bit too conservative to be against China these days.

LEVIN: How is Donald Trump doing with respect to China? He seems to be changing the paradigm a bit, doesn't he?

PILLSBURY: Yes, he's got their attention. They're in a very feisty kind of fighting mode where, they're matching all of his tariffs with their own threats. They're saying that they're innocent, all these allegations he's made and his team has made in various reports of technology theft, forcible technology transfer and many others.

They claim they're innocent, this evidence doesn't hold up, and something that is really quite dramatic, they have said that China is now leading the rest of the world in favor of free trade against President Trump.

Even I who have -- and I have great admiration for Chinese strategy, as you can tell, even I didn't think they would be that dramatic to say we are protecting the world against President Trump in terms of free trade, and this has a lot of love people believing.

LEVIN: But he's actually hurting them somewhat.

PILLSBURY: Yes.

LEVIN: The value of their currency has dropped 25%, 30%. Our currency value has gone up 17%. Even if you're a free trader like I am, that has nothing to do with China for me, it's a national security issue, do you agree it's a national security issue?

PILLSBURY: I do. That's why I wrote the book, frankly, I'm trying to sound the alarm that it's not too late, although I think it may be too late. But the scale of what we are going to have to do to turn things around is enormous.

LEVIN: I want to pursue this after the break. Can we -- given what our Congress focuses on, they are focused on Russia, what our media focus on and so forth, China has a single focus because it's an autocracy. We have a thousand different focuses, and China might be among them and maybe not? And do they use that to their advantage?

Ladies and gentlemen, don't forget, most week nights you can watch Levin TV on crtv.com, crtv.com. We'd love to have you join our community over there. Call 844-LEVIN-TV. 844-LEVIN-TV. It's that simple. Give us a call. We'll be right back.

Dr. Michael Pillsbury, is it too late? Isn't it too late? The question for me is, given the nature of our government, and particularly given the nature of one political party that has us focused on Russia, Russia, Russia, you look at the media, we're focused on Stormy Daniels and things of that sort, maybe there's a story now and that slips through about China. Do you think we can ever come together to focus on what is this truly growing national security threat and economic threat?

PILLSBURY: It's starting to happen. I think the Pentagon got alarmed over some of the Chinese technology acquisition in the Silicon Valley and elsewhere. The Pentagon began to realize that the Chinese were going upstream ahead of our current technology and trying to purchase -- succeeding in purchasing the technology to produce weapons and win wars 10 or 15 years from now.

LEVIN: By buying smaller companies that are way out front?

PILLSBURY: Yes, yes and having an uncanny instinct for where to find these small companies. They weren't just randomly knocking on doors. So once the Pentagon became alarmed, I think they asked the intelligence community for more help on this.

To some degree, the Commerce Department and the US Trade representative have gotten more concerned about the ripping off of our trade and our market share of world production in almost everything. We're losing our market share in automobiles, even things like paint. -- it's quite a long list.

There's some level of alarm, but the divisiveness still is there, that the Chinese helped us so much in the Cold War, particularly President Reagan, with the Afghanistan program where they sold us $2 billion secretly of weapons, that we then transferred to the Afghan rebels and forced the Soviet Union into a humiliating defeat to withdraw from Afghanistan, whereas the Soviets themselves undercut them in Eastern Europe.

LEVIN: I never knew this, China assisted us ...

PILLSBURY: Yes. It was a top secret program.

LEVIN: ... top secret out of Afghanistan, okay? You were there?

PILLSBURY: Yes, sir. We discovered the Chinese were hawks against the Soviet Union. In our own system, we had a lot of detente advocates, Dr. Kissinger and President Nixon were deep believers in detente, somehow working out a balance of power with the Soviet Union, and we discovered that the Chinese were willing to use force and fairly aggressive efforts including sniper rifles being provided and commando raids inside the Soviet Union.

I cover this in one of my chapters, that frankly I was delighted that the CIA permitted this to come out. It's 30 years ago, but there's still some sensitivities. They also helped us in Cambodia, as you recall the Vietnamese Army had invaded Cambodia, and the US and several other countries, I tell the story in "Hundred-Year Marathon," got together with the Chinese intelligence service and provided weapons to the Cambodian resistance to kick the Vietnamese Army out.

So Cambodia, Afghanistan, there were some other secret projects with the Chinese, where they really showed themselves as fierce opponents of the Soviet Union, and who can guess otherwise? Of course, we thought they would be anti-communist, pro-American for the rest of history, but it turned out that was just a tactical move. That at that time, the Soviets were their enemy as well as ours, so they would help us take them out, but who would have thought later they would see us as a rival for global leadership and turn on us.

LEVIN: Russia today and China, is there really this tight relationship or -- maybe Russia is really a dying economy. China is not. So what is that relationship?

PILLSBURY: Well, the way the Chinese measure power and the way they see a problem is the size of the GDP, so in their minds Russia is about 10% of their GDP. This is the Chinese, maybe $18 trillion, $19 trillion. This is the Russian economy -- $1.7 trillion on a good day.

LEVIN: They have a lot of nukes.

PILLSBURY: Yes, but what can you do? You make hollow threats, but the Russians are growing aware of the China threat themselves. There are several million undocumented aliens, shall we say, undocumented Chinese inside Russia.

LEVIN: Is that a plan by China?

PILLSBURY: Chinese says no, these are just Chinese that wanted to live in ...

LEVIN: Live in the paradise of Russia ...

PILLSBURY: ... live in Siberia, but there's a number of Chinese efforts to get control of energy resources, minerals by Russian companies. So if I were Vladimir Putin, I would be more than a little bit worried about my Chinese friends on my southern ...

LEVIN: You think he is?

PILLSBURY: I think he is, yes. I think President Trump may see this, too.

LEVIN: Now, back to the United States, you've said that unlike really any enemy, and I do consider them an enemy, that we faced, they have secreted themselves, that is government entities, individuals, in our country, in our government?

PILLSBURY: Well, with our billionaires. That's one of the more amusing parts of all this. There's something called the billionaire gap that the Chinese now have more billionaires than we do. They have about 580 billionaires. We have about 540 billionaires.

If you've seen our billionaires coming on TV whether it's Bill Gates or Steve Schwarzman, there's quite a few. They really like China, and they believe in a Chinese-American sort of partnership going forward into the future.

When our billionaires contact our President, he listens. So he may have the intelligence community in the Pentagon and his trade experts telling him, "Look, China is out to really make us into a second class country," but then he has his billionaires praising China as the force of the future. so I think this is one of the many approaches China has to continue this goodwill and pro-China policies that our government still has.

I've advocated, as you know, we should have an inventory. Congress should demand an inventory of all the Federal government programs in place, many of them for 40 years, that helped China sort of to the dot. Many departments of government are still following Jimmy Carter's orders from 1979 that every department of the government must have a joint commission or a partnership with China and find some way to help Chinese economic growth, even in nuclear reactor safety, for example, we provide them knowledge of nuclear reactor safety. Sometimes very obscure areas. We had the FAA have a team in Shanghai to teach them how to build airliners safely on the theory that we all want airline safety.

LEVIN: So nobody is in charge?

PILLSBURY: No, there never has been a czar for China, it's always a matter of what the President is concerned with.

LEVIN: When we come back, I want to ask but the way the Chinese government has insinuated itself into academia in this country to affect how younger people think about China, the types of scholarship that come out of these colleges and universities. We'll be right back.

LAUREN GREEN, CORRESPONDENT, FOX NEWS: Live from "America's News Headquarters," I'm Lauren Green. An explosion in northern Syria killing at least 39 people today, many others were wounded, a number of women and children among the victims. Two five-story buildings collapsed from the explosion trapping many of the victims in the rubble. The cause of the blast is unknown, but the Britain-based Syrian Observatory for Human Rights reports a weapons cache in the basement of one of the buildings detonated.

Nike facing a class-action lawsuit over its alleged treatment of female employees. Four women are accusing the shoe and sports clothing maker of fostering a toxic environment of sexual harassment and unequal pay. The suit is the first to hit Nike after complaints of pay discrepancies and bullying went public earlier this year. The company responded by firing at least 11 executives. I'm Lauren Green, now back to "Life, Liberty & Levin."

LEVIN: Let me ask you this question, Dr. Pillsbury. Academia -- how have the Chinese taken advantage of our so-called open campuses and free speech?

PILLSBURY: Well, they've got two goals, one is that most of their 300,000 students who are here now pay ...

LEVIN: Whoa, whoa.

PILLSBURY: Yes.

LEVIN: They have 300,000 students here?

PILLSBURY: Yes.

LEVIN: I didn't even know that.

PILLSBURY: Yes, it's over 300,000. The students are mainly in hard sciences and engineering, so they're focused on helping Chinese economic growth in this next generation of manufacturing processes. Sometime they joke and say "We're going to win Nobel Prizes." That base of hard currency paying students is important to them, that they not be challenged or investigated by the FBI, which the FBI director has already raised in public his concern about these students.

A lot of them are in laboratories. They're doing state of the art research. They believe it's okay to go back to China with the equipment, the materials, the patents that they got as graduate students, and there's a lot of success stories where they've done this. But the other goal is what I would call sort of the soft underbelly of our academic establishment, that they need visas to have access to China, so it's been very well understood for at least 20 years, if you say the right things about China, you'll have no problem getting your visa for your research into the Chinese Social Security System or whatever you want to study.

If you start criticizing China or praising the Dalai Lama or advocating arms sales to Taiwan, you won't get a visa and you will look bad to your academic management. This has been a problem that's influenced the way our academic community writes about and talks about China. There's a couple of very famous professors I happen to admire very much. One is Perry Link in California, one Is Andrew Nathan at Columbia -- they both have been denied visas for more than 20 years. Their books are quite outspoken about Chinese abuses and violations of rights and property and so forth, and these are two of our stars.

But can you imagine, they have not visited China 20 years. The other academic professors often bring this up, "Well, Professor Nathan and Professor Link, their views are so out of date." They haven't been to China for 20 years.

So, this is a kind of insidious influence on our academic world. So, I think they've succeed in both. Universities, generally speaking are quite positive in their discussions of China. They do ban the Dalai Lama often visiting most of our universities. At the same time, the economic and technology benefits of these 300,000 students has got to be enormous.

One of my Chinese colleagues in Beijing has set up a team that succeeded to bring back more and more of these students. Some were staying in the west, perhaps because they love liberty and feared going home to a nation of tyranny, and this team gave them all the incentives -- very high salaries, special living areas, their own laboratories to work on their new scientific projects and more and more of these people are going home. They're called the sea turtles because sea turtles sort of return to where they were born, and this has been a huge boost for Chinese technology and China's growth rate.

LEVIN: We've heard about these Confucius institutes.

PILLSBURY: Yes.

LEVIN: And we've talked about that somewhat before. What are these institutes?

PILLSBURY: Well, this is a Chinese initiative about -- almost 20 years ago that they realized they could go into American universities. We have the most of them. We have more than a hundred out of about 500 in the world. They could go into American universities including Stanford, for example, and they can say, "We're going to give you $4 million. We're from the Chinese government. We're in the education business." You don't really teach Mandarin in your university. "For $4 million, we'll provide the faculty, we'll rent or buy a building. We want you to sign an agreement," sometimes it's a secret, " ... and you will be able to teach your students Chinese at a very low tuition."

And obviously, most universities agreed to this. Then they found out there were strings attached that if you wanted a particular human rights dissident from China to speak, or if you wanted the Chinese defector who had the high-level knowledge of the Chinese strategy to speak, no, you couldn't do this because you place in jeopardy your contract with the Confucius Institute.

So on the surface, it's just language training, but actually it's a means of influence in a hundred universities. Once again, you have to admire the Chinese chutzpah, for a lack of a better term.

LEVIN: When you wrote this book, "The Hundred-Year Marathon," it says in here, you spoke to defectors, Chinese intellectuals, scholars throughout our country. You wrote an enormous amount of information, you put it together in this book. Now you've been doing this most of your career. You finished the book, you write your conclusion, but what did you conclude? Did you say -- because again, you were part of the group early on that said, "Let's embrace China," right?

PILLSBURY: Yes, absolutely.

LEVIN: Let's share information with them and so forth and you say to yourself, "Wait a minute, we need to make a U-turn here. We need to make it fast." And that's pretty much what your book says and you lay out the whole situation. Doesn't it like drive you almost a little crazy when you watch the news and you listen to politicians?

PILLSBURY: Yes.

LEVIN: You've laid it out for them. It couldn't be simpler and they don't discuss it. They don't discuss it. How can a country survive such a thing? If we're not focused on what is the enemy, they are an enemy. We're talking about Russia all the time, we're talking about these other things all the time. We just talked about how we have divided government and so forth. Do we at least give some credit to President Trump who is trying to focus somewhat on China?

He brings it up all the time. He is trying to deal with them economically, he is trying to deal with them militarily, he's trying to deal with them in terms of foreign policy and so forth. Do you think he gets the recognition he deserves and do you think he's doing a decent job in dealing with China?

PILLSBURY: I think he's doing a great job dealing with China. He's got their attention. They've never really seen an American President like this before. He has the concept that they are a challenge to our global leadership, and he also has the concept that they're really in some sense businessmen, so that the tariffs present a kind of effect on China all out of proportion to what they actually are.

It's not the actual tax, the word for tariff in Chinese is guanshui. It means the tax at the gate. Tariffs themselves are not bringing China to its knees, but the fact that an American president is talking about them as a challenge is something new, and because of his success so far, I have lost some of my pessimism. When I finished the book, I thought, "No, this is not going to work. It's too late."

LEVIN: We'll be right back.

Dr. Pillsbury, I want to elaborate on the Chinese military threat. Let me crystallize this. If we went to war with China, would we win or would they win?

PILLSBURY: It depends on where the war would be taking place and the tactics that would be used on the two sides. In terms of spending and numbers of let's say aircraft carriers, we're way ahead. We have something like ten to one superiority, all things considered. They don't have any stealth bombers at all. They don't have any nuclear-powered aircraft carriers at all, but in the war games, I have been involved in against China, when I'd been there, sometimes on the China team, so-called red team, I would always find if I fight with an American style, then the American team would win that particular war game. If I use Chinese style based on their writings for what they would do, attack our nerve centers first, for example, or attack our satellites in space during the first two hours of the war. If I would use things out of their Chinese textbooks, then the American team would lose.

LEVIN: Really?

PILLSBURY: And over time the Pentagon learned more and more, no matter who -- they can shift to someone else to play the Chinese team, but as long as the Chinese team used Chinese strategy, the American team would lose. So I think this was behind President Obama's pivot towards Asia, even though it wasn't as much of a pivot as it should have been and as part of the new national security strategy of President Trump to take the military balance of power in Asia seriously, that we are slowly falling behind, and these Chinese production figures, submarines, jet fighters, even tanks, they're still up, so they're continuing to keep their nuclear forces low, nothing like us or the Russians, but now they're even talking about increasing their nuclear forces.

So I would say the main challenge from China remains economics, trade, technology, politics, influencing the next generation, but the military challenge is there too, and I was very just delighted that Secretary of Defense Mattis recently made his first visit to Beijing in his entire career.

This shows somebody who has been focused on Europe and Middle East, in some sense taking seriously the military challenge from China for the first time.

LEVIN: Do the Chinese, the Chinese government integrate civilian science technology, with military science technology, there's really no break is there?

PILLSBURY: Yes, it's one of the aspects of their strategy that's hardest for us to appreciate. Take the space program. We have two. We've always separated NASA for peaceful use of space, exploring planets, putting the astronauts on the moon, from the US Air Force- military use of space, and we built two separate infrastructures, roughly $70 billion each.

The Chinese said what's the sense of that? Let's just have one space infrastructure run by the military, and save money and let's get technology from the Russians and they like to get into the American NASA high-tech stuff as well. We've blocked them so far.

And so their space program has jumped ahead in the past ten years. They've not only got their own space station, because we wouldn't let them mate with ours, but they're talking about men, people on mars and they're still dangling the idea of joint space missions and they've been very pleased with three movies. I don't know if you've seen "Gravity," "The Martian," and "Red Dawn."

LEVIN: "Red Dawn," I remember.

PILLSBURY: All three are showing the Chinese in a positive way, that their space program actually helps our marooned astronauts. So this is just another Chinese challenge that we've been in some sense blind to.

LEVIN: Ladies and gentlemen, don't forget to join us on Levin TV almost every week night, go to crtv.com, crtv.com. Give us a call also at 844- LEVIN-TV.

You interviewed eight high-level defectors for your book. I know you're not going to give us their names, nor should you. What did you learn from them?

PILLSBURY: The defectors provide a kind of opposite side of the story from Chinese officials. As you know, over the last four years, I had a lot of contact with Chinese generals, Chinese intelligence, executives, Chinese diplomats. The defectors come from within that group. They've had access to China's greatest secrets. They've now chosen freedom to come and live in the west and to seek a new identity. They're essentially in witness protection programs. They even want the stories read that they've been killed or they died, sometimes they joke about the Chinese will joke with me about, "Did that defector die?" And I'd say yes, and they'd say, "Well, was it a drowning accident?" And I'd say, yes, and they laugh, because we always give them the same story.

"Was it in South America?" I'd say yes, but actually the defectors are still alive and their view is the cynicism of the Chinese strategy that the things that took me so long to discover, the defectors can confirm all this. They've seen documents, they've been to meetings where the marathon strategy is being implemented, so it's not some kind of academic debate, "Is China really doing this or not?" As our academics would say.

To the defectors, they've been there. They know it's talked about. And in many ways, they can't believe that America puts up with this and has not discovered it over such a long period of time, and the defectors to some degree have warned me that they believe China is entering a period of maximum danger over the next five to ten years, that this is the period where they will pull ahead in economic strength. Perhaps in military power as well. And the Americans are going to wake up.

This is how they see President Trump, as the first American president who has awakened to this danger, but they're still gambling that there's enough opposition to President Trump in the Congress and in the media, that he will not be able to turn things around in terms of the China challenge.

The defectors themselves are worried about this, and as you mentioned I give them pseudonyms but tried to describe what each one had to say; and one of the most dramatic is they have something called the communist party school in Beijing where they teach the marathon strategy, and part of it is to get market share and high tech and they claim this is how the Americans after the Civil War in many decades, this is how the Americans became the number one power in the world, and that we then dominated the United Nations process in 1945. This seems to be their plan, the defectors say. There's going to be a Chinese world order. China's going to call the shots, but they're going to get there with our assistance the same way America got there with British assistance.

LEVIN: We'll be right back.

Dr. Pillsbury, you have laid out a very daunting situation. How does this end?

PILLSBURY: Well, it could end in two different ways, it depends on how much Americans care about remaining number one in the world. Apparently, 40% to 50% of Americans care about it and they don't like the idea of being disrespected overseas or losing our global leadership.

A lot of Americans don't care. I've had a lot of Americans tell me that the "Hundred Year Marathon" is based on our still being number one. We've had our chance. We've had our run for a hundred years. Let's let the Chinese see if they can do better. This is the kind of progressive view that we've been unable to achieve our goals of social justice.

The Chinese will do that. So, these are the two broad outcomes. I happen to be one of Americans who believe we really are better off being number one in the world, but I'm not sure it's a unanimous view and that's where the challenge of President Trump and his team comes in. That he seems to have support from his base and from the Congress, but whether that will be enough, I think the Chinese are gambling, "No, this is not going to work and the hundred year marathon still has them on the winning side."

LEVIN: It's been a great pleasure. It's very, very important. Thank you.

PILLSBURY: Thank you.

LEVIN: See you next time on "Life, Liberty And Levin."

Content and Programming Copyright 2018 Fox News Network, LLC. ALL RIGHTS RESERVED. Copyright 2018 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.