Defense Secretary Jim Mattis said the recently completed U.S. defense strategy, the first in 10 years, will be used to guide the revamping of the military during the Trump administration.

“Without a sound strategy, the most brilliant generals, the most well-equipped troops, the most high-tech equipment, fine tactics — none of that works unless your strategy, your framework for what you’re doing, can actually tie ways and means together,” Mr. Mattis said in a recent speech.

The retired Marine Corps general said the new strategy identifies China and Russia as the major threats facing the country and will be used as a rationale for more stable defense funding after years of cutbacks. In formulating the strategy, Pentagon strategists categorized security threats and recognized the prime danger as coming from state actors like China and Russia, not from terrorist groups.

“If you look at China, the way it is shredding trust in the South China Sea, the way it’s using predatory economics; if you look at Russia, in trying to get a veto authority over the economic, security and diplomatic decisions of the countries around its periphery and mucking around in other people’s elections — those are various forms of attack on the sovereignty and territorial integrity of the state system,” Mr. Mattis said.

“That’s the bottom line,” Mr. Mattis said.

The defense secretary said one of the highest priorities is establishing a workable relationship with China to avoid a conflict. The new strategy will “allow us to move forward from a position of strength,” he said.

Mr. Mattis recalled an experience in 2004 as a two-star Marine Corps general commanding troops in Iraq during a patrol along the Euphrates River.

“We pull into one of the camps in the middle of nowhere, and I was reminded that next morning that America’s got two fundamental sources of power: the power of inspiration and the power of intimidation,” he said. “Many times, our military acts with the power of intimidation and sometimes the power of inspiration as well.”

Mr. Mattis said that during the stopover he spoke to an English-speaking Iraqi terrorist who had been captured trying to plant a roadside bomb. The man was found digging a hole along the same road Mr. Mattis had traveled the night before. The Iraqi was caught with a wheelbarrow containing the ingredients for deadly vehicle bombs: two artillery shells, a car battery and a detonator.

One of the Marines asked if he wanted to meet the terrorist, and Mr. Mattis said, “That gets a little personal. Yeah, I’d like to meet him.”

Mr. Mattis asked the man, “What are doing this for? You’re Sunni, we’re Marines. We’re the only friends you got in this country.”

“He said, ‘Oh, you Jews, you Zionists.’ This and that. ‘You’re only here to steal the oil.’ I said, ‘Go away. You’re obviously an educated man. If you’re going to run your rant that way, just go away.’”

The Iraqi then asked to sit for a minute and asked for a cigarette. “I figured, well, don’t give him my anti-cancer lecture. Right now is probably not a good time. He’s probably not too concerned with that.”

The general and the man struck up a conversation, and the man said he did not want foreign soldiers in Iraq.

“I respect that,” Mr. Mattis replied. “I wouldn’t want foreign soldiers in my country. Now, we’re getting into a conversation.”

The Iraqi asked if he would be imprisoned and was told he would be going to Abu Ghraib prison and wearing an orange jumpsuit for a long time.

The man then asked if he would be allowed to immigrate to America if he proved to be a model prisoner.

“Now think about what he said,” Mr. Mattis said. “Halfway around the world, America’s power and inspiration went all the way to the western Euphrates River. A guy who hated so much he was trying to kill me, he would love to be sitting where you and I are today.”

Mr. Mattis noted that the Pentagon is researching the latest weapons technology and capabilities but added: “Just remember the power of inspiration and the power of intimidation. Sometimes you need both in an imperfect world.”

On terrorists seeking to impose an Islamic ideology that treats women as property and refuses to allow girls to go to school, Mr. Mattis was adamant.

“We’re never going to buy into that. There’s only one way to deal with your spiritual side. It’s our way or the highway. We’re never going to buy that. We’re Americans. We’re the most revolutionary force on this planet. So remember that and regain our fundamental friendliness toward each other.”

CHINA, RUSSIA TOP COUNTERSPY THREATS

Chinese intelligence operations in the United States are some of the most serous national security threats facing the nation, says the director of the National Counterintelligence and Security Center, a counterspy unit under the director of national intelligence.

William R. Evanina, an FBI agent and former head of counterespionage at the CIA who now heads the NCSC, told a Senate hearing Tuesday that China is using both human operatives and cyber means to steal secrets.

“I do believe China is one of the gravest concerns that we have, moving forward as a nation, with respect to our economic security,” Mr. Evanina told the Senate Select Committee on Intelligence. “China’s utilization of a whole-of-government approach towards the United States to increase their economic and military development is problematic.”

China is increasingly deploying nontraditional intelligence collectors in the United States, including engineers, scientists and students.

On the cyberfront, Chinese spies are using network penetrations to identify and extract valuable data from American research facilities. The impact has caused the loss of jobs, research and funding and has provided China with first-to-market economic products.

The Chinese have taken “our ingenuity and proprietary data and trade secrets away,” Mr. Evanina said, adding that counterintelligence efforts against Chinese technology theft have been lacking.

“Until fairly recently, China’s use of its intelligence services to advance its national development (thereby undermining the economic security of the U.S.) did not receive adequate attention,” Mr. Evanina said. “The U.S. must continue to respond to China’s systematic theft of U.S. technology across broad swaths of the U.S. economy, which represents a critical national security threat. Our economic security is our national security.”

Mr. Evanina said in the past two years the FBI and the Homeland Security Department have stepped up efforts to provide security awareness information and threat briefings to academia and industry on Chinese proprietary data theft.

Without mentioning Beijing’s role, Mr. Evanina said the 2015 foreign cyberattack on the Office of Personnel Management was a wake-up call to the threat of foreign cyberspying.

“I think we learned as a country that nothing is off limits from foreign adversary attack here,” he said. “The intelligence community is no longer just the target and victim of adversaries; that, as a country, we need to be aware of our proprietary data, trade secrets and [personally identifiable information].”

China obtained some 22 million records from the OPM hack on federal workers, including sensitive information on U.S. intelligence and security officials.

Russia’s intelligence services also pose a serious national security danger, and the Kremlin is expected to continue efforts to subvert the United States democratic system, as it did during the 2016 election, Mr. Evanina said.

“I believe the aggressive Russian intelligence services will continue their efforts to interfere and create distrust in our democratic processes, encourage anti-U.S. political views and weaken our U.S. partnerships and European allies,” he said.

Mr. Evanina also faulted efforts to counter Russian spying in 2016.

“As a nation, we were not prepared for Russia’s intent and action to interfere in U.S. democratic processes and institutions,” he said.

• Contact Bill Gertz on Twitter at @BillGertz.

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