ExclusiveSecretary Bessent: Chinese AI Model Leaked PLA Weapons Plans | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story, a Chinese AI model sent China's military weapons plans to an American company. Treasury Secretary Scott Besson says China is stealing U.S. AI technology through industrial desolation, while proposing a new channel to manage AI risks. A Chinese-American woman is facing charges of spying for China on U.S. soil. Taiwan's foreign minister visiting Arizona for the opening of a new de facto consulate there, that's over $260 billion of Taiwanese investment, is set to flow into the U.S. And Senator Rick Scott introduced two bills to kick Chinese military companies off U.S. exchanges and cut off their access to U.S. capital. We spoke with the senator for more insight. Treasury Secretary Scott Besson says China is stealing U.S. AI technology, and Washington is about to propose a crisis hotline with Beijing to manage an increasingly intense AI race. In an interview, Besson reveals a Chinese AI model sent People's Liberation Army weapons plans back to an American company. The open source models, they do industrial distillation, which is a nice word for stealing, from the U.S. models. Some of their models, one of their very powerful models is Kimmy. Kimmy thinks she is clawed. Like, Kimmy will tell you she is clawed sometime. It's public, so I can talk about it. Kimmy sent back, very helpful, Kimmy sent back some PLA weapons plans to Anthropic. Treasury Secretary Scott Besson says Beijing is using industrial distillation to steal from leading American models. Now, Chinese systems already reach 80 to 90 percent of their power, but without safety guardrails. I can tell you that it would be very different if they had to lead in AI rather than us, both from a capability point of view, how they would be using it. Meanwhile, Washington wants to manage the rivalry through an official AI dialogue. We have some kind of a notification process. I think we can agree on this is what models should not do. Besson says he will meet Chinese Vice Premier He Lifeng again within two months. During the previous talks, both sides discussed risks from uncontrolled AI agents and non-state actors with cyber or biologics. But Besson emphasizes the U.S. can't lose its lead against China. A California realtor is facing charges of spying for China on U.S. soil. Her arrest throws light on the Chinese Communist Party's activities in the United States. Here are the details. Federal authorities have charged a California woman with acting as an agent of the Chinese government. They say they arrested Wang Yingzhong yesterday at Los Angeles International Airport as she tried to leave the U.S. for China. She was conducting surveillance on behalf of the Chinese government. She was acting as a foreign agent. And she was spying on a relative of the president of Taiwan here in the U.S. And so she's conducting Chinese, essentially espionage here on our soil. And you cannot do that without our knowledge and consent, obviously. And so she is in violation of federal law. According to court documents, Zhang traveled to Seattle in 2025 at the direction of Chinese officials. The alleged target was the son of Taiwanese President Lai Ching-te, who lives in the U.S. Investigators say Zhang and an associate traveled from Las Vegas to Seattle, rented a vehicle, and waited near the family's home. They say a neighbor's security camera captured the pair photographing or recording the family. The FBI says investigators later obtained communications that showed Zhang reporting information from the surveillance to Chinese government contacts. Taiwan's presidential office condemning the surveillance. With regard to the recent case in which U.S. judicial authorities uncovered alleged Chinese surveillance of President Lai's family, this represents a typical case of transnational repression. We strongly condemn such conduct, which disregards human rights and employs intimidation and heavy-handed tactics against those who advocate freedom and democracy, as well as their family members. Federal officials say this case is a typical example of what the Communist Party does. China's very good at using people who are already here and they do it to elected officials. Yeah, exactly. So they know how to game our system. And so, you know, that was a big blow to us when the birthright case came down because the other thing they're doing now, you know, this might be breaking news as well. It's not just birthright tourism. They're sending sperm and eggs and they're implanting them in surrogates here in American surrogates here in the U.S. to get around the visa stuff. FBI Director Kash Patel is saying on NX, foreign adversaries take note. America is no longer a safe place to run your espionage operations. Zhang is scheduled to appear in an L.A. court today. Taiwan's foreign minister, Lin Xiaolong, is visiting Arizona. That's for the opening of a new de facto consulate in Phoenix. Taiwan can't open consulates in the U.S. given Washington has diplomatic relations with China instead of Taiwan. The island has Taipei Economic and Cultural Offices across the U.S. that serve as de facto consulates. The opening of a new de facto consulate in Arizona comes as Taiwanese chipmaker TSMC is investing over $260 billion to make semiconductors there. Taiwan's foreign ministry said the new office marks a milestone in Taiwan-U.S. economic and trade partnership. Meanwhile, a $14 billion U.S. arms sales to Taiwan is still on hold. Congress has approved the sale, but it cannot move forward without a green light from President Trump. Trump has described the arms sales as a good negotiating chip with China. Trump said that he didn't talk about Taiwan too much with Chinese leader Xi Jinping two weeks ago, adding that Xi understands very much how he feels. Senator Rick Scott introduced two bills last week directing the SEC, the Securities and Exchange Commission, to suspend Chinese military companies from trading on U.S. exchanges. How would this prevent the Chinese military from ultimately profiting from the U.S. stock market? To discuss entities, Steve Land spoke with a senator on Capitol Report. Take a look. Well, when they raise money in our stock market, basically Americans are helping their military to buy weapons to kill us, to destroy our way of life. I mean, this is the craziest thing in the world. You know, you think in the Second World War, the American financiers financed the Nazi Germany? Of course not. And so all this saying is that if you're a Chinese military company, you're not going to raise money, you know, on American stock exchanges or from American investors. It just doesn't make any sense why we would be helping them, you know, destroy our way of life. I mean, think about how much money we're spending in this country now to prepare for war against communist China. And we know that communist China is killing our kids with fentanyl, stealing our jobs, spying on us. I mean, so we got to stop supporting their military, stop supporting their economy, basically. It's truly incredible that this has not already been a topic of discussion, not to mention how many pension funds are invested in the Chinese economy and market there. One of these in one of your bills, Senator, one of the provisions would require the SEC to mark Chinese military linked securities with a Chinese military company ticker. It seems reasonable. How much do you think American investors currently even know about their exposure to some of these companies? Oh, I don't think they know at all. I think I think, you know, there's so much of the money in our stock markets now is through hedge funds and through mutual funds. And so it's somebody else investing the money. And, you know, it is actually disappointing to me that anybody that's an American citizen would ever put money in a Chinese one for sure, a military, some Chinese military company on top of that. Why are we helping the Chinese build an economy or a military when they're causing most of the problems we're dealing with in this country? I mean, they're killing our kids with fentanyl intentionally. This is all intentional. They never comply with trade deals. They lie all the time. So we've got to wake up. They've decided, they've chosen, the government of China has chosen to be our enemy and they want to destroy your way of life. And Senator, you've been sounding the alarm on the atrocious human rights record of the Chinese Communist Party, the Senate, unanimously, all Republicans, all Democrats just passing something called the Falun Gong and Victims of Forced Organ Harvesting Protection Act. What message does this send to China about its human rights abuses? And what do you think this means for the United States? Well, it's showing that we actually have a heart. We actually have standards. We actually care about people. You know, we care about not just Americans, but people around the world that are persecuted. China persecutes, it kills, it destroys. That's what totalitarian governments do to stay in power. And so what the Chinese government does to Falun Gong or what they do, they harvest organs or what they do to the Uyghurs. I mean, it's just a disgusting government. Xi is a disgusting person. And what he and his government does to their own people, you know, it makes us, it makes us sick to our stomach. And I hope as we do this, Americans continue every day to wake up and say, we're not going to do business with any Chinese company because it's disgusting what the government's doing. Senator, switching gears here just a little bit back to the home front. The Senate Judiciary Committee just holding a hearing on Jack Smith's alleged abuse of his authority as special counsel. Your phone records were reportedly obtained in secret during this probe. Talk to us about how that happened and sort of the abuse of authority and what does it mean for everyday Americans' privacy? You get tired of this. Under the Clinton administration, because I oppose Hillarycare, the Clinton administration targeted my hospital company that I built. And then in the Biden years, they stole my tax returns and released them. Nobody's been held accountable from Booz Allen, the company that did it, or from the Biden administration, right? You know, a contractor was held accountable, but not Booz Allen, not the Biden administration. Then Jack Smith still, you know, he takes my, he takes my records as it's a fishing expedition to say, how can I go against some guy that I, somebody I don't like? So that's what the Clinton administration has done. That's what the Biden administration has done. And so this has got to stop. If they can target a company, one of the biggest, the CEOs and a company, one of the Fortune 50 companies, if they can target a senator, then you don't think they're going to target you? They're going to target you. If the government doesn't like you, they're going to target you. This is disgusting. It's got to stop. Senator Rick Scott, as always, we appreciate you coming on. Thank you. Thanks. Derisking from China continues. Japanese companies are leaving China in record numbers. The number of Japanese companies operating in China has fallen to a record low. There were more than 10,000 companies as of June, according to a Japanese data bank. That's down 22% from the previous survey in June, 2024. Why are more Japanese businesses leaving the world's second largest economy? China's slowing economy is one reason based on a sluggish real estate sector, weakening domestic consumption and an intensified trade conflict between China and the U.S. Tensions between Japan and China are another reason. China is quietly closing the gap in advanced chip production, but there's a way for the U.S. to tackle it. China's stockpiling DUV immersion or DUVI lithography machines. These machines are essential for producing advanced AI chips. If China keeps importing DUVI at its current pace, it could build enough chip making capacity over the next five to 10 years to narrow or even erase the U.S. and allies advantage in AI chip making. Currently, the U.S. and its allies have a major advantage as the only producers of these advanced machines. China is unlikely to produce the machines at meaningful scale until the mid 2030s, but China can still import some of these machines under export controls. China has taken advantage of this opening, building a stockpile of more than 330 DUVI systems by early 2026. The experts say the U.S. could turn the tide by banning all DUVI exports to China, along with spare parts and servicing. That could help preserve the U.S. and allied lead in advanced AI chip making for at least the next decade. Coming up, a father lost his son to suicide after the 16-year-old consumed months of TikTok content promoting suicide and self-harm. Why are social media so addictive and what business model is driving the cycle? Plus, what can be done to protect our next generation from further harm? That and more after the break. Welcome back to China In Focus. I'm Tiffany Meyer. Why are social media platforms so addictive and how is it related to the targeted advertising business model of big companies? Plus, with a U.S. teenager committing suicide after consuming months of TikTok content promoting self-harm, what regulations are needed to protect our next generation? I spoke to Rex Lee, Cybersecurity Advisor at MySmartPrivacy for his take. Rex Lee, thank you so much for joining us. Great to have you back on the show. Thank you for having me on the show, Tiffany. Rex, diving right in here, you recently got to interview the FTC Chairman Andrew Ferguson, all about AI, all the different industries and also your electronic bill of rights. Diving in though, he did touch on China, mostly the Chinese scam advertising on Meta. And of course, that brings in the broader question of enforcing laws. But first, talk to us about that China element and the national security risk that brings up. I didn't interview him directly, but I did meet him after the show and we did discuss some of the topics that he went over, which is one of the main ones was enforcing existing laws when it comes to negligent tech companies and AI because of all the news about AI ending humanity in 10 years. So it was kind of interesting. The main thing that he said during his session was that in light of all of the new concerns about AI, also ad scams from China being published on platforms such as Meta. So Meta's Instagram and Facebook and other platforms that they have that are supported by targeted advertising. He said there's existing legal framework to actually go after these AI companies because you can't just arbitrarily harm children and consumers or deceive them through deceptive trade practices and so forth. He touched base on a lot of laws that are currently being violated, including the fact that AI can go out and arbitrarily hack websites of businesses and governments. These are all illegal crimes. And we have existing legal framework out of scope of Section 230 that does not protect these tech companies from this. Talk to us about the hybrid warfare aspect of all of this. Well, the hybrid warfare aspect of all this is, first of all, you have to look at why are the platforms addictive? Why do they need to put addictive design in there, which includes brain hijacking technology, manipulative advertising technology and AI indoctrination technology when combined equal military grade brainwashing technology more harmful and deadly than subliminal advertising technology that was banned in the 20th century. So when you layer that in there, that's one form of harm. But why do they have it? They have it to support their targeted advertising business model rooted in surveillance capitalism. So this is how they're getting their trillion dollar valuations with their companies. I mean, getting a trillion dollar valuation for their companies on Wall Street. This is how they're getting it. They're getting it through the amount of data and time that people spend, the amount of data they collect and the amount of time that people spend on these platforms. So they have to use addictive design. Any platform that needs to retain your attention because they're supporting a targeted advertising business model has addictive design in there. So when you look at new laws like COSA, COSA is exposing children aged 13 to these addictive and deadly apps, platforms, AI chatbots and so forth at the age of 13. Now that doesn't make any sense. If you're supposed to be protecting children from this addictive technology, why would you put the age at age 13? Also in the new laws, and this is something this goes back to what Andrew Ferguson was addressing, in the new COSA as written by the Senate, they've replaced criminal negligence. When he's saying that we have to enforce existing consumer and child protection law, that's not civil liability what we've been seeing. What we've been seeing with these tech executives and these negligent companies is civil liability in the form of settlements, congressional hearings and phony apologies by these CEOs. If you enforce existing child protection and endangerment laws and consumer protection laws and deceptive trade practices laws, then they can enforce criminal law, I mean criminal liability in the form of malicious intent and criminal negligence, which means that harmful products can actually be pulled from the marketplace. We haven't seen that. And with all the risks here that you've just laid out, and I know we've talked about this previously as well, talk to us about why there is that need for this electronic bill of rights and how that would fit into all of this. Well, so again, there was another news story that broke this past week, and it was a investigative reporter, Olivia Carville. And she exposed an internal TikTok report. This is when TikTok was owned by White Dance out of China in 2022. They conducted an experiment on their end users, just like Facebook was doing in 2012 through 2019. And the experiments were based on the addictiveness of the platform. So what they did is they actually went into millions of accounts and disabled the safety features that were set by parents on those accounts. And one of the accounts was owned, was actually being used by a 15-year-old in the United States, who was flooded with over 7,500 videos of harmful content to the extent that the 15-year-old ended up taking his life. They purposely and knowingly lifted the parental controls from this 15-year-old's account, and he ended up dying as a result of it. And so this is why we need an electronic Bill of Rights. We need the government, we need the FTC to do exactly what Andrew Ferguson said should be done, and that's apply existing consumer and child protection laws. Otherwise, with no oversight, the carnage and harm is only going to continue. And that's what the electronic Bill of Rights does. It focuses in on enforcement of existing laws, plus give you sovereignty over your name, image, likeness, and data, or your NILD, what the advertising industry refers to as your digital twin. When you're talking about shoes from Nike, or you're talking about a restaurant or a movie, and you're getting those ads, well, you literally have an avatar of yourself that comes up in that Google ad tech ecosystem, and then it goes out to a real-time bidding platform, and then all the advertisers send the ads to you, whoever wins the bid. That's the driving factor behind addictive design, and really, addictive design needs to be banned, and you can't regulate it. Well, Rex, as always, thank you so much for joining us. Thank you for having me on. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show, or have something you'd like to see us cover, send us an email at chinainfocusatntd.com. We'd love to hear from you. For on-the-clock original news coverage, visit us at ntd.com, or download our NTD app. Thanks for watching. See you tomorrow.