The George W. Bush Institute’s Malign Alignment: How China, Russia, Iran, and North Korea (CRINK) threaten U.S. and our allies project analyzes how these four countries’ growing partnerships challenge the United States’ leadership, global stability, and peace.
Olivia Hernandez:
The George W. Bush Institute’s malign alignment – how China, Russia, Iran, and North Korea threaten the U.S. and our allies – analyzes how these four countries’ growing partnerships challenge the United States’ leadership, global stability, and peace. We’re here today with the Bush Institute’s Elizabeth Kennedy Trudeau, the Bradford M. Freeman, managing director of global policy, and Igor Khrestin, senior adviser of global policy, to talk about how emerging technology and resource competition are shaping the CRINK challenge.
Elizabeth Kennedy Trudeau:
Hey, Igor, thanks for joining us today.
Igor Khrestin:
Hi, Elizabeth. It’s great to be with you.
Elizabeth Kennedy Trudeau:
So, we’re going to talk about CRINK. I have a few questions for you: China dominates global rare earth processing. Russia and Iran control critical energy supplies, while North Korea offers war material and sanctions workarounds. Together, they create these symbiotic dependencies for future CRINK cooperation that will harm both our interests as well as our allied interests. How can the United States and our allied partners break up these dependencies?.
Igor Khrestin:
Two-word answer: one is friendshoring and the other is sanctions. Those things will really help target these dependencies – which are growing, as you noted – and increasing domestic capabilities.
For instance, for rare earth, we have companies in the United States, in Canada, in Australia, and other places that are able to replicate what China is doing. But we need to invest in those capabilities. So, we start with that: working with our partners.
In terms of the dependency that we have on Russia and Iran for energy supplies, the United States is now the largest energy producer in the world. We should continue to increase our domestic processing and capabilities to get this oil to markets and to our friends and allies. So, I would say those two things, and then on sanctions: we need to be using more robust, secondary sanctions on both China and Russia to ensure that the architecture that we have in place is actually enforceable.
Elizabeth Kennedy Trudeau:
Can you say a word about secondary sanctions? Maybe explain what that is?
Igor Khrestin:
Absolutely. So, secondary sanctions – as the word implies – are sanctions on the entity that is helping the sanctioned entity. And so, this expands greatly the aperture of the sanctions to say that “if you are a bank or a Chinese financial institution that is helping a sanctioned Iranian or Russian entity get its oil or other material onto the market, the United States will punish you.” And usually that’s done through our financial system: restricting transactions through our financial system or other financial penalties.
Elizabeth Kennedy Trudeau:
That’s great. Thanks. Let’s talk about chips. After President Xi and President Trump’s summit, chips are very much in the news. Over the last decade, the United States has imposed export controls on advanced U.S. chips that aim to deny China these capabilities. But the administration has also argued that these strict export controls may inadvertently accelerate Chinese indigenous development; that they’ll create their own capabilities faster and push CRINK into a closer resource for a technology-barter arrangement.
What policies would you recommend that the United States – again, with our allied partners – enact to deny China this future technological supremacy?
Igor Khrestin:
Well, the answer, again, is twofold; one is: the cat’s out of the bag, in terms of China developing its own capabilities. We aren’t going to be able to stop that process, but we should do everything we can to slow down the advanced Chinese capabilities that may threaten our own interests: so, these are some very sophisticated nanochips that are used for training AI machines. We should maintain those sanctions and expand those, as possible.
But what we should really be doing is making sure that we invest in our own R&D capabilities to maintain our advantage over China, to make sure that we’re always in the lead. That lead is pretty precarious. If you listen to our own technology leaders, they say it’s about six months right now, our lead in AI development. We need to make sure we utilize every tool to maintain that.
The second part is that we really need to make sure that we are utilizing the legislative tools that we have. For instance, we have a great piece of legislation called the CHIPS Act which we enacted into law. Unfortunately, the funding for that has been very uneven, and it’s become a political football, unfortunately. But the idea is very simple. We invest in our own domestic capabilities and work with our allied partners to make sure that our supply chain is secure, but also we maintain that lead over China.
And then the third I’ll mention is a more difficult one: that we need to make Western technology more available to the Global South so they don’t seek to go to a Huawei, or a Chinese partner which makes that technology available at a much more affordable rate. If I could draw a model from global health – this is what we faced with the PEPFAR program at its early stages in terms of the availability of antiviral drugs because they were so expensive – and this is the same model with technology. Our stuff is leading, but it’s expensive. How do we make sure that we make that available at scale to folks who need it so that they don’t have to rely on Chinese technology? So, that’s the challenge we need to tackle.
Elizabeth Kennedy Trudeau:
That’s great. And I’m glad you mentioned the Global South. Let’s go from chips to raw materials. China has spent decades courting partners not only on the continent of Africa, but in South Asia, across Latin America to round up access to critical raw minerals – lithium, cobalt, nickel, graphite – essential to our commercial and our military products. What’s the United States counter on this?
Igor Khrestin:
So, this is the key question to the future of the United States as an industrial power, I would say – and our allies as well. China has really, over the last twenty to thirty years, seen the light on this issue and, as you had mentioned, locked up these supply chains. We’ve only very recently started to do something about this through tools like one I’ll mention, the Development Finance Corporation, which we utilize. It’s something that we need to increase, and we need to make sure that it’s robustly funded.
So, right now Congress recently raised the cap to about $200 billion. The Chinese spend almost a trillion dollars on their export development efforts. That’s the latest numbers that we see. So, anytime the United States goes and tries to negotiate with our partners, we need to make sure we have leverage to do so. And we need to offer other things like our own transparency mechanisms and their own technologies that are still superior to Chinese. But first things first, we need to have robust mechanisms for public-private partnerships that have this funding so we can work with partners.
The second thing is: we need to work with our allies and partners. We have a great initiative called the Mineral Security Partnership that’s been recently renamed by Secretary Rubio as the FORGE. But the idea is very simple: it’s to make sure that we’re working with our allies and partners to have these supply chains shored up, that we’re developing strategies together to ensure that these critical materials remain accessible to us, and that they’re not weaponized by our adversaries in any way. So, we need to expand that partnership and maybe add some sort of procurement mechanism. Right now, it’s just a forum, but there’s no procurement mechanism attached to that. So, if our leaders could see a more robust procurement mechanism that would also help alleviate some of those concerns.
The third thing is the development of technologies that really reduce our reliance on some of these critical materials that China has supply-choke holds over. One thing I’ll notice is the sodium-ion batteries or iron-air batteries, both of which avoid cobalt and lithium as primary components. So, right now, they’re still more in the development stages, but some of these technologies that could really lessen the dependence on Chinese supply chains could also be useful here.
Elizabeth Kennedy Trudeau:
So, next generation?
Igor Khrestin:
Next generation technologies, friendshoring – again, is a common theme here – and our own export financing capabilities.
Elizabeth Kennedy Trudeau:
Being at the table with the others.
Igor Khrestin:
Exactly. Absolutely.
Elizabeth Kennedy Trudeau:
Well, speaking of the next generation, we have to talk about AI. Obviously, members of CRINK are working on advancing this – not only for economic gains, but also military gains. What’s the U.S. response here?
Igor Khrestin:
So, this is the key question. AI as a technology is going to be the dominant technology of the future. We are in an inescapable, I would say, hyperloop – and again, if you listen to our financial leaders, our global leaders – of increasing reliance on AI. So, we would say AI – as in a national security space – one of the things that AI has now been integrated into is our weapons development and our defense capabilities.
So, the first thing is to ensure that we are working with partners like Ukraine, for instance, that have really been at the leading edge of developing these technologies and integrating them into our own platforms. The Department of Defense – now the Department of War – has several great initiatives: one called the Replicator Initiative that we really need to scale up to make sure we’re maintaining our edge over these technologies.
Now, in terms of denying these capabilities to CRINK, this comes back to chip controls. In order to have advanced AI capabilities, you need to have leading chips that train these models. And those chips right now are produced by a lot of our allied partners like Taiwan, the company called TSMC. And the lithography of that is produced by a Dutch company called ASML. So, these are critical key advantages – better advantages – that we need to maintain. And so, we maintain these controls that we talked about.
And then, the one thing I’ll also mention with AI is that it’s now being integrated by China at scale into surveillance technologies that are being used against human rights defenders in other ways. And they’re exporting these technologies into what’s called “the digital silk road” to other countries. So, in order to counter that we need a robust sanctions architecture to make sure that we try to penalize these activities to the extent that we can, but also developing our own open-source trusted alternatives for countries that are seeking to use it for legitimate law enforcement. It’s a very delicate, very sensitive subject, but technologies like AI do have capabilities that are very useful in these regards. But we need to make sure we’re funding alternatives or providing some alternatives that lessen reliance on Chinese models that really enhance surveillance and other various capabilities. So, I’ll mention that as well.
Elizabeth Kennedy Trudeau:
That’s a great pivot point because one of the things that I think we’re all aware of are the advanced persistence threats that China particularly – but other CRINK members – have: attacks in cyberspace, not only on our economic base, our military base, but also across our civilian infrastructure.
What would you consider – taking everything that you’ve said: AI, taking a look at chips, taking a look at the resiliency that the United States needs to build into ourselves – what would you propose as a cyber-doctrine to counter CRINK?
Igor Khrestin:
So, this is an excellent question where these states are increasing their coordination through these groups and working to really threaten some of our own agencies, and our own infrastructure, water, and energy facilities. But the easiest answer to that is that, if you recall, President Reagan actually used the Russian protocol: “trust but verify.” Well, in cyber, it really should be “never trust, always verify.” Something called zero-trust architecture. And that is something that’s a model that really should be deployed across all of our critical infrastructure.
We have an agency called CISA – Cyber Security and Infrastructure Security Agency – that really needs to be given more authorities to work with private-sector partners to mandate this and be given, again, an ability to work with like-minded partners and allies – I’ll mention here the Five Eyes, which are our intelligence security partners to develop joint solutions to this.
And so, this is increased threat sharing. This is also developing an integration of allied cyber operation responses. And I’ll say one more is, again, a sanction strategy. Right now, what we’ve done with these mostly is we have identified these threats. And we’re very good at this. We can tell down to the Chinese intelligence agent sitting in somewhere in an obscure building in Beijing, or a Russian agent in St. Petersburg and we’ve indicted them. We have the Department of Justice. That’s really not going to be enough.
We try to send this message, and we do other things on “the high side,” so to speak, but we really need to have more public awareness of this, and we need to have a sanction strategy. And, again, go back to secondary sanctions: “Are there institutions that are helping these? Can we connect? Can we inflict more damage to these entities that are trying to harm us,” because the harm is real and the harm could be incredibly disruptive.
Elizabeth Kennedy Trudeau:
Yeah. Igor, thanks for this. I always learn things when I sit down with you. It’s a pleasure talking..
Igor Khrestin:
Thank you very much.
