- Western powers and the Chinese Communist Party (CCP) are entrenched in a cold war as misinformation and propaganda seek to dismantle democracy, argues Retired U.S. General Robert Spalding.
- The last two decades of U.S. policy making have pushed the nation toward autocracy and centralized news outlets, threatening constructive dissent and creating striking parallels with the Chinese government and state-run media.
- In his book, “War Without Rules,” General Spalding describes how the American government — and its citizens — can fight back against the CCP’s growing influence.
In April 2024, President Biden signed a foreign aid legislative package that included a provision to ban TikTok in the United States unless the Chinese-owned app is sold within a year.
Many lawmakers expressed concerns that the Chinese government could compel TikTok’s parent company ByteDance to share private information about American citizens collected through the app or direct the app’s algorithm to share anti-American propaganda.
According to retired Air Force Brigadier General Robert Spalding, this cultural influence is part of a Chinese Communist Party playbook to infiltrate and dismantle Western democratic systems.
“You have to give credit to the Chinese Communist Party, not just strategically but also technologically, for understanding tools [like TikTok] and adapting them for their brand of warfare,” General Spalding says. “Consequently, you have to basically criticize the West for not waking up to this reality.”
In his book, “War Without Rules,” Spalding outlines what he sees as China’s stealth war of information, the evidence of the CCP’s expanding influence in the West and what U.S. policy decisions could be most effective in fighting back.
He’s not just an idealist — Spalding also serves as CEO of SEMPRE, a telecommunications company committed to securing American information in the face of potential foreign threats.
Cem Karsan and I spoke with General Spalding on a recent Global Macro edition of Top Traders Unplugged to understand the tactics and political implications of this information war, including the potential economic impact on large technology companies in the S&P 500. Critically, Spalding identified the ideological battlefronts that will be most important for the Western powers to defend in the coming years.
‘Unrestricted Warfare’
In 1999, two Chinese colonels in the People’s Liberation Army — the collective name for the CCP’s armed forces — published the military strategy book “Unrestricted Warfare.” The book’s primary focus is to explain how China can use political, ideological and economic means to defeat a technologically superior opponent, namely the United States.
At the time, General Spalding was flying B-2 stealth bombers in the Kosovo War. Although he read the book, he discounted it.
“My concept of war was decidedly shaped by the aircraft I [flew],” Spalding recalls. The B-2 could fly completely unobserved to circumvent the Serbian integrated air defense system, and clearly the side with the best technology had the upper end. Indeed, NATO’s targeted airstrikes relatively quickly determined the outcome of the conflict.
“The Kosovo War encapsulates the way the West thinks about warfare,” General Spalding explains. “There’s a political problem. You use the military, and there’s a political outcome that’s favorable to the victor.”
Yet “Unrestricted Warfare” gives a more holistic view of war. Its authors argue that fighting is not just the application of force, and technology is not limited to military aircraft. The CCP’s view of technology as a tool of influence proved ahead of its time. In the late 1990s, the internet was still new to most consumers. Few people in the West had visualized how global connectivity could present an ideological threat to a democratic republic.
War without bloodshed
To quote Chairman Mao, “War is politics with bloodshed. Politics is war without bloodshed.” General Spalding likens the CCP’s tactics following “Unrestricted Warfare” to a new Cold War — and this kind of cultural conflict isn’t settled overnight. Spalding is quick to point out that the geopolitical tension between the U.S. and the Soviet Union lasted nearly five decades after World War II. We may be in a similarly protracted ideological battle right now, and one could argue that China currently has the upper hand.
“The West has not [recognized] a completely different way to conceptualize warfare in the context of a modern, connected global world,” Spalding says. Instead of stealth bombers swooping in on targets in the night, this new conflict unfolds across international trade and social media newsfeeds.
So what are the tactics in this political war? Through both political actions and social movements, the CCP aims to deconstruct the narrative of Western governmental and industrial supremacy. In other words, while America saw a wave of patriotism following World War II, China is now presenting a worldview where a democratic republic seems unattractive to young people. The weapon is propaganda; the conduit is the internet.
“Where military forces were required to deal with borders, the internet and globalization could completely bypass that as a way for implementing sovereignty and then further social, cultural, political and economic norms within any given society,” General Spalding observes.
But here’s where we might pause. Are TikTok and other social platforms — many of which were invented in Silicon Valley — really so insidious? I ask General Spalding about the Western powers’ capabilities to respond to misinformation. In response, he argues Western systems have made things easier for the CCP.
The West shares the blame
With a changing economy, the United States lost an estimated one-third of independent newspapers and two-thirds of newspaper journalists since 2005. Where highly opinionated local news editors used to spark healthy debate around national headlines, it’s now more common for Americans to consume news from one of just a few digital sources.
“Media has become consolidated in a highly corporatized structure where now you’ve got five major corporations that own most of the media, at least for the United States,” Spalding says.
Not only have media outlets consolidated, but also they’re largely funded by national corporate investors with close ties to the American political system. At the same time, a handful of large technology companies on the S&P 500 dominate the market cap and have incredible influence in the daily lives of American citizens.
What’s the concern? As a prime example, the COVID-19 pandemic showcased the negative impacts of this highly consolidated system. The U.S. government largely pursued a single narrative through mainstream media, and many social media platforms took steps to moderate what they perceived as misinformation. Because these technology companies are so powerful and far-reaching, these actions ultimately created the perception among many Americans that certain acts of free speech were restricted.
“If I were an alien coming to the world and looking down on … China and the United States, fundamentally, from a messaging and narrative standpoint, I would say the two systems are similar,” Spalding says. In both systems, a small, centralized group controls the media and the distribution of news.
Those pulled unquestioningly into a single narrative are like “fish following the stream,” with no healthy dissent or independent thought, Spalding warns. Taken to the extreme, this is how a democratic republic fails.
Effectively challenging autocracy
With a wide-angle view of history, the modern Western concept of democracy is quite rare. “Power going to the top has always been the way of the world,” Cem observes. Autocracy, perhaps, is the natural state of human affairs.
To this point, Cem raises the question, “How do we, the West, compete on a level playing field against autocracy [that] has more efficient decision-making in a world of technology, data centralization, automation and the forced mechanization of human capital?”
But General Spalding is quick to push back. “Seventy-five percent of [China’s business] is state-owned enterprise. They’re far less efficient than a private sector company operating in a true free-trade environment.”
Politically, American positioning is hampered by the nation’s economic dependence on Chinese manufacturing — in 2022, the U.S. saw a $367 billion trade deficit with China. Yet this isn’t a function of the CCP running an inherently better economic policy, Spalding argues. America has opportunities to reset the power balance.
Antitrust enforcement
“We have basically stopped using antitrust as a tool to break up the consolidation of economic power,” General Spalding says. Corporate consolidation has reduced the benefits of free-market competition, and one of the most effective ways to decouple from China would be to reinvest in American manufacturing and small business innovation.
Decentralizing information
“Alongside [antitrust], we have to promote the decentralization of media in the United States and in other democracies,” Spalding adds. When there are only a few mainstream media outlets, and they’re financially tied to corporate interests, it’s detrimental to free speech and free thought.
Digital sovereignty
Additionally, Spalding emphasizes the importance of digital sovereignty — someone’s ability to control their own data. Protecting digital privacy can both reduce concerns about foreign states accessing American consumer data and offer checks and balances to the American government’s ability to collect information on its citizens without their consent. “Encryption should be a human right,” Spalding says.
The new cold war
In the Cold War of the 20th century, the use of nuclear weapons was a red line that neither side was willing to cross — famously tested in the Cuban Missile Crisis of 1962. If the United States and China are in a new cold war, what are the modern red lines that could escalate the conflict?
General Spalding suggests that the Western powers draw a clear line against Chinese military intervention in Taiwan. “It requires the same kind of conviction in the West that existed during the first Cold War, and that’s the piece that I don’t know exists [right now],” he says.
At home, Spalding draws attention to vulnerabilities in the national defense, particularly through the privatization of the U.S. power grid and digital infrastructure. “There’s no requirement for those private organizations to build that [infrastructure] to be resilient and secure,” he says, noting the potentially devastating consequences of an electromagnetic pulse (EMP) or cyberattack.
For example, Spalding discusses energy and security efficiencies that American companies could bring into the expansion of cellular networks. As CEO of SEMPRE, he’s putting these plans into practice to build reliable data access without the risk of complete infrastructure failure.
Defenses also need to happen digitally. “In our Constitution, we said we're going to have an army and a navy. Something similar needs to occur in the digital space to protect our population from being propagandized,” Spalding adds. The congressional ban on TikTok is a step in this direction of seeing the internet and social media in particular as a battlefront for the preservation of Western democracy. “Everything we know about war is that it progresses,” General Spalding says. Now is the time for the U.S. and other Western powers to set their own rules of engagement in the war of information.
This is based on an episode of Top Traders Unplugged, a bi-weekly podcast with the most interesting and experienced investors, economists, traders and thought leaders in the world. Sign up to our Newsletter or Subscribe on your preferred podcast platform so that you don’t miss out on future episodes.