Accidental Conflict: America, China, and the Clash of False Narratives

you've just written this really interesting book accidental conflict America China and The Clash of false narratives and before we dive into this why don't you just tell us uh who are you and and where did you come into the China equation and how since you did enter into this a whole question how what's your Glide pattern who am I that's a great question whoops that could be me we both are challenged here with her this is who I am you know it goes back I think to the Glorious Days of Morgan Stanley uh where I spent 30 years um largely is their Chief economist but halfway through my career I decided to take on a global role and lo and behold we stumbled into this Asian financial crisis in in the late 90s and I had a terrific team of economists working for me but they were Clueless on what this crisis meant for Asia let alone the world uh I had a hunch and I I have operated on the basis of a lot of hunches over the years the China a place I had been to a few times in the late 90s but not a lot would hold the key to the end game of that crisis so I started going there New York based at the time and uh in late 97 early 98 I was going once every other month I quickly got hooked on the place started writing about it I had a Chinese Economist working for me who was extremely helpful in translating ushering me around but I uh wrote a piece I think in um I want to say it was in the spring of 98 published in the financial times basically arguing that the Asian China would in fact come out of the Asian financial crisis as the new leader of the pan-Asian economy and the former leader in Japan would be dead money for the foreseeable future my new friends in China were embarrassed by it my old friends in Japan didn't speak to me for about 10 years and did they think you were too optimistic about Japan uh China China was sort of a a reluctant uh uh I think we're reluctant to accept that their role as being um you know a new source new source of strength both in Asia and globally in the in the late 90s they quickly got over that reluctance that was keep your head down and buy your time time hiding by it yeah um you know is is sort of these things happen a copy of that article got in the hands of the then finance minister of China Xiang waichang and he made was coming to the U.S on a official trip and on the way back was stopping at Boeing or he was about to become the representative of Boeing's largest foreign purchaser of aircraft and want to know if I'd or his team want to know if I wanted to fly fly to Seattle and meet him I did we hit it off and the rest as they say in Hollywood is history he opened a lot of doors for me to the senior leadership I got invited to a number of um pretty high level meetings and conferences in China and I establish a reputation as the Wall Street Outsider who understood China and did you feel you really understood it no I didn't I really did but I traveled around I had great curiosity I met a lot of people I I did you know have the opportunity of meeting you know a number of the I would say second generation reformers both academics and policy makers uh and I was brought into the uh Inner Circle to to some extent uh the guy who really made it for me was uh the former premier jurongji who set up uh in the year 2000 a small gathering called the China development forum uh which was designed to expose the Ministers of the state Council right after the national people's Congress uh to pretty intense debate in scrutiny with uh International academics and Outsiders and I didn't go to the first meeting but I went to the second meeting I've been every year since then it's been on hold for three years because of covet and I am going back again uh next month for I think the you know the 22nd year in a row that meeting like the second or third time I went there I got involved in a big debate with somebody over the state of the global economy and uh was very interested in the debate and uh in in our sort of final session with the premier he asked us to replay the debate and we did and and he he became a big supporter of mine as a result of that so you know it's just it's just a series of events like that you just in the right place at the right time with some instincts and hunches and uh it it it it the experience has changed my life that's for sure but those were kind of Glory Days weren't that when I mean was getting into the World Trade Organization Bill Clinton was getting the most favored nation status so I mean it seems to me back in the late 90s even maybe the early 2000s uh a certain sense of optimism that things were headed in a direction that was favorable for all parties was justified now describe what happened in in terms of how you began to look at China since that time well I I did become a student of a lot of what was written about what we now refer to perhaps fondly some of us is the dunk shopping model yeah which was a is if we saw it from the West uh a model that was taking China uh admittedly a blended economy toward increasingly market-based characteristics and the turning point for me and that part of first part of my journey was in March of 2007. after the conclusion of the national people's Congress the then Premier wenjaibao gave actually was running the economy unlike the present prime minister well the subsequent prime ministers have been pretty well uh neutered but um he was he was in charge of the economy and he made this really rather shocking statement at his press conference in March of 2007 that China looks strong on the surface but but beneath the surface it is unstable unbalanced uh uncoordinated and ultimately unsustainable did you agree with that and I did and it really I think the the important thing about that statement was it sparked a huge internal debate as to how to modify the dung Xiaoping model and the solution that came out of that is you know past performance is no guarantee of where we're headed in the future we got to do something big and the big thing they decide to do was to shift the economic growth framework away from exports and investment increasingly toward one driven by internal private consumption and that energized me I just said look you know this is a flexible system they understand what's missing and they're moving to put in place a new approach and I doubled down on my optimism and stayed that way for a long time and then what and um these last few years have been rough I hate to personalize it but since the uh the leadership of Xi Jinping in November of 2012 the pendulum is swung the other way so whether it was uh the consumer-led rebalancing which didn't get quite the traction under one jabao and hujin Tao as it should have uh the pendulum was swinging the other way stayed on Enterprise reform which is always an important missing piece of the Chinese growth equation I think stalled out and the new approach what I thought was really problematic it was sort of what they call a mixed ownership soe reform that was more japanese-like than Market oriented where soe started buying shares in one another which as we saw in the Japanese carretzels was a recipe for disaster and the meanwhile you had these huge private companies growing up alongside and competing uh I think that's you know that was that was part of the problem the soes not only were stalling out in terms of the reform but their returns and productivity uh were lagging that of the private sector and by doubling down and Shifting the pendulum of power back to the low productivity uh soe sector uh Xi Jinping I think created some very very serious headwinds for the economy so as this was all happening what's going on inside your head I mean what are you thinking in terms I was aged by stage I'm thinking you know at first having read about his his father's role uh first being persecuted in the in the cultural revolution then being um what's the word I'm looking for um rejuvenated nuts not Rehabilitation rehabilitated yeah that's a very specific rehabilitated yeah um Rejuvenation comes in later oh forgiven yeah but rehabilitated and then playing a key role in driving reforms in Guangdong Province I I figured the the sun was cut from the same cloth and I was pretty optimistic that Xi Jinping would would pick up the mantle of the reforms that had not been implemented under uh huge in town and for a year or so it looked encouraging and my friends inside of China which I now had a lot of um smart Dynamic a lot younger than me so yeah this is this is going to happen you just wait when you see the reforms that are going to be enacted under the so-called third plenum of late 2013 and sure enough you know uh uh the party under she uh proposed these um uh sort of very comprehensive set of reforms and I continue to be encouraged that this was going to be the catalytic spark to completing the emergence of a powerful Dynamic more balanced sustainable uh machine and then slowly but surely the the juice ebbed out of that impetus refer reforms an anti-corruption campaign became a campaign focused on political power consolidation and you know by 2017 uh we started seeing the uh the movement uh back toward a much deeper Marxist ideological commitment that conveniently became known as Xi Jinping thought initially uh I would have to say I was into not denial over the significance of that as were a lot of my uh Chinese friends inside of China saying you know it's just party speak don't take it seriously and in retrospect we should have taken it more seriously and now it's it really has a a strong grip on what had been a dynamic economy in in many respects a more Dynamic society and then a couple of other things happened along the way just to sort of complete my own conversion uh the demographic problems which we all knew were coming because of the one child policy have come much sooner than expected consistent with China that always does things more quickly than we're accustomed to in the west but the working age population has been uh declining since 2015 and so the economism he says we understand what that means when your working age population declines and you want to keep growing the only option you have as a policy maker is to boost the productivity of the declining Workforce makes a lot of sense and yet the productivity was going the other way because of the uh you know the shift in Focus back to low productivity soe reforms or allow immigration which China has never been there and they don't they don't like Japanese they they don't they're not big fans of bringing in foreign labor and then I guess the the final issue fell for me um in the summer of 2021 when they Unleashed these uh really uh Draconian restraints on the internet platform companies and the activities that drive uh this new digital Dynamic economy in areas like um you know in music and gaming and video streaming and they crushed the private tutoring sector uh and um you know suddenly the animal spirits that create so much incentive uh in this country and in countries like China uh were were being crushed why do you think Xi Jinping uh I mean where do you think that impulse came for him and what made him think this was something that needed to be affected to the greater glory of China well you know there's I mean there's there's a the clever answer is um one person did it Jack Ma uh and you know was it a coincidence that You Know Jack ma who always was uh very uh bold and sometimes um a little bit too forthcoming in speaking his mind but also I would say knowing Getting to Know Jack a little bit over the years courageous in in holding to a lot of strong views about uh society and the role of business in society but not being a bomb thrower he wasn't a a an active anti-party agent not at all uh he built you know the most powerful internet platform company uh uh in the history of China and some might say even in the history of the world bigger in some respects than our own uh you know uh e-commerce Giants uh in in the United States but he gave a speech um uh in front of a a conference that who in the audience sat a number of very senior Chinese Regulators who were appalled by what he said about uh the Integrity of the or lack of Integrity in the in the Chinese Financial system I think he called it a pawn shop if I recollect correction I think he did and um you know the same thing has been said about other Financial systems including the one where I'm very grateful for having spent 30 years in my career um but you know was was it a coincidence that literally within days of that that the uh the public offering of his fintech subsidiary of Alibaba and financial was pulled back canceled and then began you know a series of uh examinations and um rectification of one company after another so how do you how do you analyze now looking back on it I mean he was sort of the first high visibility entrepreneur with a so-called private company that came a Cropper but when you look back on it what do you think was going on I think these these private companies uh especially the internet platform companies uh personified a threat to the centralized ideological control that had become uh XI jinping's image uh his his goal in China the ideology did not allow for this sort of cowboy entrepreneurialism and the culture uh that these internet companies was fostering amongst young people in China I think he viewed this as a threat to his control to the party's control of of the system yeah I mean Jack ma was almost like a head of state wasn't he going around the world talking with heads of state heads of companies and um so do you think that the incipient power that these private companies which were very large and successful was what um spooked the party and thought it was time to yank their chain thank you I think that's too simple but I think I think that's you know there's there's some truth to that I really do I think they they had pushed uh too hard against the increasingly strident ideological control of the system that that she espoused and then they they sort of claim that in retrospect Well we'd been planning to do this all along and you know we we it looks like we're responding to one situation the ant uh Financial IPO but actually these are plans that had been underway for some time I I find that hard to believe yeah uh you know we could go on I think for the rest of the session talking about the uh evolution of the Chinese economy and where it's headed and maybe we'll come back to it but in your book sort of the heart of your book is the supposition that each member of this sino-us relationship has gotten the narrative about the other somehow wrong which Bridges the ability for us to establish any modicum of trust and thus do anything more than end up in a Vortex downward which we we clearly are at this point now one of the things I wanted to ask you is to describe sort of briefly what you think the two narratives are and also I I I I'd like you to get you talking a little about um I mean trust is the heart of diplomacy in the heart of being able to do things with someone else but I want you to kind of give us your assessment of how trustworthy you think the Chinese Communist party is as a diplomatic partner and then you're going to ask me and all because you know I'm a relationship guy so I always have to look at the other side the coin yes I know and the follow-up questions you're going to ask me how trustworthy is today's Republican party uh or even the Democrat I mean how trusty with these our system is a fair question uh but okay sketch this out so so people understand let me do one thing first why did I focus on false narratives I mean what is it about Nations whether they're the United States or China that the the false narrative becomes such an important part in framing our perceptions of of other nations and the simple answer is that the false narrative is an outgrowth of Nations that are surprisingly vulnerable themselves and don't want to face up to that and they'd rather blame somebody else for that vulnerability than take on the heavy lifting of um of addressing that vulnerability so two examples one the U.S and this is where I started writing the book was about America's false narratives of of China the US blames China for its trade deficit if it wasn't for China we wouldn't have a trade deficit uh ironically of course we said the same thing 30 years ago about Japan also the largest piece of our gigantic trade deficit uh in in the 1980s but the way I as an economist look at trade deficits is that they don't occur in a vacuum they occur because Nations don't save and when they don't save and they want to grow they import Surplus savings from abroad run these big balance of payments trade deficits and multilateral trade deficits with many many countries last year the U.S ran trade deficits with 106 countries China was the largest but by higher math Orville that leaves 105 other countries so um she must agree so you know the the false narrative is to blame China for a trade deficit that we ourselves are responsible for because we don't save and the major source of our dissaving is these massive budget deficits which are still a growing problem in the United States but I decided you know that if that's all I was going to write about um you know the the the the book would not be credible and I had to look carefully at uh many of uh China's false narratives in the U.S and the one I'll just give an example of is one of my favorites and we've already talked about some of it is um the fact that China has not completed the structural rebalancing of its economy and they blame America's policies of containment for that failed structural rebalancing America certainly does have I think now a you know we've come pretty clean in our desire to contain China but China's failed rebalancing has nothing to do with that it is sort of an own goal because they have not completed many of their forms that would stimulate consumption like building a robust well-funded social safety net for retirement and health care uh those those Chinese false narrative is to blame their adversary for um their their own shortcomings in uh dealing with many of their structural issues so two vulnerable Nations actually have something in common and that is blaming each other for their vulnerabilities and it goes on and on I mean I take these false narratives into the realm of uh technology and censorship on the part of China information distortion on the part of the United States and you know and then I just let the the facts fall in the last five years we've gone from a trade War to a tech War to now a new Cold War you know hello balloon uh and um this high octane fuel of conflict escalation is very disturbing to me and yet Steve I have to say um you know if we look back to where you came into this and I'm certainly a child of of this period of Engagement there were nine U.S presidential administrations from Nixon on down every single one of them bent over backwards to try to make engagement work and you will remember just as one example of what happened after 1989 which is a terrible disaster uh Bush sent Brent schoolcroft secretly to Beijing very a day or two afterwards didn't even tell the American ambassador he was there he met with done shopping and I recently got the transcript of this meeting what was so extraordinary was it wasn't dung Xiaoping begging skullcroft not to lower the boom on China it was done shopping blaming the United States for causing the demonstrations and skull cost saying please please please President Bush is your friend don't cut things off let's keep things going so I mentioned that only to say that we did have this long interregnum I wish I'd had that transcription yeah yeah you can you can second edition boys yeah um so how do you how did we get from this period where the Americans I think were quite maybe they were looking through rose-tinted glasses but we really thought we could get along we wanted to get along we were trying to get along and then yet here we are you writing this book about all these false narratives and US heading into into potential hostility yeah you know look I again I think a lot of the blame it has to come from a long hard look in the mirror on on our side as well there is this view that has been formed about the WTO accession of late 2001. and you know Clinton was certainly in a Bill Clinton was an important part of The Narrative of bring China into our Western rules-based system uh and they will be more like us yes because we lost the Soviet Union as a common enemy and we needed to record our engagement policy with something new and that something new was let's just trade it and hug it out and have cultural exchanges and we'll slowly converge right but that didn't work out yeah I don't know about you I mean I have read the WTO accession protocols that that China signed and there was no promise in there that you know we're going to be like you no uh there were some Provisions in terms of uh reciprocity of government subsidies that pertain to State and Enterprises that you know you could maybe squeeze that type of conclusion out of in terms of operating in in terms of a comparable market-based system but not the the thing that we missed is the fact that China was always its own system but with its own values and we didn't get that because we saw China through the lens that we see ourselves I think you're right but is was there not some time here I'd be very curious because I think I certainly believed that during this period of Engagement particularly before hujin town and Xi Jinping started changing things that um they weren't going to become like us but we were becoming more soluble together and I thought this was a kind of a a high point of American diplomacy to try to bend the metal not break it yeah and how did we end up where we are now then yeah that's a tough question uh Orville I it's hard to really put your finger on one thing I was pretty enthusiastic during that period for the reasons I've already described you and that is I think a lot of people were a system that was Reinventing itself you know because of when Jai Bao's uh sort of paradox that he raised that needed to be addressed and that China was responding to that in a way you think the Kool-Aid a little too yeah yeah I I certainly would uh concede that um but I think you know as the you know during this this last 10 years when uh The Angst of the American middle class really Rose to the surface and and became the main event uh in our national political debates certainly uh very much so with the election of our 45th president Donald Trump there there was no turning back uh in terms of the animosity that has been directed toward China and I'm not going to sit here and blame uh the conflict on Trump because this has been building uh for years before that but his rhetoric uh and the actions that he took uh and I have a whole chapter on that where I examine the so-called section 301 allegations that were written up by his trade representative Robert lighthizer um in March of 2018 that were the became the foundational evidence of the uh the tariffs that were launched that personifies the the case that then became accepted wisdom in in America that it's the unfair trading practices uh the Espionage uh the the force technology transfer uh the unfair uh treatments with respect to uh subsidies of statement Enterprises Chinese uh industrial policy it it it took on a life of its own yeah and it's hard to put that Genie back in the bottle now but once was it not in some regards uh I mean Trump is a kind of a curious storm system all of his own but the overall General downward decline in relationship I wonder if you apportion this is difficult to do blame on both sides what kind of an equation do you come out with I mean that that who sort of pulled the trigger who's who really started it and then threw fuel on the fire you've cited Trump and I went to China with Trump and watched the whole thing him and Xi Jinping together that was like a experience out of some strange dream but uh uh we were at that dinner in the Forbidden City yeah I I didn't go to that dinner because they didn't let lowly uh lowly people like me into the dinner but you know it it was really we did go to the dinner Mar-A-Lago I saw a picture of course a zelig-like but when you look back at I mean Trump is somehow special but at the at the overall evolution what do you think really triggered this thing and and through most of the fuel on the fire to get us into the train wreck we're in now because it seems like I don't want to I don't want you to think well you probably will but I I it'll sound like I'm ducking the answer no but let me let me give you my take on that yeah uh in this country we say America has a China problem uh in China the view is that China has an America problem this book starts out the first part of the book is about what I call the relationship problem that we both have problems with each other and you know I I sort of make this audacious leap into relying on uh the pathology of Human Relationships and framing National relationships where most of us know full well that um when there are problems in a relationship it's 99 times out of 100 the fault of both not one and so I really believe that you know in in terms of assessing blame uh I I blame both Nations uh probably equally uh for what is now a dysfunctional relationship with zero trust between them and you know one of the chapters of the book really surprised me as I wrote it it was called from Trump to Biden the the plot thickens you know talk about naivete I truly believed that when Biden won that he was going to change try to put some of the genie back in the bottle I mean on day one of his presidency January 20th 2021 I think he signed 14 executive orders that reversed some of the most outrageous things that Trump had done he stopped the construction on the border wall of Mexico he ended the Muslim travel ban he rejoined the Paris agreement on climate change rejoined the World Health Organization he had the perfect opportunity to say we're taking these tariffs back to where they were before the trade war and we're going to sit down and negotiate with China a tough agenda but we're not going to negotiate on the basis of costly tariffs that are taking a toll on American businesses and consumers he didn't do that and when he didn't do that the window slammed shut the politics the thin margin of support that Joe Biden had and still has in the U.S Congress and does not allow him to reverse course on an issue that resonates so deeply in the middle class they didn't really complete the point I was trying to make earlier and I think this middle class angst allow does not allow American politicians the opportunity to constructively engage in in China right now and I think if there's one person who actually is uh could engage in a way that would thaw out Xi Jinping it is Joe Biden so what you're suggesting is that internal politics here as internal politics in China makes it too costly for him to do that would you like to see him just call up Xi Jinping and say listen we are in a terrible impasse here I fear what's going to happen lets you on I get together and Slug it out and see if we can't find some off-ramps would you be in favor of something like that I would I think it'd be a great idea do you think do you think it's impossible for him to do it I think right now the odds of him doing it are a number pretty close to zero yeah but isn't this what great leaders do leadership ultimately successful leadership uh is a true Act of Courage so you've got to do something that is unpopular goes against the grain prepared to take uh your political heat and recognize that you know in the case of an American president uh you're Midway through a four-year term it's obviously already focused on you know his decision with respect to 2024 but uh you know he took he took a lot of risk this week and going to Kiev or mostly physical I think he knows how to in other words he knows how to pick his spots and take a risk China is not one a spot that he seems prepared to pick right now but I think ultimately as the conflict deepens there will be a leadership decision point that a U.S president will have to face and we'll have to make some tough choices that will not be politically popular uh in his own or her own constituency in the United States I mean remember Trump went to see Kim Jong-un hardly a popular decision he didn't not much came out of it and Trump is not a very Adept uh I think Diplomat but uh you you do have to in a certain sense say that he stepped out of line to try to do something well isn't a better example Nixon goes to China yes I mean you know who would have ever thought I grew up you know in in California and certainly remember uh you know his background as somebody who is stridently anti-communist in in the early 1950s yeah Rose to power that way and uh and that was an important part of his ascendancy and then the guy goes to China yeah and changed everything and that's what he's remembered for yes not all of the other things he did which are less edifying I think well I think you know he a very complex man with a a complex Legacy but that that was a decisive and critical and strategically um determined moment for the United States now before we get to questions from you all let me ask you a final question because it's so Central to your book and that is the notion of trust that when trust vanishes uh it's very hard for countries to come to terms with with issues particularly such as War do you think it is possible as you've experienced China and and as you come to know at least From A Distant Xi Jinping in the Chinese Communist party do you think they are trustworthy in a in a way that that an American leader could could find some receptor site to actually do something if they were bold enough and and creative enough I I end the book with with three chapters on an agenda for sort of the relationship solution to the conflict that I describe in in the preceding chapters of the book and I don't pretend this is the well they're very good idea final answer but I I start out with moving from distrusted trust and I recognize that we can't do anything until we re-establish trust to your point so I lay out an agenda low hanging fruit fruit sort of Midway in the tree and then you know really the the big reaches and I started out with a low hanging fruit that can be picked easily reopen closed consulates uh in uh two countries um relax um stringent visa requirements uh restart popular and very successful foreign exchange programs somewhat higher in the tree relaxed constraints on non-governmental organizations ngos that have been tightened up dramatically in so let's say we had a leader that read your book and said yes I like this I see a road map here I'm going to try it how do you think China would respond I think if if we reopened um uh the Chinese Consulate that has been closed in Houston they would reciprocate there's a chance they would reciprocate and reopen the Consulate in Chengdu and what's you know what what what's the cost if they don't do it we open we reopen a consulate in Houston big deal yeah uh or uh on visas um I'm actually right now uh trying to get my 10-year Visa reinstated which has been suspended during covet I I think I've got it done but I don't want to tell you that handstands and cartwheels I'm going through to get that done it it shouldn't shouldn't you know if the Chinese were to make it really easy that would we would do the same thing there's a good chance we did the same thing so you actually think that given the system that we now have become familiar with in China and given our own political system the leadership was there that we could actually break through some of these these boundaries and and little things are important and I think um the small steps when you put them together become big steps I mean the other two pieces of my plan one is to re-establish um or restart negotiations on a bilateral investment treaty to open markets to each other which is pro-growth as opposed to doing things like uh focusing on bilateral trade deficits which for reasons I tried to explain earlier won't work but the third piece is one that actually I'm proudest of that has the least likelihood of being endorsed in the U.S and that's establishing a full-time organization that I call a U.S China Secretariat that brings together professionals from both countries operating uh on a full-time 24 7 basis in dealing with all aspects of the relationship from Trading economics uh to um uh innovation technology State and Enterprise subsidies even these big issues like climate Health cyber and even human rights that comes with a dispute resolution mechanism the ability to convene experts to troubleshoot difficult problems like covid by working together and in a collaborative spirit uh again we take small steps in rebuilding Trust there's a lot great potential to collaborate at the professional high level uh in in both Nations I've built over the 25 years I've been engaged in China extraordinary relationships with the Chinese I know you have too and you know that that collaborative work can percolate up yes I mean it's a it's a long process to to sort of restore the musculature between the two countries that could actually deal with some of these problems uh I I just uh and here I may may disagree a little with you that's why I've been pressing you on it to what degree you think China might respond in an open and reciprocal manner to some of these questions these suggestions that you have because it seems very often they don't we can't even get a hotline a mill-to-mill dialogue that was that was the problem with the balloon yeah yeah and they don't pick up the phone you know and what are you gonna do we hurt their feelings I mean look I I don't know Orville I I mean I'm sorry I'm very big on safe spaces Steve yeah I have to say I get that but look um I've had the opportunity to present this uh sort of um a plan of con conflict resolution on sort of both sides of the Pacific I have not yet um been able to do that inside of China as I said I'm going there next month and I'm going to do it well godspeed but I was in Hong Kong last month which as you know is now a large Chinese City and I was uh pleasantly surprised by the response that I got when I presented my three-point plan to a number of different audiences in Hong Kong well God knows we need some solution here because we are in a Vortex it seems to by taking it on the other hand I have made the presentation to comparable groups in the U.S and the collective response is you got to be kidding me no way but what if Xi Jinping proposed something said to Biden listen call them and said listen we got to do something we can't just let this thing slide down the Mountainside and said let's start with this this and this what do you think the response would be I I don't know I you know I I'd have to I mean there's a part of me that wants to say you know Joe come on you know he's he's giving you an olive branch you know you're a practical guy uh think about it and then there's the sort of the political baggage that the presidency is always encumbered with when he starts uh troubleshooting this proposal amongst his staff and and they always you know raise other questions about collateral issues that say well if we give on this what about that and well this is of course where leadership has to override ambiguity it isn't it and and get something done otherwise you'll just never go anywhere um well listen I mean we you and I could talk for a long time but we have a whole audience out here uh pardon yeah let's take a few questions I cannot see uh you all but pass the microphone and just quickly identify yourself and and quickly ask a question and we'll get Steve to respond can Ken Wasserman I'm an attorney can you offer some of your thoughts on how to balance the lower productivity of soes with the lower inequality that they help to bring to the Chinese people well they they do have this campaign called common Prosperity which is addressed uh to uh deal with the inequality of China it goes back uh to uh dung Xiaoping in the late 80s when he also spoke of um well in you know encouraging development don't forget those who have been left behind um I think is the English translation was it's okay to get rich and the second sentence was rarely translated in dealing with those um who've been left behind Xi Jinping is this is important to his overall uh egalitarian instincts is a socialist leader um and yet you know it it The Proposal occurred at the same time uh when he clamped down right from a regulatory point of view on the dynamic internet platform company so that was a one-two blow for the wealth creation um uh uh Ambitions that underpinned a powerful Drive of animal spirits in China um so you know I I don't know how far he's going to go and how successful he's going to be in dealing with inequality in this campaign it's a noble objective you know we have horrific inequality problems in this country and I I've tried to allude to the fact that that's played an important role uh in bringing China into focus is a lightning rod and dealing with some of the problems that have Arisen at the lower end of our income distribution as well I don't think this is going to be enough to offset and answer your question the productivity headwinds from ossified inefficient state-owned Enterprises okay next question okay one of these speak hello yes go I work through I need to mention I was a journal leader for many years Steve thank you for your talk and thank you for your realism and your optimism I'm the president of Taiwan obviously complex for many reasons as an economist who understands politics how do you see the role of semi semiconductor production uh tempering or exacerbating the situation around Taiwan I think it lurks in the background of any serious discussion of China's intentions in uh Taiwan China obviously is lagging um in having a domestic capability in chips that is comparable to that of Taiwan some think that is a strong enough motive in and of itself to accelerate reunification I don't buy that contrary to The View in the United States uh I I do not subscribe to the notion that there's been a dramatic acceleration of the timetable that Xi Jinping or China has with respect to reunification I know he's made some or some statements have been attributed to him that might suggest to the contrary but I know full well or I I feel strongly I should say that um uh that there's a real wariness of of promoting a an outright military uh invasion of the island and the cost that that would take with respect to not just uh military losses in China but to China's place in the the the broader world I worry though that you know about Taiwan that we're up in the Annie from our side and we may Force his hand and so the conflict that maybe he doesn't want he gets pressured into uh making a an ill-advised move but you know we've had one speaker go to Taiwan we have another speaker about ready to go the the new house select committee on China bashing their chairman just wrote an article in the Wall Street Journal today about his commitment to a strong and independent to Taiwan we've had a a senior Pentagon official in Taipei recently the U.S Congress just passed a 10 billion dollar Taiwan arms bill I mean we're up in the Annie Big Time on uh you know our views that uh Taiwan personifies this struggle of autocracy versus democracy and we're not I think fully taking on board the reaper potential repercussions of of forcing uh this issue when I worry about that a lot my name is Wilson from convergence consultancy number one if you can't say a few words about the uighurs and human rights that's a big issue and number two can the U.S and China collaborate on fighting the climate crisis even though there's a lot of backlash in the United States against ESG thank you votes on the uyghurs and I mean in your book you cite climate change as one of the three climate is Big I'd prefer to talk about climate than uh xinjiang I'll let you talk about that you know a lot more about it than me that's a third rail yeah that's truly the third rail um not good uh there's a terrific opportunity for us to collaborate on uh on on climate um uh and alternative energy and China has obviously has an enormous environmental challenge of its own one that again I haven't been there in three years but one I have seen visible signs of improvement on in the last decade and you know it's one uh key aspect of the their challenge to improve the quality of economic growth that I think they've made our progress on and and will continue to um to do that and shame on us if we don't uh work with them uh in our common goal of dealing that with that um and I think that that's the one area of these big issues where there's been a little bit of progress in the discussions that John Kerry has led from our side but a good deal more needs to be done and I agree with you and you know the the xinjiang problem it's a you know it's it's a horrible problem and China's unwillingness to really be transparent in addressing that is of deep concern to all of us the best book I've read about it from my point of view is a book that came out I think in September a surveillance State and one of the co-authors Lisa Lynn was a former teaching assistant of mine at Yale so I'm proud of her for doing incredible work on that and uh it it tells a a really uh dystopian story of where technology can be used to suppress a you know a population a segment of the population for whatever the motive is uh with uh horrific consequences [Applause] Marvel thank you you're awesome

Channel: Asia Society

Views: 96,583

Keywords: asia society new york, current affairs, program, china wise book series, accidental conflict: america, china, and the clash of false narratives, u.s.-china relations, stephen roach, orville schell

Id: cPyG69dGy8I

Length: 63min 33sec (3813 seconds)

Published: Thu Feb 23 2023