Benjamin Shobert: Blaming China

you we're thrilled today to have somebody from the West Coast in fact it's except for Alaska and Hawaii it's tough to get further away from New York and then Seattle but he's written a book which kind of we think about all the time it's called blaming China it might feel good but it won't fix America's economy but it kind of it's a theme of so many of the things we talk about in our programs here which is where's the data where's the where the facts that can lead to these conclusions and what this book really does is it explains why it is that Americans have chosen or our political leaders have chosen kind of to blame China for what's going on in the United States rather than trying to institute more difficult policies to fix what's wrong at home and it's a book it lays it out in really I mean it's a it's a fun read some of the books we get are tough to slog through this is not tough to slog through it's a it's a fun read it kind of talks about a lot of the things that that we think about but it's wonderful to have you here you have Ben's bio so I'm not gonna waste time to recite it but it's a great read it's great to have you here and we look forward to the discussion because one thing this book certainly is is thought-provoking you read it each page you go oh gosh what should we really be doing what does this really mean but thank you welcome to New York well thank you for the invitation Steve and for the opportunity to speak at the National Committee it was Steve was walking me around the offices showing me these pictures of people of significant historical import in the context of the us-china relationship and that's particularly humbling and it's a moment where the type of education and the conversation that's happening at the national committee in the context of the us-china relationship is is literally more important than ever I also want to make sure I say thank you to Margaux and to mark börje who I believe used to work here and actually made my introduction yes and so I have to make a point of saying thank you to mark who's now a vice-president and I has niacin Seattle this book is admittedly not always a happy read it was written in the immediate aftermath of the two wars in Iraq and Afghanistan the 2008 financial crisis and what I characterized in the book as a reaction to President Obama who for all of his flaws and for all of the policy disagreements that I think reasonable people can have with him was simply not the leader that many people are characterizing him to be and at the end of 2012 when I finished the first draft of this book what I was struggling with was why the United States was so economically anxious why the political dysfunction had become such a pervasive part of the American consciousness this awareness that at a very practical level the US political economy just didn't work for the American middle class for the American blue-collar worker and as I wrestled with that it just became very obvious to me that something was very badly broken in American life and as you start to unpack that thought that something is just wrong in American life you very quickly develop the idea the hypothesis that one of two things can happen the United States can either get very serious about hard issues that go to the quick of our ability to politically reform a system that is ossified that's no longer focused on the right questions or we can look for an external actor to blame and so the question became very simple which did I think was more likely was it more likely that the American Congress or that a presidential candidate that at the end of 2012 was just an idea just figurehead it certainly wasn't President Trump himself was it more likely that the American political system as represented in Washington DC would continue to be dysfunctional continue to struggle with making very hard choices or would we pivot and actually begin to think very seriously about China or some other outside actor as the underlying root cause of our problems once I had that basic hypothesis firmly in mind the question was in what ways could those insecurities be uniquely perverted and projected onto China was China actually the best actor that could take on that emotional burden would they actually be the best country through which American anxieties could be projected blaming China at its core argues that while there are many problems in the us-china relationship there are many reasons not to blindly or blithely trust China at its at our core right now the single most important thing that the United States needs to get right has nothing to do with the us-china relationship it has entirely to do with the political choices that affect our economy our political system things entirely within our control in Washington DC now what are those foreign securities now before I get to those foreign securities I want to make sure I'm clear on some ground rules nothing in this book argues that China has it all figured out as a matter of fact my underlying conviction is that in three years we're having a conversation about the Chinese economy where we are able to see that a lot of death has accumulated much more debt has accumulated than a market economy would have ever accommodated and so I don't ever presuppose that the Beijing model has something fundamentally right about it that we've missed there are definitely insights I also never argue that there are not hard and difficult conversations that need to happen both in the commercial and on the political side in China commercially we have to have very hard conversations about IP about market access about cybersecurity on the political side there are very real disconnects between how America at its core as a post-enlightenment country that believes that free markets ultimately lead to free people that believes in religious freedom that believes in political dissent these are not trivial disconnects and it does neither country any service to pretend that these are not significant structural barriers to us working together in the future I also believe that if America were to embrace these hard political conversations there's no reason that we cannot have another era of PAC's Americana that we ultimately cannot have another 50 years of peace prosperity and stability but that to do that we have to have some very hard conversations about how we're doing business politically right now so what are those four insecurities the first and probably the most obvious is economic again in the immediate aftermath of the 2008 financial crisis it was common wisdom that the American economy didn't work for people and we now see in the current administration a political moment that owes much of its gravitas to an ability to connect to a deep emotional truth in the part of the world in the part of the country where I grew up in rural Indiana where people feel anxious about their futures in the book I talk about how this economic insecurity in some ways was inevitable at some levels in the period after World War two the US economy accounted for over 50% of all manufacturing globally why every one of our economic near-peer competitors had been leveled Singapore Japan Korea Germany China their industrial infrastructure was almost gone and so when we hear people talk about making America great again at some level they're going back to a moment in time that was absolutely a historical anomaly if we wanted to have the middle American middle class B similarly confident in their futures we needed to make much more explicit the job of the politicians that we sent to our state capitals and to DC that their single-minded focus needed to be on economic policies that ensured the stability of our working class of our middle class politically there was this profound anxiety and I were talking the book about being with a major GOP donor who on his private jets who would take the different GOP presidential candidates from different campaign events and he would use that time to get to know them and he we were talking about at the time he had taken Huckabee somewhere and we were talking about his particular economic policies and this gentleman not not governor Huckabee but this particular GOP donor was talking about a factory that he was building in China and he was just talking with Glee about how easy it was for him to get what he what he needed to get done he talked about how there was you know some farmland that they needed and how quickly they got that farmland and they tore the houses down and they built that factory and we finished the conversation I asked him I said well what about as a conservative as a disciplined conservative what about your view on those individuals rights things like eminent domain what's your point of view on that he grouse for a second and he said well why they get results and so this economic anxiety translated to a political anxiety where for for all kinds of reasons the Chinese system was perceived for the last 15 years to get results and the American political system which is characterized by dissent which actually views disagreement as a necessary thing that gets to better outcomes at the end of the day wasn't so our elevation of dissent as this great good actually wasn't being perceived as generating better results than a system that was ostensibly more authoritarian where does that leave the American self perception of our pullet what makes us politically unique where does that leave us third insecurity that Americans were walking around with I touched on in the book is art is where I'm going to characterize US foreign policy or to say differently what's our place in the world one of the things Obama got a significant amount of grief for was this idea that he was somehow apologizing to the world and the immediate aftermath of Afghanistan and Iraq his somewhat infamous now speech in Cairo was perceived by many many of his critics as apologizing for America and the underlying disconnect therefore many Middle America again where I grew up in rural Indiana was are we now apologizing are we no longer the world's hegemon and for not the world hegemon then who are we can we still get our own way when we want to or need to and that was that anxiety was expressing itself at a moment in time when China was embarking on his extraordinarily ambitious initiatives the one belt one road initiative as a good example and again unpacking whether that's ultimately going to be effective or not let's set that aside the perception in parts of the United States is that America is that America had lost its way in terms of our place in the world and China was stepping up and filling the gap in the last insecurity which which is I would argue necessary for what I fear could happen to the us-china relationship the last insecurity is America's profound fear over being safe and let me let me unpack that a little bit in the United States our political system is at its best and in perhaps any political system is at its best when it's not dealing with a shapeless and stateless threat specifically the threat of terrorism our political systems are at their best when they can actually orient themselves against a near peer competitor and in the absence of a near peer competitor when a society feels deeply distressed politicians normal tendencies are going to be to try and find a near peer competitor against which those anxieties can be packaged up and projected so it didn't have to be China necessarily but it would have helped if it was someone who has a carrier supercarrier intentions to build one and stealth fighters and things like that it certainly helps package those anxieties and like them all of this in late 2012 early 2013 was perceived by many publishers as a little bit ridiculous but the book has been in many ways unfortunately very predictive of the world that we're living in unfortunately in in at the end of the 2008 financial crisis Steve and I were talking about this before coming in here and the seemed to lab wrote a column in the Financial Times and he was talking about how in the in the months after the financial crisis policy makers who had more or less constructed the world that had imploded were given the keys to the kingdom yet again and in that op-ed he wrote something that has haunted me he said it's as if we have a tragic failure of imagination so right now right now at this moment two years into the current administration an administration that has made use of things like tariffs which for most of the post-world War 2 era were widely accepted as the cause one of the causes of the Great Depression one of the things that made the Great Depression Depression much worse and much longer than it needed to be we are now actually in a moment where the current administration believes that to be an essential policy tool that not only will that somehow create a new equilibrium economically between the United States and China but that we can impose these tariffs without somehow unwinding the complexities of this current moment of globalization my question to us all and the question the book is attempting to wrestle with is are we guilty of a similar tragic failure of imagination right now the bulk of the question that we're asking ourselves relative to the us-china relationship is about economics but economics ultimately lead to politics and as Clausewitz famously said whereas politics by other means and at what point does this stop being purely an economic conversation and begin to be one that is is framed up as a traditional great power rivalry and at what point does that framing inevitably take us back to some of the great power politics that were proven to be so dangerous in the 20th century none of this is inevitable I still believe that if the United States makes hard choices if we embrace some very difficult reforms if we get very serious about the type of industrial policies that are necessary to ensure that this remains the best place in the world to innovate for biotech for high-technology for an IT if we get very serious about that the United States can enjoy another period of peace of prosperity but that can only happen if we challenge our leaders to not blame China for problems entirely of our making let me read you a paragraph from the book which takes this argument to an unfortunate but I think necessary and and in asking the questions in this last paragraph what I'm trying to get to is is the human hubris that many times in the past has characterized similar moments in time where people where leaders were convinced that somehow this time was different that somehow weakest compartmentalize political dysfunction economic and security underlying deep and pervasive anxieties and prevent them from spiraling out of control only to be proven wrong time after time let me read this and then we can open up the question and answers in the aftermath of every war mankind steps back and wonders aloud how we can prevent such atrocities from ever happening again we survey the national cemeteries look at the wounded and the families left behind and demand of ourselves that we never let such a moment happen again and yet it does again and again men throw themselves at one another equally committed to their cause and country equally sure of the justice and righteousness of their actions and every time is the heat of battle fades we wonder aloud how humanity could have been guilty of such a moment of irrationality it here is the deeper truth war is always rational it is always the sensible choice as understood by the people who stand up and offer themselves at the altar of each generations god of war it is rational because their leaders understand two essential things about human nature insecure people need someone to blame and blaming an outside actor is always the preferred choice as opposed to dealing with deeper and more problematic structural issues at home none of this is inevitable and I would assume that most of us in this room are deeply committed to a healthy if not challenging relationship between the two countries the underlying argument in this book though is that what we have to get right about the us-china relationship has much more to do with choices entirely within our control then should then choices that will be made in Beijing let me stop there and open it up for questions well your last sentence was actually my my question which is the book really talks about how these problems are generated by a US political dysfunctional US political system by the four anxieties that that you talked about given that what can the Chinese government do just sit there and say well we hope the patient gets better but if it doesn't you know there has to be more the Chinese government can do to make this right so let can I can I say that differently what's the deal that president Trump would say yes to that wouldn't make make him turn the temperature down on this relationship right isn't that I mean let's just use the current administration's language I think the book lays out I think the book actually lays out a persuasive argument that even without trouble this happens yes I think the book basically it's not really about Trump it's about America and it's about the choices that America has made so even if Trump didn't exist with these problems exist yes I mean I I the the core of the book is the belief that Trump the personality was inevitable Trump the person was not I mean if I knew that Donald Trump was gonna be president I would be doing something on Wall Street that would not require me be writing books in my part time but but being able to predict a moment in time where it would be emotionally true two significant parts of the American populous that someone like Donald Trump was necessary to hit the Chinese back to hit the multinationals back that was predictable and that is how we got so the question you're asking is Donald Trump does it did it have to be Donald Trump of course not it would have been someone and the great fear that the book alludes to isn't Donald Trump the great fear is someone who actually has what I would characterize as an organized world that brings together hostility towards China with real economic populism with a real willingness to let that bleed into militarism that's that we're not there yet and again me and there's every night you know we'll find out at the midterms there's there's a possibility that this is the wake-up call in in the body politic in the United States that gets people to say okay this is this is not the solution to the problem and I want a different type a different type of politician who asks different questions who forces me to wrestle with different complexities I'm very very much want to see that happen I'm not sure that what's transpiring right now would suggest that that's probable so back to my original question what should the Chinese government be doing is the conclusion by reading this book they get nothing it's all up to the United States I don't think that's the right I don't think they can afford to be perceived by stakeholders and United States as doing nothing I also don't think that the things that the that this administration is asking them to do are likely going to be enough to fundamentally change the conversation that's happening between light hyzer and between his counterparts in Beijing so I don't think that the Chinese actually have enough to offer DC I don't think that there's some sort of sweeping SOE reforms you know some sort of fundamental change to be you know becoming more of a market economy that is within the reach of the Chinese leadership that would actually make this better in the short to medium term you're sitting with top leaders in China what do you tell him what do you tell them to do we need a we need a so let me let me go back prior to prior to the last couple of years I've been spending a lot of time with the CFDA the Chinese FTA working very heavily on trying to show that harmonization of the Chinese FTA system to the global what's called the GXP standards is actually good for their domestic companies it's good for their innovators it actually allows to have a chance of exporting innovation the only thing that I think we can ultimately in a short-term we can get the Chinese to agree to would be some incremental opening of key markets that are high technology in nature where we could show that by doing that it would actually ultimately help them become more competitive beyond that I'm not sure boy that's not pretty depressing yeah I see we already have some hands although in the back I can't see who that is oh yeah what the what guard United States is the one that's being antagonistic there's a winter activity versus release and obviously responding in a question of manner the healthy choice responsible for this conflict at all so I can remember undescended hearing at home in the States to stop the wars but it's when we get back to the perspective of the what's changed what actually the basis of my brush want initially was of course during the Cold War was doing the Vietnam War and that relationship has developed and obviously a lot of China to do to grow as a consequence and of course part of the relationship is that tied it with not to being in any struggles a boy that was part of that one everything right so what's changed which changes that China's development in economies to find an alternative economic development system with the belton road right and that's really what the basis of the conflict is because he had a one hand u.s. foreign policy being very aggressive under the leaf spring which a Zionist project for the most part and then you have the Dalton road which is a I see the peaceful alternative and economic development and this is you can find these two two positions in conflict and if teams made that this terrible war is really more geostrategic than anything else is less about trade trying to stop China's economic growth and I don't know if you have any perspective but what do the houses in the end lead to whether or not it seems successful but I obviously think that the problems here at home the United States so two questions what what is what has changed and what is the administration's goal so so what has changed I mean we're I think everyone in here has enough subject matter expertise to you know know what China looked like in the late 70s and early 80s right so set aside the the triangulation against the Soviet Union okay which was significant right that was a significant part of the the real politique that led to a relationship between United States and China let's just set that aside that you're right what's changed I would argue is that the Chinese system has proven to be the political system has proven to be much more resilient and it has proven that the American aspiration of using mark a market-based economy to spread democracy in China was they could actually decouple that okay so that right out of the gate that's extraordinarily destabilizing because at the core of the American experience ourself ourself can our conviction of self is that you cannot be you cannot have free markets and not have free people and so the Chinese what's changed is the Chinese have actually figured out that there is a way to decouple that there there that is not necessarily something that goes hand in hand so that has changed and then at the same time in the book I argue that American on both the left and the right did this okay they knew that everybody moved to the left move to the center and the right went crazy okay and I and I say that as somebody who worked for Dick Lugar okay I grew up in Indiana I met my wife at senator Lugar's election night party in 1996 I ran in wrote one several college Republican races and haven't voted Republican in 15 years okay because if he obvious to me about 15 years ago that the the Republicans were moved were just embracing what I characterize in the book is free market fundamentalism and it and even it progressives and you know Frank Rich's written about this progressives have even moved to the Center where the assumption was that hey you know you're gonna have to get it retrained you're gonna have to find a new job you may have to move well say that too you know say that the people in Plymouth Indiana who have a GED or a high school diploma have been working on an assembly line right that that that was never honest that was never an actual assessment of what would have to happen so what's changed China has closed the gap in China's political system has delivered results at a time when there's a perception maybe not entirely fair but a perception that the American system hasn't and so person-to-person middle-class person in China middle-class person in Indiana working class in China working class in Indiana China has closed the gap by being able to convince people that tomorrow's gonna be better than today that your leaders for all of their flaws and for all of their corruption they get up with a single-minded focus every day to make sure that the economy is getting better and in the United States especially at the a in the era of the Cold War coming to an end the peace dividend we had we were filled with hubris and we embraced a particular type of political orthodoxy that said people will figure this out that same political orthodoxy right now is is going all the way down to how we think about health care we're still in this moment where we're really wrestling with the role of particular perversions of what I would argue or Berkey and conservative real insights that conservative politics should have we've perverted that and China has just pragmatically step-by-step closed the gap at a time when a very particular type of free-market fundamentalism here has prevented our ability to really create an organized system that delivers value to the middle class so I think that that is the significant reason the second question you ask what does the administration want I have this weird timing I was on Capitol Hill testifying the day that the 200 billion dollar tariffs were announced and that was one of the questions that we got asked and I I I mean this this the administration's motives at face value would be to restore some sort of economic parity between the two countries I think when we look when we hear the comments from pence a couple of weeks ago I think we take Steve Bannon seriously which I would suggest that we do when he talks about having a war in the South China Sea and more or less you could swap out noun for noun and have someone in Germany in 1933 saying the same thing I mean I think we should more or less assume that there is there are additional goals around constraining China that are not purely economic and again I argue in the book those are pretty those are deep and securities that go to whether or not America has confidence about its position in the world whether or not our model really is better and but and will work best from an average person's point of view right here front I should confess I'm not a nest an area outside of my expertise so III live in the world of artificial intelligence and healthcare so the subsidy debate is a little bit outside of my worldview I go into dr. Allison who wrote the the city and tract most recent interpretation of it read the book and send me a note and he said you caught something that most people don't pay attention to or don't don't don't think about enough which is that we are in a new city and trap but it's not inevitable but what makes it not inevitable has much more to do with us than with China so I that was something I proceeded do I think that we're in something that approximates the thew city and trap yes I do III at a very basic level I think we are a great power that is perhaps approaching what Schumpeter saw and characterizes a moment of creative destruction where industrial societies become complex and top-heavy and they implode and in the aftermath of that you have an opportunity to create something new something good my best-case interpretation is that that's that's what characterizes America for the next ten years we have our struggles we have some really hard moments ahead of us but we don't let those difficulties spread that requires a type of political courage that I yet I don't yet see being exhibited so so do I think that we're in a through city and trap yes I think it's escapable and I think escaping it has much more to do with choices that we have within our control and what you say to the dragon slayers who argue China's action in the East China Sea China's action in the South China Sea China's restriction of access to its markets China's tariff barriers China's non-tariff barrier you can I can go on it would take all the time we have left to go on the list of actions which the Chinese have taken which have made this Thucydides trap worse much worse so so a couple of things right right out of the gate I I pre suppose that a rising power is going to be characterized by certain types of activities that will be an attempt to express confidence and an ability to control one's local locality in ways that they couldn't write other games so it's not even talking about China any rising power one of the characteristics of that rising power is going to be let's just say to flex a little bit of muscle china has some particular insecurities of their own then make some of that muscle flexing perhaps not more understandable but more explainable okay so that none of that's to suggest that we should simply whitewash those those are we need to have some very hard conversations about those things I at my core though I would argue that China's reforms on balance have been more progressive and led to a version of China that is better and has contributed more to the world stability then we originally had hope had hoped for so these are problems these are hard things we have to talk through and in some cases there is a version of the future where China could be so militaristic where the United States would have to counterbalance that with military force I just want to be careful that we don't take the world towards to war on a path to war over some atolls in the South China Sea that that would to me to my way of thinking be wildly asymmetric to the actual threat that that that that presents to the world that we currently inhabit so the the first the first question that you're asking I'm gonna betray some of my conservative principles if you will if I go back to Iraq and Afghanistan conservative philosophy at its core begins with an acknowledgement that there are things that you cannot change for another person but there are things that the other person has to change on their own right so if you take that value and you extrapolate at the foreign policy the idea that America can change Iraq's political system to me was always doomed to fail okay that to me that goes back to just some very predicate convictions that I hold so if I take those convictions than I extrapolate them to China I have a conviction that we have to be careful about how much about China's current reform trajectory we can really influence so that's not to suggest that we don't have to argue that they are on the wrong track that the last that really the last four to six years have been very disheartened that we see problems and that many of those problems are going to make it untenable for us to continue to persuasively argue at the policy-making level and at the popular culture level that a positive relationship with China is a good thing so so I don't that is a really hard conversation I see no reason for us to pull our punches there I also don't think those are punches that we should throw in public at least not yet I think we would get a lot further in those conversations by trying to make sure that we're having them in there in the place where they're going to land the most which is not on Twitter so that that that's why and it just to be very clear again I go back to something us at the beginning one of the underlying convictions of the book is that China has a lot of problems I talked about in the book striking up a written correspondence with a Christian pastor who is under house arrest and it was a very deliberate attempt on my part to get out of the Potemkin village experience of being a businessman who's building a business in China I wanted to make sure that I had at least some however clumsy some line of sight into what it was like to be a part of China that wasn't working and I only wasn't working but was under real real persecution and that was and that was an attempt to make sure that I understood and had a holistic sense of China so those to me the last couple years have been distressing they are very problematic and and there's a scenario you know to what Steve was asking there's a scenario where China's own militarism China's own nationalism China's own political lack of reform and perhaps even reversal takes us on a path to war that could happen I just want to make sure that my country where I do have the most control is starting from a position of confidence and conviction that we are doing that with our feet firmly planted having dealt with the significant structural problems that we have that we have within our control that for me is where it starts and again that goes back to this underlying conviction that we have to be careful about how much we can change for countries outside our own jann you've said several times that being stuck in this passivity strap and taking it to its worst end it's not there are things we can do if you were listening to outside advice give us your structure of what your top four things he has to sell is this specific to the us-china relationship the fact of the question is has to be frames that current administration makes this hard because to my way of thinking he embodies the the the the fundamental dysfunction in American political life the the lack of any perception of complexity any desire to think about root causes anything to to you know to not deal with structural real structural inequalities that persist in American life yeah so again I'm gonna Freight phrase Framus as someone who grew up in very conservative politics and I have my I have my diploma to speak for that number one we have to have a really hard conversation about tax policy in the United States number two we have to have a conversation about why gains are being privatized and losses are being socialized number three we have to have a really hard conversation about how money is being allocated in relation to services that are accessed by and necessary to the vitality of the American middle class and the American worker so those so those would be my first three my fourth would be I would I would argue that if you look at the reform trajectory and let's talk about health care we've talked about globalization let's talk about health care because they actually they're similar in terms of root causes and the thought process behind them the progressive point of view on health care reform the United States is actually that we're gonna stop thinking about people as patients we're gonna start thinking about them as as consumers and we are going to move from just like we moved from an area of an era of pensions to 401ks in in the next couple of years we will move from an era of employer-provided health care to individual health care being purchased by the combined individual that they can take around as they move employers and progressives by and large will probably get behind this I was with Aneesh Chopra a couple of months ago who is a President Obama's chief technology officer for healthcare.gov when that launched and even in each who's a committed progressive we'll talk about you know his point of view and how political reform is going to be is gonna be influenced by what happens in health care and at its core a very progressive person when you listen to what's being said is arguing for a very libertarian approach to solving the problem so the fourth thing that I push on is this idea that they're at the market and that libertarian orthodoxies are the only way for us to solve significant structural problems I think that's a real philosophical disconnect that's most extremely embraced by conservatives but I think it's infected even progressive thinking so those are those would be my four things the fifth thing is I would argue fundamentally for us to double down on our strategic investments can call that having an industrial policy but when we look at the the monies that have been allocated towards like the NIH we're not even on inflation adjusted dollars I think back to where we were in 2003 so those kind of the more we bleed those investments the less likely it is that the American economy is going to be generating the sort of innovation that's necessary so those would be my five thinks the other thing I would push on or election reform well no I mean I think realistically I think gerrymandering which should be the first thing that we attack yeah Jerry Jerry if the Thucydides trap is effectively inevitable if America doesn't have the leadership to change what it does is that but is that your conclusion then no I I hate the word inevitable mmm-hmm I think inevitability is lazy nothing again I'm gonna go back to it dr. Allison said after reading the book nothing about this is inevitable there are things that we can do that are within our control they are hard but they are within our control whether or not in this particular moment we have the willpower to make those decisions is a different matter death what's the same death and taxes are inevitable that doesn't mean we don't pay our taxes and it doesn't mean we don't go to the gym right there are things that we can do to try and optimize for better outcomes in this this organization and the ground that you've covered you've done that and you and this this organization has lived through the us-china relationship has lived through some very trying times we were talking earlier about the the the period after Tiananmen yeah there were really dark moments and I I believe we can get think that you think this is the darkest I'm probably not the person to ask because I was in high Chris has been around a long time is this the darkest because Chris murk who used to be the prayer well he's worked in China for decades and used to be the president of the American Chamber and the chairman of the American Chamber in Beijing after Caitlyn was the kind of crisis that kind of crisis but I think the trends right now are extremely negative and the interesting thing to me is the extent to which negative on the Chinese side I could write your book were to focus on China China after the 2008 crisis was seized a series of incorrect conclusions about the state of the world their own so we now have returning a lot of the aspects of reform including the leadership and that project ultimately is not going to be successful it's not really addressing the economic and social needs so I think the transponder fair- the trends that us are also very negative but in some ways I have more confidence about the u.s. because I think we are more easily self-correcting as a system despite political dysfunction I think we're a little bit more self-correcting system you know I another way of looking at this in fact if I were to write I would look at it competitiveness and the United States ten years from now 20 years from now will be a far more competitive position than China demography alone right his name Norma's factory can't do anything about that now no matter what you do in terms of allowing people to have as many babies as they wanted still takes 20 years to grow a child twenty two or three years to grow an infant to somebody who enters the workforce with appropriate training so they they have locked themselves into some very very serious policy changes I did not really see that there is a gap that has been closed with the United States I really like with my education context about that in terms of you know what were the figures you were thinking about when you say a gap has been closed I do not think the Chinese government where the Chinese political system is really much more effective than ours I think they have a political crisis underway which is as serious as ours and in both cases it goes to the leadership already heavily driven by by a person at the top the reaction in China as woman just said a few minutes ago it's not visible but it's very see very slow anything you want to see on that yeah on the on the gap question I the what I'm what I'm arguing for isn't that the United you know the United States economy and the Chinese economy are somehow close to being at parity all right that's that's the worst you know that that's the worst kind of macroeconomic you know that's that that what I'm arguing for what I'm arguing for is that if you look at the China of today based on almost any economic metric they have made progress the perception in the United States is that not only have we not made progress but that in many cases we've gone in the in the opposite direction we people in this room being deep people have subject matter expertise can can very precisely look at that so yes but there's still a significant gap you would still rather be middle class in the United States and you'd rather be middle class you'd rather be the working poor in the United States and the working poor in China I understand that but but emotionally right now part of what explains I argue this moment in American political life is a perception that we are not our leaders are not a single mindedly dedicated to advancing the caught the economic cause of middle America and the working class as their counterparts are in China that's that's maybe emotionally true and factually wrong Henry you've been on this at this many decades you think it's the lowest moment in the relationship and experience experience what - max McCarthy McCarthy the arches and the crossing - Yahoo grow many people and the adulation that he experienced and being a Chinese in America fact that was no picnic and refer to Chris doesn't say where are we going I'm afraid that I talked to my Chinese friends in America that we have to be so you're afraid we're entering a McCarthy period directed against Chinese yes that's a fair fear Peter you've been at this for many decades too it's the lowest you've seen were surpassingly certain technologies than the west part of our dysfunction this 20 30 years Terry and what they're trying to do in that tenure and so I think that you know the political discourse that we have today I agree with you're saying there's not that type of industrial policy that changes but it's an infrastructure with technology and so forth the Chinese have mastered in a certain sense those incentives to Chinese companies or even the foreign companies and you're not seeing that and so if we're not willing to recognize that what I wouldn't change that yes all the different predictions whether China's gonna surpass the United States and ten years twenty years thirty years and different economic parameters it already military and so forth our ballot concerns but I do think at the end of the day operation between both governments both economies so that we've seen it enough people-to-people that whole business the business level I I wrestle with what what we what did we really let's assume this moment at some level is grounded in some something that's true okay this moment that were in need us-china relationship let's assume that what did we really get wrong okay did we really an error right because this kind of anxiety is only provoked when you think we got something really wrong did we get something fundamentally wrong in the us-china relationship or or what I argue in the book did we get something wrong about how to run our domestic economy that's a really important really really important question I asked the class early in the book let's let's give the dragonslayers full control let's say from 1980 to today the dragonslayers are in control what what happens is China just a much bigger more dangerous less stable version of North Korea what what is what is from their point of view what is it that we got wrong in the us-china relationship now I would I think there's plenty of things that we could have done differently we could have gated any number of free trade agreements in ways that would have protected labor here and there there's there's definitely things that we could have done differently but I would also argue that America by and large has had its best and brightest dealing with the us-china relationship from the very beginning we've done a lot of really extraordinary things we've built a really really good relationship with China we've done a lot of hard necessary good work over the last 40 years and when we talk about being at this particular moment I can't help but feel at some level we're asking the wrong question to the wrong people it has much less to do with what we got wrong about China and much more to do with what we got wrong here why do you think it is that yeah what always amazes me of these discussions about you know what we got wrong with China and what we got right with China is I guess there's only a handful of us who are old enough in this room who went to Vietnam during the war in Vietnam and since that we've established diplomatic relations guess what no American soldiers have died in Asia that's an incredible statement given the prior 40 years hundreds of thousands died and that's a product of the establishment of diplomatic relations with China because we reached an agreement of how Asia was going to run and yet there's no discussion there's just discussion now of further militarizing and you're quite right when you say this some at holes in the South China Sea if you're a mother or a father is it worth having your kid die over those adults I think that question is not being discussed so not only is the political system dysfunctional but discussion the real issues are not occurring or the real kind so why watch so this is the system thing that I was talking with a colleague not too long ago which is you know again like one of the concepts so what I call panda girls like Panda huggers have some hard questions that they have to answer in terms of how do we would have handled the us-china relationship differently but dragon slayers also have to I mean the Steve bandhans of the world what they are gonna be held accountable to is if they get their way and this conflict has to happen they have to be held accountable for that hmm okay so by all means by all means let's argue over the things that we got wrong in the US China kill me and you're gonna be accountable for killing me well well what but but if Bannon is gonna argue that we I mean this is this is I think the literal the actual quote we might if we're gonna be at war with China in the next 10 years we might as well go to war with them now I mean that literally literally you could take that and parse that differently and have that come out of the hops burg Empire in their fear over Russia in the in the in the years in advance of World War one it takes it takes no imagination zero imagination to say that's an act absolute historical adjacency and that's happening right now that's the moment that we're actually in so you know I think that the challenge to the dragon dragon slayers of the world is okay if what you want is the policy set that we embrace you have to be willing to live with the consequences and be held accountable to that but Peter and then Margo and then we got somebody in the back we're gonna run out of time I suspect a deal is gonna get done on the other side of a 1500 point drop in the Dow that's my underlying conviction is is when he needs it right I think it's right now politically useful to be perceived in parts of the country where he is strong where his base is asking for this I think at the moment at which multinationals and the broader economy starts to suffer this will change and there will be some very cosmetic yeah there'll be something that happens which will allow their information OB that's right that's right there will be the you know that the e2 will land on the deck of the Nimitz and it will be mission accomplished right there'll be the economic equivalent of that Marga too many pages so the book the book was written as a prophylactic and in an attempt to be prophetic and at the end again at the end of 2012 as I said early on this was I mean I David Brooks his agent was like this is if this is right it's wildly too early and so at the time I wrote it the the least anyone who's written a book knows it takes a couple years for these things to get to market you know there was a publisher who's willing to take a risk on at the time what was kind of a outlandish hypothesis which was that it was gonna be the United States they actually had the potential to destabilize the modern global era right the idea that conflict in US China wasn't wasn't was possible is not a new idea but that the idea that the United States could actually in a moment of extraordinary dysfunction be the one that was just not something most publishers that was worth talking about and then 2016 happen and all of a sudden this made a lot more sense so as originally conceived it was an attempt to be a prophylactic against a moment that I feared was coming and that in fact happened that is definitely the one of the flaws in the book one of the flaws in the book is not much more explicitly landing a message that says here's what the United States needs to do the last chapter lays out kind of two paths and it characterizes the things that the United States should do some of which are very personal some of which yet you know the book talks about you know that consuming outrage I loved walking by a bookstore today and seeing that Glenn Beck's new book is about something along like don't consume outrage how how lovely for somebody who's been peddling you dope for twenty years to say you should really stop that dope it's like your teeth your skin doesn't look good like you stop you know but by my you know one more hit right one more hit so I mean there there are things in the book that are trying to land a message of here's what we can do on a very personal basis on a structural basis but if I was gonna write the book now I would be much more reductionist and saying here's what I actually think needs to be done that both parties could bring to the conversation that would be things they could agree on they have to stop in the back I thought I was the only one who's gonna cross over that bridge hang Cornell University so I really resonate with your understanding of anxiety and optimism in China I grew up in Hong Kong and also grew up in Missouri suburban Missouri so I see both sides of the coin really clearly so I have two questions first are there any firm historic parallels you see that we can learn from about the great power struggle such as late 19th century rise of Germany and the British anxiety about shipbuilding or early 20th century Japan and the u.s. reaction to imperialism there and more relevantly what do you think as younger people can do who are caught in between all of this because US Chinese Americans we're gonna be the ones that will have to deal with the fallout of this anxiety and fear and all those things the lat the last the last thing you just said cuts me to my heart I have a lot of you know very very dear Chinese friends chinese-american friends and I live in Seattle now which is very influenced by China Chinese culture is you know very common part of the experience of being in Seattle and I think about on my 30th birthday at the time I was living in Indiana and my friend who's Korean which you know I suppose would be able tell a difference but to a group of rednecks that were driving by as we were having a beer on my 30th birthday I felt like they needed to scream some racial epithets at him just to express themselves I worry about war for sure I worry about what could happen to my friends I look at some of the thinking of one very dear friend in particular at a mixed marriage I worry just what what what the what could this all mean the question that you're asking is what you can do about it and I don't want to give you a trite answer but you have we have to be involved we have to have make our voices heard we have to challenge our politicians and the political system that we all inhabit to not accommodate cheap answers to really really expensive questions more so than any other group of people at any other moment in time we have more influence over our future than anyone else ever has so I still believe that we can change the trajectory of this conversation but it requires us to stop consuming outrage it requires us to make a very intentional decision to hear what other people are saying to really think about the people who support an administration that many of us find very challenging what is it about their lived experience that makes that particular expression of their politics right it's very hard people believe what they believe for a reason and a lot of times there's something true at the core so understanding that having those conversations with those people is more important now than it ever has been the first question that you asked which is you know the historical parallels I think he pretty much got him unfortunately I think those when I think about the moment that we're in and the closest analogs over the last hundred and fifty years those are what come to mind for me as well which is part of what makes the underlying hypothesis of this book problematic because I think that these are very similar structurally which which is brought which is a problem that is I would say the first part of the answer was the perfect ending to the program the second part less optimistic but it's it's the book is available for sale outside the author is gonna stay a few minutes to sign the books but thank you so much this has been a very interesting program [Applause]

Channel: National Committee on U.S.-China Relations

Views: 41,039

Keywords: china, us-china, trump, xi jinping, trump voters, trade war, economy, economic insecurity, domestic issues, trade imbalance, bilateral trade, gdp, midwest

Id: wDXflS0FaNk

Length: 71min 4sec (4264 seconds)

Published: Mon Nov 05 2018