Steve Bannon and Kyle Bass on China trade deal

I'll basses well both will know to the CNBC audience and the Committee on present danger is the fourth iteration of really an organization that was built in the 1950s to counter Russian influence as well it's gone through a number of cycles this fourth cycle really is based on the China threat these two gentlemen are members that organization Steve to start with you listen okay I heard your talk and there's a lot of talk about the China threat per capita income of $9,000 right agrarian pre-industrial economy still demographic cliff why do you believe China really is such a threat to the United States and the global economy well look at what they're doing look at look at one belt one road made in China 20-25 in the in the 5g rollout of Huawei they have a converging geopolitical strategy to combine to basically unite two Eurasian landmass into one single market into force the United States first out of the western Pacific then have the Pacific overall and off the Eurasian landmass I mean they are the most significant existential threat that we've ever faced and and and on a per capita basis it may be correct but they're a major financial power a major industrial power and the radical cadre this is not the Chinese people the Chinese people among the most hardworking and decent people in the world this is about a radical cadre that is taking charge of the Chinese Communist Party led by President Xi and Wan Shi Shan and other of his henchmen that are driving us to really they've been running economic war against the industrial democracies Japan South Korea North America and Western Europe for 20 years Steve is an industrial war or is it just exactly what the United States did a hundred years ago right we were the low-cost labor producer to England we had child labor we had all these labor law violations seven days a week the Triangle Shirtwaist Factory in a hang on hang we never we'd that before they they're just trying to build their economy the same way we built ours a 100 percent different we still had the rule of law right we had the Constitution we had free speech we had freedom of religion rent freedom of expression we had free market capitalism okay what they have is exactly opposite right they so they are basically and this is what you see with both the wiegert's and what their technology and their and their facial recognition they essentially run and you know almost a slave camp right they are a suppressive totalitarian dictatorship that the Western the West has financed it's totally different than the rise of the United States which just was the rise of another developing country like India and others you don't see what China is is foisted on the world and right now they've got this predatory capitalism like the British East India Company that is this one belt one road that they get these countries and depth traps foreclose on the assets and then take total control so it's this a radically different thing on the second I got a fall weather than that cuz you had a line in there which I think open a lot of eyeballs because there's a lot of Wall Street people that we're listening you and you said corporate America is the lobbying firm for the Chinese Communist Party and Wall Street is the investor relations firm for really funding the Chinese Communist Party by the way the funding the tire the tire operation of the Chinese Communist Party and what they're running in China is being funded by Wall Street which Kyle can walk through being funded by Wall Street in corporate America remember PBS or NPR had this thing of the day about about its intrusions into stealing intellectual property in American companies they talked to a Treasury official that went around to like 200 companies not one company would had been stolen from would press charges because they didn't want to be blocked out of China corporate America today is the lobbying arm of the Chinese Communist Party and wall street is the investor relations department you can see this on president Trump's on president Trump's trade negotiation which I say is basically an armistice on the economic war when Lee huh comes the United States where does he go first he goes to me he had a lunch at this about two months ago trade represent the president she she he comes the first day he has a lunch with representatives the governor fairs guys in the CEOs and the presidents of the big biggest companies in China to put pressure on President Trump all the pressure coming from President Trump to get a deal is not from the Chinese it's from Wall Street is from industrial America okay Kyle you've been critical of China and their economy in their banking system and their currencies for a long time how to tie in what Steve is saying to what you're trying to do your first investor letter in three years came out today called the quiet panic talking about Hong Kong do you believe that the political issues there are bleeding into the the markets which by the way as I don't need to tell you are the strongest performing stock markets in the world issue yeah well you know you have you have incredible debt led growth in China but I do I do agree with what Steve saying specifically about corporate America being the lobbying of the Chinese look look at who fought Sophia's reform the some of the biggest fortune 500 companies in United States and Wall Street Lobby together to fight Cepheus reform and safety it's a committee for foreign investment the US that decides whether something's is security violations right basically protecting national security from investment let's say from the Communist Party or by the Communist Party so Steve is right a hundred percent on who's fighting and you look behind the scenes its corporate America pushing Trump to do a deal and it's and it's the corporate American chieftains that have their biggest businesses and let's say most growth coming out of China and China plays that card they play it better than anyone else they open a market to very specific people to to basically court influence with that person and going to into the into the presidential office to to actually get changed policy before President Trump came we had we had kind of these disparate movements and kind of talking to China now we have a whole-of-government if you look at the pensive speech at Hudson Institute we have a whole-of-government approach to really confront China on this economic war this this has never happened whether it was a Democratic administration or Republican administration the permanent local class and their pay masters on Wall Street we're totally all about strategic economic dialogue that is allowed China to tap us along while they do more force technology transfers intellectual property theft and keep this massive subsidies the state of Venice we've seen corporate America public companies anyway have a fiduciary duty to maximize the shareholder value can you blame corporate America from going into China and trying to get the best deal corporate America has I went to Harvard Business School and worked at Goldman Sachs and you lived in China I've lived in China off and on I've owned businesses over there I worked at Goldman Sachs I've worked on deals cross-border deals you know for 20 30 years what corporate America has a fiduciary responsibility for us there's stakeholders maximization shareholder value is one but they also have it to the employees they also have it to the country they're just not domiciled here there is our American corporation and what Trump has done is I think get everybody focused on and behind closed doors a lot of these guys saying yes the force technology transfers are terrible but I can't get into China I can't tap the market I can't tap the low production cost unless I do business with don't don't sell a Buick into China don't sell a cab now what you do is your back president Trump President Trump that's why these the six verticals remember he promised in the State of the Union he would bring structural changes to the Chinese economy to integrate it more into the free market industrial democracies remember we have two different systems running right now they're a totalitarian mercantilist system what he's trying to do in these structural changes which force technology transfers non trade barriers currency manipulation you know the the cyber intrusions all of those verticals what light hyzer and Navarro are trying to do is get major structural changes as a beginning to really bring China more into what I call the Westphalian Western democracies the nation state and not just so they're the center of the manufacturing universe the people should look at they don't call it one belt one road anymore right because they knew the terminology looked like they were trying to dominate the Eurasian landmass they don't call it made in China 2025 anymore they haven't talked about that in six months because they understand the the West was starting to wake up under Trump to said hey look unless we confront this today not just tappet along unless we confront it today in five ten fifteen years they're gonna be the dominant economic power in the world you know the news letter though Kyle there's two systems as well economically there's there's domestic and there's Hong Kong right Hong Kong he's got this sort of unique system as a story in the journal the other day about how we can't sell satellites to China but these Hong kong-based companies can lease them because they're under sort of a different sphere your if I'm and I don't want to misquote you your newsletter effectively says that the Hong Kong dollar needs to drop because Hong Kong is what just like you correctly predicted subprime is a bubble well I know I think look something that was fixed 36 years ago for different economic and political reasons doesn't have the same economic and political reasons to be fixed today and the thing I point out is Hong Kong happens to be the place where the Chinese raise all of their dollars right they they do equity offerings they do bond offerings money behind it by the way when American pensions and endowments invest in China they send the money to Hong Kong Hong Kong has a very very important free trade relationship with the u.s. that we signed as part of the US Hong Kong Policy Act in 1992 but we require we as a country required long Kong to live up to a few things for us to maintain that agreement every year and it's they need to have an autonomy in their economy they need to have an autonomy in their judicial system and they must keep a free democracy and for those people that think Hong Kong is going to be this oasis of democracy in Southeast Asia they're just they're just wrong pro-democracy activists were sent to 16 months in prison yesterday in Hong Kong right so all the way so my point I need Nationals my point isn't as narrowly focused on where the currency is going Brian what I'm saying is if you look at Hong Kong their banks are now almost 900 percent of their GDP their household leverage is 300 percent of GDP they're the most levered developed country in the world they're running out of their reserves they spent 80 percent of the reserves defending this 36 year old peg that I think is gonna end up falling because their economies more linked to China than it is to the US 36 years ago they were more linked to US economic growth and there was a synchronicity you got famous because a number of years ago you and a few small groups of others were saying screaming about subprime people said you were nuts that you were wrong that you were clearly partially that look you had hair then okay who's going and by the way then a few years later they made a book about you guys being right when everyone said you were wrong do you believe that's the case with Hong Kong right now well I mean the numbers are impossible to argue all right the the outcome is is what's under debate and now look if you if you look at it and develop an objective opinion here as to where the imbalances are you know you have a 36 year peg that creates a pressure cooker and it looks like the pressure cookers about to go off and about to in the timeline of 36 years might mean a year it might mean two years it might need might mean look we might mean something back to see what's the outcome that you're looking for that no I mean I did I think you're gonna see a revaluation of all the Southeast Asian currencies including on down down including China and Hong Kong Joe Biden yeah I think you're first of all Joe Biden's going to Pennsylvania today to try to cut into he understands that he's got to deliver the the the Midwest and the industrial blue-collar workers the Reagan Democrats that came over and voted for President Trump he's in Pittsburgh a day he's a total hypocrite what he should do first he should this way in 2013 he took his son on Air Force two I think it was in the Sun a week later cut a billion dollar deal with the Bank of China on a private equity fund remember we kicked off I I worked on Clinton cash with Peter Schweitzer for years which was the thing that got the Clintons rolling and put them on her spotlight of the corruption we also did one that I had I took off for the White House in the campaign but secret empires specifically calls out the Biden's and what Joe Biden's got to do he's got to talk about his relationships with senior members of the Chinese Communist Party he's got to talk about his relationships with financial institutions he and his son where this bean and a half dollar fund came from and Biden was part of the Obama administration they looked the other way when those stationery islands was built in the South China Sea which is the single biggest national security threat to the Western democracies is closing off the South China Sea that happened on Joe Biden's watch he didn't say a word what we need to hear from Joe Biden's up in Pennsylvania he ought to say why he didn't put tariffs on steel and aluminum when he was vice president nine states and didn't have President Obama did it's Donald Trump that did that all the happy talking all Joe Biden is nothing but happy to talk about I can't bear fine I wasn't there I didn't write the book I'm gonna question okay you win you said the other day - Joe Kernan on CNBC - a day maybe a month and half ago that was Kamala Beto I think some combination that could beat Trump can didin win absolutely not Joe Biden will not win their primary you're seeing Pete Biden right now Joe Biden will not be able to standing up in this primary process and I don't and no chance of that he could take on Donald Trump one-on-one he doesn't have the stamina he doesn't have the smarts he doesn't have the actual get into combat with somebody like Trump Trump Trump true and I think the Democrats going to understand that I think you're seeing peak Biden right now but what bike has got to others we start he starts going around and blowing smoke up talking to blue-collar workers ready for peace hold on I've got and then why then why did he not defend these workers why did it take Donald Trump to do it I am we're out of time I got to ask you this do you believe what's gonna be the culmination of the malla report will Donald Trump your former boss be impeached absolutely zero they're not even I mean the mole people should read their own report there's absolutely a participant was absolutely no collusion where as Donald Trump said and I actually recommended don't fire call me because there's no collusion in there collusion there's no obstruction and so I think this thing passes the Democrats are going to try to like I said this is gonna be the six months of terrible vitriol because every day they're going to Gordon to going up there's finances to go after his family they're gonna go after everything because they control the house Donald Trump will power through this but they're the Democrats going to need somebody that can mobilize and I'm gonna tell the Democrats something unless you start talking about China you're not going to be competitive in 2020 against Donald Trump they had five hours of CNN the other night one thing you never hear about is China you

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Id: Ii_KQEw0BcA

Length: 13min 57sec (837 seconds)

Published: Thu Apr 25 2019