The Return of Asia in the 21st Century

this is Rob Johnson president of the institute for New Economic thinking I'm here today with an extraordinary gentleman Kishore mabubani who is currently the head of the Asia peace program he's written many many books he served with the United Nations and with the Ministry of Foreign Affairs in Singapore he has how would I say he inspired me to read Ajay chiber's book who we made a chapter with because he had such a lot of Tory comments on the book jacket I've learned a great deal from him over time and I wanted to share his perspective on the 21st century Asia with you all this is a book which I was alluded to by Singapore Straits times the Asian 21st century in my mind is at the center of very very important geopolitics and what what I would call challenges for humankind and whether we're talking about climate or monetary systems or trade or intellectual property it's all going to be embedded in the context that he explores brilliantly in this book Kishore thanks for joining me here today let's talk about you've written a number of books has China won many many things many articles I followed your work for a long time but this compilation seems to be saying something which you might call bigger and bolder what inspired you to write this book at this time the reason why I wanted to have this book out uh at this point in time is that we we are often preoccupied with what's happening this month this year maybe even this decade but we're not taking a longer look at the Arc of human history and asking how the 21st century will be different from the previous two centuries and it's it's very clear uh that the 21st century will be as I say the Asian 21st century uh you know and this is you know uh a natural return of Asia which I also emphasize because from the year one to the year 1820 or 1800 after the last two thousand years the two largest economies of the world were always those of uh China uh and India and it's only in the last 200 years that Europe has taken off followed by North America taking off by the past 200 years of all history when you put it against the backdrop of the past 2 000 years of world history have been a major historical aberration uh all aberrations come to a natural end so what we're going to see in the 21st century the biggest theme will be the return of Asia and as you can know from the Western media pays very little attention to it but I'm very happy to learn Rob that the rest of the world is very interested in the story because this book was uh it's a free books and it was an open uh access book you can download it for free it was released in January and uh after two months there had been one million downloads of the book in 90 countries one million downloads of the book in two months in 90 countries and that made me aware that actually there is a deep anger uh in the whole world to understand hey we know an Asian century is coming well why isn't anybody talking about it so which is why I hope my book and serve as a kind of a guide uh into how Asians view the world very differently and if it's going to be the Asian 21st century and I'm certain it's going to be the Asian 21st century then let's try and step into Asian perspectives and understand them and I hope that's what my book will uh will will contribute towards in terms of developing a better understanding of our contemporary world my uh experience through various coincidences I became friendly years ago with the gentleman Chalmers Johnson who was at the time and he had a a person that he turned me on to who sometimes goes by the name Patrick Smith others Patrick Lawrence in about 2011 he wrote a book called somebody else's century and he was alluding to where you're filling in the Gap but he was seeing that Changing of the Guard as as a very very powerful thing and and I know Chalmers was very enthusiastic about Patrick's vision and his work in the first part of your book you spend a lot of time on something that I think is very important the United States has been a world leader since World War II and as we approached the Asian 21st century the question is what is it about America that you would expect people to want to emulate or not and I thought that your perspective from the vantage point of Asia you know to put it in a silly way is this the better mousetrap that we should try to become or given the Deep philosophical history that somewhat how did I say it intention with Cartesian enlightenment it's a broader sense of of I guess we and a little bit less of me but when I look at that first part of your book before we go into Asia what is it that you see about the United States that would either attract or push away emulation by people everywhere but particularly Asia the United States of America is still a great society and it is still greatly admired Society around the world because there are many aspects uh of American society that make it uh incredibly uh uh uh you know sort of admirable I mean you have the world's greatest uh University you know whether it's Harvard or Yale Stanford or Princeton uh Colombia you know you have so many great universities and you you also have a remarkably uh entrepreneurial Society I mean you produce giant World beating corporations uh you know every decade and you're also you're also the society that is best at bringing in migrants and integrating them into your Society so you can have two of the largest corporations in America uh Microsoft being run by Satya Nadella an immigrant from India or Google being run by Sundar pichai an immigrant from India now that kind of openness you will not find in China or India or Japan as you know so that all these aspects of American society uh are truly amazing and that's why the world continues to admire United States of America that's why many young people around the world to Aspire to go and live and work in uh the United States of America but at the same time you know there's also a growing awareness in the rest of the world that the United States is now developing some structural uh weaknesses you know and I'll mention a few one is of course the United States is clearly becoming a plutocracy it's a government of the one percent by the one percent for the one percent and I have an essay on that uh in my book and uh and and in the plutocracy the basically all the public policy decisions that are made uh benefit the one percent and the rest are not benefiting at all and that's why this is the second aspect of the United States which I highlighted the book The Bottom 50 percent uh in America I've seen a stagnation in their incomes and standard of living uh for three decades or so and that created what the Nobel Laureate Angus Deaton calls the deaths of despair uh and you know it's very sad so you have on the one hand some aspects of uh United States that are amazing that the rest of the world continues to admire and some aspects of it that shock the rest of the world and I think if John draws a great American philosopher were alive today he will be actually quite shocked to see how far the United States has deviated from his vision to just to create a socially just Society where even people at the very bottom could aspire to reach at the very top and that's not happening in the way that it used to happen in American society in the context of this what I'll call plutocratic structure how did the how they say experience of covet 19. affect that did it seem to be that America is starting to shift gears or did it seem to highlight the concentration of wealth and power and the suffering therefore for many was exacerbated in the from your perspective one I would say that you know uh the the record of the United States and America on coven is is mixed uh uh on the one hand you know the when the world came out that there had been a new virus in China on the one hand you know we when the word came out that there had been a new virus in China and after the landsat magazine published an article in January 2020 warning that a new virus was emerging that we should start preparing for it and the rational response by the United States which is after all still you know a modern rational uh well-managed Society should I mean they say hey what can we do to prepare for this and deal with it but as you know president Trump who was your president then was in the state of complete denial about uh covid-19 and what shocked the rest of the world is that the United States has always been a leader uh in the field of science and to have a president who refused to listen to Scientific evidence on covid-19 like for example that wearing masks would save lives you know something very simple as that you know he's something that he resisted or that stay at home or isolation would help again he resisted that for a long time so that that was that was and that's why as a result of that the United the number of deaths that the United States had from covid-19 was amazingly High because as you know uh it had over 800 000 deaths or so when China had less than 5 000 deaths from covet 19. so that's the negative side of The Ledger but on the positive side of course the United States showed that he's still a scientific superpower because he came out with vaccines in record time and indeed you know I myself got three uh Pfizer shots and I actually believed that it was American Technology that saved my life personally I'm very grateful that uh the United States of America produced uh the modern vaccines and these vaccines have made a huge uh difference to save a lot of lives around the world and now actually as you know uh finally uh after the stumbles and all that the United States is emerging out of covid-19 and surprisingly uh China is still struggling to get out of covid so you know it's it's funny there's some parts of the United States on covid-19 where I did that b and other parts where it has done very well so it's a mixed record yeah well and I agree with you about the onset and Donald Trump and I think the dread of acknowledgment of the challenge of that Scope when you were up for re-election was probably very daunting uh but it's not a basis or an excuse for avoiding the responsibility he was more focused on his re-election rather than being focused on the lives of the Americans and saving their lives yes let's let's talk a little bit about Trump you in the latter part of the first section of the book you talked about how Trump affected China and I'll just start with a touch of background from my own experience I was watching after the China 2025 Vision came out which was not what you might call just fall in line in a position of subordinate comparative advantage to American companies or european companies and multinationals I saw the China 2025 as a vision of creating knowledge intensive industry and building on their own and moving to which you might call the front row of high value-added but I saw at the Council on Florida relations in the United States people like Blackwell and Campbell and so forth even before Trump's campaign writing what I will call nationalistic uh concerns and obviously the lack of penetration perhaps for cyber security reasons of the internet platforms companies from the United States into China was another facet but I saw a great deal of resistance even on Wall Street because they weren't getting enough access to the development of the Chinese internal financial markets so there there was a tension what I'll call The Changing of the Guard in the role that China wanted to play relative to the role America wanted them to play and it was evident even in 2014 and early 2015. but it seems like when Trump became president there was something that there's an economist Dean Baker in the United States who who emphasizes he turned on the suffering that white blue-collar workers in the midwest had experienced and energized that and blamed it on China and Mexico rather than on the lack of adjustment assistance within the United States to the transformation related to globalization so we we have this context in where Trump seemed to motivate the people with the despair that Angus Deaton and Ann case wrote about oops but how how did he affect U.S China relations and what's the residual impact of his what you might call accelerating or amplifying the Discord between those two major powers you know it's it's you know it's very strange we've often focused on individuals and individuals uh do matter uh but you know I've written a book as you know has China won on uh U.S China relations uh and in the very first paragraph I say uh that this U.S China contest has been started by Donald Trump especially when he launched a trade war against China in 2017-2018 but I said it will Outlast him and sure enough Trump lost the election Biden won he's reversed many of Trump's policies but he's actually reverse almost none of Trump's uh policies on on on China and so therefore the the the fundamentally to understand the U.S China contest it's important to understand the structural forces that are driving it and clearly uh the it's being driven by the fact that the United States having been number one the number one economic power for 130 years plus since about 1890. uh cannot accept the fact that is going to become the number two uh economic power sometime in the next decade or two and so it is quite natural for the United States to try and stop China's rise because that's what all great Powers have done for thousands of years it's it's logical great power Behavior to retain its number one position and I have no doubt that uh if Hillary Clinton had won she wouldn't have been as uh her Administration wouldn't have been as rude and is insulting towards China as Mike Pence was or Mike Pompeo was you know um but nonetheless I think the U.S China contests would have continued to gain momentum and we see this in the fact that Joe Biden is one of the nicest guys you can possibly have uh as president but his hands are tied and he cannot reverse many of Trump's policies and including you know your your your very distinguished Economist rob you know better than I do that tariffs uh don't hurt Chinese producers tariffs American consumers and you know it's sort of it's sort of bizarre that uh you that that that this trade war was launched against any kind of sensible uh uh economic uh advice you know so it's so that that was of course that that's something that Donald Trump uh did and and he of course he did it for only for domestic political reasons and also because he said he he doesn't understand economics I think Donald Trump and doesn't understand the danger of tariffs and I and I actually heard a podcast uh with uh some one of his economic advisors Gary Cohn uh of of uh Goldman Sachs uh and I've actually been married and Gary said he tried so hard to explain to Donald Trump why tariffs didn't work why they were hurting American consumers and why wasn't good for the American economy and he said he just couldn't change his mind and so he one day he finally asked Donald Trump so why why why are you insisting on tariffs and Donald Trump replied I like tariffs I mean he is actually quite shocking that the president of the world's most advanced Society the world's most educated society and as I mentioned earlier the world's best university just didn't understand economics 101 uh on on tariffs you know and I think that's the damage and of course the the the that's the really sad part is that Trump is gone right the year a year and three months have gone by and none of the none of these tariffs have been uh removed in fact we would serve America's national interests uh to remove them and right now in the United States as you know is worrying about the threat of inflation which is real one of the few policy measures actually the United States government can take to fight inflation actually is to remove the tariffs uh on Chinese products by the way have not worked to reduce the trade deficit between U.S and China in fact the trade deficit with the U.S and China has gone up intensely that has were introduced you know so it is sort of very very strange to the rest of the world that you know for the United States as one more Nobel prizes in economics than any other Society has uh and you the fact that you have the most number of Nobel prize winning economists seems to have no impact at all on your public policies I think uh Donald Trump as you suggest may not be a master of Economics but he is a master of political theater and uh I do think the uh see how would I see this is a man who came to America with a message I'm running against essentially both parties and the system is rigged and the system is rigged that's the plutocracy that you're referring to people can feel that they don't themselves perhaps this is a lack of our education system not our Nobel laureates but the breadth of understanding uh our population wants to alleviate that despair but the techniques of doing so as you say probably don't include much in the way of tariffs so as I could see it Joe Biden Comes To Town and he doesn't have other ways of reassuring people that he's going to alleviate their despair so they can't rescind the tariffs because the political theater of distress is what's dominant context and he's got I would I would how would I say as a matter of patience he's got to find a way out and perhaps as you're suggesting rescinding those tariffs along the way is well I I think it is overdue uh that a very strong consensus has built up in the American Body politics that the time has come for the United States to stand up to China and to stop China's rise and what I find sad about the United States today is that even though in private uh many of your more thoughtful uh American policy makers many of you are more thoughtful uh American opinion makers realize that this this zero-sum uh contest approach to China is not a wise one and that if you need China's help on things like climate change and earlier on and fighting covet and now dealing with a possible global economic recession and you in that case you know you need to work out a more balanced uh approach towards China which is what I advocate my book where you compete with China in areas where you have to where you cooperate with in areas in in with China and areas where we should benefit ordinary Americans yes ordinary Americans would be better off uh with a combination of competition and and cooperation but as you can tell that doesn't get votes at all in the uh United States and so it's almost impossible to find a politician that can make a reasonable speech uh on on China today and this is why quite often as you know uh that's why economics alone is not enough do you need good economics and you need good politics if you're going to have good public policies it is that's one of the premises of this organization inet which is politics and economics are inseparable they cannot be looked at everyone needs you well we'll keep up we'll keep putting our shoulder to the wheel let's talk a little bit the next phase we've talked quite a bit now about the challenges in the United States paint the picture for us of the Asian Renaissance the next phase of your book The Dawn of the Asian century what's happening with asean the role of India and then we'll come back to China well I think uh you know I uh was born and brought up in Singapore and you know when I was born Singapore's per capita income was about the same as Ghana's about five hundred dollars you know and Singapore was a poor third world country and uh I I lived in a poor family in a poor Federal country so at the age of six I was put in a special feeding program because I was technically undergarif and I can tell you that I always say in my life the biggest Turning Point came uh when we got a flush toilet at the age of 13. because the sense your the dignity the sense of dignity in your life improved dramatically when you could just flush it away instead of having to wash this bound grow uh in the course of a day in a can that never moved so you know so that's that's the kind of uh escape from poverty that I have personally experienced uh in my life and that's what uh hundreds of millions of Asians are experiencing you know and since I actually experienced you know real third world poverty I understand how the emancipating is to be liberated from poverty and the fact that China has you know um uh saved 800 billion people more than double the population of United States from poverty is a remarkable achievement I think when future historians write about our era that's what they will write about and and so I my lifetime I've seen remarkable changes uh uh in Asia you know including especially in Singapore which has gone from a world third world developing country to having a per capita income which I think may even be higher than that of the United States you know uh so you can see what a remarkable Journey Singapore has done but Singapore is like what they call the tip of the iceberg so what Singapore has accomplished the rest of Asia uh is now uh accomplishing and of course as as in as in sort of what we have seen through all of human history first you have a kind of uh economic Rejuvenation of societies and then that's followed by uh you know a cultural Renaissance a sense of discovering their identity a sense of rediscovering their roots and that's what's also happening uh throughout Asia and in one one of the biggest facts about Asia that many in the west are not aware of this is how diverse Asia is you know you have China and of course the related Confucian societies like South Korea to some extent Japan to some extent but then you have uh southeast Asia which is the most diverse part of uh planet Earth because about 680 million people you have 250 million Muslims 150 million uh Christians 150 million Buddhism we have hinduists uh Confucius and even Communists in Southeast Asia so it's a very diverse region and and all these regions are doing well and let me just give you one one statistic to illustrate this in the Year everyone knows that Japan is a major Global power economic power right it's it's a really significant global economy in the year 2000 Japan's economy was eight times the size of the 10 asean countries in Southeast Asia in the year 2000 by 2020 Euros only 1.5 times larger by 2030 asean will become larger than uh Japan and in 30 years right isn't that amazing that is extraordinary everybody knows about it but nobody no that's right yeah at the same time the middle classes new middle classes are being built and there is a tremendous sense of optimism for the form for the future among many young people all through this region you'll find this optimism in China you'll find this optimism uh among among the 1.4 billion people in China among the 680 million people in Southeast Asia and among the 1.3 billion people in India and you just add those three figures I mentioned you come to almost half the world's population and almost half the world's population is now enjoying a new kind of optimism which they haven't experienced in centuries right and and that's that again is a massive change in world history and and and unfortunately because Western societies do a lot of Naval gazing they feel their own pessimism and they don't understand that a population that is like four or five three or four times the size uh of the the West combined has now suddenly begun to feel optimistic and and they don't understand that they don't see it they're not aware of it that's why I think this book is so it's so critical because it opens windows into big developments that are happening that many in the west are not aware of yes I've uh Mike Spence and uh montec single Welly and I did a talk one day uh about the ramifications of the lessons these really extraordinary experiences in Asia for African development because there's so much concern you were talking about population growth International office of migration is protecting an enormous increase in African population between now and 2075 a lot a good portion of the continent is what you might call an equatorial region global warming threatens subsistence farming so social stability migration even the what you might say East Asian development model it's an industry protection learning by doing is threatened by Global Supply chains and automation but Mike and montec had some very very insightful perspective on there are other ways to develop in Africa now and we can learn from Asia and I think that's I think that's a very important contribution to another large portion of mankind is the example that you've set and the kind of things you've underscored here in the last few minutes that's why I was very happy when I saw that among the uh over one million downloads of my book in two months uh there were quite a few downloads in in Africa to and you know the the the the Africans I think uh are particularly appreciative uh of the fact that China is coming to them with concrete projects on how to improve their societies you know so uh so the Chinese are building roads Bridges Railways and at the end of the day all these things make a huge difference you know and your sense of self-esteem improves a lot when you see your infrastructure uh improving in your Society and and China is the only country going around uh building this new uh infrastructure uh all over Africa and that's why you notice that uh whenever China holds a China African leader Summit uh virtually all the African leaders turn up because they understand that they can now cooperate with uh China in a positive sum game and also a gift and to be fair it gives the Africans uh Alternatives because when the West Was dominant the West either colonized and trampled on Africa but even after they were decolonized the African states were bullied uh you know I think you must know that Joe stiglitz has a story in in one of his books about how the Ethiopian government was penalized by the World Bank because it repaid alone early to American banks have been talking that that you know when when a poor country pays a high interest rate going early to an American Bank it gets punished punished by the world bank now that that's the kind of thing that Africans know about so when China comes along and provides an alternative uh it's it's it's it's it's positive for Africa but it's also by the way also very positive for Europe because one statistic I give to Europeans is that in the year 1950 Europe's population was more than double that of Africans today Africa's population is more than double that of Europe much more than double and by 2100 Africa's population will be 10 times the size of Europe and you know it's if the Europeans really thought long term about what is the number one challenge to European societies in the long run the number one challenges Society through Europe in the long run is that if Europe doesn't export jobs to Africa Africa will export Africans to Europe I mean it is inevitable it's you can't stop it you know so therefore when China invests in Africa it is actually doing the Europeans a major favor because it is creating jobs in Africa that will keep Africans uh in Africa and I'm glad actually in some ways there's a new competition among the Asian States uh within China and India and Japan and South Korea to invest more in Africa and I think that's very positive for the Africans and actually the biggest beneficiaries of this paradoxically will be the Europeans and and if the Europeans were wise they would partner the Asian countries in investing in Africa I'm reminded of the uh feature film in China wolf Warrior Two which talked a great deal about that brutish colonialism and metaphorically the role of the Chinese in lifting up the spirits of the Africans and at one point that was uh people told me they thought that film partly because of the scale of the Chinese population that that film would be seen more than Star Wars or E.T cumulatively uh it would hit the all-time top five list uh and and I know it got off to a very good start uh in the spirit that you're describing the uh let's talk a little bit about India you had some very interesting uh sections in your Asian rise chapter India may be the best bet for moral leadership let's discuss where where does that vision derived from what do you see uh you know when we talk about uh Asia as you know and to some extent we we are guilty of it we have talked a lot about China but the there are two big stories in Asia I would say three big stories I would say China India and asean uh and I could call it the new CIA China India asean uh the so um the in the Indian story I think is equally important and India is also uh undergoing a major transformation you know now the Indian economy clearly hasn't grown as fast as the Chinese economy because in the Year 1980 then Indian economy and Chinese economy was about the same size you know 1980 India may have been slightly bigger too but today China's economy is five times the size of India and that on the one hand can be a source of Despair on the other hand it can be a sign of sign of Hope because then what what China has accomplished today India can accomplish tomorrow because in by any sense and I say this you know I'm not a Chinese I'm actually ethnically Indian so as an Indian I know that Indians are capable of being as productive in economic terms uh as the Chinese are and so I'm an also equally bullish about the prospects of the uh Indian economy of course if the right economic policies uh uh put in place and my only criticism of India is that it refuses to plunge into the ocean of globalization in the same way that China has done so because if India did so India would do as well uh as China and I think one of the saddest thing that's happened is India's refusal who joined the regional comprehensive economic partnership the world's largest Free Trade Agreement which actually just took off in January 2022 two months ago I think if India could make that switch uh India will not tremendous potential to but despite that I think India's economy will still do well and of course India today has the advantage of having a new kind of political stability because you know as you know India is a lots of changes in government and political instability of various kinds now you have a leader Narendra Modi that who commands a tremendous amount of popularity in India and just recently he won the elections spectacularly in uh the most popular state in India so it's likely that you know Modi will remain the prime minister of India for the next five to ten years and as you know what's interesting about Prime Minister Modi is on the one hand he relates well with the Western world but on the other hand he never wears a western suit never was and he's very keen to revive uh traditional uh Indian culture and that's also part of the Renaissance that is happening and you know the the thing about India is that if you're looking for a country that can be a bridge between the East and the West it's like that country is probably uh India because it's obviously he's got very deep uh Asian roots it's linked to his fellow Asian countries and yet it has uh Westminster style uh parliamentary uh democracy uh a large part of his population speaks English uh Indian migrants have done very well in advanced Western societies like uh United States United Kingdom Australia Canada and so on so forth uh the treasurer of the uh United Kingdom is an Indian Rishi Sonata so you can see how Indians have done very well in the West too there's one society that can build Bridges uh between the East and the West in the 21st century uh it's India and and I think that's what uh the West should that's why that's another reason why the West should be working very closely with with India uh in the 21st century and uh how do you see the role of India in the challenge of climate change obviously given their size and scale they're they're very important dimension but how they say asking people stop burning carbon and perhaps stop the pace of development While others are burning a lot more carbon from having uh like the United States already been there uh what is the role of India in this in this challenge well I think really uh if India is not part of the solution uh India's credit part of the problem and uh but what I what I noticed is that many Western analysts point to the fact that all the new flows of greenhouse gas emissions uh are coming from China and India which is true but as you know climate change is happening not just because of the new flows of greenhouse gas emissions but because of the stock of greenhouse gas emissions that have been put up the atmosphere since the Industrial Revolution and you know if you look at the overall stock my figures may be wrong but they're roughly right I think United States has contributed about 25 percent of the stock I mean the European countries probably another 20 to 25 percent I think China is still about 11 or 13 percent and India is only about two or three percent so I think it's a bit unfair to penalize India and ask India to do more in uh climate change because many Indians still don't have electricity right you know and you notice that many countries are happy to fight climate change as long as they don't have to make any sacrifices uh I mean if you look at the two of the richest countries in the world like Canada and Australia on a per capita basis they contribute tremendous amount to climate change but Canada is one of the richest countries in the world will not give up his past sense project in Alberta and you know but that that's not fair I mean why are you asking of course country like India uh whose book per capita income is still very very low uh to make sacrifices when rich countries like Canada and Australia with very high per capita contributions to climate uh to greenhouse gas emission are not willing to make economic sacrifices and that's why you notice that on the issue of climate change actually that has been uh there have been lots of political differences between China and India in many areas but on climate change they both have been cooperating with each other to try and persuade the West to be more reasonable in what it expects but the good news is that the Indians accept the fact that they have to do something about climate change and they are trying to try and make a contribution we see uh you know we as the United States as you described the plutocracy we have a rich and poor country at the same time and what many are seeing here Robert Pollan or John Paul or Manuel Pasteur is that the fear of transition is a really really big how'd I say um obstacle to transformation of the U.S energy structure in West Virginia coal miners have said to people like Robert pollen well look what they did with globalization and so forth to to Detroit and Cleveland are you we're going to sit by and say oh we're going to join the team for climate change and watch them trample Us in other words the transformational assistance so that we're all on the team is missing in the United States and uh I think that uh some of these Scholars who I just mentioned are really at the Vanguard of talking about removing the obstacles through greater social justice now this is where frankly you're absolutely right I mean if you objectively analyze uh why the jobs have been lost in the United States and it's very sad jobs are lost in the United States it's it's partly because of globalization but it's also because of Technology and and the most importantly public policies in the United States uh do not provide support to employees who have to retrain themselves and you know Singapore is the Other Extreme uh Singapore understands that we you know if you want to compete in the global world uh some Industries will succeed some Industries will fail and for the ones that fail don't try and support them by subsidizing them they have to let them die because they cannot compete but but who is you provide uh uh support for the workers so that they can retrain themselves and join new Industries and that's something that is very very difficult for uh uh for the United States to do and it's a bit sad you know but that's a result of plutocracy where you you provide uh funding for example to very rich American farmers to provide huge subsidies to them because they have a lot of political cloud but you provide very few subsidies to poor workers in Detroit and Michigan who need to be retrained to uh try to take on new jobs yeah but uh I think I think that's a formidable part of our challenge not to mention we've turned what used to be called tax evasion into tax avoidance meaning people can keep their money offshore and then they can complain we don't have the means to improve the public school programs so the younger Generations many of the diseases of Despair are the older talking about their children do not have the rungs in the latter to move out of this of this rut and so there's a great deal of which you might call structural challenge I remember years ago and I won't mention the person by name but a very high level Chinese leader and I met and uh he said to me you know what's really really Troublesome to me yes or what he said it's that we don't have the power to create the adjustment assistance that America needs to deal with as you said technology and globalization and we're being demonized and what really should be demonized is the American political system for not taking care of its people we have no power over that so that was a fascinating observation it was quite uh it wasn't it wasn't anger it was humble in when he was staying I think and I think the United States can still you know American workers can still compete with the rest of the world if they're given the right training and assistance to do so well as you come to the last part of this book what's the peaceful rise of China where is China now and how are they operating in this context we see Hong Kong we see the Ukraine which uh but we see the aftermath of trump we've alluded to some of these things through this conversation but what's the picture of China at this juncture in your in your mind well I think yeah um uh 2020 22 is proving a very difficult year for China uh and it's he's got two major challenges this year the first major challenge is that it is struggling to get out of its zero covet policy I mean there is zero public policy in many ways work well for China because it's saved frankly millions of lives uh because if if China had had the same number of deaths but uh perhaps million people as the United States uh instead of having uh know 5000 bits I would have probably had a 5 million deaths at least because his populations were more than four times that of uh United States so uh clearly zero covet policy of China has saved a lot of lives but right now they have to come out of it uh because there's no way you can keep an economy closed for so long and so that's going to be number one challenge for China in 2022 and then the second challenge it faces is a result of Ukraine because in many ways uh Ukraine has been a major setback uh for China on several counts number one uh its partner strategic Partners number one strategic partner to balance in a sense United States and Europe was Russia now clearly uh Russia has been weakened uh is bleeding in Ukraine so that is a setback for China secondly the Ukraine war has also destabilized the global economy and as you know growth prospects for countries around the world are going to come down because of the uh after shocks of the Ukraine war and the sanctions that have been put on Russia and so at a time when China is already struggling to achieve 5.5 growth the Ukraine war is going to make it even harder to achieve that goal of 5.5 percent growth and then thirdly uh China has been trying uh very hard to deal with the United States and Europe as two independent polls in a multi-polar world and it's easier for United for China to deal with the United States and Europe separately rather than as a combined Force but one of the results of the uh Ukraine war has been a compete has been a tremendous regalization of Western solidarity uh in the United States and Europe have come together very very forcefully and of course the Europeans are very grateful for American assistance but at the same time the United States will say Hey you know we saved your bacon uh on Ukraine please join outside on China and and that's okay clearly another setback uh for China and then firstly uh the United States itself you know was feeling uh a sense of you know uh uncertainty uh about the future about you know where is hating and so on so forth but the fact that it is now succeeding uh it has succeeded in crippling uh Russia so effectively has enhanced the self-confidence of American policy makers also and and here this brings me to the one of the other important things the fifth point which is the uh I think once really shocked the Chinese more than anything else is not the military assistance now that the West has been given to Ukraine because that is obviously damaged the Russians uh clearly but the fact that the United States and Europe could seize half the assets of the Russian Central Bank and over 320 billion dollars with this boom gone just like that now if Russia has got 640 billion dollars in reserve China's got 3.2 trillion dollars in reserves so suddenly all those U.S treasury bills that China bought I think this provided China leverage against the United States of America that this U.S treasury bills have now can now become hostages to Fortune and that's a major reversal and setback for for China so I I think this this the this huge weaponization of the US dollar uh has on the one hand revealed a major asset for the United States but on the other hand uh it's going to lead to the Chinese and many other countries thinking how do we reduce our Reliance on the U.S yes yes the next big thing and and this is why I thought it's very unwise of the U.S to weaponize this U.S dollar because if if ever the day comes may not be in my lifetime that the US dollar is no longer the global Reserve currency then as you know United States will lose an exorbitant privilege because he can no longer print money to buy Chinese Goods yes yes when we uh in my imagination I envision bringing you to Washington and we walk into the White House and you sit down with President Biden you may have already done this but in my imagination what what would you tell him given your understanding of what's happening in Asia I don't mean like you and I talked about earlier with Trump the political theater though that's a dimension of it but deep down inside how does the United States make a better American a better world in light of what you understand about Asia the big message I would convey is that the world wants to see a strong United States and not a weak United States so the world wants to see him succeed in his mission of strengthening and rejuvenating the United States but the best way to do it is not to engage in a in a trade War uh with China not to engage in a zero-sum contest with China but actually to work with China and the rest of East Asia to boost the global economy because by doing that then we'll be creating jobs in the United States and you'll be creating a stronger uh United States of America so and and the real tragedy here is that the reason why Asians many Asian countries now believe in free trade is because they learn the virtues of free trade from the Great American universities these are these are American ideas that are propelling the rich the the rise and return of Asia and the United States should believe in its own ideas of free trade and come back and rejoin the trans-pacific partnership but all this of course you need to explain to the American people that they shouldn't be afraid of the return of China they shouldn't be afraid of the return uh of the rest of Asia because the the in the Asian 21st century the Asians will send a big thank you note to the United States of America and say thank you very much uh it was your ideas that have enabled us to succeed and and do so well and many of the countries in in East Asia and South Asia want to partner United States and work with the United States but more in the economic realm and that's where United States should focus on um well I'll give a little uh backward looking congratulations to our friends in Great Britain as well because people like Adam Smith and David Ricardo got these things moving but uh of course thank Adam Smith what I really like I'm thinking in the uh analogy to the current uh Health situation I see this book 21st century Asia that you've written and distributed freely as a vaccination for the minds of the world against the disease of the breakdown of trade and the nationalistic brutality that might emerge and so I think everybody should receive this mental vaccine and read your book it's an extraordinary achievement it really relates to the depth and the breadth of your experience and your wisdom and uh in particular I'd really like you to come back and at some point do a big lecture with my young scholars initiative because that's who we're passing the books on to in the next chapter and getting them vaccinated in the mind uh I think would be very good for the health of this world so I remember very fondly my business and when we did our first yes I did and I locked together and I'm very happy to have this second dialogue with you and I'm very much looking forward to our third dialogue in New York yeah well thank you for making this additional chapter with me today we'll keep an eye on your writing and Elevate that as uh I think is like I said it's extraordinary but thanks for giving me uh an hour of your time today to continue to nourish our audience thank you

Channel: New Economic Thinking

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Length: 63min 9sec (3789 seconds)

Published: Mon Apr 18 2022