U.S.-China Symbiosis: A Conversation with Joe Tsai

we're starting what is for me one of my absolute favorite events of the year and this is the SoCon look lectureship and I'm especially honored to be the sort of master of ceremonies here tonight because I have the immense good fortune to be the so Kwan law professor at graduate school of global policy and strategy and this naming similarity reflects a very important historical reality in our school which is that as we build China studies at the University of California San Diego one of our earliest strongest best most consistent and most generous supporters has been mr. Sok Wong local Kuan so as we all call it and from the beginning of Kuan support for the China program based on a you know really broad far-seeing vision that these two great countries China and the United States have so much in common but also inevitably areas of friction I think that was a vision that we we now see realized in many ways today both good and bad obviously is going to be the part of our of our discussion with with Joe Tai today but Quan foresaw many of these issues many of these problems and of course many of the opportunities and so it was precisely for this purpose that Quan from the beginning said you know in addition to the other kinds of support I'd also like to create a lectureship it was his idea was his constant and the very first occupant the very first person who came to deliver the so-called multi lectureship was the Dean of studies of China and China overseas mr. Wang dong woo wah-wah-whoo in singapore who very distinguished gentleman and I believe was hosted at this I was house when he came here I just saw professor Wong in Singapore he's 88 years old just published a new book still lightning lightning quick one of the sharpest minds I've ever met and he shook my hand and of course the first thing he said was and house Kuan so and Mary instead of doing it was delightful delightful moment so it's really a pleasure to to bring this now to almost our 20th iteration and in order to introduce the the participants first I'm going to ask Dean Peter Cowie to come forward and say a few words of welcome on behalf of the University and the school of global policy and strategy Peter so thanks very much barry i am a poor but larger substitute for chancellor Khosla who was supposed to be with us tonight chancellor Khosla was flying back from europe and guess what happened his plane flights got messed up so he asked me to send his personal apologies but on behalf of the chancellor and for all of us at the school of global policy and strategy and the larger UC san diego community that has a passion for China and as engage with 21st century China program I welcome you here UC San Diego is truly a global University it draws the highest caliber of scholars and students from around the world but within that global reach the relationship with China obviously looms very very large our activities as a school and as a university are intended to serve all of human society but in particular we attempt to you our insights from research and teaching to build partnerships and certainly this relationship between the United States and China is one of the key partnerships that will define the evolution of the 21st century and the fate of human society on this planet so as we undertake this effort in partnership it's important that we invest and nurture the institutions that can be the catalyst for the partnership and I think that both Chancellor coastal and I would like to pay special tribute to the leadership of the 21st century China Center I could go through all the names but obviously two are particularly important from the ranks of our scholars professor Susan shirk and professor Barry Norman school of global policy and strategy itself is very much part and parcel of this visit a vision of partnership it's also part of the DNA of UC San Diego to do the unconventional when this school was created 30 years ago and as we celebrate it's 30 at the anniversary we made a bet and we made a bet that the focus of global dynamics would shift from a fulcrum point in the Atlantic to one in the Pacific where Asia and the Americas would be the start of the great events in the world and I think that vision has been proven out and that we have built appropriately for it as part of that continuous effort to build partnership reflection research understanding and service I'm pleased to say that this August were convening the inaugural UC San Diego forum on UC on us-china relations it's going to be a high-level meeting of thought leaders drawn from all quarters of us society business government nonprofits universities people who are distinguished in their work and understanding of China and it will also include some influential and if I might say independent minded experts from China in the discussion we see this is the beginning of an annual event that will be a signature place for the reflection on this partnership in all of its highs and lows and of course as Professor Norton said none of this would have come to fruition without the foresight the energy the unwavering dedication of Quan and Miriam so for both establishing this lectureship and establishing the chair that Barry holds I want to thank them I want to thank their daughter Annie and thereand otter and law grace who are with us also tonight so to the entire so family take a bow and finally I want to say that it's a great honor for us to have Joe Tsai as our featured lecturer tonight we're fortunate that he and his wife Clara who have chosen to live here in the st. UC San Diego neighborhood and to become active participants in our University so with that said let me welcome professor Norton back to the podium so that he can continue his role as the master of ceremonies and to all of you thank you for braving the rains thank you for showing a passion for this program and thank you for being our partners and building it to the next level of greatness yeah San Diego's are not afraid of a little rain right we're all out here adversity you know we can handle it so it's my great pleasure now to introduce Joe Toye who's our featured speaker in Converse end of the night I think everybody knows that Joe Tai is the executive vice chairman of the Alibaba Corporation and one of the small group of elect the founders of Alibaba who worked with Jack Ma from day one to create this amazing amazing company there's no point in me adding very many details to his biography except to say that he's somebody who didn't it it's not as if the Alibaba opportunity dropped out of the sky on him this is somebody who was preparing who was had already come from Taiwan to the United States engaged in the American education system went to Yale studied economics and East Asian Studies the two greatest combination of things that you could possibly study in this world then went on to study law at Yale Law School he had a whole career of his own before Alibaba and this is somebody a person of principle who follows his own ideals and vision as well and it's my understanding of course this may be mythology but I suspect this is like many myths a myth founded in reality that when I when when Jack Ma was starting up he said know if you want to be with me you have to leave everything else behind and join our small group at a relatively small shall we say in their salary and and Joe didn't hesitate and he joined this group who group of people who let's face it in some fundamental way changed the world we live in today so Joe is gonna be joined in conversation by Susan shark Susan is of course a professor here at GPS and the head of the 21st century China program and also the lead author of a task force report that was just published two days ago on how US policy should be adapted to to cope with this new situation of the increased tensions between China and the United States Josiah and Susan shark Leah please come on up to that I've enjoyed some of our recent conversations about us-china relations and I'm really glad that you agreed to come and honor the saw family by participating in this great event and to continue the conversation with our friends in the community so those Susan first I am really honored to be here I really want to again acknowledge mr. and mrs. so and their family here the other people I want to acknowledge are my parents in-law they're also sitting here and I know that in the audience there's a lot of professors my father-in-law was a economics professor at the University of Kansas for 30 years so I you know dad and mom you know I want to recognize and we wouldn't be here my wife is also here my wife Clara so Clara and I Clara and I wouldn't be here if it weren't for my parents-in-law because almost I think something like 16 years ago they had the wisdom of picking San Diego as their new home to retire and that's why we we've decided to come here and start to raise a family here so that's great well thanks to all of you it is one of the great advantages of UCSD is that we attract a wonderful community around us at every stage in life right we have young people coming and the we have all these interesting very young retired people who come here too which is great you know we just picked our place to retire a little early right so let's start with the the title you chose for our conversation the symbiosis of China and the United States now the the meaning of symbiosis is you have two dissimilar organisms but they're in a mutually beneficial relationship and so let's just start by asking you to say a little bit about how you see this as a symbiotic relationship and what you think are the most important elements in it and what are the benefits that the two countries get from it sure sure I find it quite interesting that I will have to refresh people's memories on symbiosis between the two countries because this really happened very quickly this sort of antagonism or the sense of conflict between China and the United States really happened over the last 18 months and but the the reality is on several levels the two countries are quite interdependent there is the there is the trade aspect I know there's a lot of trade but you know right now the Trump administration is harking about the trade deficit but the reality is China is importing something like a hundred and eighty billion dollars of goods and also about sixty billion dollars of services from the United States there's actually a service surplus that the United States enjoys with China to the tune of forty billion dollars every year so that's you know American America is benefiting from that and I would touch upon that later on but I think this trade deficit will over time structurally correct itself as China imports more because there is a a real critical mass of 300 million consumer middle-class that would be buying from the United States so at that's at the trade level very symbiotic the other thing is business activity corporate activity there's sixty eight thousand American companies operating in China and annually they generate about six hundred billion dollars of revenue and forty billion dollars of profits we've all seen how successful Apple Starbucks companies like Nike are making lots of lots of money in China and of course when the Chinese economy seemed to show a little bit of weakness Apple catches a huge cold so so so that that's that that's the inter relationship and then there's you know the different at the financial level China holds more than a trillion US dollars of American government debt so that's almost 30 percent of American government debt that's held by foreign governments are held by China and for America to continue to finance the government deficit 22 the 222 trillion dollars and you know I've seen forecast over the next few years there's going to be another additional two trillion dollars to finance tax cuts and things like that where's America gonna show its debt if China Chinese are turning away from from America right so that's that's at the financial level and then finally at the intellectual level you know there's everywhere I go it to the universities to the even to the Silicon Valley companies there's lots of people from China originally from China that of contributing greatly to American life and American business activity if all that's gonna be curtailed over time I think both countries were will hurt a lot so I really don't understand what happened over the last 18 months it's like we're on Valentine's Day yet we're in the middle of the worst storm that's ever happened in San Diego so I don't get this well I guess the political climate has changed too the political climate certainly has changed so you know it's undeniable that the US and China are in a more competitive relationship now people view it as a contest you know economist covers you know this is just standard framework for thinking about us China relations now but what what are we actually competing about well from I think from the American perspective here there are several areas the first thing is I think America's own introspection about the hollowing out of the manufacturing base and also seeing China being becoming more proficient at developing technology becoming leaders in certain areas of technology that presents itself presents of fear so there's this sense of anxiety about Oh sometime in the future China is going to become an upgraded country in terms of high-tech manufacturing that will become more competitive than we are that that's one level of anxiety the other level exam anxiety is if China develops all this great technology how about the military they're gonna use that to the military advantage so that's that that's the second thing the third thing is just overall sort of global influence America still today is a preeminent global power and all when you look at all these global institutions the World Bank I think the World Bank chief just stepped down and it's kind of interesting to see that the appointment is to be made by the American president well traditional than traditional but all heads the World Bank a European heads the IMF Japanese so so you have we still have kind of the American dominance in global institutions so when they see things like the one belt one Road initiative the Asian infrastructure investment bank that's kind of initiated by China there is a little sense of anxiety there so from at those levels from from technology manufacturing to military to global institutions these are sort of largely the three levels where that's giving America and anxiety from the book from the Chinese perspective that's not how China is seeing it I think really if you look at the the Communist Party today they really have two broad objectives sort of two goals one is to continue to grow Chinese economy so that Chinese citizens are wealthier and earning better income every year okay so that's so the life is better every year and that's giving legitimacy to the party to a single-party system the second thing is this whole this is a relatively new concept of Ming Zhu fushing which is unfortunately miss translated into English as national rejuvenation it is nothing to do with nationalism but it really is talking about the Renaissance of the Chinese culture and the Chinese people that's what the way I see means we're pushing means and the Xi Jinping government is is talking about that as a communications point but I think it's been misinterpreted in the in the West and the reason has been misinterpreted is if you look at Chinese history the recent several hundred years of history especially the late Qing Dynasty has been one of humiliation and shame starting from the Boxer Rebellion the eight nations Alliance the PACU injuring two the opium war to the Japanese invasion of China China has been basically raped in a very bad way and so so when the Xi Jingping government comes in he is saying look we need to eliminate this sense of shame that China has suffered at the hands of foreign powers in the future we need to make sure that Chinese people when they travel abroad they feel proud of themselves and not feel like they're they can be hauled Shifu you know if it can be you know beat up upon I still remember when I was young I saw a Bruce Lee movie and the Bruce Lee movie that there's this one scene as vivid is still in my memory the movie with the scene was that the a bunch of Japanese people went to Bruce Lee's a training center his martial arts training center and gave him a what do you call being fool it's a banner right on the banner says dongyeop being fool it says the sick man of the East that is what the Japanese called the Chinese so all that sense of humiliation and shame I think is the impetus behind this whole idea of means of wishing a renaissance of the Chinese so I think this is I think the communist government besides the economic aspect is taking on to itself that the this sort of sense of obligation to make sure that China in the future will be strong strong not not in a aggressive way but strong in the sense that so in the future Chinese people will not be looked down upon by foreign foreigners I think that's really what's happening but the communication somehow did not translate well into the United States I see your face so yeah yeah because I want to put it out there yeah you can you can believe it you can you can study it yourself but I think it's anyone that's interested in understanding the Chinese psyche today need to understand Chinese recent history the the last 200 years of Chinese history well certainly you know I think that the century of humiliation framework is one that's alarming to the outside world because it sounds like it's time to pay back the foreigners you know it's like no it sounds it's an anti foreign kind of framing it's not just pride that China's standing up but it's also attributing the fact that China was humiliated because of the West and that framework is not a framework that promotes cooperation well that's that's a that's your hypothesis I I disagree I think it I think the communication of this sort of Renaissance of the Chinese is not quite well communicated and that's why it's it comes across as being threatening but I think if you look at the history of you know China and the Chinese the Chinese people as a people we're not very aggressive people the China has largely been very defensive in all of its sort of psyche I I want to sort of steal a paraphrase of Henry Kissinger I think he once said that China is always surrounded by strong neighbors and American America has never been you know has always had weak neighbors around around this borders so sitting America it's hard to understand how the China feels with Russia to the North India to the South Japan and Korea of being you know close to two Americans so I think I think we need to reflect on on that on the circumstances okay so now of course you didn't grow up in China you grew up in Taiwan you're educated in America then you went back to China yeah so to lead a major company so how does that perspective you know growing up in Taiwan being educated in America how does that you know you didn't study the text books about century of humiliation you you I did in Taiwan yes I was very fortunate in two respects number one I was brought up Chinese in why I went to Chinese school I didn't speak English until I was in you know in boarding school in the United States and and absolutely those things are in the history books and the other aspect is I fortunately I came here when I was relatively young I spent most of my formative years in the United States so I think I understand Americans right I involve myself a lot in sports which is very big part in America and so I so I feel quite fortunate that I could have sort of both perspectives and and can be sort of balanced about it great so now the view in China's official media now is that well I mean you you've said something similar that basically Americans are freaking out because China is so successful and as China gets closer to the United States in GDP and in technological sophistication and in military strength and everything that is basically the narrowing of the gap between the two countries that's the big problem which is what is normally called the lucidity strap right that just a rising power and the dominant power is very hard for them to get along because especially because the dominant power feels very threatened and overreacts to the threat of the rise in power so is it your view that basically that's what's going on I think we have all the ingredients yeah of a facilities trap whether it's going to end up in war really depend on us right depend on all of us mm-hmm to figure things out now China is very very different from the Cold War from the Russia era or China is very different from Russia well the relationship between our two countries is very different I you I would say that the relationship between the United States and Russia doesn't have to be symbiotic and in a way it's sort of zero-sum the Russian economy is much smaller oh yeah Russia has a population of a hundred and thirty million people and they lose about 600,000 people every day I'm sorry every year every year not every day and it's a from an economic standpoint it's a declining that power but it's you know being propped up because they have a regime that that's wants to flex its muscles but if Russia does very poorly which American can do buy American can do buy you know depressing oil prices rut that doesn't hurt Americans okay but if China does very poorly I think it's foolish for anybody to think that oh the Chinese stock market is the worst performing stock market this year Chinese economy is going to the craps and and therefore that will give American and advantage in the Train ago she ation it that is a foolish thing the it's it's already coming back to bite the United States so this relationship if people start to realize that that we have to live together in a in a constructive way then people will find ways to reach out to find areas of cooperation of course there's going to be areas of disagreement I think there's a huge disagreement on political systems and how a country should be governed yeah we can cover cover that but I think there are big differences in in the stage of development even though China is catching up to the United States and GDP but if you look at GDP per capita china is still a developing country now sure enough there's about 300 million consumers middle class citizens in China that are probably just as well off as people were living in LA or you know if not better but better airports for sure better airports yes I mean are you still surprised that we can't even build a high-speed rail between San Francisco and LA and in China that's just not a non-issue and that's that those are the benefits of a single-party system when government decides that they want to execute they want to do something it gets done to the benefit of the people so so well what I'm getting at is China is still you know there's still three quarters of the population that are still have a very very low level of income China's GP per capita today is about nine thousand roughly around ninety thousand US dollars America is at fifty-six thousand US dollars so China has huge a long way to go before it can be feel like a rich country so the backlash against China is occurring not just in the United States but it's in other advanced industrial countries as well yeah we see it in Europe we see it in Japan of course Japan China relations are always a special case but and so I'm wondering if you know I mean we have many of us here have a lot of problems with the way our own government is going about foreign policy now but I'm wondering if you believe that there are policies that China's leaders should have undertaken that are in part causing this backlash hmm so before I get to that question I want to address whether the backlash is a global ie the Europeans and Japanese are also feeling the same way I think the the Europeans and the Japanese feel quite ambivalent I think there's one level at the national security level obviously you have this investigation of Huawei whether Huawei equipment is safe from a national security standpoint and America has gotten the European governments involved in that yeah but at the tre level everyone is saying it's thinking gee you know China has this giant economy it's going to be driven by a domestic demand they're gonna import a lot of things Xi Jinping has said in the next 15 years China is going to import 30 trillion US dollars of goods and 10 trillion dollars of services all that is opportunity to sell to China so if US leaves and leaves a vacuum that's we ought to jump in so if I was Germany or France or Italy I'm thinking that's exactly what I should be doing so I think the Europeans and the Japanese are our feel very ambivalent they're a lot of Japanese companies operating in China and their products are very popular in china they'd love to sell to the Chinese population that's the big difference between China and Russia Russia doesn't have a viable middle class that will that's that's that is really soft power if you are consuming a lot from all over the world people have to listen to you right right so that's I I think your question is about what has whether the Chinese is there anything that the Chinese have done the Chinese government has done that's provoked backlash I think I I think not by design of course um I think if you look at some of the areas that Americans are worried about for example on intellectual property in fact China has improved in its protection of intellectual property I want to separate that from cybersecurity okay that's a that the stuff of the CIA that's a separate matter but just the so-called stealing of intellectual property I think if you look at the last five years China has improved there's a study by the Peterson Institute that said well is there is this stuff of you know copyright infringement IP infringement that going on absolutely it's going on but it's been exaggerated that's basically the point of the Peterson Institute what it said is that they look at the the royalty payments that China has made to globally to the other countries in 2017 it was twenty nine billion dollars it's the it's the second largest after the United States well there's two countries that are in between its Netherlands and Ireland but those are special entity you know you take those out China pays the second largest royalty payments for intellectual property to the rest of the world okay so I think if you look at the IP issue that's that's being you know China has actually improved is there a sense that Chinese government's saying hey look if you guys want to come in and access to 1.3 billion people all of the consumers you need to transfer technology we need to protect some weaker industries yes absolutely and I think these are some of the issues that this trade negotiations will try to address that are not right absolutely so that's nothing that's so so that's that's been going on for a long time so there's really nothing that the Chinese have done recently that's provoked this I think what that I think what's been I would probably say there's there's a few couple things that has gotten people scared but not by design I think I think they've all been misunderstood I think one thing is this China manufacturing 2025 it's really part of the you know national rejuvenation rejuvenation if you will and there's really nothing wrong with the Chinese government saying hey look we've been making clothing and shoes and low-end manufacturing we're assembling phones for Tim Cook why can't we invent iPhones in our own country why can't we upgrade our own technology in manufacturing so that's really what's behind the 2025 plan but when it's translated over here it becomes very very threatening well I think it was the setting of the targets for China to dominate certain sectors not just inside China but internationally was fixed you know percentages and things like that that set up a kind of zero-sum framework yeah yeah exactly a sort of X amount of software will have to be procured domestic right it's led by the government as massive amounts of money and it's not I mean it's private firms as well as state-owned but it's a lot of money going I would say yes I I agree and and I think that's gotten people worried but I think there is a a there is a little bit of national security element behind that since the revelation by Edward Snowden about all these backdoor traps that you know they can build into routers and cisco equipment the chinese government is concerned the same reason why the american government is concerned about 5g equipment made by Huawei I mean so III think that's that's what's happening okay the other area is I think the Chinese government has been promoting this idea of socialism with Chinese characteristics except the that here in America we only hear about socialism and we say oh that's Marxist that's they are on a different system they have different values but I think the emphasis ought to be on with Chinese characteristics which is mark you know very market driven very entrepreneurial you know you look at the Chinese small businesses and Chinese entrepreneurs their values toward a free-market economy is very very similar to Americans anyway so the question whether China has done something recently in terms of policy or or anything that's gotten a America scared I would say yes in a way they emphasize certain things but but it's been misinterpreted here in America okay so do you feel that there is a bias that I mean why are American businesses so frustrated with the situation in China today you know because business used to be the key constituency for engagement policy with China and it's there disaffection yeah that really is a major factor in changing the political mood sure without the support of business and right now the national security concerns are dominating normally North you have national security concerns then the business people always want to do business and the White House has to strike the balance but right now national security is dominating and business isn't really pushing back very much so that's I think because they're frustrated with the situation mm-hmm in China okay so do you think Charlie's government could fix that I I think there's definitely room for improvement not for example in the pharmaceutical industry this market can be a little bit more open to American and European drug companies to come in I think that in the area of technology both hardware and software is always going to be tricky because of the national security concerns on both sides national security and all technologies are just an Internet and information communication communications hardware communications devices cell phones you know America is now banning Huawei cell phones from being sold here so but Apple is still really too bad because they're really good Apple Apple is still selling very well in China but we I don't want to see a day when Chinese government says we we don't we you're not allowed to sell it iPhones in China anymore that's that would be a bad result but that could happen if there's there's too much if America or the the current administration puts on too much pressure but I think you're right there's definitely a room for improvement one of the biggest things we've talked about this is what's giving sort of the current administration fuel to be very very aggressive toward China is that the business community are not putting up a fight they're saying go put some pressure on China so that we can open up markets right in China I think there's a little bit of jumping on the bandwagon but I think given what happened to Apple you know with they were blaming their their latest quarter on on Chinese weakness American companies are suffering so that I think there's going you're going to start my prediction is in the next six to nine months there will be people that are coming that will come out business people that would and strike a more conciliatory tone toward that we work with Starbucks in China they are doing extremely well in China they are adding something like over 200 stores every year in in China I mean you know there there's some American companies that are still very successful right so they they decide to keep quiet or or they decide to run for president [Laughter] exactly yeah so what's his position on us-china relations yes I don't know I can't speak for consoles but I have to say it's refreshing and it's surprising to see how antagonistic the the very far left Democrats or Democratic Party has gone so far to the left that they are attacking Howard Schultz who is a centrist Democrat but except that he couldn't he realized that he couldn't run as a Democrat he has to run as an independent mmm it's kind of well thank you sir votes from Democrats which is what they don't want him to run he'll take votes from the Republicans - hmm I mean he'll be a great alternative to trump vote from the Republicans stamps have you signed on with the Herald show oh I I can't vote here but I would say from an objective foreigner standpoint he would seem like he seemed like a very attractive candidate mm-hmm I think a lot of people feel we elected a businessman this time we're not so sure we want another businessman there is a difference I feel like I'm defending Howard Schultz I have to say he grew up in the projects in Brooklyn yeah he is a self-made successful businessman and well and okay so let's let's talk about what's happening right now with the so-called trade war which I hate to talk about trade war it's but in Chinese that's what people call it too right yes yeah so as a business how is this going to affect Alibaba you know is it impacting your the the business itself is not suffering because the Alibaba business is driven by domestic consumption and also to an extent of our cloud computing business the corporate digital transformation of China and so none of that have has anything to do with exports right or tariffs or anything but from a sentiment standpoint because we have a stock that's listed on the New York Stock Exchange the investors treat the Alibaba stock as a proxy for China's health so when they don't feel good about China the they would try to short our stock that's really the only effect yeah but what about going global is if we really move toward two blocks in the information and communication technology domain will this limit alibaba's potential to really go global I think so certainly it will limit our potential to operate in the United States and maybe in certain European countries so it's a bad thing to have to create these two parallel universes that don't work with each other where we are expanding internationally is in Southeast Asia the Southeast Asian countries their economies are developing economies their history in terms of economics looks more like how China has developed over the last 20 years so when we come in they they welcome us to come in and and even some of the I would say poor European European countries you know countries like you know Spain where the unemployment rate list is twenty five percent they actually love to buy from our platform from products from China sure so but but if we are creating two separate universes and they are antagonistic to each other that's definitely going to affect our ability to you know expand overseas it's gonna affect American companies from doing business in in the other sphere if you will so this horrible decoupling that appears to have already begun which you know I guess from Americans perspective this really sort of started with the secure and controllable policy of the Chinese government which limited our companies from operating in China and now the United States is doing the same and even more so perhaps so but it's primarily in this information communication technology so I guess something I've been wondering is can we limit this you know maybe we're just gonna have to live with this there's no going back to full integration in that area but can we limit it to just the information and communication technologies and still have this very fruitful symbiotic relationship in developing biotech and what about robotics what about AI you know AI people are treating as kind of symbol they're linking it to national security and of course it has potential to affect your military capabilities but do you think we can still manage to stay integrated in these other technical technological domains or is it a snowball I I think there's definitely an opportunity to work together again going back to the idea of synthesis right I mean just look at AI well I don't know if you read Chi fuli's book about the AI superpowers and China's maybe getting better at AI because the availability of data and all the scientists that could create algorithms and also you know how computing capability and all that I think in a way it is trying he's trying to look - was a great friend of mine but he's overdramatizing this competitive nature of AI between the two countries I think the reality is if you look at the applications of ai ai ai can now detect diseases and and get better treatment to people ai can be applied to agriculture to produce better crop yields AI can be applied to manufacturing to reduce the error defective rates if you look at the application of AI in all these sectors why shouldn't certain technology develop in one country why shouldn't that be shared yeah for the benefit of humankind and I think there's a lot of room for cooperation so just to take AI as an example you know people should be thinking about that instead when people think of AI they think about fighting robots the you know and so I I just think that that's a misunderstanding of AI right but it's going to be a big challenge to preserve that kind of integration because the decoupling in the internet space is also generates this kind of hostile mutual hostility and it's all the earth solvable problems I'll give you an example of AI we we are developing a we're working with a farmers cooperative in China on developing a way to assess credit to the farmers they have their data sets we have our data sets and then we say it's better for the two data sets to work together to train the machines but our client says well we're concerned about giving our data to you so let's figure out a way to train the machine with two separate data sets and we developed a technology to compartmentalize their data so it's all encrypted and protected and and we don't have access we don't see that data but we can continue to use two data sets to train the machine so then the shing got smarter so there are ways to solve these sort of concerns about data and and and privacy issues I just think that if people try hard enough and think hard enough we can we can find good solutions okay let's let's hope that we can do that so Alibaba is a Chinese company but its creation included bringing together a lot of know-how that's international right including that you brought for one thing and others in the company so technology finance corporate governance you know all united by Jack Maas unique vision so do you think a company like Alibaba could be creative today it's harder today I don't think it's impossible but it's harder today for the same reason that is harder to create another Google or Amazon or Facebook today then 15 20 years ago when Internet was a new thing and I think we were lucky to catch the the explosion of internet usage and I think but but I think 10 years from now Ali Ali Baba may not be the top Internet company in China there could be two or three other companies that that'll come up so we're certainly being very paranoid we we're definitely a subscribe to Auntie grows thesis of the only the paranoid survive yeah so let's talk now about what non-governmental organizations like businesses or universities or NGOs can do to try to reduce this growing hostility in us-china relations so so do you have any good ideas i I don't have the perfect ideas button having forums like this for people to exchange views I think that's that's good I think China suffers from one area and that is today for the Chinese to go internationally to communicate to the rest of the world they're speaking in their second language and that's a huge problem it's I I happen to you know I grew up only speaking Chinese mm-hmm and I know how difficult it is going to a new environment not speaking the language not be able to communicate so so today if there are international forums and events let's say Davos and things like that you don't see a lot of Chinese either government officials or business people that can be as articulate as Jack Ma so that's a problem because the story is not being told properly so I think so uh I think when I go back you know I'm gonna have to start to think about how do we how do we make sure that enough people from China who have the experience the business experience and knowledge and the language capability and push them out to talk talk about you know what is really happening in China rather than people getting their information from the New York Times only the New York Times is important it reports on certain aspect of China but I think there's 90% of China that people don't don't know about don't understand that which is why where we at 21st century China Center are starting this new project on China from the ground up right because I agree with you that people look at China as a monolith right and they always questioning what does China want you know what are its goals well Chinese people want a whole diversity of different things absolutely and so that's why we're gonna be studying more through surveys and other types of data what ordinary people in China watch and the other thing is in the other direction I think today there is a risk that Chinese people become very insular that don't and they don't understand enough about what's happening in America and Europe or other parts of Asia and what's not helping is if American universities are shutting off Chinese academics and students from coming here to really get a perspective and then bring that back to China if that's not happening anymore that's a very bad thing yeah I'll say it's you know universities are really one of the places where Chinese and Americans have come together the most fruitfully you know it's really been it's been a great thing and it would be horrible to see that in but I can tell you that there it's at risk for sure because of the concerns about loss of Technology and Chinese students coming here and the this concern about counterespionage you know the fact that you know there is some effort on the part of the Chinese government certainly most Chinese students I assume here for legitimate purposes and even those who report back to the Chinese government are here for legitimate purposes but they feel under pressure to report back so it's a huge problem I mean the the FBI DHS all of these agencies and I was just in Washington this week and there's and these people are professionals you know they're not political people really but they are very they've been worried about this I think for a long time and now they have a political leadership that is listening to them and really moving forward on this and it's and they're going out to universities to warn them that they have to be very careful about how they handle Chinese students in certain technical specialties and it's about right what about Chinese Americans people like my wife was born here yeah Wow see a threat well I know I know I'm very worried about yes I think I think there's a slippery slope here yeah and and you know I think if America is confident of its values and what they could teach young people yeah there shouldn't be fear I think in certain areas of research if touches on national security issues there there's a whole sort of classify system right do you have a classify status to work in a certain lab and things like that so I think that that apparatus is inside research universally but we do but even among technology some are more directly related to national security than others I think the danger is when you have to expansive a definition of which technologies are related to national security so now on the Chinese side we're facing restrictions too though you know because restrictions on Westerners doing research on they're creating a lot of new textbooks they don't want Western articles not so much in science and engineering but more in social science and humanities yeah so what's driving that do you think it's not different motivation I think a lot of fact that makes the Chinese are worried about their expression of very liberal opinions which in a in a single-party state it's that sometimes I could be viewed as as you know being disruptive it is what it is China - the fact is China today is a single-party system so there there's going to be restrictions on academic freedoms and freedom of expression that I mean do people like that I think most people are like don't like it for sure but I think too that that's but that's how the party the Communist Party needs to control that in order to feel that feel confident about pushing all their policies in other areas but it is what it is and and I think that it is the single party system is in place because the elite in China feel that china is still a developing country it is not where it should be and to get you know I talked about the two broader goals to make sure that the population is there you know every year wealthier and doing better and also to have this sort of sense of restore the sense of renaissance and pride about the Chinese culture they feel that dissent has to take take a back seat and that what whatever they're doing is right and that's that's that's what it is and it has to be clearly communicated so do you think people will still continue to make that trade-off if the economic growth slows and things get a little tougher economically in China I I think it's I think if people's income levels are declining every year no no but not to climbing maybe I'm just not clean here's the thing the slowdown right so the so-called chinese slow down people are obsessing over whether chinese economy grows 6.6 percent by 4 percent it's ridiculous and it's ridiculous because six percent of thirteen trillion dollar economy that's creating 800 billion dollars of new wealth every year that's an entire economy of the Netherlands so every year China is creating a new Netherlands every year so you know if it that that's what's going on and and today I think what's ultimately gonna happen maybe 20 30 years from now if you have 300 million people in the middle class that grows to 600 million people to 700 million people and all of their material needs are satisfied and they're just as well off as anybody living in San Diego or New York or San Francisco maybe they're they they would start to demand a little bit of freedom in other areas and and we'll see what happens well of course I mean things have improved tremendously from when I started studying China you know back in now yeah yeah it's just that the the improvement the pace of improvement has kind of slowed down you know and so it's a big question mark about how people in China feel about that I I think I can understand that sentiment I think especially over the last say three or four years but it is what it is yeah right but but Dan you know I think with China is the longer-term trajectory is still growth and I believe over time more liberalization in in all sectors of the economy so you know we we have to we have to live with sort of three steps forward two steps back kind of situation right well you saw Taiwan go from being a one-party state mmm disaster Oh economically that's well yes I think I look I I'm we're gonna have family issues [Laughter] look at look at what's happening to Taiwan economically people are very very unhappy because I think the current government is focused on the wrong things and and intentionally trying to shut off its all the relationships with China and Taiwan is could benefit so much from China quite integrated with China it is very very integrated in China think there is something like 2 million Taiwanese people working in China out of the population 23 million people so you know very integrated but the policy of the government right now is to anything that's having anything to do with China is being turned back okay so let's I think we're having such a good time but there are there are questions out there in the audience so let me ask my last question the NBA all-star game is just around the corner do you have a favorite player from the Eastern Conference all-stars absolutely I have four favorite players D'Angelo Russell rody Couric's Joe Harris and Jared Allen they all play for this Brooklyn Nets so you gonna go watch the games yeah I hope I hope so yeah what what what about the sports future for San Diego what do you have in mind for us I know there a lot of sports fans in San Diego and I think the future is quite interesting I've been personally involved in bringing in the indoor lacrosse team it's called the San Diego seals it's great and and you know I just found out about this there's a new football league professional football league called the Alliance of American football AAF nobody's heard about it but they just play their inaugural game this past weekend with great TV racers I don't I don't think the San Diego team played I'm not sure which team play but do we have it has a team it's called the San Diego fleet they lost okay but they have a they have a professional football team now I don't know where they play though what I'm not sure which stadium I see so they are still looking for a home site yeah yeah so so this issue with San Diego is there's a lack of proper venue for professional sports teams to play obviously the Chargers left because they felt the stadium was was not up to scratch and they needed to build a new stadium they needed some city government financing and couldn't get it so that that's kind of the the issue so you need to have I guess governments that are going to be a little bit more friendly to sports teams and and also business people that have that a little bit more daring to make that upfront investment you know building a stadium as a billion dollar type of proposition so it's not a thing right all right well thanks so much let's open it to the audience I got a safe to YouTube boat that was riveting and I've heard a lot of things build as conversations that weren't really dialogue and that was really a dialogue Thank You boom boom fantastic we do have a couple of questions from the floor we're gonna affair which I think a lot of these are for jobs so oh I left out you can always talk to Betty okay all right so the first one very interesting about conditions in China is economic reform in China moving in the right direction we gone forward or backward market ah I think there's a there's a feeling among business people in China that things have stalled a little bit or even move toward more state control of businesses but I would say that this is more of a pendulum and I think in recent months the senior leadership in the government have become better listeners they're listening to the business people and the most recent measure is tax relief for small businesses all last year they were trying to put more restrictions on their small businesses in terms of tax enforcement and things like that now they realize that they've gone a little bit too far so this tax relief for small business is quite welcome so so I think that the short answer is yes reform has stalled a little bit it I think it's disappointed some people especially in the business sector and it's hit the confidence of the business people and that's actually contributing to some of the slowdown because when business people don't have the confidence investment stops and you know we all know that investment is part of the economy a part of the economic growth so but but I think the government right now is starting to self-correct with some of the measures I think it's important that they promote this fiscal policy in the past the government has used monetary policy in other words pumping a lot of liquidity into the system and hoping that that money will be channeled to productive enterprises but the problem is that you have these large state-owned banks that have no incentive to really channel the funds to where it should go and instead the money went into property market speculation in the stock market and all that so monetary policy doesn't work anymore now is the time to for the Chinese government to run more of a deficit you know fiscal fiscal policy and cutting taxes is one of them so I think it's quite welcome but that's just been a measure that's only announced in January so we'll have to see what happens so I was gonna say you're you're a very big company obviously but you have contact with an enormous number of small businesses selling sort of other things yeah would you say they're starting to feel some relief starting to signal or is it still too early it's too early right now I don't I don't we don't see the tangible effects yet but I think it'll work through work through yeah this is kind of related it's a government connection crucial for the success of private enterprise question oh yeah so so I think connection is the wrong word I think good relationship and also building the trust between the enterprise and government is a universal idea for if you're a company in any country you want to have good relationship with the government you know if you look at Google Amazon Facebook they have tons of lobbyists in Washington what are they doing they're building that relationship and trust with with with the government so saying with a company like Alibaba we need to make sure that the whatever we do because what we do is all very new so when government regulators see new things new phenomena they the first reaction is not oh great let's let's go for it the very first reaction is hmm is this right how do we drag so you need to make sure that you're transparent to the government let them know about what's going on and and so that they they you build this sort of level of trust without and gendering any knee-jerk reaction from the regulator's so I think it's important yes Alibaba is doing very interesting things in Hangzhou in terms of developing a smart city approach you know very much in in conjunction with government but in a way I think a lot of people would say well you're out ahead and are leading the way is that something you would point to as an example of good relationship with the government uh it's it's both good relationship and also it's good business because the government sector you know the municipalities there are over I think a hundred and sixty cities in China 160 cities in China that have a population of more than 1 million people in America that's about 10 right so all these cities all have issues with traffic management police enforcement and things like that so they need to have tons of technology and if we can provide the right technology to them and sell the technology to then that'll be welcomed so that's actually good for our business yeah absolutely I got so many great questions here I'm gonna have to perform some triage we've only got really about three or five minutes left but let me let me ask you a question about Alibaba I hope that's okay it's a very interesting question here the questioner says in one of Jack Maas public speeches he mentions Alibaba is not an e-commerce company but a data company what's your opinion about the yeah Poli Baba's position in the Big Data revolution in China or however you want to hit that that's a question that's related to yeah because to to be good at AI you need to have large amounts of data to train the machines I think I want to demystify AI a little bit for the audience here ai is about teaching machines to be almost as smart as human beings you know we all debate whether it can be more smart smarter than human beings but to feed the Machine the food of machine in the AI context is data the more data it absorbs it can learn better so for example image recognition to recognize whether an animal is a cat or a dog you feed the machine literally millions of photos of cats and dogs and say okay that's a cat yes no that's a dog no so that's how you teach machines are actually pretty dumb they're not like babies who you know when they see a cat maybe once or twice they could recognize a cat but machines you need to have millions and millions of photos that's all data so we are if you look at the large-scale internet companies in the world the Facebook's of the world Amazon they are literally serving billions of people every day in their regular service so they have regular touches with consumers with users and in that process there are always collecting large amounts of data and then they they would use that data to improve their own service and also move into adjacent areas to launch new products and services yeah yeah it's uh death very good so a number of people have put forward versions of this question it's a very sensitive one which is is how worried are you about a backlash against Chinese Americans Chinese students in the United States you know when we think of the tremendous contribution that Chinese whether they're born here or naturalized or just visiting how worried are you about rough edges of this backlash I I don't worry about it because history repeats itself you know I think people don't know this that up until about six months ago there used to be a Supreme Court case that's infamous it's Korematsu I don't know if you know about it the Korematsu case is about basically the Supreme Court says it's actually not unconstitutional it's okay to lock up japanese-americans in these internment camps it's a very infamous case Korematsu was still good law until I think about six months ago when the Supreme Court actually in in dictum reversed it I think the legal status is not still not very clear but today if if the similar things happen let's say two Chinese Americans it is I'm not sure and people say oh that's unconstitutional the Supreme Court will have a case and I'm not sure how it's going to be decided so yes history repeats itself so I'm worried given us charge in a sense well yeah and you know our task force am i all right the I just like to make a plug for people to go on our website and read our test force report that you were part of the task force Barry and we did this together 21st century China center with the Asia Society course correction toward a effective and sustainable policy toward China and you know we talk about preventing those kinds of overreactions and we warn against them and it's the loss of talent and the possibility of anti Chinese Red Scare this kind of thing so you know certainly our voices are being expressed that concern in trying to slow down this kind of rush to talk about restrictions on students and export controls and things like this so no I think I'd really appreciate this opportunity to to you know have this exchange because I think most Americans are quite constructive it's just that right now the extreme voice is taking over the narrative and not enough people are I have spoken up but I think you will see more and more of that sort of more moderate and more constructive voice that that says look we've got plenty of problems with China they've got all these areas where they need to improve and we're gonna be very clear about that but the way moving forward is a symbiotic relationship we need to find ways areas where the two countries can cooperate and work with each other because the the potential damage the loss both economics and human lies is just too large right right if we don't work together [Applause]

Channel: UC San Diego School of Global Policy and Strategy

Views: 73,864

Rating: 4.7320199 out of 5

Keywords: china, gps, school of global policy and strategy, ucsd, uc san diego, 21st Century China Center, economics, international relations

Id: 8pwM4pvzykQ

Length: 81min 17sec (4877 seconds)

Published: Thu Mar 07 2019