¶ Intro / Opening
Bloomberg Audio Studios, Podcasts, Radio News.
Hello and welcome to another episode of The Odd Laws podcast.
I'm joll Wisenthal and I'm Tracy Alloway.
Tracy, you know, we talk all the time about US China relations, multiple times a month, games for obvious reasons we need. We usually get it from something resembling a US perspective, not always, but I think it's a bit skewed.
Yeah, there is a geographic bias at play, for sure, a linguistic one, yes, But you're right, there is always a lot going on with US China relations, and especially recently. Right So we're recording this on September sixteenth, and we have Chinese and American officials gathering in I think it's Madrid to talk trade, try to hammer out some sort of deal on the tear. By the time this episode comes out, maybe US China relations will have changed completely. But somehow I doubt it.
There's going to be some new era of peace. Everything is going to be solved, There's going to be no more anxiety about trade, A TikTok deal will have been made with the perfect algorithm that satisfies everyone everything. No, probably unlikely. Probably we are going to be talking about some version of this for a long time. I don't want say, you know, it's not like our perspectives are just strictly US. You know, we talked to Cameron Johnson
who works in China regularly, so it's not none. But we obviously have to change the mix up.
I admire your efforts at being on partisan.
Well cross border. You know, we have to still do it via zoom obviously. But isn't this a long historic
¶ Podcast Introduction and Context
trying to try like build build dialogue between multiple sides and get multiple perspectives in the hopes of achieving something.
All I'm gonna say is we need to go to Beijing, mostly for the food, but also for in her US China dialogue.
The dream is that in twenty twenty six US Alive. It's in Beijing. We're putting it out into the world right now, and I hope that we can manifest it into existence. Yes, all right, Well, I am really excited to say that in these efforts, we really do have the perfect guest. We're going to be speaking with Henry Wong. Here's the founder and president for the Center for China and Globalization. It's the largest independent think tank in China.
Someone perfectly placed to talk about all of these topics from a Chinese perspective that we don't usually get. So Henry, thank you so much for coming on the.
Podcast, and thank you, yeah that plessure. What is the.
Center for China and Globalization? Why did you found it? What is its goal? And what is this independent think tank that exists?
Yes, we actually founded since twenty two oh eight. Actually, yeah, right after the Beijing Olympic. You know, at that time, you know, when we watched the Beijing Olympic, the slogan for the Olympics then was one word, one dream. So I thought that that's actually it's a globalization and Chinie actually embarked on a globalization year because I think Olympic, Beijing Olympics in two eight was something that China's started to read about globally. And so that's where we start
to found this think tank. At first, I have to take all of the savings. You know, I was doing all the business before, but we really want to study. But I really have found this thing tank that can't combine my experience in a government, business and academic and also you know, since then, it's seventeen eighteen years now and we become one of the top one hundred think tank in the world, actually ranked four times in the top hundred by the University of Pennsylvania Think Tank and
the Service Society Program. So, so CCG, you know, abbreviation for Santa Ma China is a bridge. Is a communication platform, dialogue platform, and also it's a research platform for big issues, policy issues regarding US and China, gobal governance, golobal economy,
¶ Founding the China Center
and of course goobal migration. So just to name a few. But since then we've been doing Okay, we had about over sixty seventy people, and we've been based in Beijing and Honju and Guangdo, a few places in China, and we've been very active. We're doing one hundred event a year. We published a dozen books and multiple reports. So thank you for asking that.
So you described the center as something of a bridge, and I was reading an Economist article from a couple of years ago where you yourself are described as something of a go between for technocratic government ministries, Chinese entrepreneurs, and foreign embassies in Beijing. So my question is, how busy have you been lately?
We are pretty busy. I just give you a few examples for example, last week I was in sham and attending September eight the twenty five annual China Investment and Business Forum and Export. There the Vice Premier Relifone, who is now in Madrid talking with Scott Basin, was there opening up that forum, and so I was speaking at the keynote speaker at one of the Bricks Summit conference there.
But also just Friday Santava, China hold another conference at China International Service Export, you know, held in Beijing, where there's another one hundred some countries come as well. And yesterday we had our seventeen's mostly VIP launching, and we have attend ambassadors from European, from Japan, from Turkey, from many other countries, quite a member from European countries, and just yesterday with fifty people I'm represented in China. We
have a lot of multinational global media. And also of course last night I attend relevant riception the US members a hold the reception were becoming the new Deputy Head of the Mission, mister Gregg, and he actually made an action speech there. He said, the China and the US relation now rather than in the past. I mean, you know,
¶ Current Diplomatic Activities
I know that in the past we had a lot of a strategic rivalry, but the new head of a new deputy head of the US mission here in China and said, now we should put a strategic stability. He's not talking about strategic arriving now, So it's the strategical stability you maintained a US channel relation and Secretary of Rubio also said that in July. So it's very encouraging
to see the thing going on. But that's also shows how busy we are meeting all the peoples and talking to all the parties and the business too.
I get that various people might describe an ambition for stability, it does not typically feel like it when I read the headlines that this is a stable relationship for various reasons, particularly the headlines that come out of the Trump administration, which strike me as volatile. Setting aside what you hear from officials, whether at the embassy or the State Department.
Does it feel like that is the trajectory, because it certainly feels, especially over the last ten years, that when I was younger, the relationship felt something more like stability, and at these days it's much more about rivalry and anxiety about potential conflict.
That's right, I agree with you. I think that basically because of this deterioration since the first Trump administration in twenty seventeen and now eight years later, the resion does really go down quite a lot already. And because in the twenty seventeen the National Security Committee of US has put a strategic report and according China a strategic rivalry number one, I mean before Russia. Actually, so we see that. Since then we had a trade war and the tire war.
But this second term, somehow I felt well in China a bit more, you know, getting used to this kind of tariff trade war. And China is also better prepared
¶ Stability in US-China Relations?
than the other countries because we already experienced in the first trum administration. So now I think also china economy is second only to the US. The two countries are too much independence among each other. And so, you know, because geo politically, we are really looking very bad. And then I think the consensus on post government is that we need to look for some stability because we can't change each other. We cannot wepe, you know, delete each other.
We have to coexist and peacefully. And that's probably the conclusion that we're getting there. And so we have to seek a common ground and the coexisting even we are having a lot of different views and ideas.
So you mentioned just then the idea of the world's two biggest economies being more dependent on each other. Perhaps less so nowadays, but over I guess the decades of the early two thousands, certainly they grew more dependent on each other because of globalization. And this is something that I wanted to ask you, which is, what exactly is
China's definition or understanding of globalization. And I ask this because I think in the West it's sort of generally thought of as this process of more countries trading with each other and again becoming more economically dependent on each other. But there's also this sort of social element that's also in there, because I think the assumption was always that as countries trade more with each other, they're going to start sharing, you know, values, whether those are political or social.
And I'm curious if globalization is thought of the same way in China.
Well, I think that in China because it was a late commerce you know, for example, you see the globalization in the nineteenth century, which is, you know, Britain invented the steam power that led the industrial revolution, in nineteenth century and twentieth century. American invented the internet, computers and digital and US has led in the twentieth century. I
¶ China's View on Globalization
think twenty first century Chinese is also you know coming up now for example on green power, Chinese leading on evs, on the solar panels and also the wind power and other sea But in the compalization concept in the Chinese mind is really more referred to the economic coorgalization because because that's the benefit they're getting substantially. For example, eight hundred million people has been lifted out of property since
China embraced opening up, basically embraced the globalization. And then you can see China now is the largest trading nation or major trading nation with one fifty seven countries around the world. And also furthermore, China is have since the opening up in the last forty seven years, China's about almost ten million student study the board, I mean almost half of that in the United States. So that means cooplization. I think there's a.
Flow of people, flow of talent, flow of goods, you know, in connect connectivities fast you know, stock marketing, exchange listed with each other, and also business doing. You know, there are seventy thousand US company operating in China generating seven hundred billion revenues here in China.
And also you know Apple will make eighteen ninety percent of his iPhone in China, and Tesla make fifty percent of its evy cars in China, and one Apprecious about sixty percent. That's a surprise from China. So I think that's probably the colation in China felt the substantial benefit probably for both Chinese and as American consumers. They are less ideological, but they're more probably on an economic sense that globalizations really bring them a lot of a good
and benefits. Example, since China John A. W Two, twenty eleven, Chinese GENIP has gone up thirteen fourteen times. So that really I think in the minds of Chinese when they talk about globalization, they're really talking about joining economic orbalization rather than the global securitization. They don't want to see the Arcust, they don't want to see the Quad. They don't want to see Camp David of Korea, Japan and all those security or NATO move into Asia, that kind
of militarized globalization. They want to see more economic clublizations.
I'm a huge personal beneficiary of these students, of living in the East Village, where there's been an absolute explosion of amazing Chinese restaurants in my neighborhood of New York City because there's so many students there. So I'm personally very invested in this trend continuing. But let's talk a little bit more about the security angle. You've actually written somewhat recently that China could play some role in the eventual,
hopeful end of Russia's war with Ukraine. But we don't tend to associate the Chinese government with playing an active role in global conflicts not directly near the borders, including Israel and Gaza, which we should talk about too. But when it comes to something, you know, when it comes to the Russia Ukraine war that tends to be focused
on the Europeans, the role that US will play. Is there going to be a point in the near future or is there something we're missing where China sees this conflict that is far from its direct borders and wants to play a more activist role in bringing peace or is this something that is only associated with the sort of American style, Western led style of globalization.
Well, I think that's probably now the world is. I mean I was at Munich Security Conference kickoff meeting Berlin earlier this year with the chairman of the Munich Secure Conference. The issue the report I was discussing. On that report they called multipolarity. So we're getting into multipolar war. I mean, China suddenly become one part of of this multipolar war and then you can see what happened in the Russian Ukraine War. There it's getting nowhere. We had Alaska sammit.
That's why I published up the Foreign Policy two days before the Alaska SAMI. Basically, I suggest that if you as a defense secretary, I heard him saying at the Munich Security Conference that the one peace making troops coming from European countries and non European countries. So what'll be by now European countries? So I think that countries could be these brick countries from China, India, Brazil, you know,
South Africa or Turkey, whatever, bricks countries. But basically, again you see that when Trump actually after the Alaska talking to G seven at White House, put an actor talked to President Ship before he's Alaska and talked to Lulah talk to Moody and talk to the person of South Africa after the Alaska So I think that I recently seen macomb proposing that let's have twenty six European countries troops placed into Ukraine. But that get very strong reaction
from Russia that Putting is that okay? For that is the case that we regard it as a NATO violation or something. So we see that the excuse for Putting to start the war is because the Natal troops are puaching Russian border. I mean, after three and a half years fighted me, you have a NATO European troops there again, I mean he will not probably ending that war easy.
So I think a more extra guarantee for this peace making in addition to NATO, EU and and also US, let's get China, India, Brazil, those the largest buyers of Russian energy product and what else is really an extra safe keeping for the for the border. And then by having Chinese peace keeping force there, it will really you know, make you know, make Russia difficult to violate that peace border because you know, China has a lot of influence
on Russia. Same for India, same for Brazil. So so I think that we're in there is this, We're stuck in this. You know, Trump says, you know, he started to sanction again. You're not going anywhere. But I think by adding the China bricks element, we probably see a more security piece that's going to happen.
M What does China actually think its role in the world should be? And we talked about its role economically and the idea of globalization, but setting aside economies when it comes to geopolitical security, be what exactly does China want to be?
Yes, well, thank you, I think. But basically China is
¶ China's Role in Ukraine War
a large country, of course, but it's basically agriculture culture. You know, it's basically you have a five thousand years history, I interrupt the civilization. It based on agriculture economy. The farmers cultivated along the Yan's River and the Yellow River, and the confusion said, if your parents alive, don't travel far away, and then you can only cultivate the land for seasons that they can grow enough vegetables and wheat
and grain to feed yourself. So it's really that kind of a culture cultivated the culture of China, and they are not really a nation on horses or like Mongolias. They're going to expeditions or going to have a connalize any places. In the mid Dallas there's a Marshall called had a big expedition trips beyond almost to Africa. Also, you know as young country socialization, they never they never stayed anywhere, they never occupy any places. They all returned
seven times. It was even earlier than Columbia. So you see, that is really the culture China has until now, for the last forty years, China hasn't started any wars, stand any soul journeywhere, or colonize any place, or invaded any other country. So I think geopolitically, we had this big parade on September third to commemorate in the Second World War. But I think China has produced enough deteriories so that you know, probably if they are in any hot conflict,
they have enough defenses to deter in that. So if we cannot have a nuclear or hot war to mutually assure destruction, then the only thing remains is peaceful competition on the economy, on the soft power, on the culture, on the people to people exchanges. So I think China wants to really see, let's have a level print field and let's really compete on the economic China now is having seventy percent of Go Go speed, the railway, five gen networks of the world, out of the ten largest
container ports, several of them in China. China also has thirteen million college graduate every year, and you know, they have a lot of the things that they are doing on their own and also on energy installation now They're electricity consumption is two point five times of US, three times of Europe now and in terms of green power, China has produced a fifteen to sixteen million EV cars total number will be thirty million, and they have a
sixteen million charges stations in China everywhere, you know, very convenient to charge your EV carnal. So I think, you know, they want to public compete in those area rather than geopolitically. So I think maybe if China can play some maintains on peace keeping would be great because China is the
largest the peace keeping budget contributed to the UN. China is the largest peace keeping sending force amount the P five countries, so China can do more peacekeeping and also economically, you know, China larned the money initiative about the ROW initiative, China just did summit in Tangine where they is so Bank. They have a bricks Bank, New Development Bank, so they're
doing all this kind of economic stuff. I think that's how they view the world should be intertwined the more economically business wise, rather than we are really divided according to the ideological divided according to democracy versus autocracy, and divided by you know this this east or West. So there's many things. I think China is thinking a little differently.
You mentioned the United Nations, and there's sort of this question about the relevant or the vitality of a lot of these Western developed multilateral organizations wto being among them,
¶ China's Geopolitical Aspirations
but you specifically in your vision, maybe China's vision, or maybe there's distinct Is it's important to breathe new life into these organizations or is there a new set of organizations, including some of the ones that China has set up itself, whether it's the be r I, whether we're talking about the Bricks, whether it talk about some of these others.
Is the future more okay? If we're going to have this sort of new style of globalization, we actually genuinely need new organizations rather than the husks of the organizations that were sort of built out of the Western liberal order.
Absolutely, I think that's that's quite true. I have written to Listen to Me, wrote the book about my dialogue with grand Allison, the funding thing of Havard Coundedy School, which have become a very good seller in China now also English wise. Basically, we find that in our dialogue we talk about US China relations as con John tweens. You know, we cannot separate each other. You know, if we want to separate each other, we end up damage ourself. So that's a given. So we should avoid the so
he hit his trap that Grandma isn't famously defined. But also on the other hand, we should also avoid the Kinderberger trap, which means that when new rising power starting to catching up existing number one power, there's a vacuum in the global public goods like when US was taking place in UK, there's a lot of a missing linking points. You know, we've got big recession in the in the thirties, nineteen thirties and things like that. So China actually is US is now put a bit back on its policy.
Now it's become a mega you know, make me first, make me great again, and rather than there's no country. Really, it's looking at the gob of public goods. So that's what China is now. China has not backed on a climate change agreement. China strongly support that and China has developed a very clime friendly environment now and we reach cobon neutral and combon peak ahead of time.
But just to be clear, these legacy organizations, specifically like the U, China feel like these are their bets that China is intended to make, that these are going to be important institutions or are they fading like many legacy institutions, And that the sort of new more stable order that you may envision doesn't have to be with a fresh set of multilateral international organizations.
No. I think China is a strong support of existing UN system, and as president, she just recently proposed the Global Governance institu I mean on five point two or three point he was emphasized the UN principal view and chant of UN and also we can't help he has improved and make it better, but we should not just restart.
But on the other hand, we see you also getting quite a marginalized and there's a be awakening and for example, China become a second largest donor to the UN budget now close to you has almost no difference now and also when US putting out of who, China committed the five hundred million US dollars who and when you know W two is marginal, China is working with your Europeans to do that. But furthermore, I think China is still the only public big country, one of the largest economies
still proposing economic corporations like a Belgium ROA initiative. For the last twelve thirteen years, Chinese invest over one trillion US dollars for three thousand projects. And also furthermore, China has started the China Africa Economic Summit, China and Latin American Economic SUMMI, China and US CEO Economic Summit, and China Central Asia and China Arab Economic su So it's
all economy related. And furthermore, and while Persident Trump has raised in one hundred some country tariff, China announced they're
¶ Reforming Global Institutions
they're going to reduce the tariff of fifty three least development country tariff zero for coming to China. So you can see the contrast there. So I think China is really providing enough public goods to fill some to vacuum US is backing off on development on the global sal and on the on the US system. You know, Chinese US are putting off the UNICO Chinese that was a big support of UNISICO, UH and so and so forth. So so I think China is doing a lot of that kind of activities now.
When it comes to US China relations. You know, you mentioned that your book was selling well in China. I'm really curious what is the biggest misunderstanding or the biggest concern that you hear from Chinese people on the ground when it comes to US policy. And I realized it's a little bit unfair word treating you as a spokesman
for an entire country and China. We don't intend to do that, but I'd be curious, like, what sort of questions do you get on a daily basis from the average Chinese person about America and what it's doing well.
I think the biggest throwing point basically that the bother of the ordinary Chinese that we see the US you know, navies coming to Chinese Ivan Street or South Channel Sea or quite often we see you know, airplan patrol in this part of the world. We never see Chinese aircraft or Navy go to Hawaii or go to Caribbean. You know, we never see that, but we see the US military persons very strong. We had the forty thousand US a
minitary personnality in South Korea. It's just just neighboring China and another I don't know how many, you know, it's quite thirty forty thousand public in Japan and we have now in Philippine. And then they have also miss cells, mid range miss sells place there and also they're going to place new missiles in Japan now and South Korea. So those of them actually bought because because China felt you know, Taiwan is part of China, and certainly the
people in the USA, oh, China's or democracy. We have the defender, but China has a Chinese style democracy. Maritocracy also works perfect, you know, not perfect, but at least to work well for this most populous country in the world. So I think, you know, we all have a different governor style. But just because our governor style is with you, and then that's why you need to because Taiwan, because the reason for the protecting Taiwan is Taiwan is the democracy.
Say that we have to protect that but I think you know, China can also absorbing that. And you know, China promised to Taiwan, you know, no tax to be given to federal government, a lot of autonomy, and China announced that Taiwan Taiwanese will be free to walk in the mayland. You know, no visa needed, anything needed. We already two million taiwan Is working to mainland, and there's
half a million husband wife married across the street. And then before tai when you know formal person of Taiwan, you know, there's six million mayland flooded the Taiwan with tourism. Send me the money spending restaurant, hotels. You know, there was almost integrated already if not for the four interference. So I think the Chinese said, okay, please maybe just let us peacefully unified, like like Germany you had the you know East Germany, West Germany unified, and let's also
hope in North Korea sALS Care unified. So basically they were really looking for less interference on that. And so I think that would be greatly improve in the reason because in the communicate that the established three Communicate China US have it said very clear US will not maintained. You know, we're just named the normal time, no official times. But then we see US officials, parliament managary Nazi policy keep visiting Taiwan or Taiwanese leaders coming to the visiting US.
So those in public about a bit of ordinary Chinese. But of course again win then of course US was a world place man for a long time. But now we see many countries also the governt model is not working perfectly. We have all the domestic issues, US has it, European has it, All the countries has that. But China on the other and seems maintain a pretty good status.
And that's also keep lifting people out of property. So I think they should give China some credit for doing that rather than okay, is always shown in front of
¶ Chinese Concerns on US Policy
the China's those steps, and you have a US parade of military muscles all the time, So that's a bit of bothered for the Chinese.
Basically, when you think about China's relationship with the other bricks countries, with African countries, with the global South country so to speak, have you seen substantive changes in those relationships, specifically since the wake of October twenty twenty three and the start of the war on Gaza and countries sort of rethinking. You know, has this prompted a concrete rethinking about you know, you said the US was the global policeman and a lot of people have perceived that in
the wake of this ongoing war. Has there been a substantive change the way countries want to have a relationship with China.
Well, absolutely, you can. You know, this show was for the first time you see China Asian Summit at the g CC. You know, golf countries all came to CM. So you had the first China Asian CC Summit. And now you can see also the bricks countries expanding that. You had the you know, UAE was there, and there's a lot of you know, Middle Eastern countries really coming to China. You have you also have the s Shaha Corporation summit. Recently, you had the Turkey, you had the
Iranian president. You have a lot of people from that region. So I think China's road does play because China, for example, a few years ago, China clinched do between Saudis and Iranians rather than you know, we're seeing the current chaos going on. China also causing the fourteen different fractions of Palestinian group had aging Palestinian decoration, and China could publicly do more in making a peace promoting peace between and Palestinian.
China also maintained good religion in the past with issue. So I think that sooner or later, probably those countries we realize that we cannot really let just what happened that gods are the humanitarian crisis that you know, deaths of thousands and tens of thousands of people, what happened you're living on a daily basis, I mean, where is where is the where is the you know, children are dying and all these things, so that kind of justice.
Where is the justice? Now? So of course there's there's there's always problem to start with, but I think we cannot because a two round doesn't make it right. I really think that we should continue to have this international moral power that the United Nations Security Council should really exercise rather than you know, being vtled all the time. So I'm thinking, you know, China public could play more role in the future. But that's that's let's solve this
Quinn crisis. If the if the breaks country peace making can happen. Uh left by China and I'm sure that model could be applied to other conflicts in other regions. China also trying to You can see Prime Minister Moodie and the Prime Minister of Pakistan was at the same type a few months after fighting in China, and we said Armenia and Azerbaijab president coming to sing in Tanging as well. So probably China is its building up its mediating power and peace keeping power as time goes on.
M just going back to globalization for a second. I think everyone agrees, and you've already talked about this, that China has been a huge beneficiary from globalization over time, but I get the sense that there is still of feeling within China that some aspects of the global economic order or trade agreements are unfair to China. How do you sort of square that tension and where do you think the concern or the worries over unfairness actually comes from.
And by the way, I could ask this question to American officials as well, Like the US is a massive beneficiary of the global economic order, and yet the Trump administration clearly feels very aggrieved about America's place in the world. But when it comes to China, like where does the sense of unfairness actually come from.
¶ China's Global South Engagement
Well, there's quite a few actually. You see. One of the things that US was treating the pure deficit. That's the only reason they started tire for war. I was giving a talk just the last April to a few months ago at the UN Security Council where they called a specially arena meeting in New York. Eighty countries representably
un participated. Where I gave a speech there. I was saying that for example, US only looking at the goods deficit, you know, merchandise compasite, but all of that deficit was maybe you know, thirty forty fifty percent was produced by multinational thirty percent by US. For example, out of the four hundred billion deficit, the Trump is a levy on China's three hundred some billion deficit. He immediately waived one hundred billion because a lot of the companies are made
goods in China. Apple has to source their iPhone from India, but it's not enough, so they have to lift that sanctions on those deficits. Anyway, and there's a lot of inter time. But also US and joined one trillion dollar trade surplus on the service tree. They're not counting that. And also the calculation about China's export. For example, every every phone we made in China, I've iPhone made here, China probably made the labor costs, you know, eighty percent
was made by multinationals, even cars the same. So why is just purely looking at the trade deficit numbers. A lot of money was not made in China, was made by international multinational companies and they're not sending back to the country. So that's why I agree with the President Trump to have more investment back to US because multinational made a lot of money in China and elsewhere, but they should really investment back rather than putting the tax heavens.
So that's why the Global minimum taps proposed by OECD has a great by over one hundreds some countries, but it's not practiced yet on that now. So that's what aspect. The other spect I could say is the for example, US is starting these sanctions on China, for example, forbidden the use selling the chips to China, so that is really and also they called in the Trump administration, you know,
high fance, small yard and all those things. And there's one thousand and five hundred Chinese companies on the US anti the least. I mean, maybe China has a dozen or or two dozen of US companies, but compared with the magnitude of US, is too much. Too many over the security, over use of the security raises to really restrict all the Chinese companies on that. So that really
become a problem. And so that's why China started to say, okay, if chips can be the do use goods, right, you can say okay, can be used for security or military. The same is true for rare earths right, raiers can be making for airplanes, tanks, everything. So when China started a little bit on that, that US starting to relax on the sale of the chips now quite a bit.
So you can see, you know, morally, it's the same reason if US doing things in the first term, China didn't respond like that, but now China starting to respond like that. So I think that's why we see quite a few agreement made by between US and Chinese off issues,
because China is much resilient now, much stronger. And also US has realized if they really sanctioned so hard on China, the Christmas shopping sees that we're coming up the shoves will be empty, and we could you know, American consumer will suffer and then that going to hurt the Trump space. That's why we keep extending. They have these seems more they talk to each other, more friendly than talk to Indian and Brazil and others. So I think they probably
realized that too. Lott is economy, they can really organize each other. They have to fund the ready to collabor.
The Christmas shopping season is my personal super Bowl.
Yes, earlier this year, actually not that long ago, Bloomberg reported, So therefore it's absolutely true. It says quote officials in Beijing verbally encouraged regulatory agencies and local governments to curb technology transfers and equipment exports to India and Southeast Asia. And there were some stories about Fox con engineers, for example, who may have been part of some sort of moving the supply chain of those Apple iPhones, the men part
of the final assembly perhaps to India. And this report that Chinese officials may have been pushing back against it, I get like rhetorically, the existing system where American companies do a lot of manufacturing or in China has been incredibly beneficial. Is China totally comfortable with the fact that as part of this globalization, some of this manufacturing may end up leaving or is you know, US seeks to diversify its sources. Is China comfortable with this?
China, I think it's pretty comfortable now. And that's why China is more confident. For example, in twenty nineteen one, before covid Us is largest trading part of China, and now US fall into the third place or the first place now because URCI become the largest place trading part
of China since the Asset Regional Comprehensive Partnership Agreement. And then that is actually happening because you know, Viennam become China FAS's largest trading partner now and Indonesia, Malaysia and now expanded to Latin American, you know, most a lot of American countries. China is the largest trading partner. And also with Africa. Now China lifted all the tariff from African countries products to come to China. You will see a flot of African products coming to China. So so
I think you know that probably China doesn't mine. There's low maybe a little bit labor entires because the labor average labor workerforce micro workers ages forty three years old. It's getting old China. So there's a lot of shoemaking or you know, low low income labor cost jobs went to Vienna went to China. Really doesn't mine now. The China now is focused on the high end now. For example, Chinese focus on the green power transition.
¶ Perceived Trade Imbalances
No curves like there's no curves as far as like from your perspective, there's no impulsive the government to curb moving some of these more advanced things again talk about iPhones and such to a country like India.
Not really. I think China still encourage the investment for example Bui d or you know, c ATL and I know quite a few companies still very bullished investing overseas. There may be sensitive military or rare stuff that China may be question a little bit, but on the general I think things are still quite open.
Is there an argument to be made that China should perhaps open its own economy further if you know, it actually desires more economic integration with the rest of the world, because we're talking about globalization still. But China still has capital controls, still has currency controls, still has some restrictions on investment and things like that. Should it be more.
Open, absolutely, I agree with you. I think China should be more open, and that's why we've been that's our think time role to promote that. For example, we proposed people promoting the visa. Now China has you should beatly laterally you should visa for forty some countries in our European countries, Australia, Japan, South Korea. I urge also you recommend China to policymakers to open visa for US citizens
for Canadia City this coming to Channel Free. But also on the trade policy, I think there should be more libilization continuously. I note that the government is located to that and fifteen five years plan will probably be even more open. Of course, there's always rooms to improve. I totally agree. And they have opened a financial sector quite a long time ago, and as you said, maybe in
currency they should be more convertible. And also on the on the investment in the culture, in the in the in the you know, other areas pharmaceutical and now Channa also welcome for university come to China to open their branches and do it. I'm on the board of a Duke Queensland University in China, which is John Vander between
Duke University and Huhai University. You know, we have so many international student there and Yu shang Hai is operating very well, so we hope to have more goloble exchanges. I agree with you. You know, there's there's still more rooms. That's why I think this kind of talk between China and US. Now we see tiktoks almost maybe have a deal there, and it's great, so we listen, is this start we should continuously talk and engage and reach agreement and open up further to acm to each other.
First comes diplomacy through dance videos, Joe, and then comes an easing of currency restrictions.
Well podcast recordings. Just to be clear, you know, obviously we don't expect you to be the representative of the entire Chinese perspective, Tracy, and I need to establish that we do not represent the entire United States and the questions that we have. You mentioned the goods trade deficit, and of course one of the things is you know, obviously China has gotten up much richer thanks to the booming industrial sector. The US has benefited from a lot
of less expensive, more sophisticated goods that AD buys. But there is this source of concern, and I say this, you know, a couple of weeks after that military prade, there is a source of concern that without a robust American manufacturing capacity that we can no longer be a powerful military country as well. And I know I do not believe it is China's role to sort of helped
the US figure out its industrial capacity questions. Nonetheless, from the perspective, does the US concern make sense to you? Perhaps there are things that seem unfair, certain technology transfer restrictions,
seem counter to the spirit of globalization, et cetera. But is the US fundamentally wrong to be concerned there is more and more of the world's share, however you want to measure it of manufacturing of advanced goods somehow become centered around China, that that long term weakened the national security position of the United States.
Well, I think we are now more intertwined. Warnow, there's quite a bit of the competitive advantage, like Davi Kanto mentioned in many years ago. So what I think US is still leading. The US is very good at inventing innovation.
¶ China's Evolving Manufacturing
You see Silicon Valley. You CEI. You know, by the way Jason Hulk said, the half of the AA talent's coming from China. You know, US is a big harvest of Chinese talent too, And that's why we're saying several million Chinese student went to the United States. I mean probably half of them return still have a remain that greatly benefited the US economy. So what I think that that is really US is good doing zero to one, and maybe China is good at one to one hundred.
So of the world one hundred university top fifty is doing the United States. The reason China did allders of manufacturing because as I mentioned, China is seventy percent of the global speed railway sixty, golo go five, gen networks ten, largest container broad seven. They have the infrastructure to so this is a value change supply chain for the world, not for China. So maybe in Chinese is made for the world. I think US only worried about if they
can make you cannot make big ships or aircraft. Now they go to South Korea to do that now, so they still find a way to do that. But I don't think that you have to depend totally on the manufacturer. So if if if we're leaving the pre uh you know, the trade war era, you know where we buy so much chips from US China China energy depends on the import Channa to spend more money buying the chips than
China importing energy. So now US said they're not selling to China, and then the US company losing a big profit center and then they are really reduced their antibuddy, and China is forced to do reinvent well, and there's a lot of waste there. So we see this separation is really no good all on security reasons. We should not overseecurize and we should really display our own each other's a compartit advantage.
I want to ask one more question about security philosophy. Obviously, when Russia invaded Ukraine, the US opposed all kinds of sanctions on Russia and tried to constrain its ability to trade it all or make any money. Going back to Israel's war in Gaza, and you express the horror that you see from that and the sort of response to that. But China still trades with Israel as the US does in the future in a sort of different global world.
Order.
Would it ever be part of China's diplomatic arsenal to take a more heavy hand in some of these conflicts and say, oh, we're not going to trade you, We're not going to sell you advanced technology that you need to run your economy or run your military, et cetera. Because so far, despite the sort of concerns or the response,
there hasn't been any change in the trading relationship. Could it ever get to that point where China views its sort of diplomatic commercial power that way in conflicts that it's not directly involved in.
¶ Calls for Greater Chinese Openness
Well, I think China certainly would like to do more, you know, like what do you happen on the WHL? Chinese already fulfilled its objecations too. I think the key is really we need to restore the U and authority and principle, particularly US Security Council. Maybe we should also reform that too. Maybe we should add twenty members are the sixteen to twenty members as associated permanent member of UN. And we should really not let the Union Lanto single
veto be abused. For example, since the founding of you and Russia abused use the veto one hundred sometimes twenty forty times US, one hundred times China and twenty times. We need to really control that. So I think we reform you wan to reflect this multipolar world. And in the future, if there's any other there's any problem happened, let's send the UN Peacekeeping Force to do that. And so if the old Security member have a big majority and general sample have a big majority, we should make
that happen. So I think reform this multipolar world. We also need to reform you and to reflect that because the war is no longer fits. The superstructure does not fit the relative today.
Now all right, Henry Wong, Founder and President for Center for China and Globalization, So fantastic to have you on the show. Can we do a live odd Lots in Beijing with you at some point?
Yeah, yeah, Pea, welcome back. All right.
We are gonna as soon as as soon as we get off this call, we are going to begin the preparations to figure out how we're going to make this happen. So great chatting you with you. Thank you for staying up late in your time to talk with us, and I'll hope to talk to you against him.
Thank you, Thank you so much, both of you.
Thank you so much, Tracy. I really enjoyed that conversation. It was interesting thinking about, you know, this idea that rhetorically there are a lot of people on both sides of the aisle who say things like, oh, we need
¶ US Manufacturing Security Concerns
to get out of this sort of competition framework, et cetera. It doesn't really feel like anything is actually happening on that front.
Yes, one thing that struck me from the conversation was, I guess how economic oriented it feels like all of Chinese policy actually is. And I suppose maybe that gets back to this idea. This is an old idea now, but that social contract idea about the CCP, so as long as people feel that their lives are getting better right than, the CCP has strong support. I think the economic focus really came through in that conversation.
I think, you know, obviously from the US perspective, there is this view that you know, Henry is the word global policeman. A lot of people would say yes, absolutely, and that a big role of the US Navy specifically is enforcing the fact or freeing the world for trade. Right that part of the reason that the world could trade freely, that.
That's like a public good provided Bible.
And Opposer has talked about this, and others have talked about this idea that these things go hand in hand. And it's interesting because so Henry talked about impulse for continuation of global trade, including with the US, et cetera. They're clearly, to my mind, seems to be less of an appetite from China to like, it's not obvious that there is a to fill the gap, yeah, or that you know, and I guess there's a question like does the world need such muscle to trade?
Right? Does it?
Could you have a world of trade where there is not one entity that has a truly global military footprint. I think these are really interesting questions. Henry of course talked about, especially in that last answer, restrengthening the UN, et cetera, restructure, restructuring the UN exactly. It's not entirely obvious to me that these institutions as they're constructed can really be revived, even with lots of Chinese money going into them. I think that's still kind of TVD well.
I think this is it right, even if you restructure the Security Council so that, you know, you wouldn't have one powerful member vedoing stuff all the time. Even if people agreed to do things, what is the UN actually going to do? Right?
Right?
What is the UAD actually going to do? I don't we didn't get into it that much, but like the idea of a sort of war, I don't know, bricks composed peace keeping force. I bet there are a lot of people in the US who would love that. They're like, yeah, let's have peace, let's.
Have a sea, someone else take care, let's give a.
Ceasefire in Russia and Ukraine. And also let's not have it be particularly dominated by Western peacekeepers shouldering that burden. I bet a lot of people in the US would love that. I would, you know, head more time. I would love to really explore, like what the constraints on that actually happening are there? But I thought that was a very useful sort of overview of some of these questions from the Chinese perspective.
Absolutely don't explore the constraints, Joe, just take credit for solving us China attentions on the podcast in less than an hour.
Shall we leave it there, Let's leave it there.
This has been another episode of the All Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy.
Alloway and I'm Joe.
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¶ China's Security Philosophy
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