>> Peter Robinson: From the Trump administration's National Security Strategy of 2017 quote, China challenges American power, influence, and interests. From the Biden administration's National Security Strategy of 2022, China is the only competitor with both the intent to reshape the international order and the power to advance that objective. If Trump and Biden agree that China is a threat, China is a threat. Today, a scholar who has devoted her professional life to the study of that threat.
Elizabeth Economy on Uncommon Knowledge Now. >> [APPLAUSE] [MUSIC] >> Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Elizabeth Economy did her undergraduate work at Swarthmore, earned an MA here at Stanford, and holds a doctorate from the University of Michigan. She served at the Council on Foreign Relations and at the World Economic Forum before coming here to the Hoover Institution in 2020.
Doctor Economy is the author of half a dozen books, including her most recent volume, The World According to China. And she has just returned to Hoover after a leave of absence in Washington, where she served as senior advisor for China to Secretary of Commerce, Gina Raimondo. Liz, welcome back. >> Elizabeth Economy: Thank you, Peter, great to be here.
>> Peter Robinson: If Xi Jinping could have everything he wanted, if he could adjust the entire world to his liking, how would life here in the United States be different? >> Elizabeth Economy: I mean, it would be radically different. But maybe I'll take a step back first and just describe a little bit what Xi Jinping's ambitions actually are, because I think it's important to understand just how transformational his vision is for reordering the world order.
I think, to begin with, if you look back to 2017, Xi Jinping, when he was reselected as General Secretary of the Communist Party for his second five year terminal, delivered a three and a half hour speech without break in which he uttered the phrase, China has stood up, grown rich, becomes strong, and is moving towards center stage. And that part about becoming strong and moving towards center stage really reflects Xi's ultimate ambition.
It is about the great rejuvenation of the Chinese nation or reclaiming Chinese centrality on the global stage. What does it mean in practical terms? I'll just tick off, I think, the main points. First, it means reclaiming the territory that Xi Jinping considers to be Chinese sovereign territory. In the first instance, Taiwan, Hong Kong, the South China Sea, but the Diaoyutai Senkaku Islands that are administered by Japan, obviously border territory with India.
All told, China has 14 different border conflicts. So making China whole again, really redrawing the map of China in a pretty significant way. He wants China to be the dominant power in the Asia Pacific, send the United States back across the Pacific to be in a regional Atlantic power. He calls for the dissolution of the US-led alliance system, right, not only in Asia, but also NATO, calls it anachronistic and targeted against China.
And he wants the world, the rest of the world, its rules, its norms, the policy choices of other countries to reflect Chinese interests and values and priorities. And you see that through the Belt and Road Initiative, right?
Which has become not only an infrastructure, a hard infrastructure initiative, but really an effort by Xi Jinping to transfer, to transmit chinese political values, chinese military interests, establishing bases globally, helping other countries authoritarian states learn how to control the internet and suppress civil society. So it's a really grand scale effort to shape the world in ways that will serve Chinese interests. So that's the ambition, I think.
So what does it mean for the United States? What would life look like? I think above all, and maybe the recent events, the attack against Israel by Hamas, sort of, I think serves to illustrate this, the world would be without its policemen, right? China would be the dominant, the pre-eminent power. You wouldn't have the system of alliances that underpins the liberal international order. To the extent that we think about the world as chaotic and disorderly.
It would be magnified tenfold, right, if China were the dominant power, because we've seen China's reaction, right, to the Ukraine, to the Russian invasion of Ukraine, to the attack on Israel. China's unwilling to stand up and do what's right, right? It's unwilling to make a claim about what is right in the international system. So I think that would be one pretty significant difference in the world. Second, I think for the US economy, probably it would suffer.
I think, first, if the Yuan were to become the world's reserve currency to replace the Dollar, the cost of borrowing, the cost of capital would go up. If China were setting technology standards globally, then our companies would become sort of second-tier players. If China's laying the fiber optic cable and dominating e-commerce and satellite systems and cloud, right, that would make life much more difficult.
>> Peter Robinson: So we would no longer be top country, we would live in a much more dangerous world. We would be poorer than we would be otherwise. And can I ask another question? A few years ago, I probably shouldn't name the name because Beijing is watching. That's the question, in a certain sense. There was a Chinese scholar from Fudan University here at Hoover for a year, and I asked this scholar, what's the best part about being in California? And I thought that he would say, the weather.
We were just having a cup of coffee. And the answer was internet searches. Because when I'm at home, every time I do a search, I know two things. One, they're filtering the information they give me, and two, they're keeping track of the questions I ask. And I have to say, I just found that the store made my blood run for a moment, even though it was an informal cup of coffee. But that would be the case, is it not so that if he had everything he wanted, it would be Orwellian?
We would feel as though, or am I overstating the case? Does Google already know everything about us? >> Elizabeth Economy: Well, Google may or may not know everything about us, but one thing we can count on is that we have a legal system that will protect our rights, right? And we can go after Google if we feel like Google is abusing the use of our information.
And we know that Google is not going to turn that information over to the government if the government simply asks for it, so you're absolutely right. I think that issue, that sort of cross-section of technology control that China would have, along with its belief that the state should determine the rights and its surveillance system- >> Peter Robinson: And that there's no recourse against the state? >> Elizabeth Economy: No rule of law, right, in the Chinese system.
Maybe it wouldn't affect internal discussions within the United States, but certainly cross-border zooms with people. I mean, you can see the way when Daryl Morey, right, the general manager of the Houston Rockets, tweeted, fight for freedom, stand up for Hong Kong. The Chinese then went after the Houston. They stopped televising all of the NBA games for a period of over a year.
So that ability to use its economic leverage, to use its technology, to coerce, right, individuals to try to adjust what they say and how they behave, [CROSSTALK], >> Peter Robinson: They are real bastards. >> [LAUGH] >> Elizabeth Economy: I try to avoid words like that. >> Peter Robinson: You've laid out this, the breathtaking scope of what he wants to accomplish. I would like to know if it's possible to get to the answer to this question, why does he want to accomplish that?
And the argument that comes to my mind is China has done pretty well in the world order that the United States and our allies established after the second world war. Hundreds of millions of Chinese have been brought out of poverty, a not insignificant number of Chinese have been made rich, truly, really rich, at Silicon Valley levels. That country has been prospering, educational levels, on and on it goes. They've been doing just fine, so why does he want to turn it all upside down?
>> Elizabeth Economy: I mean, I think there are probably two things behind that question, maybe. First is that I don't think Xi Jinping looks at China's success and believes that it is the result of its integration into the international system. I would say he would argue that it is the result of the Chinese Communist Party and the resilience and industriousness of the chinese people. So I think, first of all,- >> Peter Robinson: He just reads the facts.
>> Elizabeth Economy: He would see a different, I think he would read the facts very differently. And second, Xi Jinping looks back in history to a time when China was really the center of the world. As the point I made at the outset about the great ambition is reclaiming Chinese centrality on the global stage. And so bringing that back requires a different international order [LAUGH], right?
China's not gonna be the center of the world if its values and if it's the way that it trades and invests and doesn't have military bases, it's not going to be the center of the world unless it has all those things. So that's why the world needs to transform, so that China gets what it wants. >> Peter Robinson: Now, that leads, by the way, you're doing my job, you just set up the next question beautifully, but I'll take a moment here because I'm gonna read you three quotations.
One from our Hoover colleague, Stephen Kotkin, the Chinese Communist Party is a Leninist organization. You can't be half communist, just like you can't be half pregnant. Our Hoover colleague, Frank Dickotter, quote, the constants of Chinese leadership, the Leninist principle of a monopoly on power and state ownership of the means of production, which is a very good Marxist principle. Now, here's my third quotation, and this comes from my Hoover colleague Liz Economy.
One of Xi's foreign policy innovations has been the promotion of China's political model and the export of some of its authoritarian elements, close quote. Okay, so whereas Stephen Kotkin and Frank Dickotter both say they're communists, and that's tremendously important to grasp. This is the question, do you disagree or you place a different emphasis on it?
I mean, in the old days, the Soviets were Russian, and that explained part of the picture, but you couldn't understand the full picture unless you understood that they were also communist. All right, so how do you weight this, to what extent is Xi behaving the way he's behaving because he's a communist and to what extent, because he's working in a 1000 year imperial tradition?. >> Elizabeth Economy: So I'm glad you put it as Xi Jinping as opposed to the Chinese, right?
Because I think it's important to remember that there are as many different perspectives within China about what the Chinese political system should look like as there are in the United States. And, the Chinese communist party represents only about 7% of the Chinese population. It's a very small number, so imagine all those other people, what they might think. And even within the Chinese Communist Party, there are people that are not what I would call true believers.
As far as Xi Jinping is concerned, it's a really interesting question, I think Xi Jinping is certainly an imperialist. And if you look at the Belt and Road Initiative, if you look how he discusses it with reference to the Silk Road, right? Which takes you back to the Han and the Tang dynasties, when China was kind of at the apex of its economic influence and its cultural influence, China doubled its territory during the Han dynasty.
I think that's very appealing to Xi Jinping, and the Belt and Road is all about trade routes, it's about establishing military outposts, it's about exploring China's cultural influence. So imperialist, yes, communist, I think, is a different question. So Xi Jinping, yes, he uses the rhetoric of class struggle, right? He talks about the fact that socialism will triumph over capitalism.
And he certainly, as both Steve and Frank mentioned, believes in the centrality of the Chinese communist party, and he believes in an enhanced role for the state in the Chinese economy. But I think if you try to look at what communism also says about from each, according to his, what am I saying? >> [CROSSTALK]. >> Elizabeth Economy: Right, if you look at that, or if you look at efforts to develop a social welfare net to make China a more equal society, right?
Then you see that Xi Jinping has not really done much over the course of the past eleven years. And so I think that the overlay of a sort of authoritarianism, veering toward totalitarianism over communism gives you Xi Jinping. But when you start to move past that overlay of what we would consider to be authoritarian and totalitarianism into what would be distinctly communist. I think at that point, Xi Jinping does actually not represent much of what we consider to be communist.
>> Peter Robinson: So not much explanatory power, if you. >> Elizabeth Economy: Not to my mind. >> Peter Robinson: Okay, could I try this one more? I'm searching for analogs here, which is the only way I can go about this. So again, the old Soviet Union, Khrushchev, we know from his memoirs, he's toppled from power, and he writes memoirs which are almost touching in their naivete. He really was a believer that communism would usher in this wonderful new world.
Khrushchev is one thing, a true believer, let's use that term, and then you get Brezhnev. Who knows what Brezhnev, I mean, in the end, who knows if he was even sentient? But he represents decadence from the communist point of view, they don't believe anymore, that's just the bureau. It's just the system chugging along because it can't figure out what else to do. If this were a spectrum, does she fit on it, or is he something completely different, so Chinese that those analogs aren't useful?
>> Elizabeth Economy: No, I mean, I think he's different because he is, so he's centralized power to a degree that Khrushchev and Brezhnev could only have dreamed of, centralized power in his own hands. So in that sense, probably an analog would be more like a Stalin. And what he's driving toward does not seem to be, again, doesn't seem to be a new egalitarian society, a new form of economic relations and political relations that resemble true communism.
He also is someone who, and I think for this, there's some degree of credit that he deserves. Someone that's gone after all that corruption that certainly plagued the Brezhnev years, for example, in the Soviet Union. And so he's attacked party members for their corruption. Now, part of it is self serving. He's eliminated his political opposition through this. But it's also true that if you look over the course of Xi Jinping's career, he was always about anti corruption.
So even when he was a lower level sort of civil servant rising through the party. He always talked about how people should not use the communist party, their membership, as a means for sort of political or economic personal gain. So I think that part is real. >> Peter Robinson: Now I'm going subjective here. So just reach across and slap me because I'm answering your question. There's no good grad student.
I'm sure you wouldn't tolerate this from a grad student, but when you look at Brezhnev, you have the feeling of the end of something. Something is tired, something is spent, momentum is running out. And with Xi Jinping, you have the feeling of a project that is just beginning. I mean, I'm not delighted to say that, but does it feel that way? Or am I saying things that just don't even make sense to a scholar? >> Elizabeth Economy: So, my first, I served twice in government.
First was right after I finished my master's at Stanford. I was the Gorbachev analyst at the CIA. And so I came into the job right as almost he took power just a few months after that. >> Peter Robinson: 85. >> Elizabeth Economy: 85, summer of 85. And, at that time, nobody thought Gorbachev was gonna be anything special. Nobody would have predicted, right, the change in the Soviet Union, really, that he ushered in.
>> Peter Robinson: Nobody would have said the Soviet Union would become defunct by 1991. >> Elizabeth Economy: Exactly, so, even as we look at Xi Jinping and, he seems so powerful, he has so much power in his own hands. I think you can look beneath the surface, inside China and see a country that is incredibly polarized, equally as polarized as the United States, along gender lines, along ethnic lines.
Along, income inequality gaps between what you consider to be the bureaucratic class and the creative class. What has happened to the entrepreneurial class in China, to scholarly class in China? Anyone who colors outside the lines in the country, right, their worlds have become so small. Jennifer Pan here at Stanford in the communications department, has done amazing research doing survey research of urban middle class Chinese. And she found the majority want freedom of speech.
They want the right to assemble they want private property. We saw when Doctor Lee Wenliang died during COVID remember, a million people went online calling for freedom of speech. So just because we can't see beneath the surface as easily as we did pre Xi Jinping, because of the repression. Because of the tight controls on information, doesn't mean we might not be surprised at some point in the future that he is at least pushed back to the second line.
Kind of like what happened to Mao Zedong after the Cultural Revolution or after the great leap forward sorry. Where he became just sort of one leader among many. So, I'm somebody who- >> Peter Robinson: You were going to insist on the contingency of history. Nothing here is preordered. >> Elizabeth Economy: Exactly. >> Peter Robinson: All right. >> Elizabeth Economy: Yes, you said it in, five words. I said it in 500, so sorry [LAUGH].
>> Peter Robinson: It's my job to try to hold an audience's attention. It's your job to write the books that matter. Another couple of quotations, more Hoover colleagues, the late Henry Rowen. Henry Rowen, writing in 1998, imagine a prosperous China with an educated, well informed, homeowning population. Now imagine that this population is still ruled by a party with something like the monopoly of power and controls over behavior that exists today.
The combination simply doesn't compute close quote. Now, our colleague Larry Diamond in 2012, for some time, I suspected that Henry Rowen's projections were a bit optimistic. Now, I suspect hes writing in 2012 that the end of the CCP rule will come much sooner than I used to suppose. China cannot keep moving forward to a middle income country without the pressures for democratic change that Korea and Taiwan experienced more than two decades ago. Liz, doggone it.
Korea starts out a country run by tough, bad guys. It introduces economic growth and it becomes a democracy. Taiwan is run by people much friendlier to the United States. But these were not sweethearts. These were tough guys. Economic growth and now it's a democracy. Why hasn't that happened in China? To the contrary, Xi Jinping, we thought we knew of course, Harry and Larry, brilliant people. They weren't misreading things, that's the way it looked to inform people in those days.
And Xi Jinping comes along and pulls a ue why? >> Elizabeth Economy: Yeah, I mean, look, [LAUGH] you can look back into the 1980s, right into the late 1980s, which is really when South Korea and Taiwan kind of made their transition from roughly authoritarian states to more resilient democracies. And see that China was actually almost exactly the same point, right? Because if you stop to think about it, you had a rising middle class that was demanding greater political reform.
You had an event, just like you did in South Korea and Taiwan, you had events that triggered mass protests. In this case, you had the death of Hu Yaobang, who was a much beloved former general secretary of the Communist Party, extremely politically reform oriented. That led to the Tiananmen square protests, right? >> Peter Robinson: 1989. >> Elizabeth Economy: 1989, Hu Yaobang died in April of 1989. And then you end up with these mass protests, calls for political reform.
You also have Zhao Ziyang, who, like his Taiwanese and South Korean compatriots, felt that the time was probably right for some political reform. He was prepared to negotiate with the protesters, but Zhao Ziyang wasn't really the power. The power behind the throne was Deng Xiaoping. And Deng Xiaoping was not interested, didn't feel like his back was up against the wall, was not inclined toward political reform. And so you didn't get that moment. That moment didn't translate into a transition.
Fast forward to 2010, 2011. And you had, again, massive protests in China around the environment. You had an extremely active Internet with people calling for political reform. You had salons with billionaires and reform oriented scholars and lawyers meeting weekly to talk about how China could transition. >> [CROSSTALK]. >> Elizabeth Economy: Exactly, incredibly exciting, vibrant political society during that time. But you got Xi Jinping. And so, again, I think leaders matter a lot.
And Xi Jinping has never demonstrated an interest in opening up the political system. Barely demonstrated interest in economic, continuing economic reform. >> Peter Robinson: Can I jump ahead to on this stage? What was it? Four years ago, I interviewed Jimmy Lai. Jimmy Lai, the Hong Kong business figure, immensely successful man, who at that point had taken a lead in the democracy protest. And I said to Jimmy Lai, aren't you afraid?
Great big country up there, little tiny city down here, China Hong Kong. And he said, no, 60% of foreign investment into China flows through the banking system in Hong Kong. And today, Jimmy Lai is in prison. And they did move on Hong Kong. So is it as simple as this, that given a choice between economic growth and the party's power, the party will choose power every single time. >> Elizabeth Economy: Yes, I think that is true, I think it's also an issue of sovereignty.
So, if you extrapolate, then from Hong Kong to Taiwan, I think what we don't want to do is make the mistake in thinking that just because China is reliant on TSMC. >> Peter Robinson: TSMC is the semiconductor industry company in Taiwan. >> Elizabeth Economy: In Taiwan. >> Peter Robinson: Right? [COUGH]. >> Elizabeth Economy: Right, that produces most of the advanced chips in the world.
Just because China is extremely dependent on Taiwan for those chips, that it would not be willing to take military action against Taiwan. So, I think it's not just about party power, it's about that issue of sovereignty as well. >> Peter Robinson: Okay, we'll come back to that in a moment. I began with Trump and Biden, let's go through this. Trump and Biden quickly and then you. The question is, where is the continuity? Or where would you criticize either administration?
And where would you criticize either administration? I'm going to ask for grades. Here's Trump. The Trump administration places a series of tariffs on Chinese goods. I couldn't resist this, the tariffs are so stiff that during the July 2019 presidential debate, Joe Biden said, President Trump may think he's being tough on China, all that he's delivered is Americans paying more, close quote.
The Biden administration retains the Trump tariffs that Joe Biden attacked, but has also placed limits on the transfer to China of advanced graphics processor units. By the way, the first thing you can do is correct me, because you know this in the detail, I don't. Place limits on the transfer to China of advanced graphics processor units. These are important in AI applications and placed new limits on the transfer to China of American ships and american technical expertise.
Quotation this time from our Hoover, I set myself a little challenge that I will only quote Hoover fellows. >> Elizabeth Economy: I 'm impressed. >> Peter Robinson: Our Hoover colleague Neil Ferguson, quote, in short, the Biden administration aims to halt technological progress in China. Trump did nothing so radical, close quote. Okay. >> Elizabeth Economy: Yeah, okay, so you want me to grade them is that what you're saying?
[LAUGH] >> Peter Robinson: Yes, I think, from the look on your face, I'd far rather you grade them than grade my question. >> Elizabeth Economy: Well, I think the question perhaps is a little bit narrow, if we're thinking about these things as being the sum total of the administration's approach and policy and strategy toward China. So, t doesn't really only boil down to the tariffs for Trump and the controls on technology for the Biden administration. So, maybe I'll just.
>> Peter Robinson: Okay, so, no, no, let's open the aperture to be fair here. >> Elizabeth Economy: Yes, yes, to be fair. >> Peter Robinson: What do we need to do and how have we been doing? >> Elizabeth Economy: Yeah, okay. I mean, I think, look, the Trump administration did a really, a good thing when it kind of looked across the landscape and said, China is posing really significant threats in a whole array of areas, and we need to change the way that we're doing business.
So, in many respects, what the Trump administration did most effectively was simply to right the ship, to right the American ship. Beyond that, I think, in terms of sort of setting an agenda and then executing, you know, on a strategy to realize a set of objectives. I think that the Trump administration was really of two minds. So it's difficult to kind of give them a grade.
On the one hand, you had sort of President Trump, who had a much more personalistic and idiosyncratic approach to policy and toward China, embraced authoritarianism, at times, sort of devalued our allies, pulled us out of a lot of international institutions. So that in many respects, and as you said, kind of made the singular effort of his China focus really about the bilateral trade deficit and saying, and putting the tariffs on in the phase one trade. So that was kind of his effort.
At the same time, you had a kind of shadow government operating, many of whom people are now here at Hoover, right? So, Secretary Mattis and national security adviser McMaster, my good friends Matt Pottinger and Matt Turpin, all of whom, I think, approached China in a much more traditionalist way, right?
Continued to value our allies, continued to work to keep us in international institutions, sort of proclaimed the free and open Indo Pacific, worked with our Asian allies and partners to strengthen the Quad, to strengthen those relationships. Those are really important and lasting impacts of the Trump administration. So, you know, if this were like a group project, I'd have to give two different grades, one for Trump and one for those guys. I won't say what those would be.
So for the Biden administration, I would say that probably it has not been as clear in its overall objective with regard to China. I think managing competition or managed competition doesn't probably get us where we would want in terms of having a very clear strategic objective. However, I think it's done a really good job of putting in place the sort of things that we need to be able to compete effectively with China over the 21st century.
So investing at home chips and Science act and the Inflation Reduction act and bipartisan infrastructure law, you know, all of these, all the investment in R& D, I think all of these things are essential for us to be able to compete. You mentioned the controls. I mean, there's export controls, but there's also rethinking our supply chains, right? There's the French shoring and the reshoring, and there's the new outbound investment restrictions.
So, really trying to modernize our foreign policy tools in ways, again, that will protect us, you know, in fact, from Chinese actions. But wait, and I think critically repairing relations with our allies, particularly in Europe, and bolstering our ties, because trying to deal with China alone will get us nowhere.
Right, whether we're talking about those technology controls or we're talking about competing with the Belt and road or whatever it is, we have to do these things in concert with our partners and our allies. And I think that's been a real strength of the Biden administration's efforts. >> Peter Robinson: So can I, again, correct me if I'm wrong about this, but it does strike me that between Trump and Biden, one remarkable thing has happened, probably a very good thing, I think.
And that is that although we're polarized in all kinds of ways, and you could tell from the debate stage that Trump and Biden could barely be in the same room together, even if it was a very big room. All of that, the notion that China is a danger and must be dealt with, details to follow is now bipartisan. That's an amazing thing in the polarized state in which we find ourselves. >> Elizabeth Economy: Yes, but devil is in the details, right?
Details matter >> Peter Robinson: Details matter to you, of course you have. >> Elizabeth Economy: Yes. >> Peter Robinson: All right, okay, so to Taiwan, then, Neil Ferguson, again, [COUGH] cutting China off from high end chips today seems a lot like cutting Japan off from oil in 1941. Economic sanctions so boxed in the imperial government of Japan that there seemed no better option than to gamble on a surprise attack, close quote. Okay, you're not going to go for that.
The question here is, sovereignty you've already Explained that Xi Jinping is very concerned about reasserting his notion of Chinese sovereignty. At how much risk is Taiwan today? >> Elizabeth Economy: Yes, look, from the minute that Xi Jinping came into power, he talked about the necessity of reunifying Taiwan. He's talked about Taiwan as one of the 14 must do items to achieve his great rejuvenation of the Chinese nation.
This is not about the technologies, this is about a belief that Taiwan is an integral part of mainland China. So how great a risk is Taiwan at? That is a serious risk, [LAUGH] because I don't think that Xi Jinping will be satisfied ever leaving office without having made substantial progress toward reunification. Now, that doesn't mean that he necessarily is gonna launch an invasion. We have the Taiwanese elections coming up in January 2024, so just in a few months.
So we need to look at what the outcome is there. I think what Xi Jinping is probably hoping for is that somebody from the KMT, from the previous ruling party, the one that has more affinity. Has more openness to some form of closer ties with mainland, some of whom actually believe that reunification ultimately should be an objective. That if one of those candidates, of which there are three wins, then you probably get the temperature taken down a little bit.
I think Xi Jinping would be interested to see how does it play out. Do you get another Mingzhou, who's willing to think about increasing economic ties, who's willing to go back to the 92 consensus, which acknowledges, which claims that Taiwan is part of China. There is but one China, and Taiwan is part of it. So do you get that? Or do you get William Laihe, right?
Who says there's no need for Taiwan to declare independence because it's already a sovereign country, it's already independent, so no need to declare it again. And has been in the past a firebrand. He's taken the temperature down himself a little bit, but that will send a different signal to the mainland. >> Peter Robinson: Okay, so our interests [COUGH] there's an argument, Elbridge Colby, back in Washington has a book out, and he's been making this argument.
Maybe he's the leading or the most articulate proponent of this argument that the defense of Taiwan is in our interests. He even goes so far as to say whether the Taiwanese want to defend themselves or not, that's one argument. Here's another argument, the Biden administration has passed the chips act to establish manufacturing of very modern chips here in this country. Many billions of dollars at stake.
You will know more, again, just stipulate, I'll say it for the last time, you know more than I do. But in talking to people here in Silicon Valley, the general feeling seems to be that we're about five years out of the game. That it will take five years of spending this money and hiring the best people and getting fab plants up and operating for us to either close the gap substantially with what's taking place in Taiwan.
Or a couple of knowledgeable people have told me that actually it's time for us to just leapfrog them to go to next generation. One way or the other, five years, single digit number of years. And here's presidential candidate Vivek Ramaswamy, quote, I would defend Taiwan vigorously until the US achieves semiconductor independence, close quote. Well, those are two different views. Can I add one other point back to Jimmy Lai?
As far as I can tell, Jimmy Lai and Martin Li, if I recall the name, are really the only two prominent members of the Hong Kong business community who defied the mainland. The Hong Kong business community, by and large, once it was clear that Xi Jinping was gonna move on, Hong Kong said, well, okay, let's figure out how to live with these people. Why wouldn't the Taiwanese do the same?
What importance does that island have to us if indeed we can achieve semiconductor independence within a single digit number of years? >> Elizabeth Economy: I mean, look, going back to 1979 and the Taiwan Relations act, right? We have a commitment, right, a law, we have a commitment to provide Taiwan with material that is adequate for its defense. Also, in the Taiwan Relations act, it stipulated that the United States retains the capacity to help defend.
It doesn't commit us to defending Taiwan, but that's also in there. This is, well, before there was any consideration of semiconductors, there was no technology element to any of this. It was based on security calculation, at the time. It wasn't even based on a democracy calculation because Taiwan at the time was not a democracy, right? So it was based on security calculation.
And anti communist calculation that holds true today, and now I think there's an ad, and if you talk with members of Congress, Taiwan is a thriving democracy, right, and a very strong partner for the United States. So to me, the semiconductor issue is an icing on the cake. From this, we have a longstanding commitment, again, bipartisan commitment, to uphold Taiwan's. >> Peter Robinson: What is the security calculation? Aside from the semiconductors, what is the security calculation?
>> Elizabeth Economy: The security calculation is that- >> Peter Robinson: It goes unstated position so often- [CROSSTALK]. >> Elizabeth Economy: It positions China that much closer to the United States. That whole first island chain, second island chain then becomes much more in China's control. So there's no benefit to us, right, for China to assume control of Taiwan. Now, having said that, it is up to the Taiwanese people to decide, right?
That is also, that's part of the sort of agreement that we have with China. If the Taiwanese people decided that they wanted to have unification with the mainland, based on our own agreements, we would allow that to take place whether Eldridge Colby thinks so or not. >> Peter Robinson: So you wanna stand on the 1979 arrangement? >> Elizabeth Economy: It's a law. >> Peter Robinson: Well, laws can be rewritten. >> Elizabeth Economy: [LAUGH] Yeah, they can be, but it is the law.
>> Peter Robinson: Dan Blumenthal and Fred Kagan, in an op ed this past march. China is pursuing three roads to unification. It seeks to persuade the Taiwanese people to accept unification peacefully. It seeks to coerce such acceptance through means short of war. And it is preparing direct military action. The US must block all three. How are we doing? >> Elizabeth Economy: Yeah, I mean, I don't know that we block all three.
I think the Chinese themselves are doing a terrible job of persuading the Taiwanese. I mean, they've basically cut off a lot of the trade, they've gone after Taiwan's allies and partners, bought them off. They reduced the tourists, they've made everything very difficult. They've had 200 sorties, air force sorties into Taiwan's airspace just in September. >> Peter Robinson: Sorry, 200 sorties last month alone? >> Elizabeth Economy: Correct.
So there's no persuading the Taiwanese that sort of a soft power persuasion at this point in time. In terms of coercion, similarly, it's clearly not working. You can look at public opinion polls in Taiwan. There has not been a major spike in the number of people that view unification with the mainland as ultimately their positive kind of outcome for the future of the Island. And the rest of it is to defend Taiwan, right?
To protect Taiwan, that's the part where the United States would actually play a role. And I think the Biden administration has this as a major focus of effort, both in terms of working with training with the Taiwanese military, encouraging the Taiwanese military to invest more, encouraging the Taiwanese government to invest more in its own military.
I think we've also sought to broaden the number of countries to enhance the number of countries that view Taiwan's security as essential to their own security. So you see Japan stepping up in a very new and different way to make exactly that claim and to send a new defense attache to Taiwan. So, Australia also has said that it considers Taiwan's security to be related to its own security.
So, and you have Europe becoming much more involved in the Indo-Pacific, not necessarily with claims to Taiwan security, but nonetheless at least a commitment to freeing an open Indo-Pacific. So, all of these raise the cost, right, they raise the cost for China of launching some kind of military action. >> Peter Robinson: So we're doing pretty well, it's intelligent? There are good people hard at work on all this, all right?
So, a few last questions before we close, and all these questions are about this country. February 2022, Russia attacks Ukraine, last Saturday, Hamas attacked Israel. On one argument, the Chinese are watching both and in our own interest, we must ensure that Ukraine and Israel prevail. The defense of Taiwan and the entire international order runs through Ukraine and now through the Middle East. That's one argument, here's the second.
American forces are designed to sustain major operations on two fronts, the Pacific, Ukraine, Israel makes three. It may all be happening in slow motion, but the United States of America is already overstretched. >> Elizabeth Economy: I mean, I think that's probably true, the United States is overstretched, and we can only do the best that we can do. We are heavily committed in Ukraine, that probably has already slowed down some of the military transfers that we might wanna be making to Taiwan.
The role that we play right now in Israel will certainly be shaped or constrained to some extent by what we're already committed to in Ukraine, I don't know. But, I think that's also where our allies and partners are gonna have to step up. And Europe has stepped up more in Ukraine, they pledged more, but it can't all be dependent entirely on the United States, right? This has to be a multilateral effort.
>> Peter Robinson: So, you just returned a week ago, as you said, from a couple of years in Washington, what did you make of Washington? Did it seem like a world capital that's up to it, or did it seem so polarized? By the way, I think I'll do the stipulating so you don't have to make the argument. The person you were working for, secretary of Commerce Gina Raimundo, is one of the few people in the Biden administration who gets very high marks on both sides of the aisle.
So, I'll stipulate that so you don't have to stick up for your boss. What did you make of the capital of the tenor of the tone of its general ability to get important things done? >> Elizabeth Economy: I found, such an interesting question, [LAUGH], I think I found people in Washington overall to be very committed to doing the right thing. And there can be debates about exactly how to go about doing that, political battles about it.
But for the most part, whether talking about the federal government or Congress, people wanna do the right thing by the United States. I think one of the most heartening things I found was, and this is sitting in the Department of Commerce, is that a lot of our strategy for the Indo-Pacific in particular involved calling on the private sector to work in partnership with the government.
And I can tell you that 2001 American companies, big, major multinationals, would stand up and say, just tell us what you need us to do and we will be there. You need us to do something in Africa? Okay, we'll be there. You need us to provide digital upskilling opportunities to all the emerging economies of the Indo-Pacific economic framework. 14 companies signed up to do that, right huge initiative.
You need us to adhere to your export controls, just give us clarity and consistency and we'll do it. So, I actually left Washington if I had one, the most positive takeaway really was witnessing that kind of patriotism and the ability of the United States once again to bring the private sector in and to work hand in hand to realize sort of broader US strategic objectives.
And I'll say I think there were people in the Biden administration that did not believe that that would happen, that did not look at US business as patriotic actors. So, I was really proud and pleased to be part of efforts that actually brought that to fruition. >> Peter Robinson: [COUGH] Last question. [COUGH] We've been talking so far about mostly economic and military matters. Question of morale is what I'd like to get at in this last question.
So, let me give you an episode from our own recent history and then a quotation. Here's the episode, it's a decade, in 1979, we suffer the humiliation of the soviet invasion of Afghanistan. And by 1989, we've so reversed Cold War dynamics that the Berlin Wall comes down. In one decade, this country undergoes a renewal so sweeping that it spills over and changes world history, there's one episode. Here's the quotation, and this comes from the economist, this is a couple of years ago.
The economist could run the sentence today, and it would seem pertinent. China is increasingly sure that America is in long-term irreversible decline. China is now applying calculated doses of pain to shock Westerners into realizing that the old American-led order is ending, close quote. What do you make of this country, is it capable of the kind of renewal that it needs, or is the old order vanishing?
>> Elizabeth Economy: I think we're already in the process of renewal, I mean, I think that's what I was trying to describe in terms of the Biden administration efforts to rebuild America, reinvest at home, put money back into R&D, partner with the business sector, have our allies on board. I think all of these reflected American dynamism and renewal. And I will point out that I'm not sure when you got that quotation. >> Peter Robinson: 2021 is the quotation.
>> Elizabeth Economy: 2021, so, I would say in the past few years, right, we've seen a big change in China. You don't see Xi Jinping and other members of the Chinese elite saying as much the east is rising, the west is declining, right? Their economy is having trouble, multinationals are not investing in the same way as they were in China. Again, they're politically polarized, they face a lot of challenges, their belt and road is very bumpy, right?
So, they're facing a lot of their own challenges. So, I think some of that hubris, some of that certainty about the decline of the West and the rise of China has been tempered. >> Peter Robinson: You're supposed to be a jaded, world weary scholar. >> Elizabeth Economy: Never, ever. >> Peter Robinson: You'd bet on this country. >> Elizabeth Economy: I bet on America. >> Peter Robinson: Elizabeth Economy, thank you. >> Elizabeth Economy: Thanks. >> [APPLAUSE].
>> Peter Robinson: For Uncommon Knowledge, the Hoover Institution, I'm Peter Robinson. [MUSIC]