WEBVTT - 46: Brexit Is Really All About China

0:00:00.240 --> 0:00:02.920
<v Speaker 1>Bloomberg Benchmark is brought to you by Stage Summit, the

0:00:02.920 --> 0:00:06.360
<v Speaker 1>world's largest gathering of small and medium businesses, featuring Sir

0:00:06.480 --> 0:00:11.880
<v Speaker 1>Richard Branson. July Chicago. Register with promo code business at

0:00:11.880 --> 0:00:18.960
<v Speaker 1>stage summit dot com for just while, Jelly, then you

0:00:19.120 --> 0:00:22.200
<v Speaker 1>know you had the young I asked you how that

0:00:22.239 --> 0:00:33.839
<v Speaker 1>the weather was in New York. Thanks, hello, and welcome

0:00:33.880 --> 0:00:38.280
<v Speaker 1>back to the Bloomberg Benchmark Podcast. I'm Daniel Moss, Executive

0:00:38.360 --> 0:00:41.760
<v Speaker 1>editor for Global Economics of Bloomberg News. You no doubt

0:00:41.800 --> 0:00:45.680
<v Speaker 1>feel bombarded with news and opinions about breggsit, Britain's vote

0:00:45.680 --> 0:00:49.040
<v Speaker 1>to leave the European Union and why it matters. But

0:00:49.159 --> 0:00:52.800
<v Speaker 1>have you heard that disgruntled electors in the UK might

0:00:52.960 --> 0:00:55.680
<v Speaker 1>really have been voting to leave China. More on that

0:00:55.760 --> 0:00:59.880
<v Speaker 1>in a minute. First, some introductions to two new coho

0:01:00.840 --> 0:01:02.880
<v Speaker 1>Kate Smith, who is with me here in New York,

0:01:03.280 --> 0:01:06.160
<v Speaker 1>and Scott Lammon in Washington. Kate, one thing I want

0:01:06.160 --> 0:01:08.639
<v Speaker 1>to share with our listeners is that, prior to joining

0:01:08.640 --> 0:01:13.559
<v Speaker 1>Bloomberg News, you actually covered murders in Baltimore. Yes, which

0:01:13.600 --> 0:01:16.600
<v Speaker 1>makes me, of course uniquely and absolutely qualified to talk

0:01:16.640 --> 0:01:18.959
<v Speaker 1>about the global economy, don't you think I think we'll

0:01:19.000 --> 0:01:21.360
<v Speaker 1>have to do an episode on the economics of inner

0:01:21.360 --> 0:01:25.320
<v Speaker 1>city crime and Scott. You're an economics editor in d

0:01:25.440 --> 0:01:28.959
<v Speaker 1>C and you spent three years in Beijing closely observing

0:01:29.400 --> 0:01:32.760
<v Speaker 1>what's become the world's second largest economy from our office there.

0:01:32.840 --> 0:01:40.760
<v Speaker 1>Welcome Dan. You know you had the young I asked

0:01:40.800 --> 0:01:44.559
<v Speaker 1>you how that the weather was in New York. Thanks

0:01:44.600 --> 0:01:48.800
<v Speaker 1>back to the UK. Now to expand on precisely why

0:01:48.840 --> 0:01:51.720
<v Speaker 1>this may have been a vote to leave Beijing rather

0:01:51.800 --> 0:01:55.600
<v Speaker 1>than Brussels, our guest is Mark Champion. Mark's a writer

0:01:55.680 --> 0:01:59.240
<v Speaker 1>in our London bureau. He's been covering government in Europe

0:01:59.240 --> 0:02:02.440
<v Speaker 1>and the Middle East for the better part of three decades. Mark,

0:02:02.600 --> 0:02:06.080
<v Speaker 1>Thanks for joining us, and not at all thank you Dan. Now,

0:02:06.200 --> 0:02:10.320
<v Speaker 1>China wasn't formally on the ballot, but in many ways

0:02:10.520 --> 0:02:14.560
<v Speaker 1>wasn't the contest a referendum on the enormous changes to

0:02:14.680 --> 0:02:19.720
<v Speaker 1>the world economic system that's resulted from China's rise. Well,

0:02:19.760 --> 0:02:23.240
<v Speaker 1>I think that has to be right, even though I

0:02:23.280 --> 0:02:27.480
<v Speaker 1>think few Brexit voters would articulated that way. Um, you

0:02:27.520 --> 0:02:30.400
<v Speaker 1>know a lot more wood point at globalization, you know,

0:02:30.440 --> 0:02:33.960
<v Speaker 1>all that unsettling change that helped to turn developed economies,

0:02:34.080 --> 0:02:38.800
<v Speaker 1>especially the UK from manufacturers into service providers, and that

0:02:38.960 --> 0:02:42.200
<v Speaker 1>caused a lot of you know, churn and turmoil for

0:02:42.919 --> 0:02:46.200
<v Speaker 1>workers in these countries. And you know, globalization, of course,

0:02:46.240 --> 0:02:49.280
<v Speaker 1>relies on a free movement of capital and of people.

0:02:49.400 --> 0:02:52.000
<v Speaker 1>It's the kind of the flat world that the journalist

0:02:52.080 --> 0:02:55.120
<v Speaker 1>Tom Freeman likes to talk about. And it's great for

0:02:55.160 --> 0:02:57.760
<v Speaker 1>people who have globally competitive skills, so you know, people

0:02:57.760 --> 0:03:01.720
<v Speaker 1>who design stuff and the law as the financiers, and

0:03:01.760 --> 0:03:04.720
<v Speaker 1>those people tended to vote to stay in the EU.

0:03:04.919 --> 0:03:07.799
<v Speaker 1>But it is not so great for those who lacked

0:03:07.840 --> 0:03:11.079
<v Speaker 1>the skills to compete. And you know, these people, they

0:03:11.200 --> 0:03:15.200
<v Speaker 1>won't meet Chinese workers, but they do meet globalization. It

0:03:15.320 --> 0:03:20.160
<v Speaker 1>just takes the form of for them of inequality immigration,

0:03:20.720 --> 0:03:23.160
<v Speaker 1>and it causes a lot of resentment. And that's all

0:03:23.240 --> 0:03:26.120
<v Speaker 1>now bubbling over. You know, they blame their governments, they

0:03:26.160 --> 0:03:29.720
<v Speaker 1>blame the EU, they blame these people and these institutions

0:03:29.760 --> 0:03:32.000
<v Speaker 1>for just failing to protect them. Now, if you look

0:03:32.000 --> 0:03:35.760
<v Speaker 1>at the economic changes that have taken place in China

0:03:35.920 --> 0:03:40.040
<v Speaker 1>and the breakneck pace of growth that's happened since the

0:03:40.120 --> 0:03:43.840
<v Speaker 1>late seventies when Done opened the place up, China has

0:03:43.920 --> 0:03:48.960
<v Speaker 1>become emblematic of precisely what these people are rebelling against. Yes,

0:03:49.040 --> 0:03:51.160
<v Speaker 1>it has. And you know, the other kind of interesting

0:03:51.200 --> 0:03:54.680
<v Speaker 1>thing is that China has buy in here. You know

0:03:54.720 --> 0:03:58.200
<v Speaker 1>what was kind of interesting in the international response to

0:03:58.240 --> 0:04:01.720
<v Speaker 1>the Brexit campaign be for the vote in particular, but

0:04:01.840 --> 0:04:04.600
<v Speaker 1>since too it was how you know, the Russian and

0:04:04.720 --> 0:04:10.400
<v Speaker 1>Chinese responses were different. You know, Russia was just unable

0:04:10.480 --> 0:04:13.560
<v Speaker 1>to hide its glee at the idea of a Brexit vote,

0:04:13.600 --> 0:04:18.120
<v Speaker 1>of the EU becoming weaker and the transatlantic lines being weaker,

0:04:18.200 --> 0:04:19.920
<v Speaker 1>saw it very much in terms of a zero some

0:04:20.080 --> 0:04:23.440
<v Speaker 1>political game. But for Chinese leaders, they would just be

0:04:23.600 --> 0:04:27.640
<v Speaker 1>mused and troubled as to why the UK would want

0:04:27.680 --> 0:04:29.440
<v Speaker 1>to do such a thing. I mean, they have a

0:04:29.480 --> 0:04:33.719
<v Speaker 1>big steak in rich consumer economies of the West buying

0:04:33.760 --> 0:04:37.840
<v Speaker 1>their goods. They like the European Single Market, they like

0:04:38.040 --> 0:04:41.840
<v Speaker 1>these trading institutions, and they're they're big stakeholders. That's because

0:04:41.880 --> 0:04:45.080
<v Speaker 1>they're big stakeholders in globalization. And of course, you know

0:04:45.200 --> 0:04:49.279
<v Speaker 1>the UK, I'm sorry, China is the second largest importer

0:04:49.440 --> 0:04:52.240
<v Speaker 1>of goods into the UK, behind Germany, of course. I

0:04:52.279 --> 0:04:54.760
<v Speaker 1>mean it's eight point seven percent of all of the

0:04:54.839 --> 0:04:57.839
<v Speaker 1>UK's imports. That's that's not a small number. But I

0:04:57.880 --> 0:05:00.120
<v Speaker 1>do find it funny that the what we're taught king

0:05:00.200 --> 0:05:03.440
<v Speaker 1>about is the the average leave voter doesn't see the

0:05:03.520 --> 0:05:06.080
<v Speaker 1>Chinese immigrant as a threat. You know, physically, they don't

0:05:06.120 --> 0:05:08.800
<v Speaker 1>see them, but actually they might start to. I was

0:05:08.839 --> 0:05:12.159
<v Speaker 1>looking at some immigration stats and at the turn of

0:05:12.160 --> 0:05:15.560
<v Speaker 1>the millennius in two thousand, China was the eleventh largest

0:05:15.680 --> 0:05:19.040
<v Speaker 1>immigrator into the UK and I was about ninety six

0:05:19.080 --> 0:05:21.919
<v Speaker 1>thousand people a year. Well last year they actually jumped

0:05:21.960 --> 0:05:24.440
<v Speaker 1>to the eighth largest and this is behind, you know,

0:05:24.560 --> 0:05:27.480
<v Speaker 1>not all countries in the EU, and that was a

0:05:27.560 --> 0:05:30.039
<v Speaker 1>hundred and ninety six thousands. So Dan, you know, you

0:05:30.080 --> 0:05:32.040
<v Speaker 1>started this podcast by saying, you know, the average leave

0:05:32.080 --> 0:05:35.560
<v Speaker 1>voter might not see the Chinese as you know, the

0:05:35.640 --> 0:05:38.400
<v Speaker 1>threat to you know, that factory job that they lost

0:05:38.480 --> 0:05:40.880
<v Speaker 1>in northern England that they can never have again, but

0:05:40.920 --> 0:05:43.320
<v Speaker 1>they actually might start to, They might start to realize that.

0:05:43.920 --> 0:05:47.119
<v Speaker 1>And Scott is China the world's largest export of danny

0:05:47.200 --> 0:05:51.159
<v Speaker 1>and everything. Indeed they are, They're far larger, I think

0:05:51.160 --> 0:05:55.000
<v Speaker 1>than the US at number two. It just feels like

0:05:55.080 --> 0:05:58.880
<v Speaker 1>one of the dominant narratives economic narratives of the last

0:05:59.200 --> 0:06:05.600
<v Speaker 1>several Dick Aids has been China's ability to attract manufacturing

0:06:05.720 --> 0:06:10.960
<v Speaker 1>plants from Western companies, assemble the stuff there, and then

0:06:11.000 --> 0:06:15.440
<v Speaker 1>export it to wherever. Sometimes it's component parts that are

0:06:15.480 --> 0:06:19.680
<v Speaker 1>being exported for reassembly somewhere else. Now China is moving

0:06:19.760 --> 0:06:23.000
<v Speaker 1>up the value chain and it certainly is not as

0:06:23.120 --> 0:06:26.599
<v Speaker 1>cheap as it once was. But you know, again, it

0:06:26.760 --> 0:06:29.240
<v Speaker 1>just seems like it's got to be at the core

0:06:29.320 --> 0:06:32.919
<v Speaker 1>of any discussion we have about globalization. But we also

0:06:33.080 --> 0:06:35.640
<v Speaker 1>can't forget all the benefits that it has for the

0:06:35.680 --> 0:06:39.680
<v Speaker 1>average Chinese worker as well. I mean again, in two thousand,

0:06:39.680 --> 0:06:42.120
<v Speaker 1>you had about five million households who you would kind

0:06:42.120 --> 0:06:45.719
<v Speaker 1>of classify in that middle income band, and now just

0:06:45.839 --> 0:06:48.960
<v Speaker 1>last year it was two hundred and twenty five million households.

0:06:48.960 --> 0:06:51.520
<v Speaker 1>That is such it's such a large jump. So as

0:06:51.520 --> 0:06:53.640
<v Speaker 1>we're you know, thinking about those workers, are whoa is me?

0:06:53.680 --> 0:06:55.839
<v Speaker 1>I don't have my factory job anymore. Like, let's not

0:06:55.920 --> 0:06:59.159
<v Speaker 1>forget the massive positive impact we've had on a just

0:06:59.240 --> 0:07:02.719
<v Speaker 1>a miss group of people. What's interesting is that China

0:07:02.880 --> 0:07:06.040
<v Speaker 1>is actually being subject to the same kind of globalization

0:07:06.120 --> 0:07:10.040
<v Speaker 1>forces that have affected the Western world, the advanced economies

0:07:10.160 --> 0:07:13.400
<v Speaker 1>US and UK. In the last several decades, you have

0:07:13.840 --> 0:07:19.960
<v Speaker 1>cheaper countries like Vietnam, Malaysia, Indonesia, Bangladesh and so on,

0:07:20.080 --> 0:07:24.600
<v Speaker 1>where large Western companies are actually moving production and that's

0:07:24.600 --> 0:07:27.160
<v Speaker 1>why China is indeed having to move up to higher

0:07:27.240 --> 0:07:31.520
<v Speaker 1>value goods. Now that's not disappearing anytime soon, but it

0:07:31.920 --> 0:07:34.520
<v Speaker 1>is happening, which just shows you it's not a you know,

0:07:34.560 --> 0:07:37.000
<v Speaker 1>a one way street that this is happening. But I

0:07:37.040 --> 0:07:39.920
<v Speaker 1>actually wanted to ask another question to Mark that we're

0:07:39.920 --> 0:07:42.720
<v Speaker 1>in the middle of this presidential campaign right now where

0:07:43.400 --> 0:07:46.200
<v Speaker 1>this does happen every four years, But again, China is

0:07:46.240 --> 0:07:51.600
<v Speaker 1>being demonized really by both Republicans and Democrats. What are

0:07:51.600 --> 0:07:54.000
<v Speaker 1>the attitudes towards China on the ground In the UK?

0:07:54.520 --> 0:07:57.000
<v Speaker 1>You have a government under David Cameron that tried to

0:07:57.040 --> 0:08:00.680
<v Speaker 1>bend over backwards to please China win in investment after

0:08:00.720 --> 0:08:03.200
<v Speaker 1>they had anchored Chinese leaders a few years ago with

0:08:03.240 --> 0:08:06.240
<v Speaker 1>a visit from the Dali Lama. Is that going to

0:08:06.320 --> 0:08:09.240
<v Speaker 1>change at all under Theresa May? Is there any of

0:08:09.280 --> 0:08:12.640
<v Speaker 1>the anger that we have in the US over working

0:08:12.680 --> 0:08:17.600
<v Speaker 1>folks jobs being taken away by China. Well, again, it's

0:08:17.720 --> 0:08:22.400
<v Speaker 1>articulated differently, so I think there's a consensus that the

0:08:22.560 --> 0:08:26.160
<v Speaker 1>UK would like to export more to China, and ironically,

0:08:26.200 --> 0:08:28.400
<v Speaker 1>given all the blame on the EU, they'd like to

0:08:28.600 --> 0:08:31.960
<v Speaker 1>be as successful as the Germans are in exporting to China.

0:08:32.040 --> 0:08:35.600
<v Speaker 1>So I think there's support for David Cameron when he

0:08:35.640 --> 0:08:39.240
<v Speaker 1>goes over to China and trying to talk up big

0:08:39.440 --> 0:08:43.560
<v Speaker 1>trade deals and investment deals. Their support for that. But

0:08:43.679 --> 0:08:48.200
<v Speaker 1>then in terms of broader trade deals you have the

0:08:48.280 --> 0:08:51.720
<v Speaker 1>same hostility there that has developed to the idea of

0:08:52.280 --> 0:08:56.280
<v Speaker 1>a transatlantic trade deal deal with the European Union that

0:08:56.400 --> 0:08:59.720
<v Speaker 1>has developed in the US towards the Trans Pacific Partnership.

0:09:00.360 --> 0:09:03.040
<v Speaker 1>So there are a lot of people upset about that

0:09:03.080 --> 0:09:05.240
<v Speaker 1>in the UK, which has been a big driver. The

0:09:05.240 --> 0:09:08.600
<v Speaker 1>government has been a big driver for that deal um

0:09:08.640 --> 0:09:11.760
<v Speaker 1>and yet it is increasingly unpopular. And I think that's

0:09:11.760 --> 0:09:15.840
<v Speaker 1>where you see the kind of hidden resentment of what

0:09:15.960 --> 0:09:20.840
<v Speaker 1>you know China represents in terms of globalization. But it

0:09:20.880 --> 0:09:24.240
<v Speaker 1>doesn't necessarily take the form of being upset with doing

0:09:24.559 --> 0:09:27.800
<v Speaker 1>trade with China. People assume they're going to be importing

0:09:27.920 --> 0:09:30.480
<v Speaker 1>Chinese goods. They know that they can't make the toys anymore,

0:09:31.040 --> 0:09:35.200
<v Speaker 1>but they want to have a bigger export market in

0:09:35.360 --> 0:09:39.560
<v Speaker 1>China Um. What they get upset about is that these

0:09:39.679 --> 0:09:42.559
<v Speaker 1>large trade deals. We're going to take a quick break

0:09:42.600 --> 0:09:44.959
<v Speaker 1>and hear from our sponsor. Hold that thought. Mark will

0:09:45.000 --> 0:09:53.320
<v Speaker 1>be right back, Limberg. Benchmark is brought to you by

0:09:53.360 --> 0:09:57.000
<v Speaker 1>Stage Summit, the world's largest gathering of small and medium businesses,

0:09:57.200 --> 0:10:02.319
<v Speaker 1>featuring Sir Richard Branson July the Chicago Register with promo

0:10:02.360 --> 0:10:08.400
<v Speaker 1>code business at stage summit dot com. For just now, Mark,

0:10:08.520 --> 0:10:11.680
<v Speaker 1>You've spent the last couple of weeks traveling around the

0:10:11.760 --> 0:10:15.640
<v Speaker 1>United Kingdom talking to people about Brexit. So what would

0:10:15.640 --> 0:10:20.719
<v Speaker 1>an average Brexit voter in a one time industrial stronghold

0:10:20.720 --> 0:10:23.080
<v Speaker 1>in northern England, sort of place that gave us the

0:10:23.120 --> 0:10:26.800
<v Speaker 1>Industrial Revolution? What would they say to the idea that

0:10:26.840 --> 0:10:31.360
<v Speaker 1>the EU actually isn't responsible for what it is that's

0:10:31.400 --> 0:10:37.559
<v Speaker 1>bothering them. They're railing against the wrong target. If they

0:10:37.600 --> 0:10:41.400
<v Speaker 1>are voting for Brexit, they've been persuaded that the EU

0:10:41.880 --> 0:10:46.960
<v Speaker 1>is the culprit um and they probably wouldn't be very

0:10:46.960 --> 0:10:51.440
<v Speaker 1>receptive to, you know, the argument, simply because the Remain

0:10:51.520 --> 0:10:54.440
<v Speaker 1>campaign has been trying to persuade the otherwise for for

0:10:54.480 --> 0:10:58.040
<v Speaker 1>some time and they rejected that argument. But you know,

0:10:58.640 --> 0:11:02.160
<v Speaker 1>I think it is difficult for them. I mean, if

0:11:02.160 --> 0:11:05.080
<v Speaker 1>you put it a bit differently, the EU is really

0:11:05.080 --> 0:11:08.520
<v Speaker 1>a symptom of the problem that they are upset with.

0:11:08.960 --> 0:11:11.080
<v Speaker 1>You know, people are upset about it for for all

0:11:11.200 --> 0:11:14.199
<v Speaker 1>kinds of different reasons, you know, issues of sovereignty or identity,

0:11:14.400 --> 0:11:19.240
<v Speaker 1>even imperial nostalgia for some, but overwhelmingly it's about inequality

0:11:19.600 --> 0:11:24.760
<v Speaker 1>and immigration. And the EU at route didn't cause those things,

0:11:25.720 --> 0:11:29.360
<v Speaker 1>but it is very much involved in people's minds, and

0:11:29.400 --> 0:11:33.160
<v Speaker 1>it is involved. So you can read the EU in

0:11:33.240 --> 0:11:35.880
<v Speaker 1>fact as an attempt by you know, European nations to

0:11:36.000 --> 0:11:38.760
<v Speaker 1>kind of bulk themselves up with a bigger market, a

0:11:38.880 --> 0:11:42.000
<v Speaker 1>bigger currency, so that they can have a kind of

0:11:42.040 --> 0:11:46.280
<v Speaker 1>stronger collective defense against globalization. If you just think about

0:11:46.320 --> 0:11:48.400
<v Speaker 1>trade deals, you know, how do you how do you

0:11:48.440 --> 0:11:51.800
<v Speaker 1>have weight across the negotiating table with the Chinese? Well,

0:11:51.840 --> 0:11:53.960
<v Speaker 1>the best way to do that is to have you know,

0:11:54.000 --> 0:11:56.920
<v Speaker 1>a really big market. Um same goes for anti dumping

0:11:56.960 --> 0:12:00.880
<v Speaker 1>disputes and things. You know, market sizes might but then

0:12:00.920 --> 0:12:05.040
<v Speaker 1>you have people like the German finance minister Volkan Schoebler,

0:12:05.440 --> 0:12:07.880
<v Speaker 1>and he was just incredulous that the idea of the

0:12:07.960 --> 0:12:11.160
<v Speaker 1>choice that the UK was making because you know, as

0:12:11.200 --> 0:12:15.360
<v Speaker 1>he said, you know, choosing splendid isolization, isolation is simply

0:12:15.440 --> 0:12:19.679
<v Speaker 1>not smart in today's global economy. And that's what he

0:12:20.040 --> 0:12:22.280
<v Speaker 1>know by rejecting the EU, that's what he thinks and

0:12:22.400 --> 0:12:25.319
<v Speaker 1>what most of you leaders think the UK is doing.

0:12:26.120 --> 0:12:28.960
<v Speaker 1>But the real problem for the EU and making that argument,

0:12:29.280 --> 0:12:31.199
<v Speaker 1>and which I think is actually a pretty good argument,

0:12:31.240 --> 0:12:33.360
<v Speaker 1>but the real problem for the U s is doing

0:12:33.360 --> 0:12:36.720
<v Speaker 1>a very bad job. You know, it's a strong argument

0:12:36.760 --> 0:12:39.040
<v Speaker 1>for the Leave campaign. Was the point that the euro

0:12:39.120 --> 0:12:43.400
<v Speaker 1>crisis that Greece, you know, high unemployment, massive youth unemployment

0:12:43.400 --> 0:12:46.280
<v Speaker 1>in Spain and Italy, um and and just to ask

0:12:46.280 --> 0:12:49.160
<v Speaker 1>who needs that kind of help. It's interesting the way

0:12:49.240 --> 0:12:53.360
<v Speaker 1>some of the historical timelines aligned here. You know, when

0:12:53.360 --> 0:12:58.760
<v Speaker 1>Britain had its first referendum on EU membership in it

0:12:58.960 --> 0:13:03.079
<v Speaker 1>was an O O awhelmingly popular thing, something like sixty

0:13:03.080 --> 0:13:08.000
<v Speaker 1>seven mark voted in favor of membership. And yet it's

0:13:08.080 --> 0:13:12.040
<v Speaker 1>around that time some momentous changes were beginning to build

0:13:12.200 --> 0:13:15.600
<v Speaker 1>in China. Now in s Maw was still alive, but

0:13:16.200 --> 0:13:19.040
<v Speaker 1>he was ailing, and within a couple of years of

0:13:19.120 --> 0:13:23.400
<v Speaker 1>his passing the following year Done had consolidated power and

0:13:23.440 --> 0:13:27.800
<v Speaker 1>the economic history of the globe was never the same. Again, Scott,

0:13:28.120 --> 0:13:32.319
<v Speaker 1>we just shows that globalization is not a zero sum game.

0:13:33.120 --> 0:13:36.679
<v Speaker 1>You know that just because China has become a winner

0:13:36.920 --> 0:13:39.160
<v Speaker 1>and it's it's lifted a lot of boats in China,

0:13:39.240 --> 0:13:42.400
<v Speaker 1>it hasn't lifted everyone else in the rest of the world.

0:13:42.559 --> 0:13:46.040
<v Speaker 1>And that's the predicament that a lot of countries are

0:13:46.080 --> 0:13:49.320
<v Speaker 1>finding themselves in. Since uh, you knows, as we know,

0:13:49.640 --> 0:13:54.520
<v Speaker 1>the phenomenon of protesting through votes or however against anti

0:13:54.520 --> 0:13:59.240
<v Speaker 1>globalization forces is not against globalization forces, excuse me, is

0:13:59.280 --> 0:14:01.719
<v Speaker 1>not limited to the Brexit vote. So, I mean it

0:14:01.760 --> 0:14:03.720
<v Speaker 1>sounds like from what we're saying is that the voters

0:14:03.880 --> 0:14:06.320
<v Speaker 1>in the UK had the right idea, but they hit

0:14:06.360 --> 0:14:08.679
<v Speaker 1>the wrong target. You know, China has so much worse

0:14:08.760 --> 0:14:11.480
<v Speaker 1>way over economic forces that shapes the lives of British

0:14:11.559 --> 0:14:15.800
<v Speaker 1>voters than the EU. Mark. Yes, in the sense that

0:14:15.880 --> 0:14:18.840
<v Speaker 1>I think that's right. That the big slogan, the powerful

0:14:18.840 --> 0:14:23.080
<v Speaker 1>slogan that you know, arguably really swung the vote for

0:14:23.160 --> 0:14:25.440
<v Speaker 1>the Leave campaign was you know, we want to take

0:14:25.480 --> 0:14:29.560
<v Speaker 1>back control. And I think that is the ultimate sense

0:14:29.680 --> 0:14:33.120
<v Speaker 1>that people have that they have somehow they have lost control,

0:14:33.200 --> 0:14:37.560
<v Speaker 1>lost control of their borders, lost control of economic policy.

0:14:38.080 --> 0:14:41.000
<v Speaker 1>The global capital markets are just so large that, you know,

0:14:41.080 --> 0:14:44.200
<v Speaker 1>governments don't really have the power anymore to make the

0:14:44.240 --> 0:14:46.920
<v Speaker 1>decisions that people would like them to be making in

0:14:47.040 --> 0:14:49.640
<v Speaker 1>order to protect them. And so this was a kind

0:14:49.640 --> 0:14:52.360
<v Speaker 1>of a cry of enough. And you know, whenever you

0:14:52.520 --> 0:14:57.640
<v Speaker 1>call a referendum, people intend to vote about anything but

0:14:57.720 --> 0:15:00.240
<v Speaker 1>the question on the ballot. And I think you could

0:15:00.280 --> 0:15:03.600
<v Speaker 1>argue that that has happened here again, that the EU

0:15:03.840 --> 0:15:06.680
<v Speaker 1>was just unfortunate enough to be on the ballot. But

0:15:06.720 --> 0:15:09.640
<v Speaker 1>if you had a call to referendum on anything that

0:15:09.800 --> 0:15:13.200
<v Speaker 1>asked people to answer the question are you happy with

0:15:13.280 --> 0:15:15.800
<v Speaker 1>the way that things are now? The answer would have

0:15:15.800 --> 0:15:19.880
<v Speaker 1>been known. So if you make the argument that China

0:15:19.960 --> 0:15:22.920
<v Speaker 1>has really been the driving force and changes in the

0:15:22.920 --> 0:15:27.600
<v Speaker 1>global economy in the past several decades, then by extension,

0:15:28.160 --> 0:15:33.120
<v Speaker 1>globalization will ultimately survive breggsit if the EU was a

0:15:33.200 --> 0:15:36.440
<v Speaker 1>symptom rather than a cause. So this would just be

0:15:36.520 --> 0:15:40.040
<v Speaker 1>a glancing blow in a long war. Actually, I think

0:15:40.080 --> 0:15:43.840
<v Speaker 1>that if you look at the on the ground in China,

0:15:44.240 --> 0:15:48.120
<v Speaker 1>the evidence of globalization is all around you, and there's

0:15:48.160 --> 0:15:52.560
<v Speaker 1>a fascination in China with British culture, for example, that

0:15:52.680 --> 0:15:55.720
<v Speaker 1>there's a housing development on the outskirts of Shanghai that

0:15:55.760 --> 0:15:59.800
<v Speaker 1>looks like an English town with red telephone booths. Downtonn

0:16:00.080 --> 0:16:03.160
<v Speaker 1>be is hugely popular. I lived down the street from

0:16:03.160 --> 0:16:07.760
<v Speaker 1>a Bentley dealership there. Marks and Spencer, the iconic British

0:16:08.280 --> 0:16:12.280
<v Speaker 1>department store, has locations in Shanghai and Beijing, as well

0:16:12.320 --> 0:16:16.560
<v Speaker 1>as three other second tier cities in China. There's tourism

0:16:16.640 --> 0:16:20.440
<v Speaker 1>ads in the subway for visiting the UK. Just those

0:16:20.560 --> 0:16:24.520
<v Speaker 1>kinds of ties signal to me at least that this

0:16:24.600 --> 0:16:27.440
<v Speaker 1>is not a passing fat and that Brexit, you know,

0:16:27.520 --> 0:16:31.720
<v Speaker 1>it might affect one area of relations, but it's not

0:16:31.840 --> 0:16:35.680
<v Speaker 1>going to undermine the global tide. Mark. What are your

0:16:35.680 --> 0:16:38.640
<v Speaker 1>thoughts on that? Well, I think that's generally right, and

0:16:38.880 --> 0:16:42.280
<v Speaker 1>you know, optimistically, I very much hope that that's right.

0:16:42.320 --> 0:16:45.080
<v Speaker 1>But I think that one lesson of Brexit that we

0:16:45.120 --> 0:16:49.359
<v Speaker 1>should all take to heart is that you ignore politics

0:16:49.520 --> 0:16:54.680
<v Speaker 1>and the politics of emotion at your peril. It surprises you. Nobody,

0:16:54.720 --> 0:16:58.800
<v Speaker 1>including the Leave campaign, expected for the Brexit vote to win,

0:16:59.560 --> 0:17:03.920
<v Speaker 1>and everyone was surprised because they assume that people would

0:17:04.000 --> 0:17:07.920
<v Speaker 1>vote in their own economic interests. Instead, they have conducted

0:17:07.960 --> 0:17:12.120
<v Speaker 1>a vote which in all probability is in it will

0:17:12.160 --> 0:17:15.280
<v Speaker 1>do them harm. Um And this isn't the first time

0:17:15.480 --> 0:17:18.160
<v Speaker 1>that we've been through this, you know, there have been

0:17:18.280 --> 0:17:21.640
<v Speaker 1>ages of globalization before, you know, the period before World

0:17:21.680 --> 0:17:25.560
<v Speaker 1>War One was a high high watermark of globalization too.

0:17:26.240 --> 0:17:29.959
<v Speaker 1>But politics can intervene and in you know, you you

0:17:30.000 --> 0:17:33.240
<v Speaker 1>could argue that we are kind of in the middle

0:17:33.280 --> 0:17:37.000
<v Speaker 1>of a sort of modern revolution, you know, where and

0:17:37.080 --> 0:17:39.800
<v Speaker 1>all the old order is being changed, and assumptions are

0:17:39.840 --> 0:17:44.240
<v Speaker 1>being over termed, regimes are being changed, are populist parties

0:17:44.640 --> 0:17:49.040
<v Speaker 1>arising all over Europe? Centrist parties that have had you

0:17:49.240 --> 0:17:53.040
<v Speaker 1>been around for a hundred years are you know, almost disappearing.

0:17:53.840 --> 0:17:56.640
<v Speaker 1>And nobody, like with all revolutions, you know, nobody really

0:17:56.640 --> 0:17:59.399
<v Speaker 1>has the slightest idea how it will turn out. You

0:17:59.400 --> 0:18:02.040
<v Speaker 1>can be pretty sure they won't turn out the way

0:18:02.080 --> 0:18:05.520
<v Speaker 1>that you know, the people making these votes I think

0:18:05.560 --> 0:18:08.520
<v Speaker 1>it will. The only good thing about it all is

0:18:08.560 --> 0:18:11.800
<v Speaker 1>that it's happening nowadays, you know, in referendums and and

0:18:11.920 --> 0:18:16.840
<v Speaker 1>elections and not not violence. Well Mark, we can't thank

0:18:16.840 --> 0:18:19.639
<v Speaker 1>you enough for adding this perspective for us. We'll follow

0:18:19.680 --> 0:18:24.800
<v Speaker 1>your reporting around the UK with great interest. They so, Kate,

0:18:25.040 --> 0:18:27.200
<v Speaker 1>have you heard enough to come back next week? Yeah?

0:18:27.240 --> 0:18:29.200
<v Speaker 1>I think I think I'll come back. I think I'll

0:18:29.200 --> 0:18:32.000
<v Speaker 1>come back. Do you think we should let Scott make definitely?

0:18:32.640 --> 0:18:35.680
<v Speaker 1>Wait wait wait, I heard that. I heard that Scot

0:18:35.960 --> 0:18:38.240
<v Speaker 1>on the line. You know I can I can speak

0:18:38.280 --> 0:18:42.159
<v Speaker 1>English too, not just changing. As for Benchmark, we'll be

0:18:42.200 --> 0:18:44.800
<v Speaker 1>back next week and until then, you can find us

0:18:44.800 --> 0:18:48.200
<v Speaker 1>on the Bloomberg terminal and Bloomberg dot com, as well

0:18:48.240 --> 0:18:51.640
<v Speaker 1>as on iTunes, pocket Cast, and Stitcher. While you're there,

0:18:51.960 --> 0:18:54.359
<v Speaker 1>take a minute to rate and review the show so

0:18:54.480 --> 0:18:56.800
<v Speaker 1>more listeners can find us and let us know what

0:18:56.840 --> 0:18:58.520
<v Speaker 1>you thought of the show. You can talk to us

0:18:58.560 --> 0:19:01.280
<v Speaker 1>and follow us on Twitter. You can Scott at Scott Landman.

0:19:01.359 --> 0:19:03.560
<v Speaker 1>You can find me at by Kate Smith. You can

0:19:03.640 --> 0:19:07.920
<v Speaker 1>find Dan at Daniel Moss d C. It's like jan Bloomberg.

0:19:07.920 --> 0:19:10.439
<v Speaker 1>Benchmark is brought to you by Sage Summit, the world's

0:19:10.520 --> 0:19:13.960
<v Speaker 1>largest gathering of small and medium businesses, featuring Sir Richard

0:19:13.960 --> 0:19:19.040
<v Speaker 1>Branson July in Chicago, registered with promo code business at

0:19:19.080 --> 0:19:21.480
<v Speaker 1>Sage Summit dot com for just ninety nine dollars