1 00:00:00,840 --> 00:00:04,080 Speaker 1: The war in Ukraine taking center stage when the United 2 00:00:04,200 --> 00:00:07,800 Speaker 1: Nations General Assembly meets in New York. From the packed agenda, 3 00:00:08,000 --> 00:00:11,959 Speaker 1: escalating tensions with China and Russia's war in Ukraine launched 4 00:00:11,960 --> 00:00:12,840 Speaker 1: early last. 5 00:00:12,680 --> 00:00:17,759 Speaker 2: Year, but some key players are expected to skip that gathering. Specifically, 6 00:00:18,040 --> 00:00:20,880 Speaker 2: four out of the five permanent members on the Security 7 00:00:20,880 --> 00:00:23,360 Speaker 2: Council China, the UK, France. 8 00:00:23,200 --> 00:00:23,799 Speaker 3: And Russia. 9 00:00:24,600 --> 00:00:29,480 Speaker 4: The high level talks about economics, energy, trade, and war 10 00:00:29,720 --> 00:00:33,760 Speaker 4: at the UN this week highlight the geopolitical schisms that 11 00:00:33,840 --> 00:00:37,760 Speaker 4: are reshaping the balance of power in the world and 12 00:00:38,080 --> 00:00:43,720 Speaker 4: increasingly forcing nations to choose sides. But not just nations, 13 00:00:44,040 --> 00:00:48,160 Speaker 4: corporations too are looking at the shifting political map when 14 00:00:48,159 --> 00:00:51,800 Speaker 4: they make decisions that will impact their business for decades, 15 00:00:52,320 --> 00:00:56,120 Speaker 4: like where to build a new factory. A just release 16 00:00:56,160 --> 00:01:00,280 Speaker 4: Bloomberg analysis puts numbers to these decisions for the first time. 17 00:01:00,840 --> 00:01:04,440 Speaker 4: It shows how political divides like those exposed by Russia's 18 00:01:04,440 --> 00:01:08,839 Speaker 4: war in Ukraine and increasing tensions between the US and China, 19 00:01:08,920 --> 00:01:14,560 Speaker 4: are also disrupting decades of commercial relationships, and it reveals 20 00:01:14,560 --> 00:01:18,880 Speaker 4: how the world is splitting into economic blocks that resemble 21 00:01:19,040 --> 00:01:20,559 Speaker 4: political fault lines. 22 00:01:21,319 --> 00:01:23,959 Speaker 5: Lot has happened in the last five years in the 23 00:01:24,000 --> 00:01:27,960 Speaker 5: global economy started. I think with the trade wars between 24 00:01:28,160 --> 00:01:31,000 Speaker 5: the US and China, what we've seen is that when 25 00:01:31,040 --> 00:01:34,200 Speaker 5: you look at tide numbers, you can already see some 26 00:01:34,680 --> 00:01:37,200 Speaker 5: decupling happening between the countries. 27 00:01:37,840 --> 00:01:41,880 Speaker 4: That's Bloomberg economists Mevak Cousin. She and senior economics writer 28 00:01:41,959 --> 00:01:45,399 Speaker 4: Sean Donnin are here to talk about how companies are 29 00:01:45,400 --> 00:01:48,920 Speaker 4: seeking to insulate themselves from political turmoil. 30 00:01:49,560 --> 00:01:54,520 Speaker 1: We know that companies hate uncertainty, so we have a 31 00:01:54,600 --> 00:01:57,280 Speaker 1: kind of level of uncertainty that is being created by 32 00:01:57,320 --> 00:02:01,080 Speaker 1: governments that is just making it hard to do business 33 00:02:01,080 --> 00:02:01,639 Speaker 1: in the world. 34 00:02:06,960 --> 00:02:10,680 Speaker 4: I'm west Kosova today on the Big take when politics 35 00:02:10,880 --> 00:02:18,120 Speaker 4: and business collide. 36 00:02:20,639 --> 00:02:23,280 Speaker 1: Sean, welcome back. Thanks so much for having me back here. 37 00:02:23,919 --> 00:02:26,600 Speaker 4: So you know, we've been hearing for years about how 38 00:02:26,680 --> 00:02:30,560 Speaker 4: companies put factories where they can manufacture their goods cheaply, 39 00:02:30,720 --> 00:02:32,880 Speaker 4: or put them closer to their customers so they don't 40 00:02:32,919 --> 00:02:36,160 Speaker 4: have to have long supply chains. But what's so fascinating 41 00:02:36,240 --> 00:02:38,639 Speaker 4: about the story that you and Mava, along with our 42 00:02:38,720 --> 00:02:42,320 Speaker 4: colleagues Enda Kerran and Jenna Hawk wrote is that there 43 00:02:42,360 --> 00:02:47,760 Speaker 4: are so many more hidden factors into where companies choose 44 00:02:48,200 --> 00:02:50,240 Speaker 4: to do their business these days. 45 00:02:50,880 --> 00:02:55,400 Speaker 1: And they're new factors, right. So for decades, the decisions 46 00:02:55,400 --> 00:02:59,200 Speaker 1: that CEOs and boards made in terms of where they 47 00:02:59,200 --> 00:03:02,520 Speaker 1: were alca their capital, the big business bets that they 48 00:03:02,560 --> 00:03:06,640 Speaker 1: were making, were based on returns and profits and where's 49 00:03:06,680 --> 00:03:10,120 Speaker 1: the big market, Where can I sell underarm deodorant, Where 50 00:03:10,160 --> 00:03:12,600 Speaker 1: can I sell a car? Where can I make the 51 00:03:12,639 --> 00:03:16,919 Speaker 1: biggest buck? And what we're seeing in the last few years, 52 00:03:17,280 --> 00:03:21,799 Speaker 1: and this is something that's really confounding economists because it's 53 00:03:21,800 --> 00:03:24,480 Speaker 1: not the way it's supposed to happen in a normal economy. 54 00:03:24,520 --> 00:03:28,640 Speaker 1: This is not how they teach economics in college. Is 55 00:03:28,680 --> 00:03:32,480 Speaker 1: that geopolitics is starting to drive decisions and that is 56 00:03:32,560 --> 00:03:36,640 Speaker 1: a whole new ballgame, and we're just starting to be 57 00:03:36,680 --> 00:03:38,560 Speaker 1: able to kind of see the data. And that's what 58 00:03:38,560 --> 00:03:40,920 Speaker 1: we've tried to do with the story and Mava. 59 00:03:41,240 --> 00:03:44,480 Speaker 4: This question of how politics is driving some of the 60 00:03:44,520 --> 00:03:48,280 Speaker 4: decisions that big companies make is very hard to measure, 61 00:03:48,320 --> 00:03:50,640 Speaker 4: which is why what you've done in the story is 62 00:03:50,640 --> 00:03:51,120 Speaker 4: so new. 63 00:03:51,840 --> 00:03:52,760 Speaker 1: Yeah, that's very high. 64 00:03:52,840 --> 00:03:55,480 Speaker 5: It's difficult to measure. We are used to measure things 65 00:03:55,520 --> 00:03:59,240 Speaker 5: like the size of the economy, the distance between countries, 66 00:03:59,320 --> 00:04:03,520 Speaker 5: the tariffs that exist even non tariff barriers when there 67 00:04:03,560 --> 00:04:07,800 Speaker 5: are some regulations that make it difficult to import and exports. 68 00:04:08,240 --> 00:04:13,080 Speaker 5: But the geopolitics, and in particular the concerns about geopolitical 69 00:04:13,160 --> 00:04:16,160 Speaker 5: tension and the fact that maybe in the future there 70 00:04:16,160 --> 00:04:19,760 Speaker 5: could be restrictions, there could be export controls and bands, 71 00:04:20,080 --> 00:04:23,560 Speaker 5: this is much harder to measure. So we can start 72 00:04:23,600 --> 00:04:27,240 Speaker 5: to see in the data that this is having an impact. 73 00:04:27,760 --> 00:04:31,599 Speaker 5: We can use some poxies. We've used UN votes in 74 00:04:31,640 --> 00:04:36,480 Speaker 5: the UN resolution on whether to condemn Russia's invasion of Ukraine. 75 00:04:36,600 --> 00:04:40,640 Speaker 5: We've used those voting patterns as a proxy to understand 76 00:04:40,680 --> 00:04:44,880 Speaker 5: the geopolitical similarities between countries. But you're right, it's actually 77 00:04:44,920 --> 00:04:50,200 Speaker 5: something that's much more intangible than standard economic tools. 78 00:04:51,040 --> 00:04:53,440 Speaker 4: Sean, What gave you the idea to look at this, 79 00:04:53,640 --> 00:04:56,200 Speaker 4: What was the thing that made you think, huh, it 80 00:04:56,240 --> 00:05:00,360 Speaker 4: looks like geopolitics getting into the middle of these decision. 81 00:05:01,040 --> 00:05:03,279 Speaker 1: We've been trying to think about all of the different 82 00:05:03,279 --> 00:05:05,440 Speaker 1: things that are happening out there in the global economy 83 00:05:05,440 --> 00:05:08,280 Speaker 1: and how it's being shaped, and we're trying to get 84 00:05:08,279 --> 00:05:11,599 Speaker 1: our head around what's really happening to globalization in the world, 85 00:05:11,720 --> 00:05:14,040 Speaker 1: and what was clear and what we're starting to hear 86 00:05:14,080 --> 00:05:18,360 Speaker 1: from more and more economists, is that geopolitics was a thing. Now, 87 00:05:18,400 --> 00:05:21,640 Speaker 1: that's kind of obvious. We've heard here in Washington people 88 00:05:21,839 --> 00:05:25,039 Speaker 1: every day are talking about China and the competition with 89 00:05:25,160 --> 00:05:28,640 Speaker 1: China in Europe likewise, they are exercised by this. Certainly 90 00:05:28,720 --> 00:05:31,040 Speaker 1: in China. China feels under assault and is trying to 91 00:05:31,040 --> 00:05:34,360 Speaker 1: build new alliances. We know that geopolitics is shaping the world, 92 00:05:34,720 --> 00:05:37,719 Speaker 1: but it's harder to get a hold on how you 93 00:05:38,440 --> 00:05:43,479 Speaker 1: actually measure capital decisions capital allocation decisions, which has been 94 00:05:43,800 --> 00:05:46,040 Speaker 1: important to us at Bloomberg Right because that's kind of 95 00:05:46,240 --> 00:05:50,040 Speaker 1: what we write about. And that's when we started noticing 96 00:05:50,040 --> 00:05:52,400 Speaker 1: that a lot of economists were starting to latch on 97 00:05:52,760 --> 00:05:57,920 Speaker 1: to un voting patterns and other measures of geopolitics. People 98 00:05:57,920 --> 00:06:00,960 Speaker 1: look at the number of mentions on Earth calls of 99 00:06:01,080 --> 00:06:03,840 Speaker 1: the word geopolitics. So far this year, there's been some 100 00:06:03,960 --> 00:06:08,040 Speaker 1: twelve thousand mentions by executives of standard Ports five hundred companies. 101 00:06:08,080 --> 00:06:11,119 Speaker 1: These are the world's largest companies, and that's three times 102 00:06:11,160 --> 00:06:14,320 Speaker 1: what it was just two years ago. Economists have looked 103 00:06:14,360 --> 00:06:18,920 Speaker 1: at other trading relationships, arm sales, or other kind of 104 00:06:19,000 --> 00:06:23,520 Speaker 1: measures of geopolitical proximity, whether you're members of the G 105 00:06:23,640 --> 00:06:26,440 Speaker 1: seven for example, or the G twenty or different blocks, 106 00:06:26,760 --> 00:06:30,040 Speaker 1: and there is this whole effort by economists to try 107 00:06:30,040 --> 00:06:32,599 Speaker 1: and understand this new force, and this seemed like the 108 00:06:32,600 --> 00:06:34,080 Speaker 1: cleanest way for us to do it. 109 00:06:34,720 --> 00:06:37,720 Speaker 4: Maybe, can you tell us exactly what the numbers show, 110 00:06:37,839 --> 00:06:41,160 Speaker 4: what you were looking for and what you've found. 111 00:06:42,279 --> 00:06:45,080 Speaker 5: We looked in particular at what we call green field 112 00:06:45,360 --> 00:06:49,400 Speaker 5: for indirect investment. That's investment in new projects in factory 113 00:06:49,440 --> 00:06:51,719 Speaker 5: is that will sometimes take years to build. So that's 114 00:06:51,760 --> 00:06:55,080 Speaker 5: really the sort of decision today about where you want 115 00:06:55,080 --> 00:06:56,560 Speaker 5: to do business in the future. 116 00:06:57,360 --> 00:07:01,240 Speaker 4: And so this is companies deciding where they want to 117 00:07:01,279 --> 00:07:04,720 Speaker 4: build a new plant. So Toyota, should they build it 118 00:07:04,760 --> 00:07:06,600 Speaker 4: in China, the US or Mexico. 119 00:07:07,360 --> 00:07:09,760 Speaker 5: That's right, That's exactly what we've been looking at in 120 00:07:09,800 --> 00:07:13,560 Speaker 5: this World Investment Report. What we did is that we 121 00:07:13,720 --> 00:07:17,840 Speaker 5: focused on those greenfield investment reports and we looked at 122 00:07:18,000 --> 00:07:21,680 Speaker 5: where the new flows of investments were going, and we 123 00:07:21,760 --> 00:07:26,080 Speaker 5: focused in particular on whether countries had been voting to 124 00:07:26,200 --> 00:07:29,840 Speaker 5: condemn Russia's invasion of Ukraine in February twenty twenty three 125 00:07:29,960 --> 00:07:33,840 Speaker 5: in the United Nations or if that voted against containing 126 00:07:33,880 --> 00:07:37,400 Speaker 5: the invasion or abstained. And what we noticed is that 127 00:07:37,480 --> 00:07:40,880 Speaker 5: the share of those new projects that was going to 128 00:07:41,280 --> 00:07:45,200 Speaker 5: countries that did not condemn the invasion of Ukraine by Russia, 129 00:07:45,360 --> 00:07:48,520 Speaker 5: this share of new investment going to those countries has 130 00:07:48,560 --> 00:07:52,440 Speaker 5: fallen very substantially. It was about thirty percent of all 131 00:07:52,480 --> 00:07:56,280 Speaker 5: investments in the decade to twenty nineteen. By twenty twenty 132 00:07:56,320 --> 00:08:00,600 Speaker 5: two it was only fifteen percent. And within those countries 133 00:08:00,920 --> 00:08:04,400 Speaker 5: there are two big losers. One is Russia in twenty 134 00:08:04,440 --> 00:08:08,560 Speaker 5: twenty two that received no investment at no new investment 135 00:08:08,680 --> 00:08:11,520 Speaker 5: at all. That means no investment from the US or Europe. 136 00:08:11,600 --> 00:08:14,520 Speaker 5: But that also means no investment from China, for example, 137 00:08:14,720 --> 00:08:17,360 Speaker 5: which is quite striking I find. And the other big 138 00:08:17,400 --> 00:08:21,640 Speaker 5: loser China. So in the decade twenty nineteen, China was 139 00:08:21,680 --> 00:08:24,680 Speaker 5: receiving an average about ten percent of all the flows 140 00:08:24,720 --> 00:08:28,520 Speaker 5: of new investment in new projects. In twenty twenty two 141 00:08:28,720 --> 00:08:31,920 Speaker 5: they received less than two percent. So we really see 142 00:08:31,960 --> 00:08:36,200 Speaker 5: this sort of decisions, companies deciding that they don't want 143 00:08:36,240 --> 00:08:39,320 Speaker 5: to invest at a moment in those countries anymore. 144 00:08:41,000 --> 00:08:43,800 Speaker 4: Sean, let's pull that apart just a little bit. Why 145 00:08:43,840 --> 00:08:46,920 Speaker 4: did you focus in particular on this vote about Russia's 146 00:08:46,960 --> 00:08:50,000 Speaker 4: invasion of Ukraine. Why was that such an important dividing 147 00:08:50,080 --> 00:08:53,720 Speaker 4: line when looking at investment decisions about where to put factories. 148 00:08:54,520 --> 00:08:58,520 Speaker 1: We know that Vladimir put in decision to invade Ukraine 149 00:08:59,080 --> 00:09:02,640 Speaker 1: was the geopolitical moment of the last couple of years, 150 00:09:02,679 --> 00:09:06,640 Speaker 1: and so where countries position themselves on that, whether they 151 00:09:06,720 --> 00:09:10,360 Speaker 1: choose to condemn the vote or just simply abstained, told 152 00:09:10,400 --> 00:09:12,440 Speaker 1: you a lot about their thinking and how they were 153 00:09:12,559 --> 00:09:16,959 Speaker 1: kind of positioning themselves and their alliances, their geopolitical alliances. 154 00:09:17,000 --> 00:09:19,640 Speaker 1: So there's that To be clear, we're not saying in 155 00:09:19,679 --> 00:09:24,440 Speaker 1: this that the only reason people are moving their factories 156 00:09:24,679 --> 00:09:27,200 Speaker 1: is because of the war in Ukraine. There are other 157 00:09:27,360 --> 00:09:30,880 Speaker 1: reasons why people are choosing to invest in the United 158 00:09:30,920 --> 00:09:34,640 Speaker 1: States or in Western Europe, including a whole surge in 159 00:09:34,640 --> 00:09:38,280 Speaker 1: industrial policy and subsidies that we've seen here in the 160 00:09:38,360 --> 00:09:41,320 Speaker 1: United States in particular. We also know that China in 161 00:09:41,400 --> 00:09:45,120 Speaker 1: twenty twenty one, in twenty twenty two was largely shut 162 00:09:45,160 --> 00:09:48,439 Speaker 1: down because of a zero COVID policy that was putting 163 00:09:48,520 --> 00:09:51,320 Speaker 1: off a lot of foreign investors. But there is a 164 00:09:51,440 --> 00:09:54,840 Speaker 1: clear divide at the same time that is happening in 165 00:09:54,880 --> 00:09:59,400 Speaker 1: the world, and we see it in summits of leaders. 166 00:09:59,520 --> 00:10:04,440 Speaker 1: We see in different policy areas in Washington efforts to 167 00:10:04,559 --> 00:10:08,760 Speaker 1: try and stop technological exports to China, for example, the 168 00:10:08,800 --> 00:10:13,400 Speaker 1: export of semiconductors and semiconductor making equipment to China. So 169 00:10:13,679 --> 00:10:17,160 Speaker 1: we know this broader geopolitical tensions are happening. We're just 170 00:10:17,280 --> 00:10:21,160 Speaker 1: using this vote to kind of sort through this data. 171 00:10:21,600 --> 00:10:25,360 Speaker 4: And maybe what does the data tell us about how 172 00:10:25,440 --> 00:10:30,320 Speaker 4: much the war in Ukraine is driving investment decisions versus 173 00:10:30,600 --> 00:10:35,240 Speaker 4: the war in Ukraine exposing divisions that were there even before. 174 00:10:35,840 --> 00:10:37,800 Speaker 5: It's a very good question, and a lot has happened 175 00:10:37,840 --> 00:10:41,480 Speaker 5: in the last five years in the global economy started. 176 00:10:41,520 --> 00:10:44,800 Speaker 5: I think with the trade wars between the US and China, 177 00:10:45,360 --> 00:10:48,439 Speaker 5: what we've seen is that when you look at tide numbers, 178 00:10:48,920 --> 00:10:53,239 Speaker 5: you can already see some decupling happening between the countries. 179 00:10:53,480 --> 00:10:55,480 Speaker 5: When you look at tide numbers, you have a very 180 00:10:55,520 --> 00:10:58,280 Speaker 5: clear cut. In twenty eighteen, with the start of the 181 00:10:58,320 --> 00:11:01,640 Speaker 5: trade wars between the US and China, US imports from 182 00:11:01,720 --> 00:11:05,720 Speaker 5: China have fallen thirty five percent across all the tarift products. 183 00:11:05,880 --> 00:11:06,880 Speaker 1: So that's a big gap. 184 00:11:07,320 --> 00:11:10,800 Speaker 5: At the same time, China's imports from the US have 185 00:11:11,000 --> 00:11:14,240 Speaker 5: also fallen. They've fallen for trift products, but they also 186 00:11:14,400 --> 00:11:17,120 Speaker 5: have declined. And that's what Sean was saying. All those 187 00:11:17,160 --> 00:11:21,400 Speaker 5: semiconductors related technology. Some of it is likely directly link 188 00:11:21,480 --> 00:11:25,440 Speaker 5: to export restrictions imposed by the US on RUEWEI on 189 00:11:25,840 --> 00:11:29,320 Speaker 5: SMC from October twenty twenty, to the sort of broad 190 00:11:29,320 --> 00:11:33,520 Speaker 5: based export restrictions on semiconductor technologies. But some of it 191 00:11:33,559 --> 00:11:37,560 Speaker 5: is probably geopolitical decopling's China trying to move away in 192 00:11:37,640 --> 00:11:40,679 Speaker 5: this very strategic technology. Actually, if you were to look 193 00:11:40,679 --> 00:11:42,800 Speaker 5: at Russia as well, you can see that Russia was 194 00:11:42,880 --> 00:11:47,680 Speaker 5: already starting to decoupel Western economies since twenty fourteen, since 195 00:11:47,679 --> 00:11:51,240 Speaker 5: the invasion of Crimea and the start of sanctions. So clearly, 196 00:11:51,440 --> 00:11:54,880 Speaker 5: for me, the un vertes and the invasion of Ukraine 197 00:11:54,960 --> 00:11:58,839 Speaker 5: and votes around the invasion of Ukraine have actually crystallized 198 00:11:59,200 --> 00:12:03,440 Speaker 5: some of the growing divisions and tensions that we're already 199 00:12:03,520 --> 00:12:06,120 Speaker 5: growing under the surface in the global economy. 200 00:12:08,000 --> 00:12:11,679 Speaker 4: Seans, where we have this broad divide that you show 201 00:12:11,920 --> 00:12:14,840 Speaker 4: in this story, and we know, of course there's China 202 00:12:14,920 --> 00:12:17,080 Speaker 4: on one side, the US on the other, but there's 203 00:12:17,160 --> 00:12:20,680 Speaker 4: every other country in between what is the divide which 204 00:12:20,720 --> 00:12:22,640 Speaker 4: countries are on each side. 205 00:12:23,320 --> 00:12:27,360 Speaker 1: On one side you have you know, the big Western economies, 206 00:12:27,360 --> 00:12:32,280 Speaker 1: the United States, Europe Asian allies like Japan and South Korea, 207 00:12:32,840 --> 00:12:35,200 Speaker 1: and on the other side you have China and a 208 00:12:35,200 --> 00:12:38,720 Speaker 1: lot of developing countries. And to be clear, there are 209 00:12:38,760 --> 00:12:41,000 Speaker 1: a lot of countries that are trying to have a 210 00:12:41,040 --> 00:12:43,680 Speaker 1: bet both ways, right, and this is actually an interesting 211 00:12:43,720 --> 00:12:45,960 Speaker 1: set of economies that we're going to be looking further at. 212 00:12:46,280 --> 00:12:51,280 Speaker 1: Countries like India, Vietnam that abstained when it came to 213 00:12:51,440 --> 00:12:55,040 Speaker 1: this big United Nations vote that we've been looking at 214 00:12:55,200 --> 00:12:59,320 Speaker 1: that has kind of crystallized this geopolitical divide, and at 215 00:12:59,360 --> 00:13:02,000 Speaker 1: the same time, and they're trying to have strategic relationships 216 00:13:02,000 --> 00:13:05,440 Speaker 1: with the United States as well. President Biden was recently 217 00:13:05,480 --> 00:13:08,640 Speaker 1: in Vietnam and India and in both of those visits 218 00:13:08,880 --> 00:13:12,800 Speaker 1: was trying very hard to strengthen the relationship there and likewise, 219 00:13:12,880 --> 00:13:15,800 Speaker 1: the leaders of India and Vietnam were very happy to 220 00:13:15,800 --> 00:13:18,960 Speaker 1: see the American president there. At the same time, they're 221 00:13:18,960 --> 00:13:21,560 Speaker 1: trying to kind of maintain a relationship with China and 222 00:13:21,559 --> 00:13:24,360 Speaker 1: so on. So you know, these are not clean blocks, right. 223 00:13:24,440 --> 00:13:27,480 Speaker 1: We should also be clear that these are not equal blocks. 224 00:13:27,520 --> 00:13:30,839 Speaker 1: About two thirds of the global economy is on the 225 00:13:30,920 --> 00:13:34,199 Speaker 1: kind of US and G seven side. About a third 226 00:13:34,240 --> 00:13:37,920 Speaker 1: of the world economy is on the Russia China side, 227 00:13:37,960 --> 00:13:40,320 Speaker 1: if you will. One of the ways you can really 228 00:13:40,520 --> 00:13:43,319 Speaker 1: track what is happening and this divide in the global 229 00:13:43,360 --> 00:13:46,679 Speaker 1: economy is how folks have voted at the United Nations 230 00:13:46,880 --> 00:13:50,679 Speaker 1: on whether to condemn russia invasion of Ukraine or not. 231 00:13:52,000 --> 00:13:54,720 Speaker 4: After the break, Which countries have the most to win 232 00:13:55,000 --> 00:14:07,760 Speaker 4: and lose in this shifting global structure. Maybe Sean said 233 00:14:07,800 --> 00:14:11,679 Speaker 4: earlier that on earnings calls, when executives of big companies 234 00:14:11,720 --> 00:14:16,760 Speaker 4: talk about their performance, they've been talking about global tensions 235 00:14:16,880 --> 00:14:19,720 Speaker 4: quite a lot. What are some of the companies that 236 00:14:19,920 --> 00:14:22,560 Speaker 4: were caught up in all of this that are making 237 00:14:22,600 --> 00:14:26,480 Speaker 4: these decisions in part based on global politics. 238 00:14:27,000 --> 00:14:31,440 Speaker 5: What I found fascinating in the latest World Investment report 239 00:14:31,960 --> 00:14:36,440 Speaker 5: is really the weight of semiconductors in those decisions. It's 240 00:14:36,480 --> 00:14:40,720 Speaker 5: fascinating to see that greenfield projects, the new projects in 241 00:14:40,840 --> 00:14:45,400 Speaker 5: fabs in semiconductor factories have jumped by about two hundred 242 00:14:45,440 --> 00:14:49,840 Speaker 5: percent multiplied by three since twenty nineteen or twenty twenty. 243 00:14:50,200 --> 00:14:53,280 Speaker 5: And in fact, you can see that companies like TSMC 244 00:14:53,880 --> 00:14:57,880 Speaker 5: based in Taiwan, one of the geopolitical hotspots who used 245 00:14:57,920 --> 00:15:02,160 Speaker 5: to have factories mostly in Taiwan and Menan. China is 246 00:15:02,200 --> 00:15:06,040 Speaker 5: building factories in the US, in Japan, and his index 247 00:15:06,160 --> 00:15:07,360 Speaker 5: to build in Germany. 248 00:15:08,200 --> 00:15:10,480 Speaker 1: And it's not just semiconductors, right. We've been talking a 249 00:15:10,480 --> 00:15:14,000 Speaker 1: lot since the pandemic about the importance of semiconductors to 250 00:15:14,040 --> 00:15:18,200 Speaker 1: building everything from cars to cell phones to washing machines. 251 00:15:18,640 --> 00:15:20,640 Speaker 1: If you listen to the earnings calls and you look 252 00:15:20,640 --> 00:15:23,880 Speaker 1: at the transcripts, what you see is Wall Street giants 253 00:15:24,000 --> 00:15:27,680 Speaker 1: like Black Rock and Larry Fink their chairman, talking about 254 00:15:27,880 --> 00:15:30,520 Speaker 1: geopolitics and how it's going to hit returns. 255 00:15:30,840 --> 00:15:35,240 Speaker 6: These forces include a fragmented geopolitical landscape causing a rewiring 256 00:15:35,280 --> 00:15:39,240 Speaker 6: supply chains, a transition to a lower carbon economy, and 257 00:15:39,280 --> 00:15:42,480 Speaker 6: the aging population in the developed world, all of which 258 00:15:42,600 --> 00:15:44,840 Speaker 6: are likely to be inflationary over time. 259 00:15:45,840 --> 00:15:49,880 Speaker 1: You see big consumer giants like Coca Cola and Tesla 260 00:15:50,000 --> 00:15:53,600 Speaker 1: and Elon Musk talking about geopolitics. You also see big 261 00:15:53,640 --> 00:15:57,880 Speaker 1: industrial companies like three M talking about geopolitics and worrying 262 00:15:57,880 --> 00:16:02,240 Speaker 1: about it. It's hard to find a big company right 263 00:16:02,280 --> 00:16:05,480 Speaker 1: now that isn't thinking about geopolitics in a way that 264 00:16:05,520 --> 00:16:07,560 Speaker 1: they just weren't a few years ago. 265 00:16:08,040 --> 00:16:09,920 Speaker 4: And what do they say on those calls, What are 266 00:16:09,960 --> 00:16:13,040 Speaker 4: their specific concerns when they talk about geopolitics. 267 00:16:13,600 --> 00:16:16,480 Speaker 1: The first concern is, this is a big risk, right. 268 00:16:16,640 --> 00:16:19,320 Speaker 1: We are worried that a big geopolitical event and that 269 00:16:19,360 --> 00:16:22,760 Speaker 1: these geopolitical tensions could affect our ability to do business 270 00:16:23,120 --> 00:16:27,200 Speaker 1: in the world. The second thing they say is, we 271 00:16:27,240 --> 00:16:32,240 Speaker 1: are working to reorganize our supply chains because of the 272 00:16:32,320 --> 00:16:35,080 Speaker 1: geopolitical risk, and we don't want our supply chains to 273 00:16:35,080 --> 00:16:37,840 Speaker 1: be caught up in a big geopolitical event. And the 274 00:16:37,880 --> 00:16:41,320 Speaker 1: third thing they say is we're trying very hard to 275 00:16:41,360 --> 00:16:45,440 Speaker 1: find a way around geopolitics. And so Elon Musk in July, 276 00:16:45,560 --> 00:16:48,480 Speaker 1: when he was talking to Tesla investors, had this fascinating 277 00:16:48,560 --> 00:16:51,440 Speaker 1: line where he said, look, this is a really strange 278 00:16:51,480 --> 00:16:54,480 Speaker 1: period in terms of geopolitical tensions in the world. 279 00:16:54,760 --> 00:16:58,320 Speaker 7: The best we can do is have factories and many 280 00:16:58,400 --> 00:17:00,720 Speaker 7: past the world such that if is get cut in 281 00:17:00,720 --> 00:17:03,000 Speaker 7: one part of the world, we know we can still 282 00:17:03,040 --> 00:17:04,879 Speaker 7: keep things going in the rest of the world. 283 00:17:06,000 --> 00:17:08,880 Speaker 1: And we're seeing him do that. Right. Elon Musk has 284 00:17:08,960 --> 00:17:12,840 Speaker 1: factories in Texas. He has factories in China outside Shanghai. 285 00:17:12,880 --> 00:17:16,440 Speaker 1: He's building a big new factory just outside Berlin. And 286 00:17:16,560 --> 00:17:19,320 Speaker 1: he's got a big factory in Mexico as well that's 287 00:17:19,359 --> 00:17:23,400 Speaker 1: under development. And he, like a lot of big companies 288 00:17:23,440 --> 00:17:27,080 Speaker 1: and like a lot of CEOs, is making sure that 289 00:17:27,840 --> 00:17:33,080 Speaker 1: he is both respecting these new geopolitical interests but also 290 00:17:33,200 --> 00:17:36,960 Speaker 1: finding a way to kind of survive this geopolitical time 291 00:17:37,000 --> 00:17:37,400 Speaker 1: as well. 292 00:17:38,160 --> 00:17:41,640 Speaker 4: Maybe earlier you talked about how Russia and China are 293 00:17:42,440 --> 00:17:45,840 Speaker 4: some of the bigger losers in this new divide. Who 294 00:17:45,880 --> 00:17:49,920 Speaker 4: are the winners who are inheriting new companies, new factories 295 00:17:50,359 --> 00:17:53,000 Speaker 4: where before they wouldn't have gotten that business. 296 00:17:53,640 --> 00:17:55,679 Speaker 5: I think so far what we've seen is that some 297 00:17:55,760 --> 00:17:57,920 Speaker 5: of the big winners are actually in the G seven 298 00:17:58,440 --> 00:18:02,040 Speaker 5: United States. He's a country that has seyn the credits 299 00:18:02,040 --> 00:18:07,840 Speaker 5: increase in its new projects, Germany, Italy. So clearly at 300 00:18:07,880 --> 00:18:09,880 Speaker 5: the moment, I guess it's a bit of a flight 301 00:18:09,920 --> 00:18:13,000 Speaker 5: to safety, going to the sort of very safe place. 302 00:18:13,200 --> 00:18:17,560 Speaker 5: The blocks are starting to get identified, but I think 303 00:18:17,600 --> 00:18:21,040 Speaker 5: it's still a bit in flex and so I guess 304 00:18:21,040 --> 00:18:24,600 Speaker 5: that's maybe why at the moment companies are choosing the 305 00:18:24,680 --> 00:18:27,399 Speaker 5: sort of safe bets and going where they really know 306 00:18:27,560 --> 00:18:30,800 Speaker 5: on which side it's going to fall. That's a big winners. 307 00:18:31,480 --> 00:18:34,720 Speaker 5: In our data, we can see other winners. We know that, 308 00:18:34,800 --> 00:18:38,399 Speaker 5: for example, some countries have taken up some of the 309 00:18:38,640 --> 00:18:42,720 Speaker 5: slack left by China in US imports. We know it's 310 00:18:42,760 --> 00:18:46,200 Speaker 5: actually quite a lot of Asian countries. It's China, it's Vietnam, 311 00:18:46,480 --> 00:18:49,400 Speaker 5: it's also India. So you see two countries that actually 312 00:18:49,680 --> 00:18:53,280 Speaker 5: didn't vote to condemn Russia's invasion have taken up a 313 00:18:53,320 --> 00:18:55,160 Speaker 5: lot of the sex in the US. 314 00:18:55,720 --> 00:18:58,280 Speaker 1: And there's another important point to make here, which is 315 00:18:58,880 --> 00:19:00,960 Speaker 1: on the kind of loser. And this is what a 316 00:19:01,000 --> 00:19:04,480 Speaker 1: lot of economists and smart people really worry about, and 317 00:19:04,560 --> 00:19:08,120 Speaker 1: that is the story of globalization over the last half 318 00:19:08,200 --> 00:19:12,960 Speaker 1: century has been one of yes, production shifting from places 319 00:19:13,000 --> 00:19:16,600 Speaker 1: like the United States to Mexico and China, but it's 320 00:19:16,640 --> 00:19:20,600 Speaker 1: also been shifting and manufacturing has been growing rapidly in 321 00:19:20,800 --> 00:19:24,679 Speaker 1: other poor countries, developing countries, and that has meant for 322 00:19:24,720 --> 00:19:29,840 Speaker 1: the world a huge reduction in poverty. There are far 323 00:19:29,960 --> 00:19:33,800 Speaker 1: fewer people living in extreme poverty in the world today 324 00:19:34,160 --> 00:19:37,560 Speaker 1: than there were fifty years ago. That said, if you 325 00:19:37,600 --> 00:19:41,520 Speaker 1: look forward now, if geopolitics has this big influence, and 326 00:19:41,640 --> 00:19:44,679 Speaker 1: we are doing this thing that some people call friend shoring, right, 327 00:19:44,720 --> 00:19:47,239 Speaker 1: We're putting factories in friendly countries. A lot of those 328 00:19:47,280 --> 00:19:50,879 Speaker 1: friendly countries are other rich countries. That means that that 329 00:19:51,000 --> 00:19:54,280 Speaker 1: investment is not going to poor countries. That means that 330 00:19:54,320 --> 00:19:57,040 Speaker 1: those poor countries are likely to stay poorer for longer. 331 00:19:57,200 --> 00:20:00,320 Speaker 1: It's likely to increase in equality in the world world, 332 00:20:00,840 --> 00:20:04,000 Speaker 1: it's going to increase poverty in the world, and that 333 00:20:04,359 --> 00:20:06,440 Speaker 1: is going to lead to all sorts of other problems. 334 00:20:06,480 --> 00:20:10,000 Speaker 1: And so if you are sitting at the International Monetary 335 00:20:10,000 --> 00:20:12,360 Speaker 1: Fund or the World Bank and you are looking out 336 00:20:12,400 --> 00:20:16,880 Speaker 1: at the global economy beyond these rich economies, you are 337 00:20:16,920 --> 00:20:20,520 Speaker 1: worrying about the impact of this fragmentation on the world 338 00:20:22,440 --> 00:20:22,840 Speaker 1: and sean. 339 00:20:22,880 --> 00:20:27,600 Speaker 4: About three decades ago, we saw another bipolar system come 340 00:20:27,640 --> 00:20:31,440 Speaker 4: crashing down with the collapse of the Soviet Union. How 341 00:20:31,480 --> 00:20:33,920 Speaker 4: does what's happening now compare to that. 342 00:20:34,840 --> 00:20:37,800 Speaker 1: It's really tempting to say this is the new Cold War, 343 00:20:37,920 --> 00:20:39,879 Speaker 1: right the US and China, There's going to be an 344 00:20:39,920 --> 00:20:42,680 Speaker 1: iron curtain descending on the world. And that is not 345 00:20:42,720 --> 00:20:44,919 Speaker 1: what we are saying in this piece. We're not talking 346 00:20:44,920 --> 00:20:49,280 Speaker 1: about a new Eastern Bloc and Western Bloc because the 347 00:20:49,320 --> 00:20:52,560 Speaker 1: world is just so much more complicated than it was then. 348 00:20:52,960 --> 00:20:56,199 Speaker 1: The fact is that the US and China still have 349 00:20:56,480 --> 00:21:03,040 Speaker 1: an incredibly complicated and pretty rich economic relationship. Gina Romando, 350 00:21:03,320 --> 00:21:06,760 Speaker 1: the Secretary of Commerce, was just in China literally trying 351 00:21:06,800 --> 00:21:11,719 Speaker 1: to sell Boeing aircraft to the Chinese. US still wants 352 00:21:11,760 --> 00:21:15,800 Speaker 1: to sell to China, and vice versa now. Ten years 353 00:21:15,800 --> 00:21:18,439 Speaker 1: from now, twenty years from now, fifty years from now, 354 00:21:18,680 --> 00:21:20,919 Speaker 1: that iron curtain may be a lot harder than what 355 00:21:20,960 --> 00:21:23,480 Speaker 1: we envision now. But if there is an iron curtain 356 00:21:23,480 --> 00:21:25,720 Speaker 1: coming down on the world right now, it's really porous. 357 00:21:25,800 --> 00:21:28,600 Speaker 1: It's really easy to get around and walk through even 358 00:21:29,359 --> 00:21:29,680 Speaker 1: I think. 359 00:21:29,680 --> 00:21:32,679 Speaker 5: One thing I find quite interesting is the return of 360 00:21:32,840 --> 00:21:36,960 Speaker 5: export controls and export bands wielding the economic weapon for 361 00:21:37,080 --> 00:21:41,000 Speaker 5: geopolitical purposes. It's something that more or less had disappeared 362 00:21:41,480 --> 00:21:45,200 Speaker 5: since the United States actually decided they could start selling 363 00:21:45,320 --> 00:21:48,359 Speaker 5: pieces to the USSR at the time, so that was 364 00:21:48,520 --> 00:21:52,160 Speaker 5: for me. It's one of the proper code war type tool. 365 00:21:52,480 --> 00:21:55,639 Speaker 5: So it's quite interesting and a little bit worrying to 366 00:21:55,680 --> 00:22:00,400 Speaker 5: see it coming back in this sort of tried policies back. 367 00:22:00,640 --> 00:22:03,479 Speaker 4: What will this emerging system mean for the things we 368 00:22:03,600 --> 00:22:16,480 Speaker 4: buy and how much they cost. Is there any upside 369 00:22:16,560 --> 00:22:19,679 Speaker 4: to the world being divided into different economic blocks? 370 00:22:20,560 --> 00:22:22,880 Speaker 1: You know, I've been talking with economists at the IMF 371 00:22:22,920 --> 00:22:26,560 Speaker 1: about this. You've been doing a whole series of deep 372 00:22:26,680 --> 00:22:30,320 Speaker 1: dives into different parts of the global economy and looking 373 00:22:30,320 --> 00:22:34,080 Speaker 1: at the impact of a fragmenting world. And they will 374 00:22:34,080 --> 00:22:36,919 Speaker 1: tell you we've looked at it many different ways, and 375 00:22:37,400 --> 00:22:41,560 Speaker 1: we don't see a scenario where the global economy as 376 00:22:41,560 --> 00:22:45,120 Speaker 1: a whole gains. We see this is something that destroys 377 00:22:45,359 --> 00:22:49,359 Speaker 1: kind of economic output in the world. In the worst case, 378 00:22:49,600 --> 00:22:52,640 Speaker 1: if you had a kind of hard iron curtain, if 379 00:22:52,680 --> 00:22:54,919 Speaker 1: you had a real Cold war, it would be the 380 00:22:54,920 --> 00:22:58,000 Speaker 1: equivalent of wiping out the French and German economies from 381 00:22:58,080 --> 00:23:00,399 Speaker 1: the global economy. Right now, it's about seven percent of 382 00:23:00,440 --> 00:23:01,240 Speaker 1: the global comody. 383 00:23:01,280 --> 00:23:05,000 Speaker 5: That's huge from a pure economic perspective. It's going to 384 00:23:05,040 --> 00:23:08,000 Speaker 5: be costy. How costly, it's quite difficult to know. But 385 00:23:08,600 --> 00:23:11,280 Speaker 5: we had done some estimates using a large scale model, 386 00:23:11,520 --> 00:23:13,679 Speaker 5: and we had estimated that if we had the twenty 387 00:23:13,680 --> 00:23:17,159 Speaker 5: five percent starif between the two blocks of countries, we 388 00:23:17,200 --> 00:23:21,399 Speaker 5: would probably see trade flows fall by about twenty percent 389 00:23:21,800 --> 00:23:24,639 Speaker 5: relative to what they are today, and twenty percent. That 390 00:23:24,680 --> 00:23:26,879 Speaker 5: would take us back to the early two thousand, so 391 00:23:27,080 --> 00:23:30,679 Speaker 5: just before China joined the World Trade Organization. Based on 392 00:23:30,720 --> 00:23:35,800 Speaker 5: our estimate of past relationship between trade integration and growth, 393 00:23:36,119 --> 00:23:39,080 Speaker 5: we think it could reduce global GDP by about three 394 00:23:39,080 --> 00:23:41,719 Speaker 5: point five percent. That it would be relatively broad based, 395 00:23:41,760 --> 00:23:45,600 Speaker 5: because in some places producers would lose, in some places 396 00:23:45,640 --> 00:23:49,159 Speaker 5: consumers would lose, but generally everyone would be a bit 397 00:23:49,240 --> 00:23:49,760 Speaker 5: worse UF. 398 00:23:51,520 --> 00:23:54,159 Speaker 4: So you can see how a politician would make a 399 00:23:54,200 --> 00:23:58,000 Speaker 4: decision based on a certain set of circumstances. But for 400 00:23:58,080 --> 00:24:01,320 Speaker 4: a company that is really trying to make decisions based 401 00:24:01,359 --> 00:24:04,400 Speaker 4: on how it's going to affect their business, is there 402 00:24:04,440 --> 00:24:06,960 Speaker 4: any concern that because it's so hard to measure it, 403 00:24:07,000 --> 00:24:08,000 Speaker 4: they're going to get it wrong. 404 00:24:08,560 --> 00:24:10,560 Speaker 1: Absolutely. So. I mean, one of the people I called 405 00:24:10,600 --> 00:24:12,480 Speaker 1: when we were working on this story is a woman 406 00:24:12,520 --> 00:24:15,960 Speaker 1: called Penny Goldberg, who is a former chief economist at 407 00:24:16,000 --> 00:24:17,960 Speaker 1: the World Bank. She's now at Yale. She's one of 408 00:24:17,960 --> 00:24:21,679 Speaker 1: the world's leading trade economists and experts on globalization, and 409 00:24:21,720 --> 00:24:25,399 Speaker 1: she made a really good point. She said, geopolitics is 410 00:24:25,840 --> 00:24:31,640 Speaker 1: man made uncertainty, and we know that companies hate uncertainty. 411 00:24:31,800 --> 00:24:34,560 Speaker 1: So we have a kind of level of uncertainty that 412 00:24:34,640 --> 00:24:38,239 Speaker 1: is being created by governments that is just making it 413 00:24:38,280 --> 00:24:41,600 Speaker 1: harder to do business in the world today. We have 414 00:24:41,680 --> 00:24:45,120 Speaker 1: a very recent example that kind of illustrates it all. 415 00:24:45,400 --> 00:24:48,399 Speaker 1: Look at how quickly sanctions went into place on Russia 416 00:24:48,840 --> 00:24:53,440 Speaker 1: after the invasion of Ukraine. We saw McDonald's pull out 417 00:24:53,440 --> 00:24:54,560 Speaker 1: in the matter of reasons, man. 418 00:24:54,480 --> 00:24:57,160 Speaker 3: The Possby chain will sell it's Russian business and take 419 00:24:57,240 --> 00:24:59,800 Speaker 3: a write off of up to one point four billion dollars. 420 00:25:00,080 --> 00:25:03,440 Speaker 3: Donald said that in the way the war in Ukraine continued, 421 00:25:03,440 --> 00:25:06,199 Speaker 3: ownership of the business in Russia is not consistent with 422 00:25:06,320 --> 00:25:07,520 Speaker 3: the company's values. 423 00:25:08,200 --> 00:25:11,080 Speaker 1: We saw other companies pull out their employees in a 424 00:25:11,119 --> 00:25:14,720 Speaker 1: matter of days after the invasion. We have seen the 425 00:25:14,840 --> 00:25:20,560 Speaker 1: Russian economy shut off by Western banks. The reality is 426 00:25:20,960 --> 00:25:25,520 Speaker 1: geopolitics can change things very quickly, and big companies, whether 427 00:25:25,520 --> 00:25:29,800 Speaker 1: it's Coca Cola, McDonald's, Walmart, Tesla, can feel the impact 428 00:25:30,080 --> 00:25:30,679 Speaker 1: very quickly. 429 00:25:31,400 --> 00:25:34,800 Speaker 4: Mayva for listeners, say living in the US on one 430 00:25:34,840 --> 00:25:39,199 Speaker 4: side of this block, or listener in Beijing on the 431 00:25:39,240 --> 00:25:41,320 Speaker 4: other side of the block, what would you tell them 432 00:25:41,320 --> 00:25:44,160 Speaker 4: about how it's going to affect them. Just people going 433 00:25:44,160 --> 00:25:47,760 Speaker 4: about their lives, trying to make ends meet buying products. 434 00:25:47,800 --> 00:25:49,720 Speaker 4: What does it mean for average. 435 00:25:49,359 --> 00:25:54,480 Speaker 5: People having been the US? Generally, it means that there 436 00:25:54,520 --> 00:26:00,600 Speaker 5: are greater risks that consumers may face some short or 437 00:26:00,680 --> 00:26:05,320 Speaker 5: some inflation as their products, products that used to being 438 00:26:05,400 --> 00:26:11,320 Speaker 5: imported from China get relocated or resourced from a different country. 439 00:26:12,080 --> 00:26:15,080 Speaker 5: And we know that sometimes it can be difficult, So 440 00:26:15,119 --> 00:26:18,240 Speaker 5: I think that's probably the sort of thing that may happen. 441 00:26:19,119 --> 00:26:22,119 Speaker 5: I would don't tell them to run to the shop 442 00:26:22,160 --> 00:26:25,600 Speaker 5: and hold I think they will be fine. But generally 443 00:26:25,640 --> 00:26:28,000 Speaker 5: I think that the sort of greater risk for the 444 00:26:28,040 --> 00:26:30,639 Speaker 5: sort of households or risk in the US maybe a 445 00:26:30,640 --> 00:26:35,040 Speaker 5: bit more inflation volatility in China, I imagine, or his 446 00:26:35,320 --> 00:26:39,400 Speaker 5: probably lies more of the producers. It means that depending 447 00:26:39,440 --> 00:26:42,080 Speaker 5: on how it goes. So far China has managed we 448 00:26:42,160 --> 00:26:44,600 Speaker 5: know they have lost market shares in the US. So 449 00:26:44,680 --> 00:26:47,959 Speaker 5: far they've managed to recover those market shares. I think 450 00:26:48,560 --> 00:26:52,840 Speaker 5: it means that maybe China's market share in other parts 451 00:26:52,880 --> 00:26:57,240 Speaker 5: of the US analyze word could become a bit more constrained, 452 00:26:57,720 --> 00:27:01,600 Speaker 5: and that could probably mean some jobs. So that's probably 453 00:27:01,600 --> 00:27:04,880 Speaker 5: more a job risk, has it than a consumption risk 454 00:27:05,080 --> 00:27:07,200 Speaker 5: in China? 455 00:27:07,359 --> 00:27:10,240 Speaker 1: And you know, in the background of your question is 456 00:27:11,160 --> 00:27:14,159 Speaker 1: a world where we see the two economic giants on 457 00:27:14,240 --> 00:27:18,919 Speaker 1: two very different economic paths right now. So, China's economy 458 00:27:19,000 --> 00:27:23,480 Speaker 1: is slowing and it's facing some huge structural problems like 459 00:27:23,680 --> 00:27:27,680 Speaker 1: actually a declining population, an aging population, in a way 460 00:27:27,880 --> 00:27:31,040 Speaker 1: that the United States is not. In the same way. 461 00:27:31,560 --> 00:27:35,639 Speaker 1: It has recovered more slowly from the pandemic than the 462 00:27:35,760 --> 00:27:39,840 Speaker 1: United States. There are a lot of people in Washington 463 00:27:40,040 --> 00:27:43,680 Speaker 1: and other Western capitals now who see China not as 464 00:27:43,720 --> 00:27:46,560 Speaker 1: a kind of endlessly rising power, but as one that 465 00:27:46,720 --> 00:27:49,240 Speaker 1: is starting to either peak or kind of the client. 466 00:27:49,600 --> 00:27:52,640 Speaker 1: So that is a very different path. The United States 467 00:27:52,880 --> 00:27:56,840 Speaker 1: has recovered incredibly quickly from the pandemic in a lot 468 00:27:56,880 --> 00:27:59,240 Speaker 1: of ways. There's still a lot of problems on the 469 00:27:59,240 --> 00:28:02,119 Speaker 1: ground in still very real for a lot of families 470 00:28:02,440 --> 00:28:05,040 Speaker 1: and so on. But we have a job market unemployment 471 00:28:05,119 --> 00:28:08,280 Speaker 1: rate that is at historic lows, and the Biden administration 472 00:28:08,320 --> 00:28:11,240 Speaker 1: would argue that there's all of this investment in the 473 00:28:11,280 --> 00:28:14,359 Speaker 1: future that means that the US economy is going to 474 00:28:14,440 --> 00:28:20,199 Speaker 1: be growing vigorously for a long time, and that is 475 00:28:20,240 --> 00:28:22,679 Speaker 1: going to be felt by families in the longer term. Right, 476 00:28:22,720 --> 00:28:24,679 Speaker 1: it may not be you and me who feel it 477 00:28:25,080 --> 00:28:26,879 Speaker 1: at you know, in the grocery line or when we 478 00:28:26,920 --> 00:28:30,400 Speaker 1: go out to buy our new iPhones or cars, it's 479 00:28:30,440 --> 00:28:32,399 Speaker 1: going to be maybe our kids who feel it in 480 00:28:32,480 --> 00:28:35,800 Speaker 1: a different way. And once upon a time, the story 481 00:28:36,040 --> 00:28:38,480 Speaker 1: was that by the time my kids were entering the workforce, 482 00:28:38,640 --> 00:28:41,560 Speaker 1: China would be the world's largest economy and they would 483 00:28:41,560 --> 00:28:44,840 Speaker 1: be competing in a very different way with China. It's 484 00:28:44,880 --> 00:28:46,880 Speaker 1: not so clear that that's going to be the case anymore, 485 00:28:47,080 --> 00:28:49,320 Speaker 1: and vice versa for young Chinese people. 486 00:28:50,200 --> 00:28:52,920 Speaker 4: Sean Mav thanks so much for talking with me today. 487 00:28:53,400 --> 00:28:55,640 Speaker 1: Thank you so much. Thanks finding us. 488 00:28:56,880 --> 00:28:58,720 Speaker 4: Thanks for listening to us here at The Big Take. 489 00:28:58,880 --> 00:29:02,040 Speaker 4: It's a daily podcast from Bloomberg and iHeartRadio. For more 490 00:29:02,040 --> 00:29:05,920 Speaker 4: shows from iHeartRadio, visit the iHeartRadio app, Apple Podcasts, or 491 00:29:05,960 --> 00:29:08,520 Speaker 4: wherever you listen, and we'd love to hear from you. 492 00:29:08,680 --> 00:29:11,640 Speaker 4: Email us questions or comments to Big Take at Bloomberg 493 00:29:11,680 --> 00:29:15,200 Speaker 4: dot net. The supervising producer of The Big Take is 494 00:29:15,280 --> 00:29:19,640 Speaker 4: Vicky Bergolina. Our senior producer is Katherine Fink. Our producers 495 00:29:19,640 --> 00:29:24,000 Speaker 4: are Michael Falero and Moe Barrow. Raphael mcili is our engineer. 496 00:29:24,360 --> 00:29:28,240 Speaker 4: Our original music was composed by Leo Sidrin. I'm West Kasova. 497 00:29:28,480 --> 00:29:30,680 Speaker 4: We'll be back tomorrow with another big take.