Speaker 1: Been looking forward to this conversation. We're joined by author
Speaker 1: and columnist Gordon Chang, widely recognized authority on what's happening
Speaker 1: in China, Chinese American relationships and that sort of thing.
Speaker 1: Gordon's recent column caught my eye. China's economy is collapsing.
Speaker 1: Here's why you should worry, Gordon. Welcome, How are you, sir?
Speaker 1: I'm fine, thank you, and thank you so much. Joe, Oh,
Speaker 1: it's it's my pleasure. So it's funny Jack and I
Speaker 1: and Jack's off today, but we're both really into Chinese
Speaker 1: American relations, the rise of China, China's future, and that
Speaker 1: sort of thing. While as Rush Limbaugh might have put it,
Speaker 1: the drive by media just always repeats China is the
Speaker 1: great rising economic power. China will soon eclips us. They'll
Speaker 1: soon have the biggest economy on Earth, and a lot
Speaker 1: of us are over here shouting whoa, whoa, whoa. China
Speaker 1: has some serious problems going on, so glad to hear
Speaker 1: you writing about it. Tell us about the current state
Speaker 1: of China economically, and then we'll get to what it
Speaker 1: might mean down the road. Yes, China right now has
Speaker 1: an economy which is perhaps zero growth. Maybe negative. If
Speaker 1: there is any sort of positive growth at all, it's
Speaker 1: probably less than one percent. And the reason is, of
Speaker 1: course the COVID lockdowns, which still are plaguing in the country,
Speaker 1: including still plaguing Beijing and Chinhai where they're putting new
Speaker 1: neighborhoods into restrictive measures all the time. But they're more
Speaker 1: fundamental problems. The most fundamental problem is that siege and thing.
Speaker 1: The Chinese ruler is moving back to a state dominated economy.
Speaker 1: We know that doesn't work. Also, they've got too much
Speaker 1: debt um and that debt problem is is something that
Speaker 1: they can't solve. But it's not just the economy. This
Speaker 1: is in the context of a country which really is
Speaker 1: in distress. Uh, tell us more about that sort of distress.
Speaker 1: I mean, because the COVID will come and the COVID
Speaker 1: would go. But I know a lot of problems are
Speaker 1: are structural. If you will, yes, but the problems are structural,
Speaker 1: and the most structural problem of all is demography. China
Speaker 1: right now has a population of let's say one point
Speaker 1: for one billion, which is the numb were from the
Speaker 1: most recent reporting of the National Bureau Statistics UM. Most
Speaker 1: people expect China by the end of the century will
Speaker 1: have a population of maybe five million, maybe six hundred
Speaker 1: million if they're lucky. Um So, really this is the
Speaker 1: biggest demograph that fall in history and the absence of
Speaker 1: war or disease. No country has ever gone through that before.
Speaker 1: So we don't know how China will navigate it. But
Speaker 1: all of its other problems, um, and there are a
Speaker 1: lot of them, have to be seen in the context
Speaker 1: of a rapidly shrinking country. Well, and you couple that
Speaker 1: with j and Ping and when you know, I can't
Speaker 1: remember when it was, but Jack and I had long
Speaker 1: assumed that JN Ping Stalin. A lot of the communist
Speaker 1: leaders just wanted the legitimacy, the promises of communism, but
Speaker 1: we're really running kind of an old fashioned dictatorship behind
Speaker 1: the scenes. They didn't believe their own rhetoric. But it seems,
Speaker 1: you know, that Jan Ping actually believes in communism, that
Speaker 1: it will work, and that it's time to run in
Speaker 1: this unruly capitalist thing that's that's bought them everything they have. Yes,
Speaker 1: and we never know, of course, within someone's mind, but
Speaker 1: it's clear that siegent Ping revers Mousedong. He's consistently felt
Speaker 1: that way over the course of decades, and we've seen
Speaker 1: his actions as a ruler, which is to move away
Speaker 1: from the liberalization of the economy in China which created
Speaker 1: all that growth during three and a half decades. Also,
Speaker 1: he believes in totalitarian social controls and we're seeing the
Speaker 1: return of those, so that China has really moved back
Speaker 1: to a society that he's starting to resemble the nineteen fifties,
Speaker 1: only with high speed railroads and buildings and skyscrapers. Um.
Speaker 1: But really what he's doing is he's taking the vitality
Speaker 1: out of China, and that ultimately is something that has occurred.
Speaker 1: It occurred in the first years of the People's Republic,
Speaker 1: of course, but it's also occurred during the Imperial Error
Speaker 1: from time to time where China's leaders closed up their
Speaker 1: country and it's always resulted in disaster at Joel and
Speaker 1: in your piece which folks can read it Armstrong and
Speaker 1: Getty dot Com link to the Daily Caller. Um, it's uh.
Speaker 1: You mentioned there have been a handful of run on
Speaker 1: the runs on banks. There's a very very fragile situation
Speaker 1: with the real estate market. So I mean, if all
Speaker 1: of those birds come home to roost and and China
Speaker 1: goes into a severe state of unrest or or recession,
Speaker 1: obviously that will affect the world economy. Do you want
Speaker 1: to talk about that just a little bit before we
Speaker 1: get into other geopolitical questions. Sure, um, it will affect
Speaker 1: the global economy, but much less than we think. You know,
Speaker 1: everyone says China is an engine of global growth. And yes,
Speaker 1: China does have and has had growth. But the point
Speaker 1: is China's growth has come at the expense of other
Speaker 1: countries because of their stealing of intellectual property and their
Speaker 1: predatory trade practices. So if China were, for an since
Speaker 1: just a magically disappear off the face of the earth,
Speaker 1: it actually would be good for growth of other countries
Speaker 1: because to be an engine of global growth, you've got
Speaker 1: to buy the goods and services of other countries to
Speaker 1: create growth elsewhere. And the engine of global growth today,
Speaker 1: as it's been consistently since the end of World War Two,
Speaker 1: is the United States. Because we run these enormous trade
Speaker 1: deficits with others, We're creating growth around the world. The
Speaker 1: Chinese are taking away growth from other countries. Author and
Speaker 1: columnist Gordon Chang is online. We're talking about China's economic
Speaker 1: fragility and what it might mean. And then you you
Speaker 1: hit me with You hit us with a sentence, a
Speaker 1: couple of sentences that I thought were just terrific and
Speaker 1: I did not see coming. In your peace, you ask
Speaker 1: why should we care? Well, for decades, the primary basis
Speaker 1: of legitimacy the Communist Party has been the continual lead,
Speaker 1: continual delivery of prosperity. Now, because of the accelerating downturn,
Speaker 1: the party's only remaining basis of legitimacy is nationalism. That
Speaker 1: was the twist that I did not see coming. What's
Speaker 1: that likely to look at like? Well? Si jun Ping
Speaker 1: believes that the Communist Party has a right to rule.
Speaker 1: He knows that his primary basis of legitimacy is gone.
Speaker 1: He can no longer assure prosperity, which means that he's
Speaker 1: got to show a strong China. Now, a strong China
Speaker 1: means military misadventure abroad. It means, for instance, going after India, Japan,
Speaker 1: the Philippines, Taiwan, even US. We've seen some very hostile
Speaker 1: maneuvers by the Chinese Air Force and Navy over the
Speaker 1: last couple of months. These guys are just sort of
Speaker 1: looking for a war. Um you know, they may say
Speaker 1: they don't want it, but they're taking actions that can
Speaker 1: lead to it, and so therefore we've got to be
Speaker 1: prepared that not as the Pentagon says that if war
Speaker 1: comes with China it'll be next decade, We've got to
Speaker 1: be prepared for the here and now. So you think
Speaker 1: it's a putent like effort to provoke outsiders to attack
Speaker 1: China to rally the people to the party, it would
Speaker 1: probably to be attacking others. In the first instance. We
Speaker 1: saw this in June with the sneak attack on India.
Speaker 1: We have seen this, of course with these very provocative
Speaker 1: air maneuvers um, not only with regard to Taiwan, but
Speaker 1: also last month they almost tried to uh they almost
Speaker 1: brought down in Australian reconnaissance playing in international airspace. So
Speaker 1: this is really dangerous stuff that they're doing. And so
Speaker 1: you know, the law of averages says that there's going
Speaker 1: to be a collision or there's going to be deaths,
Speaker 1: and that could lead to the spiral downward from which
Speaker 1: there is no recovery. If you are to advise the
Speaker 1: Joe Giddy administration on dissuading the Chinese from from pushing
Speaker 1: too far and provoking the sort of conflict you're talking about.
Speaker 1: What would you suggest, is there any dissuading them. I
Speaker 1: think that there is, because they realized that we're a
Speaker 1: stronger country. Um. What they don't believe is that the
Speaker 1: United States has the political will to defend our friends
Speaker 1: and allies. And a matter of fact, Ukraine is a
Speaker 1: great demonstration of a failure of deterrence. We were far stronger,
Speaker 1: our allies, were far stronger than Russia, and yet we
Speaker 1: failed to stop the Russians from attacking on the Chinese.
Speaker 1: Look at that, and I think the way that we
Speaker 1: stopped them from going after Taiwan or whatever is we
Speaker 1: make it clear that we will fight. And the way
Speaker 1: to do that is, for instance, to stay to Taiwan.
Speaker 1: We will defend you, will give you a mutual defense treaty,
Speaker 1: will put our soldiers on the island as a trip wire,
Speaker 1: will preposition um military supplies. We will do those things
Speaker 1: that make it clear that we will fight. People will
Speaker 1: say that that's extraordinarily risking, and I say, yes it is.
Speaker 1: But because of misguided policy, over the course of decades,
Speaker 1: our policies, we've created a situation where every option is
Speaker 1: exceedingly dangerous, and the most dangerous option is to continue
Speaker 1: with policies that have put us into this predicament in
Speaker 1: the first place. Gordon Chang is an independent voice taking
Speaker 1: a look at China. We always are interested in his opinion. Uh,
Speaker 1: he's the author of the Coming Collapse of China. You
Speaker 1: can follow Gordon on Twitter at Gordon g Chang. Gordon
Speaker 1: is always interesting to catch up. Thanks so much for
Speaker 1: the time. Well, thank you, Joe, I really appreciate it. Yeah,
Speaker 1: no problem. Again, it's a little frustrating, and you don't
Speaker 1: need to be an authority. I don't claim to be
Speaker 1: an authority, but you just hear the same cliches about China,
Speaker 1: repeat it over and over again, and and uh, it's
Speaker 1: a behemoth. I mean obviously the population, the economy and
Speaker 1: the rest of it. But it is an enormous, complicated, troubled,
Speaker 1: aging country and and not the you know, the plucky,
Speaker 1: young upstart that it's been portrayed as in the mainstream
Speaker 1: media for the longest time. They are well. All international
Speaker 1: politics is an extension of domestic politics, as we try
Speaker 1: to remind you all from time to time, and countries
Speaker 1: often ex rest there Uh, their difficulties domestically by reaching
Speaker 1: out and poking somebody in the eye or or you know,
Speaker 1: forming an alliance or writing a treaty or something like that.
Speaker 1: But man, never forget domestic politics or what drive international
Speaker 1: politics in China matters these days, so you've got to
Speaker 1: keep an eye on what's going on internally. So I
Speaker 1: hope you enjoyed that I did Armstrong