1
00:00:04,800 --> 00:00:07,800
Speaker 1: From Bloomberg News and I Heart Radio. It's the big tag.

2
00:00:09,760 --> 00:00:14,520
Speaker 1: I'm West Kasova. Today, the US shot down that Chinese balloon.

3
00:00:15,120 --> 00:00:28,400
Speaker 1: So what happens now? At first, it seemed like a weird,

4
00:00:28,720 --> 00:00:33,479
Speaker 1: somewhat alarming curiosity, this giant Chinese balloon flying at high

5
00:00:33,520 --> 00:00:38,519
Speaker 1: altitude across the US, the size of three school buses.

6
00:00:39,440 --> 00:00:42,159
Speaker 1: China claimed that it was a science balloon that had

7
00:00:42,240 --> 00:00:45,920
Speaker 1: drifted off course. President Biden ordered the things shot down

8
00:00:45,960 --> 00:00:49,040
Speaker 1: on Saturday once it reached open water off the coast

9
00:00:49,040 --> 00:00:53,040
Speaker 1: of South Carolina. China claimed outrage, and now that threatens

10
00:00:53,080 --> 00:00:57,000
Speaker 1: to worsen the already tense relationship between two of the

11
00:00:57,040 --> 00:01:01,960
Speaker 1: world's most powerful nations. My colleague Ras Mathison overseas Bloomberg's

12
00:01:02,000 --> 00:01:05,720
Speaker 1: government and political coverage around the world, and she's here

13
00:01:05,760 --> 00:01:08,800
Speaker 1: with me now from London to sort out what this

14
00:01:08,920 --> 00:01:14,080
Speaker 1: was all about and where things go from here. So

15
00:01:14,120 --> 00:01:17,399
Speaker 1: the Chinese are claiming that this balloon was a science

16
00:01:17,720 --> 00:01:21,760
Speaker 1: monitoring device that somehow drifted off course and wound up

17
00:01:21,800 --> 00:01:24,880
Speaker 1: over the un seas. Is that plausible? Well, from what

18
00:01:25,000 --> 00:01:28,960
Speaker 1: we know from the US government to U S intelligence sources,

19
00:01:29,000 --> 00:01:31,320
Speaker 1: they say that this in no way could have been

20
00:01:31,520 --> 00:01:35,280
Speaker 1: a weather balloon, which is what the Chinese authorities are saying,

21
00:01:35,720 --> 00:01:37,800
Speaker 1: there was too much on board in terms of its

22
00:01:37,800 --> 00:01:41,039
Speaker 1: ability to monitor and surveil to be just there to

23
00:01:41,080 --> 00:01:44,160
Speaker 1: sort of check the clouds or the weather floating over

24
00:01:44,760 --> 00:01:49,000
Speaker 1: US or Northern American airspace, and um, they could see

25
00:01:49,080 --> 00:01:52,120
Speaker 1: that it was obviously able to do much more. So

26
00:01:52,160 --> 00:01:55,040
Speaker 1: this obviously was going over some very sensitive terrain in

27
00:01:55,080 --> 00:01:57,960
Speaker 1: the US, which makes it very difficult of course again

28
00:01:58,040 --> 00:02:01,080
Speaker 1: to sort of believe the Chinese assertions that was just

29
00:02:01,120 --> 00:02:03,520
Speaker 1: there to check out the weather. These are very important

30
00:02:03,520 --> 00:02:06,880
Speaker 1: and sensitive weapons installations and so on. I mean, obviously

31
00:02:07,000 --> 00:02:09,360
Speaker 1: they can't quite dictate where this goes once it's in

32
00:02:09,400 --> 00:02:12,000
Speaker 1: the air. But it did seem to have some mobility

33
00:02:12,080 --> 00:02:14,280
Speaker 1: control and certainly when it was sent up, sent in

34
00:02:14,280 --> 00:02:17,120
Speaker 1: a certain direction, and all of that, including just the

35
00:02:17,400 --> 00:02:19,600
Speaker 1: material was on board the balloon, suggests that it was

36
00:02:19,600 --> 00:02:21,880
Speaker 1: in no way just a weather balloon. And what was

37
00:02:21,919 --> 00:02:24,280
Speaker 1: the material and more, because when we think about, you know,

38
00:02:24,280 --> 00:02:26,040
Speaker 1: a weather balloon or any of these balloons, we think

39
00:02:26,040 --> 00:02:28,040
Speaker 1: of that kind of balloon. Maybe it has a little

40
00:02:28,080 --> 00:02:32,000
Speaker 1: thing attached to it they can take weather readings, but

41
00:02:32,080 --> 00:02:35,600
Speaker 1: this thing was enormous. It was indeed, and very big

42
00:02:35,600 --> 00:02:37,280
Speaker 1: in the sky, and that's in fact how it ended

43
00:02:37,360 --> 00:02:39,639
Speaker 1: up getting spotted was because it was just showing up

44
00:02:40,040 --> 00:02:42,560
Speaker 1: in the sky. It seems to have had some advanced

45
00:02:42,639 --> 00:02:44,480
Speaker 1: material for a balloon. Of course, I think we all

46
00:02:44,480 --> 00:02:47,160
Speaker 1: think of balloon is sort of a child's toy at

47
00:02:47,200 --> 00:02:49,080
Speaker 1: a fair but in fact, as you say, this was

48
00:02:49,120 --> 00:02:51,720
Speaker 1: a very very big craft with a lot of sophisticated

49
00:02:51,760 --> 00:02:54,760
Speaker 1: material on board, and that was packed into a fairly

50
00:02:54,800 --> 00:02:57,640
Speaker 1: small space inside the balloon, and that was sort of

51
00:02:57,680 --> 00:03:00,600
Speaker 1: the technology not just to take pictures, but also to

52
00:03:00,639 --> 00:03:04,399
Speaker 1: pick up a bunch of signals. So really doing semi

53
00:03:04,400 --> 00:03:07,160
Speaker 1: the work of a satellite from a from a lower

54
00:03:07,200 --> 00:03:09,760
Speaker 1: altitude is the idea that the technology in it was

55
00:03:09,880 --> 00:03:13,000
Speaker 1: enabling them to get that kind of information that a

56
00:03:13,080 --> 00:03:16,640
Speaker 1: satellite from a much higher altitude could also do. So

57
00:03:16,680 --> 00:03:19,280
Speaker 1: it's not just taking photos, although that's a part of it,

58
00:03:19,320 --> 00:03:21,960
Speaker 1: and that's what they were seeing in the technology. But

59
00:03:22,040 --> 00:03:24,560
Speaker 1: what was interesting about this balloon was the technology to

60
00:03:24,639 --> 00:03:26,880
Speaker 1: drive it. Is they're saying there was there was sort

61
00:03:26,919 --> 00:03:30,120
Speaker 1: of advanced material in this that enabled them to send

62
00:03:30,160 --> 00:03:32,880
Speaker 1: the balloon in a certain direction and for the balloon

63
00:03:32,919 --> 00:03:37,000
Speaker 1: then to essentially direct itself. And that's part of the again,

64
00:03:37,440 --> 00:03:39,640
Speaker 1: the argument that this was much much more than a

65
00:03:39,640 --> 00:03:42,560
Speaker 1: weather balloon, as you say, was spotted because people can

66
00:03:42,600 --> 00:03:45,640
Speaker 1: actually see the thing. Everybody is looking at the sky. Now,

67
00:03:46,320 --> 00:03:49,080
Speaker 1: we have satellites looking down, we have people looking up.

68
00:03:49,240 --> 00:03:53,120
Speaker 1: Why did the Chinese think that this wouldn't be spotted

69
00:03:53,320 --> 00:03:56,080
Speaker 1: or did they know it was going to be spot Well?

70
00:03:56,120 --> 00:03:58,400
Speaker 1: This is the interesting thing because I think when a

71
00:03:58,400 --> 00:04:01,080
Speaker 1: lot of people think about China and the Chinese government,

72
00:04:01,520 --> 00:04:05,040
Speaker 1: they think of this monolithic, all powerful, all in control,

73
00:04:05,600 --> 00:04:09,160
Speaker 1: moving in the one direction under all orders entity. And

74
00:04:09,200 --> 00:04:12,920
Speaker 1: it's a really big country and it operates not not

75
00:04:12,960 --> 00:04:16,400
Speaker 1: necessarily in that way at all. So the first question

76
00:04:16,400 --> 00:04:18,640
Speaker 1: really is did the Chinese government know it was going

77
00:04:18,720 --> 00:04:21,240
Speaker 1: up now? Um? Did they order it to go up? Now?

78
00:04:21,480 --> 00:04:24,120
Speaker 1: Do you have entities that work on their own time scale?

79
00:04:24,480 --> 00:04:27,839
Speaker 1: Perhaps had been the intention to send up surveillance balloons

80
00:04:27,880 --> 00:04:30,000
Speaker 1: around now, but no one thought to send a memo

81
00:04:30,680 --> 00:04:33,320
Speaker 1: to the organization that does this to say, perhaps don't

82
00:04:33,320 --> 00:04:35,920
Speaker 1: do it at this point in time. It's a sensitive time,

83
00:04:36,320 --> 00:04:39,360
Speaker 1: and so no one stopped it. Um. So whether this

84
00:04:39,520 --> 00:04:42,960
Speaker 1: was designed to happen now as as a message from

85
00:04:42,960 --> 00:04:46,160
Speaker 1: the central government that's really unclear and as perhaps something

86
00:04:46,200 --> 00:04:49,760
Speaker 1: we'll actually really never know for sure if it was.

87
00:04:50,160 --> 00:04:52,560
Speaker 1: That's a really sort of big question, because it was

88
00:04:52,680 --> 00:04:56,080
Speaker 1: really really clear also from the language from China, from

89
00:04:56,080 --> 00:04:58,880
Speaker 1: Beijing in the previous weeks and including at the start

90
00:04:58,920 --> 00:05:02,280
Speaker 1: of this incident, they really wanted this not to blow up.

91
00:05:02,520 --> 00:05:05,360
Speaker 1: Pardon the language, but the panner on balloons, but they

92
00:05:05,440 --> 00:05:08,279
Speaker 1: really didn't want this to escalate. They started out very

93
00:05:08,440 --> 00:05:10,280
Speaker 1: very sort of low key in fact, then there was

94
00:05:10,320 --> 00:05:13,320
Speaker 1: a very unusual apology. We didn't mean this thing to

95
00:05:13,400 --> 00:05:16,240
Speaker 1: come across right now. So that again points to the

96
00:05:16,240 --> 00:05:19,440
Speaker 1: fact there wasn't necessarily some kind of coordinated action here

97
00:05:19,440 --> 00:05:24,400
Speaker 1: and a real message trying to be sent. And yet

98
00:05:24,440 --> 00:05:27,560
Speaker 1: this isn't the first time that the Chinese government has

99
00:05:27,640 --> 00:05:31,360
Speaker 1: sent a balloon toward the US. It happened a couple

100
00:05:31,400 --> 00:05:34,680
Speaker 1: of times before when President Trump was in office and

101
00:05:34,680 --> 00:05:37,880
Speaker 1: also at the beginning of the Boning administration. Is that right, well,

102
00:05:37,920 --> 00:05:40,080
Speaker 1: that's right. In fact, there's a long, long history of

103
00:05:40,200 --> 00:05:44,599
Speaker 1: Chinese surveillance craft, including balloons, coming into various orbits that

104
00:05:44,680 --> 00:05:47,400
Speaker 1: affect the US but also other countries over the years.

105
00:05:47,480 --> 00:05:51,200
Speaker 1: And interestingly, conversely, the US obviously has deployed these also

106
00:05:51,320 --> 00:05:53,880
Speaker 1: as mechanisms as surveillance over the years, so it's not

107
00:05:53,880 --> 00:05:58,159
Speaker 1: an unusual thing to have balloons floating about in the air,

108
00:05:58,200 --> 00:06:00,720
Speaker 1: and of course China always saying that they are indeed

109
00:06:00,839 --> 00:06:03,560
Speaker 1: just to monitor the weather um, so there's been a

110
00:06:03,600 --> 00:06:05,960
Speaker 1: long history of this. The interesting thing is that with

111
00:06:06,040 --> 00:06:09,719
Speaker 1: the deployment of satellites and advanced technology, there's still the

112
00:06:09,800 --> 00:06:12,240
Speaker 1: use of these balloons above all just to sort of

113
00:06:12,240 --> 00:06:15,240
Speaker 1: float across the air and take pictures really of terrain

114
00:06:15,560 --> 00:06:18,320
Speaker 1: um and they've been reports the US government is looking

115
00:06:18,360 --> 00:06:22,400
Speaker 1: to beef up its own use of surveillance balloons going forward,

116
00:06:22,560 --> 00:06:25,840
Speaker 1: even as they too rely on satellites. So these things

117
00:06:25,880 --> 00:06:28,000
Speaker 1: are really still seen as sort of a low level

118
00:06:28,160 --> 00:06:32,240
Speaker 1: tool of statecraft, partly because they don't really have radar,

119
00:06:32,480 --> 00:06:34,960
Speaker 1: they don't have heavy materials, so they can drift along

120
00:06:35,000 --> 00:06:38,039
Speaker 1: for days, usually out of sight, and they're not caught

121
00:06:38,080 --> 00:06:41,160
Speaker 1: on radar, and that's why they're still quite useful. Obviously,

122
00:06:41,160 --> 00:06:43,680
Speaker 1: this one was so big and so visible that they

123
00:06:43,760 --> 00:06:46,720
Speaker 1: became a different story, but it's possible there have been

124
00:06:46,760 --> 00:06:49,000
Speaker 1: many many balloons over the years that have gone over

125
00:06:49,040 --> 00:06:51,839
Speaker 1: that we've never really known about. As you mentioned earlier

126
00:06:51,839 --> 00:06:54,080
Speaker 1: that it went over some pretty sensitive terrain. It was

127
00:06:54,120 --> 00:06:57,360
Speaker 1: over in Montana where there's mental installations, and then traverse

128
00:06:57,440 --> 00:07:00,200
Speaker 1: the entirety of the US until it were shut down

129
00:07:00,360 --> 00:07:02,560
Speaker 1: off the east coast once it reached water, and it

130
00:07:02,720 --> 00:07:06,520
Speaker 1: wouldn't damage anything when it fell. Do US officials know

131
00:07:06,600 --> 00:07:09,480
Speaker 1: exactly what this thing was looking for? Well, that they

132
00:07:09,520 --> 00:07:11,840
Speaker 1: don't know, um, But at least the one thing is

133
00:07:11,880 --> 00:07:13,559
Speaker 1: when they were aware of it and they could start

134
00:07:13,600 --> 00:07:16,239
Speaker 1: tracking it, It's possible the U s could in fact

135
00:07:16,240 --> 00:07:19,080
Speaker 1: be sort of reverse in telling this thing if that's

136
00:07:19,080 --> 00:07:22,120
Speaker 1: such a phrase, um, and that they were able to

137
00:07:22,160 --> 00:07:24,720
Speaker 1: work out what this thing was looking at they could

138
00:07:24,760 --> 00:07:27,400
Speaker 1: draw their own intelligence from it. So letting it actually

139
00:07:27,400 --> 00:07:30,040
Speaker 1: go across the US for several days probably gave the

140
00:07:30,120 --> 00:07:32,480
Speaker 1: US in turn a treat a trove of stuff for

141
00:07:32,520 --> 00:07:36,240
Speaker 1: themselves to look out. Ras please stick around. Our conversation

142
00:07:36,480 --> 00:07:53,640
Speaker 1: continues after the break. Razi used that great word, I

143
00:07:53,680 --> 00:07:55,960
Speaker 1: don't know if it's a natural word reverse in telling

144
00:07:56,000 --> 00:07:58,120
Speaker 1: that the US was trying to figure out where they

145
00:07:58,120 --> 00:08:00,600
Speaker 1: could learn. Now that this thing is in the water,

146
00:08:00,640 --> 00:08:02,440
Speaker 1: are they're going to be able to actually get it

147
00:08:02,640 --> 00:08:06,320
Speaker 1: and crack it open and see what intelligence it gather.

148
00:08:07,000 --> 00:08:10,240
Speaker 1: So it's actually quite interesting because they sent fighter jets

149
00:08:10,440 --> 00:08:13,640
Speaker 1: F twenty two Raptors to shoot this thing down. It's

150
00:08:13,720 --> 00:08:16,640
Speaker 1: possibly the first time in the twenty five year history

151
00:08:16,680 --> 00:08:18,640
Speaker 1: of the F twenty two that it's done what's not

152
00:08:18,720 --> 00:08:21,640
Speaker 1: as an air to air kill, and that's sending something

153
00:08:21,680 --> 00:08:24,320
Speaker 1: through the air to kill something else that's also in

154
00:08:24,360 --> 00:08:27,400
Speaker 1: the air. After twenty five years of this program. It's

155
00:08:27,440 --> 00:08:31,440
Speaker 1: also at high gravity. It's really really amazing the pilot

156
00:08:31,520 --> 00:08:34,400
Speaker 1: managed to hit it, because it's very, very difficult to

157
00:08:34,400 --> 00:08:37,360
Speaker 1: shoot these things down. Um even though it's sort of

158
00:08:37,400 --> 00:08:40,720
Speaker 1: semi slow moving, it's just sort of drifting through the sky.

159
00:08:41,320 --> 00:08:43,280
Speaker 1: It doesn't have any heat on it, so you can't

160
00:08:43,280 --> 00:08:45,280
Speaker 1: put radar on it to try and shoot it down.

161
00:08:45,640 --> 00:08:49,000
Speaker 1: It's technically very difficult. I recall there was some years ago,

162
00:08:49,040 --> 00:08:51,120
Speaker 1: I think it was in Canada where there was something

163
00:08:51,120 --> 00:08:53,280
Speaker 1: else They tried to shoot down a balloon and they

164
00:08:53,280 --> 00:08:55,840
Speaker 1: put thousands of rounds into it and it failed to

165
00:08:55,880 --> 00:08:57,880
Speaker 1: think it. So the fact they managed to do this

166
00:08:58,280 --> 00:09:00,360
Speaker 1: is quite interesting, but also they did it in a

167
00:09:00,480 --> 00:09:03,040
Speaker 1: very targeted way, which is they were trying to preserve

168
00:09:03,080 --> 00:09:05,720
Speaker 1: what's known as the payload, which is the technological stuff

169
00:09:05,760 --> 00:09:08,559
Speaker 1: they want to study afterward, and of course they're very

170
00:09:08,640 --> 00:09:11,160
Speaker 1: used to picking stuff up out of the ocean after

171
00:09:11,280 --> 00:09:14,439
Speaker 1: it lands, and so with that, of course, you know

172
00:09:14,480 --> 00:09:16,560
Speaker 1: they're quite they're quite expert at being able to fish

173
00:09:16,600 --> 00:09:19,040
Speaker 1: stuff out of the water. So you imagine what they've

174
00:09:19,080 --> 00:09:21,120
Speaker 1: done is they've they've shot it down over the sea.

175
00:09:21,200 --> 00:09:22,880
Speaker 1: They're able to fish it out of the ocean and

176
00:09:22,880 --> 00:09:25,000
Speaker 1: therefore they can study it. And of course this was

177
00:09:25,040 --> 00:09:28,280
Speaker 1: a sidewinder missile that they used to fire again at

178
00:09:28,360 --> 00:09:31,600
Speaker 1: very high altitude, so at first for the F twenty two,

179
00:09:31,679 --> 00:09:34,160
Speaker 1: quite possibly in its twenty five year history. And so

180
00:09:34,280 --> 00:09:37,920
Speaker 1: this thing crashed down into the ocean. Was it in

181
00:09:38,000 --> 00:09:40,480
Speaker 1: one piece? I guess the debris could be found up

182
00:09:40,480 --> 00:09:44,079
Speaker 1: to seven miles away from where it splashed into the water,

183
00:09:44,520 --> 00:09:46,600
Speaker 1: that's right. But the only thing they really need to

184
00:09:46,600 --> 00:09:48,800
Speaker 1: track as it crashed was the payload, which is of

185
00:09:48,840 --> 00:09:50,920
Speaker 1: course the stuff they want to study. There's a large

186
00:09:50,920 --> 00:09:53,439
Speaker 1: part of the balloon which is just the infrastructure that

187
00:09:53,480 --> 00:09:56,439
Speaker 1: allows it to float along, and that's not worth anything.

188
00:09:56,600 --> 00:09:59,720
Speaker 1: Of course, a missile will blow it into smithereens. But

189
00:09:59,760 --> 00:10:01,440
Speaker 1: what we're trying to do when they shut it down

190
00:10:01,559 --> 00:10:05,040
Speaker 1: was to destroy the infrastructure of the balloon while preserving

191
00:10:05,040 --> 00:10:07,559
Speaker 1: the stuff that they would like to look out afterward,

192
00:10:07,600 --> 00:10:09,280
Speaker 1: and that's the stuff they would have been tracking as

193
00:10:09,320 --> 00:10:12,120
Speaker 1: it hit the water. Rise. What's the chance that when

194
00:10:12,120 --> 00:10:13,840
Speaker 1: that thing hit the water, like all of its electron

195
00:10:13,880 --> 00:10:15,600
Speaker 1: has just got fried, or maybe it had had a

196
00:10:15,720 --> 00:10:18,360
Speaker 1: self destruct setting that win and goes plummeting it, you know,

197
00:10:18,400 --> 00:10:21,360
Speaker 1: fries itself out. Well, that's entirely possible, because again, this

198
00:10:21,440 --> 00:10:25,080
Speaker 1: seems to have been quite an advanced Chinese surveillance balloon

199
00:10:25,080 --> 00:10:26,959
Speaker 1: in terms of the technology that was on it. That's

200
00:10:27,000 --> 00:10:28,640
Speaker 1: what they were saying. This is a different kind of

201
00:10:28,679 --> 00:10:31,839
Speaker 1: balloon then they had seen before, and when they shot

202
00:10:31,840 --> 00:10:33,720
Speaker 1: it down out of the sky again at very high

203
00:10:33,760 --> 00:10:37,120
Speaker 1: altitude with a very big missile, there's every chance that

204
00:10:37,520 --> 00:10:40,520
Speaker 1: it did destroy the entirety of the balloon, including what

205
00:10:40,520 --> 00:10:43,000
Speaker 1: they would like to pick up afterward. But at least

206
00:10:43,240 --> 00:10:45,520
Speaker 1: we know that there's the chance that it hit the

207
00:10:45,520 --> 00:10:47,520
Speaker 1: water intact, and if it did that they'd be keen

208
00:10:47,559 --> 00:10:50,000
Speaker 1: to fish it out again. And of course whatever they

209
00:10:50,040 --> 00:10:53,760
Speaker 1: faignd is going to probably come classified, so we may

210
00:10:53,960 --> 00:10:56,040
Speaker 1: not know for a long time or ever, really what

211
00:10:56,080 --> 00:10:59,240
Speaker 1: they found on board that thing. That's entirely right, and

212
00:10:59,280 --> 00:11:03,000
Speaker 1: there's been to see some similarities to previous incidents. Of course,

213
00:11:03,000 --> 00:11:05,600
Speaker 1: there was a U. S. Navy drone that China picked

214
00:11:05,640 --> 00:11:08,000
Speaker 1: up in the South China see some years ago and

215
00:11:08,080 --> 00:11:11,120
Speaker 1: held onto for several weeks before they gave it back,

216
00:11:11,559 --> 00:11:13,200
Speaker 1: and that was the question, of course, what were they

217
00:11:13,320 --> 00:11:16,360
Speaker 1: doing with it in the meantime. So even if there

218
00:11:16,440 --> 00:11:19,440
Speaker 1: is some kind of return transfer at some point, the

219
00:11:19,520 --> 00:11:21,320
Speaker 1: longer they hold onto it, the more it gives them

220
00:11:21,320 --> 00:11:24,520
Speaker 1: the chance to study it. Ris You mentioned earlier that

221
00:11:24,559 --> 00:11:27,640
Speaker 1: the Chinese government took pains to try to downplay the

222
00:11:27,760 --> 00:11:32,719
Speaker 1: significance of the balloon, that they even issued initially an apology.

223
00:11:32,840 --> 00:11:35,800
Speaker 1: Of course, after it were shot down, then it was

224
00:11:36,120 --> 00:11:39,000
Speaker 1: anger and outrage because they're claiming, of course that it's

225
00:11:39,000 --> 00:11:42,000
Speaker 1: a science balloon. This comes at a kind of a

226
00:11:42,120 --> 00:11:45,920
Speaker 1: bad time for US Chinese relations right now. Can you

227
00:11:46,000 --> 00:11:49,160
Speaker 1: talk about what that's going to mean going forward? Well,

228
00:11:49,160 --> 00:11:51,760
Speaker 1: that is the big question. I mean, we've seen episodes

229
00:11:51,840 --> 00:11:55,040
Speaker 1: like this before again where we've had near collisions or collisions,

230
00:11:55,120 --> 00:11:59,559
Speaker 1: or we've had China picking up US Navy material vice versa,

231
00:11:59,640 --> 00:12:02,840
Speaker 1: and those things have escalated and then de escalated because

232
00:12:03,320 --> 00:12:06,200
Speaker 1: in the end, neither China nor the US really wants

233
00:12:06,240 --> 00:12:09,840
Speaker 1: to see something escalate into a potential military conflict. But

234
00:12:09,880 --> 00:12:12,680
Speaker 1: this became, This came at a really really important moment

235
00:12:12,760 --> 00:12:16,160
Speaker 1: for China US ties because of course the US President

236
00:12:16,240 --> 00:12:19,160
Speaker 1: Joe Biden met with Chinese President C J. Ping late

237
00:12:19,240 --> 00:12:21,160
Speaker 1: last year at the G twenty in Bali, and that

238
00:12:21,240 --> 00:12:24,360
Speaker 1: was their first face to face meeting as presidents, and

239
00:12:24,400 --> 00:12:27,120
Speaker 1: they used that to really try and put a floor

240
00:12:27,160 --> 00:12:29,920
Speaker 1: at least under the relationship. No one's going to pretend

241
00:12:30,080 --> 00:12:34,720
Speaker 1: that there are ongoing tensions over trade, over technology, over security,

242
00:12:34,760 --> 00:12:37,920
Speaker 1: over human rights, and the longer term trajectories two big

243
00:12:38,000 --> 00:12:41,960
Speaker 1: powers competing with each other, but there was an understanding

244
00:12:42,000 --> 00:12:44,480
Speaker 1: at least that there was probably in their mutual interest

245
00:12:44,520 --> 00:12:47,360
Speaker 1: to put a floor under that relationship. And that set

246
00:12:47,400 --> 00:12:50,000
Speaker 1: the scene for a bit of a thought, including what

247
00:12:50,080 --> 00:12:51,920
Speaker 1: was going to be the visit to China by the

248
00:12:52,000 --> 00:12:55,000
Speaker 1: U S Secretary of State Anthony B. Lincoln, which was

249
00:12:55,040 --> 00:12:58,520
Speaker 1: happening the previous weekend, but of course the balloon made

250
00:12:58,520 --> 00:13:01,959
Speaker 1: that impossible. And how we've seen the US defer that trip.

251
00:13:02,200 --> 00:13:05,120
Speaker 1: They haven't canceled it, but they've deferred it. And that

252
00:13:05,240 --> 00:13:09,920
Speaker 1: really is a setback to very fragile, fragile steps towards

253
00:13:09,920 --> 00:13:13,520
Speaker 1: a better relationship between the two countries. And now, of course,

254
00:13:13,520 --> 00:13:16,320
Speaker 1: the shooting down of the balloon means what does China

255
00:13:16,440 --> 00:13:19,080
Speaker 1: have to do or say here in terms of a response.

256
00:13:19,160 --> 00:13:21,760
Speaker 1: We've seen the shift in rehetorate that you were talking about,

257
00:13:21,760 --> 00:13:24,520
Speaker 1: whereas what does that translate to. Does that mean that

258
00:13:24,559 --> 00:13:27,560
Speaker 1: we see some kind of retaliation from China? Is it

259
00:13:27,640 --> 00:13:30,560
Speaker 1: in the trade space, is it in the security space,

260
00:13:30,640 --> 00:13:33,960
Speaker 1: the military space, isn't a technology space. Do they feel

261
00:13:34,000 --> 00:13:36,280
Speaker 1: they have to do some sort of response? And then

262
00:13:36,320 --> 00:13:39,440
Speaker 1: does that just have a cascade Effectum? What you do

263
00:13:39,520 --> 00:13:42,840
Speaker 1: see though, really still through this, despite this tension, is

264
00:13:43,400 --> 00:13:46,960
Speaker 1: probably a continued desire on both China and the US

265
00:13:47,080 --> 00:13:50,360
Speaker 1: to try and still prevent this from spiraling out of control.

266
00:13:50,640 --> 00:13:53,839
Speaker 1: Of course, there's a difference between the public response China

267
00:13:54,040 --> 00:13:56,920
Speaker 1: as a show strength after those balloons were shut down,

268
00:13:57,160 --> 00:14:00,360
Speaker 1: and then there's the behind the scenes diplomacy. Do we

269
00:14:00,440 --> 00:14:05,520
Speaker 1: know whether that conversation taking place is maybe more along

270
00:14:05,559 --> 00:14:08,480
Speaker 1: the lines of what you said earlier, which is China saying, hey,

271
00:14:08,480 --> 00:14:10,240
Speaker 1: look we didn't mean to send this thing. This was

272
00:14:10,280 --> 00:14:12,760
Speaker 1: a screw up by somebody lower down in order to

273
00:14:12,840 --> 00:14:16,120
Speaker 1: diffuse those tensions. Well, we do know that Anthony B.

274
00:14:16,160 --> 00:14:19,600
Speaker 1: Lincoln spoke with his counterpart Wangye on the weekend. They

275
00:14:19,600 --> 00:14:21,880
Speaker 1: had a phone call, and that's something because that says

276
00:14:21,920 --> 00:14:25,000
Speaker 1: at least they're still talking and again that China is

277
00:14:25,000 --> 00:14:27,440
Speaker 1: willing to pick up the phone. The other thing are

278
00:14:27,440 --> 00:14:30,240
Speaker 1: reports in China that the officials that sort of run

279
00:14:30,680 --> 00:14:33,640
Speaker 1: these operations with surveillance balloon that the senior official has

280
00:14:33,680 --> 00:14:35,960
Speaker 1: been moved out of his job on the weekend, which

281
00:14:36,040 --> 00:14:38,400
Speaker 1: is quite interesting, and the fact that that's actually been

282
00:14:38,440 --> 00:14:42,600
Speaker 1: publicized another sign again that China doesn't want this to escalate.

283
00:14:42,880 --> 00:14:45,200
Speaker 1: But as you made a really important point whereas, which

284
00:14:45,240 --> 00:14:47,560
Speaker 1: is that C. J. Ping has to show strength at home.

285
00:14:47,920 --> 00:14:50,360
Speaker 1: He has to show that he's being firm in this moment,

286
00:14:50,440 --> 00:14:53,600
Speaker 1: he's being tough because of course you know that's very

287
00:14:53,680 --> 00:14:57,600
Speaker 1: much how his power resonates within China. So how much

288
00:14:57,680 --> 00:15:00,280
Speaker 1: of this is for domestic purposes and how much for

289
00:15:00,320 --> 00:15:02,480
Speaker 1: the rest of the world is in really that question

290
00:15:02,920 --> 00:15:06,080
Speaker 1: and reading between that you can see again from the

291
00:15:06,120 --> 00:15:09,440
Speaker 1: Wangi Anthony B. Lincoln phone call, at least communications are

292
00:15:09,480 --> 00:15:13,280
Speaker 1: continuing and back channeling, no doubt is similar and that

293
00:15:13,360 --> 00:15:16,000
Speaker 1: they really want to make sure this does not spiral

294
00:15:16,000 --> 00:15:34,960
Speaker 1: out of control. We'll be right back ras. Another big

295
00:15:35,000 --> 00:15:38,080
Speaker 1: thing happening soon for Joe Biden is the Stage of

296
00:15:38,120 --> 00:15:41,480
Speaker 1: the Union. That speech has always tinkered with up to

297
00:15:41,480 --> 00:15:43,800
Speaker 1: the very last second. But boy, this is a big

298
00:15:43,800 --> 00:15:46,160
Speaker 1: news section that he's probably going to need to add.

299
00:15:46,200 --> 00:15:49,040
Speaker 1: Is there any indication of how he is going to

300
00:15:49,480 --> 00:15:52,960
Speaker 1: talk about this? Well, it's interesting because of course they

301
00:15:53,000 --> 00:15:55,400
Speaker 1: knew about this balloon for days when it was flying

302
00:15:55,440 --> 00:15:58,920
Speaker 1: over the US. They didn't publicize that. When it became public,

303
00:15:59,280 --> 00:16:02,520
Speaker 1: there was a lot of Republican criticism. There were demands

304
00:16:02,520 --> 00:16:05,760
Speaker 1: immediately to do something very assertive, and criticism for not

305
00:16:05,840 --> 00:16:09,000
Speaker 1: having acted sooner. That said, he has now shot the

306
00:16:09,040 --> 00:16:11,360
Speaker 1: thing down, so he can say, look at me, I'm

307
00:16:11,360 --> 00:16:14,040
Speaker 1: being very tough on China. I'm being assertive. We're not

308
00:16:14,040 --> 00:16:17,000
Speaker 1: getting pushed around. That on the back of some pretty

309
00:16:17,040 --> 00:16:20,400
Speaker 1: good jobs numbers for the US in the latest employment

310
00:16:20,480 --> 00:16:23,280
Speaker 1: data set him up on a better footing on the economy.

311
00:16:23,320 --> 00:16:25,960
Speaker 1: So you can imagine a slight amount of possible Biden's

312
00:16:25,960 --> 00:16:28,840
Speaker 1: swagger going into the State of the Union. Look at

313
00:16:28,840 --> 00:16:31,200
Speaker 1: me again, I'm being tough on China. The economy is

314
00:16:31,200 --> 00:16:33,480
Speaker 1: on a better footing, so you can imagine they'll spin

315
00:16:33,560 --> 00:16:37,720
Speaker 1: it that way. The question the longer term is that again,

316
00:16:37,880 --> 00:16:41,600
Speaker 1: given the level of Republican criticism that happened here, he's

317
00:16:41,600 --> 00:16:43,800
Speaker 1: got to deal with that through to the election in

318
00:16:44,680 --> 00:16:48,120
Speaker 1: four the republic and controlled Congress. Is he going to

319
00:16:48,200 --> 00:16:51,840
Speaker 1: be directed by Republican criticism? Does he have to react

320
00:16:51,840 --> 00:16:54,880
Speaker 1: to that every time when issues, including China. So you

321
00:16:54,920 --> 00:16:57,600
Speaker 1: can imagine quite an assertive sort of the Union speech,

322
00:16:57,680 --> 00:17:00,560
Speaker 1: But really the underlying question is easy going to be

323
00:17:00,600 --> 00:17:04,160
Speaker 1: directed increasing on foreign policy by the Republican Party. I

324
00:17:04,200 --> 00:17:06,960
Speaker 1: heard all that Republican criticism too. It seemed like kind

325
00:17:06,960 --> 00:17:10,080
Speaker 1: of an easy enough thing for Republicans to complain about.

326
00:17:10,200 --> 00:17:12,199
Speaker 1: And people were saying, shoot that thing down. But of

327
00:17:12,240 --> 00:17:14,960
Speaker 1: course if you shot that giant thing the size of

328
00:17:15,040 --> 00:17:17,960
Speaker 1: three school buses down over the US, it would have

329
00:17:18,000 --> 00:17:21,679
Speaker 1: fallen on something or someone. Well, that's right, And certainly

330
00:17:21,760 --> 00:17:23,560
Speaker 1: now that he's actually acted and he said that he

331
00:17:23,600 --> 00:17:26,159
Speaker 1: acted in the best interests of the safety of the

332
00:17:26,160 --> 00:17:29,680
Speaker 1: American people. Um well, yet of course showing a reaction

333
00:17:29,720 --> 00:17:33,840
Speaker 1: to the Chinese government, that that Republican criticism will fade.

334
00:17:34,000 --> 00:17:36,520
Speaker 1: But certainly you saw the rhetoric from the White House

335
00:17:36,560 --> 00:17:39,919
Speaker 1: go from fairly low key to quite heated very quickly,

336
00:17:40,240 --> 00:17:42,199
Speaker 1: and that was really probably driven by the need to

337
00:17:42,240 --> 00:17:44,680
Speaker 1: show that he was being tough on China, and China

338
00:17:44,760 --> 00:17:47,720
Speaker 1: of course understands that, especially in a big speech like that,

339
00:17:47,840 --> 00:17:50,600
Speaker 1: Joe Biden is going to you know, rattle the saber,

340
00:17:50,720 --> 00:17:54,000
Speaker 1: just like Ji Jimping is doing in the other direction.

341
00:17:54,480 --> 00:17:57,680
Speaker 1: How do you get past that kind of moment of

342
00:17:58,400 --> 00:18:01,000
Speaker 1: I don't know, political theater to make sure that it

343
00:18:01,040 --> 00:18:04,200
Speaker 1: doesn't become something else. Well, it's what you were talking

344
00:18:04,200 --> 00:18:06,879
Speaker 1: about before. It's keeping those lines of communication open and

345
00:18:06,880 --> 00:18:10,000
Speaker 1: the back channels open because they'll understand that c Jmping

346
00:18:10,080 --> 00:18:12,480
Speaker 1: of course has to sound tough. He has had a

347
00:18:12,560 --> 00:18:15,159
Speaker 1: very difficult time in China in terms of the COVID

348
00:18:15,200 --> 00:18:18,560
Speaker 1: crisis that's really hit the economy. It's hit the Chinese

349
00:18:18,640 --> 00:18:21,760
Speaker 1: people very hard. He wants the economy moving again, and

350
00:18:21,800 --> 00:18:24,560
Speaker 1: that's an imperative for him to keep again comms with

351
00:18:24,600 --> 00:18:27,399
Speaker 1: the US going trade and investment coming in and out

352
00:18:27,440 --> 00:18:29,760
Speaker 1: of China to help his own economy. So you can

353
00:18:29,800 --> 00:18:32,680
Speaker 1: imagine the back channels there are going to be absolutely

354
00:18:32,720 --> 00:18:36,160
Speaker 1: crucial to understand where either of them are coming from

355
00:18:36,200 --> 00:18:38,000
Speaker 1: in this moment, and then of course, how do you

356
00:18:38,040 --> 00:18:39,760
Speaker 1: see a way through? Is there any way in the

357
00:18:39,800 --> 00:18:43,119
Speaker 1: future where this b Lincoln visit can now still go ahead?

358
00:18:45,119 --> 00:18:47,720
Speaker 1: What were the two supposed to talk about. There's a

359
00:18:47,720 --> 00:18:50,120
Speaker 1: lot of billing about this meeting that they were going

360
00:18:50,160 --> 00:18:53,240
Speaker 1: to reach some sort of breakthrough that would ease tensions

361
00:18:53,280 --> 00:18:55,960
Speaker 1: with China before all this happened. Well, the interesting thing

362
00:18:56,000 --> 00:18:59,040
Speaker 1: is that China never confirmed the meeting with C. Jimping,

363
00:18:59,400 --> 00:19:02,120
Speaker 1: and so there was no guarantee until Lincoln got there

364
00:19:02,119 --> 00:19:05,040
Speaker 1: and actually started his conversations as to whether that would

365
00:19:05,080 --> 00:19:07,560
Speaker 1: go ahead. And in fact, if it hadn't happened, it

366
00:19:07,600 --> 00:19:10,520
Speaker 1: would have been very very telling because Seeching Pink normally

367
00:19:10,560 --> 00:19:13,479
Speaker 1: meets with sort of the Secretary of State equivalent from

368
00:19:13,480 --> 00:19:16,000
Speaker 1: the U S and other countries when they visit. If

369
00:19:16,040 --> 00:19:17,879
Speaker 1: they did meet, they were going to talk about an

370
00:19:17,920 --> 00:19:23,000
Speaker 1: awful lot trade, technology, their economies, common interests around the world.

371
00:19:23,040 --> 00:19:25,440
Speaker 1: They probably would have talked about the conflict in Ukraine,

372
00:19:25,560 --> 00:19:28,600
Speaker 1: for example, that's a big one for for both countries.

373
00:19:28,920 --> 00:19:31,600
Speaker 1: There were not going to be really any enormous breakthroughs

374
00:19:31,600 --> 00:19:34,720
Speaker 1: from that meeting. Um, no coming away saying we've agreed

375
00:19:34,760 --> 00:19:37,680
Speaker 1: to do X, Y, and Z, But really just having

376
00:19:37,720 --> 00:19:40,440
Speaker 1: the meeting itself would have been a big signal and

377
00:19:40,440 --> 00:19:43,200
Speaker 1: and and a win for both countries arguably, and it

378
00:19:43,240 --> 00:19:45,520
Speaker 1: would have just set the tone because after that, potentially

379
00:19:45,560 --> 00:19:47,679
Speaker 1: you would have had a visit to the US from

380
00:19:47,800 --> 00:19:50,800
Speaker 1: Janet Yellen, the Treasury Secretary, and that you could see

381
00:19:50,800 --> 00:19:54,200
Speaker 1: an ongoing series of visits coming after that that really

382
00:19:54,200 --> 00:19:57,439
Speaker 1: would have deepened this saw that we were expecting. So

383
00:19:57,440 --> 00:19:59,600
Speaker 1: it was really about just opening the door to that

384
00:20:00,040 --> 00:20:03,360
Speaker 1: that than significant initial breakthroughs. As we're talking about here.

385
00:20:03,560 --> 00:20:06,440
Speaker 1: China in the US often like to talk tough about

386
00:20:06,440 --> 00:20:09,400
Speaker 1: each other, but both of these nations need each other

387
00:20:09,640 --> 00:20:12,560
Speaker 1: for economic and other reasons. When you look down the

388
00:20:12,640 --> 00:20:14,400
Speaker 1: road a couple of months from now, do you think

389
00:20:14,400 --> 00:20:17,119
Speaker 1: that this is still front of mind or do you

390
00:20:17,160 --> 00:20:22,399
Speaker 1: think it fades and more pressing concerns eventually rise up again.

391
00:20:22,880 --> 00:20:25,439
Speaker 1: The reality is we're probably going to see further bouts

392
00:20:25,840 --> 00:20:29,880
Speaker 1: of tension even if this immediate crisis passed, because, of course,

393
00:20:29,920 --> 00:20:33,160
Speaker 1: the US House Speaker Kevin McCarthy has said he intends

394
00:20:33,200 --> 00:20:37,240
Speaker 1: to visit Taiwan, which is a democratically ruled ireland. However,

395
00:20:37,280 --> 00:20:40,280
Speaker 1: that China sees as its sovereign territory. And we saw

396
00:20:40,320 --> 00:20:43,880
Speaker 1: what happened when the then speaking Nancy Pelosi visited Taiwan.

397
00:20:44,000 --> 00:20:47,399
Speaker 1: China retaliated militarily by firing off a bunch of staff

398
00:20:47,440 --> 00:20:50,560
Speaker 1: around Taiwan, missiles and drools and so on. And if

399
00:20:50,600 --> 00:20:53,159
Speaker 1: that goes ahead, we might we might see a pause

400
00:20:53,200 --> 00:20:55,080
Speaker 1: for a couple of weeks or a couple of months

401
00:20:55,119 --> 00:20:58,359
Speaker 1: after this, but that will then lead to another escalation.

402
00:20:58,440 --> 00:21:01,280
Speaker 1: And the reality is in the run up to u

403
00:21:01,359 --> 00:21:04,199
Speaker 1: S election and beyond, we're only going to see a

404
00:21:04,240 --> 00:21:07,600
Speaker 1: hardening really from here and in the broader toime, we're

405
00:21:07,640 --> 00:21:11,080
Speaker 1: just going to see again two very big superpowers in

406
00:21:11,119 --> 00:21:15,080
Speaker 1: a in a very combative and competitive relationship. Ros Mathison,

407
00:21:15,760 --> 00:21:20,360
Speaker 1: thanks so much for talking with me today. Anytime you

408
00:21:20,400 --> 00:21:23,280
Speaker 1: can follow all the news about the Chinese balloon, and

409
00:21:23,320 --> 00:21:26,280
Speaker 1: no doubt there will be plenty of it at Bloomberg

410
00:21:26,280 --> 00:21:29,560
Speaker 1: dot com. Thanks for listening to us here at the

411
00:21:29,600 --> 00:21:32,240
Speaker 1: Big Take. It's a daily podcast from Bloomberg and I

412
00:21:32,359 --> 00:21:35,560
Speaker 1: Heart Radio. For more shows from my heart Radio, visit

413
00:21:35,600 --> 00:21:39,280
Speaker 1: the I heart Radio app, Apple podcast, or wherever you listen,

414
00:21:39,520 --> 00:21:42,000
Speaker 1: and we'd love to hear from you. Email US questions

415
00:21:42,080 --> 00:21:46,160
Speaker 1: or comments to Big Take at bloomberg dot Net. This

416
00:21:46,280 --> 00:21:51,159
Speaker 1: episode was produced and engineered by our supervising producer, Vicky Bergolina.

417
00:21:51,480 --> 00:21:55,720
Speaker 1: Our original music was composed by Leo Sidrin. I'm Westkasova

418
00:21:55,920 --> 00:22:02,080
Speaker 1: will be back tomorrow with another Big Take Take bad

419
00:22:04,040 --> 00:22:09,160
Speaker 1: punk and punk punt bunk, then and there