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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway. Tracy, needless to say,

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Speaker 2: always a lot of anxiety about the US China trade

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Speaker 2: relationship these days. I feel like there are new tariffs

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Speaker 2: and new developments or new conversations about overcapacity and evs,

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Speaker 2: and new headlines about planes and stuff basically every day

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Speaker 2: right now.

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Speaker 3: Yeah, there were new headlines this morning, weren't there from

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Speaker 3: one of Trump's economic advisors, right, I can't remember what

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Speaker 3: it was. Oh, that's why God created tariffs. Oh yeah,

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Speaker 3: but you're absolutely right. I mean it's been years, if

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Speaker 3: not decades now where China manufacturing has been this sort

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Speaker 3: of thing that looms large over the US economy. And

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Speaker 3: I think what's interesting about the US China economic relationship

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Speaker 3: is the way we think about it, or the way

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Speaker 3: we talk about it. It seems almost like it was

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Speaker 3: an inevitability, Like it was inevitable that the two biggest

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Speaker 3: economies in the world were going to have, you know,

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Speaker 3: some sort of trade relationship, and maybe because of specific

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Speaker 3: decisions undertaken by the Chinese leadership, like Deng Chaoping or

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Speaker 3: whoever to build out the Chinese economy in a certain

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Speaker 3: way led to a lot of the increased tension. But

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Speaker 3: you know, in advance of this discussion, I was kind

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Speaker 3: of thinking about it like there was no inevitability, right,

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Speaker 3: Like India could have been our biggest trade partner.

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Speaker 2: Yeah, that's a really great point, or we might not

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Speaker 2: have like a big trade relationship at all. Or China

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Speaker 2: could have been more like Russia, in which trade is

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Speaker 2: very modest. Right, Like this idea is like, Okay, the

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Speaker 2: US is rich and we do services and stuff like that.

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Speaker 2: Here in China is poor. Their comparative advantage is cheap labor. Therefore,

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Speaker 2: China produces everything or produces a lot. That's how we talk.

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Speaker 2: And it just sort of seems, as you say, like

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Speaker 2: like yeah, inevitable, this is the natural order of things.

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Speaker 2: But there are lots of countries that have big populations

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Speaker 2: that aren't particularly rich or that aren't manufacturing powerhouses the

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Speaker 2: way China has. So I think it's interesting as you say,

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Speaker 2: like there's this conversation like it's sort of inevitable, and

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Speaker 2: we talk about it now like Okay, this is the

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Speaker 2: state of things. Do we want to change it, et cetera,

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Speaker 2: but really not much conversation about like how we got

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Speaker 2: here or how we built this relationship in the first place.

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Speaker 3: Yeah, I think there's going back to that inevitability point.

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Speaker 3: There's usually an underlying tone of like, well, the market's

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Speaker 3: gonna market. Yeah, market's gonna market, market's gonna market.

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Speaker 2: And in visible hand's gonna invisible hands.

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Speaker 3: That's try and that's how we ended up with, you know,

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Speaker 3: lots of stuff being built in China where there is

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Speaker 3: cheap labor. By the way, Joe, I'm old enough to

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Speaker 3: remember when I was living in the both, but go on, Yeah,

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Speaker 3: when I was living in Japan in the nineteen eighties,

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Speaker 3: I distinctly remember that most of my toys, like my

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Speaker 3: cheap little plastic toys, they all came from Taiwan, right,

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Speaker 3: And I remember when I was like six years old,

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Speaker 3: not really understanding where Taiwan was or what it was

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Speaker 3: at that point, but I distinctly remember like thinking that

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Speaker 3: it was this magical land where all the toys were made.

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Speaker 3: But you know, like in the nineteen eighties, I guess

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Speaker 3: we were in that transition point from moving from Taiwan

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Speaker 3: being a massive manufacturing base into China, but even as

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Speaker 3: late as like the early nineteen eighties, Taiwan was still

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Speaker 3: making a lot of stuff for me.

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Speaker 2: When I was ten years old, I lived in Malaysia

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Speaker 2: for a year, and then I have this memory of

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Speaker 2: like visiting a friend's house when I was eleven back

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Speaker 2: in the US, and I noticed that one of his

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Speaker 2: hot wheels was made in Malaysia, and I was like, Oh,

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Speaker 2: that's so cool. I didn't even know, like anyone that

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Speaker 2: else had heard of Malaysia, and so the idea like

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Speaker 2: that this company had gone to Malaysia to manufacture the

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Speaker 2: hot way, I just thought it was like so cool.

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Speaker 2: It was like, oh, I've been to that country. I

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Speaker 2: didn't know anyone else knew about it, let alone going

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Speaker 2: up to setting up a toy manufacturing operation. I guess

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Speaker 2: there's a little bit of a diversion, but it does

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Speaker 2: remain true that a lot of the countries that are

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Speaker 2: powerhouses of advanced manufacturing or one time powerhouses and still

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Speaker 2: are of low end manufacturing.

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Speaker 3: Absolutely, so I think it's worth digging into how we

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Speaker 3: actually ended up in this now contentious trade relationship with

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Speaker 3: China and why it is that, you know, instead of

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Speaker 3: maybe selling a bunch of American made goods into that market.

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Speaker 3: We ended up buying a bunch of Chinese made goods.

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Speaker 2: And this is the other thing, the other key point here,

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Speaker 2: which is that for a long time, and even still

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Speaker 2: to some extent, you hear like the dream of selling

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Speaker 2: it to China. Oh, if we could sell one you know,

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Speaker 2: box of tissue to every one billion or more than

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Speaker 2: one billion now citizens of China, that'd be billions of dollars,

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Speaker 2: et cetera. And I think a few companies have done that.

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Speaker 2: You know, Starbucks sells a lot in China, and Nike

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Speaker 2: sells a lot in China, et cetera. But by and large,

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Speaker 2: the idea of China is this huge consumer market for

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Speaker 2: American made brands. It exists to some extent, but probably

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Speaker 2: not exists to the full dream that people have imagined.

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Speaker 3: Yeah, I think that's right.

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Speaker 2: Okay, Well, I'm really excited. We do have the perfect

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Speaker 2: guest to talk about how the US China trade relationship

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Speaker 2: was really born. We're going to be speaking to doctor

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Speaker 2: Elizabeth Ingleson. She's an assistant professor at the London School

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Speaker 2: of Economics and the author of a new book that

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Speaker 2: came out this year called Made in China when US

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Speaker 2: China interests converged to transform global trades. So doctor ingleson,

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Speaker 2: thank you so much for coming on out.

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Speaker 4: Lots Hi, Joe, Hey, Tracy, it's great to be here.

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Speaker 2: Thank you so much for coming on. Why don't we

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Speaker 2: start with why this book? What was it about this

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Speaker 2: topic made in China that in your view, was important

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Speaker 2: enough that this is a focus for a book.

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Speaker 4: Huh. Well, it's interesting hearing the two of you recollect

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Speaker 4: your own engagements with Made in Taiwan or Made in Malaysia,

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Speaker 4: because in many ways I didn't start off thinking I

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Speaker 4: want to write this book. I started off as a

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Speaker 4: history undergraduate and actually a major in literature, even more

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Speaker 4: in history, and was really as an Australian growing up

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Speaker 4: just as the Cold War was ending and into the

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Speaker 4: nineteen nineties and two thousands, the US and China were

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Speaker 4: always the two biggest hours in the region. They still

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Speaker 4: are today. And it was the early twenty tens and

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Speaker 4: at that period of time, political scientists, policymakers, they were

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Speaker 4: talking about the US China relationship in terms of its

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Speaker 4: economic interdependence. They were saying, there's so much at stake

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Speaker 4: in the relationship, especially economically, that the US and China

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Speaker 4: aren't going to risk what they have for some kind

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Speaker 4: of geopolitical conflict or diplomatic tens all worse right, or war,

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Speaker 4: that the interdependence itself is enough to mitigate that. And

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Speaker 4: I wanted to learn more about this. I wanted to

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Speaker 4: think through where did this interdependence come from? How did

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Speaker 4: we get to a state in the twenty tens where

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Speaker 4: the United States and China did have such an entwined

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Speaker 4: economic relationship. And that really took me down this path

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Speaker 4: of research and thinking and going to archives all over

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Speaker 4: the world, but particularly the United States. And here we

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Speaker 4: are today with the book.

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Speaker 3: So when I think of the way a lot of

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Speaker 3: people talk and write about China's economic history, I feel

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Speaker 3: like so much of the focus is on China's opening

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Speaker 3: up right and caveat here. Right before I cracked open

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Speaker 3: your book, I was reading another book on China called

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Speaker 3: wild Ride, A Short History of the Opening and Closing

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Speaker 3: of the Chinese Economy. And I mean the clue is

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Speaker 3: in the title there, right. The emphasis is very much

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Speaker 3: on the decisions that are being made by China. So

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Speaker 3: I'm curious why you decided to comment it from a

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Speaker 3: slightly different way, and from maybe some of the decisions,

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Speaker 3: both diplomatic and economic, being made by the US and

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Speaker 3: the rest of the world.

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Speaker 4: I think one of the things that you are trained

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Speaker 4: to do as a historian is to denaturalize things, to

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Speaker 4: look at a moment in time, and you seek to

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Speaker 4: question the assumptions of the people operating in that period

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Speaker 4: of time. And so, as I mentioned, I wanted to

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Speaker 4: sort of historicize a workout where this interdependent relationship came from,

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Speaker 4: and it led me to the nineteen seventies. It led

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Speaker 4: me to this period when the US and China were

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Speaker 4: rebuilding a trade relationship after over twenty years of Cold

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Speaker 4: War isolation. So throughout the nineteen fifties and nineteen sixties,

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Speaker 4: both countries had very little, in fact none at all

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Speaker 4: economic contact and very little social and political contact at all.

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Speaker 4: It was a very strict Cold War embargo. It was

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Speaker 4: a consequence of the Korean War, but it was also

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Speaker 4: a consequence of mal declaring the People's Republic of China.

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Speaker 4: So it's this height of the Cold War tensions. And

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Speaker 4: then in the nineteen seventies you have the famous Nixon

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Speaker 4: Mao meeting, the opening up of relations and the softening

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Speaker 4: of these tensions. And it's in that period in the

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Speaker 4: nineteen seventies that the two countries rebuilt a trade relationship.

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Speaker 4: And you've really got to sort of think about what

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Speaker 4: it is that these people seeking to rebuild a trade

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Speaker 4: relationship were assuming, and rather than accepting those assumptions, critiquing them.

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Speaker 4: And so that led me then to not just look

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Speaker 4: at the business people within the United States and within China,

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Speaker 4: but a whole range of other actors who were part

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Speaker 4: of this interdependence that was being built. So I look

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Speaker 4: at diplomats in both countries, I look at labor unions,

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Speaker 4: I look at consumers, particularly within the United States. I

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Speaker 4: look at retailers within the US. And one of the

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Speaker 4: things that I found as I was doing this research

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Speaker 4: was that understanding how this relationship was rebuilt was really

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Speaker 4: a story not only about rebuilding a trade relationship, but

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Speaker 4: a much bigger question of how does China, the world's

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Speaker 4: largest communist nation, how did it converge with global capitalism. And,

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Speaker 4: as you've mentioned, Tracy, when people think about the history

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Speaker 4: of China's engagement with the capitalist world, Dung Xiaoping's reforms

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Speaker 4: loom very large and rightly so, the very very significant

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Speaker 4: moment in the history of China's political economy. But in

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Speaker 4: looking at this nineteen seventies period, started to see well,

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Speaker 4: actually a lot of the experimentation and a lot of

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Speaker 4: the groundwork for what led to Dung's reforms in the

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Speaker 4: very late nineteen seventies and really the nineteen eighties. A

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Speaker 4: lot of those experimentations within China were already happening in

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Speaker 4: the nineteen seventies. And even more than that, I realized

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Speaker 4: that one of the major assumptions that needed to be

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Speaker 4: critiqued was that China wasn't just converging with a static capitalism.

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Speaker 4: China was converging with a system that itself was undergoing

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Speaker 4: significant transformations in the nineteen seventies, and the biggest capitalist

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Speaker 4: power at the time, the United States, was at the

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Speaker 4: heart of many of these transformations occurring within the capitalist system.

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Speaker 4: And so what I trace in the book, and what

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Speaker 4: I realized needed to be historicized and understood, was a

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Speaker 4: way that these two different spaces experimentations within China but

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Speaker 4: also the United States and its economic turbulence during the

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Speaker 4: nineteen seventies, The way that those two different spaces intersected

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Speaker 4: and ultimately, through the decisions and actions of certain groups

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Speaker 4: within those two places, ultimately converged. And so it's a

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Speaker 4: story of change within the capitalist system as much it

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Speaker 4: is a story of change within China. And I was

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Speaker 4: particularly struck by the way that those two factors began

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Speaker 4: to converge in particular ways.

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Speaker 2: It would be an easy story if the story were

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Speaker 2: simply just Mao dies. There's a little bit of turmal

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Speaker 2: trying to spend a couple of years figuring out who's

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Speaker 2: going to replace him. Don't show pen comes into power,

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Speaker 2: opens up suddenly their capitalist or someone. But obviously that's

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Speaker 2: not the story. Let's talk about some of these specifics

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Speaker 2: in the early part of the nineteen seventies, who were

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Speaker 2: the first movers in the US who sort of sensed

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Speaker 2: an opportunity to trade with China in some form or another,

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Speaker 2: And then how did they do it? Because still I

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Speaker 2: guess maybe I just my mind is in sort of

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Speaker 2: the standard narrative where it's like, oh, trade with China

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Speaker 2: is impossible. It's a communist country where there's no free

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Speaker 2: enterprise or anything like that under mile. But talk to

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Speaker 2: us about like the first people who sort of sensed

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Speaker 2: an opportunity and sort of operationally what they were able

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Speaker 2: to do under the existing environment.

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Speaker 4: Yeah. Well, there are a couple of different groups of

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Speaker 4: individuals or groups of business people that I particularly focus on.

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Speaker 4: It was very important to my own analytics unpacking was

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Speaker 4: to think about which kinds of business people and which

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Speaker 4: kinds of American actors were beginning to trade with China.

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Speaker 4: So on one level, there were the big companies, the Boeings,

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Speaker 4: the Westinghouses, etc. So they were these very significant and

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Speaker 4: large titans of American industrial capital who were looking to

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Speaker 4: China really from the get go and saying we want

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Speaker 4: to sell our planes, or we want to sell fertilizer

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Speaker 4: factories or what have you to China, and sort of

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Speaker 4: result of those attempts were far more murky, and I

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Speaker 4: can get into that in a minute. But some of

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Speaker 4: the more surprising groups, in addition to perhaps the more

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Speaker 4: standard or expected groups of American business people, were these

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Speaker 4: very maverick, entrepreneurial American business people, some of them with

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Speaker 4: very little prior business expertise, who saw in China opportunities

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Speaker 4: to really take a gamboll. And so one of the

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Speaker 4: people that I look at who really was at the

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Speaker 4: forefront in opening up the trade relationship with China was

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Speaker 4: this woman named Veronica Yap. She was an architect in

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Speaker 4: the early nineteen seventies who was born in Shanghai, had

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Speaker 4: family in Hong Kong, but had grown up in the

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Speaker 4: United States, and she when she sort of heard that

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Speaker 4: Nixon was easing trade restrictions, saw an opportunity to import

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Speaker 4: from China, and so she began, through her connections in

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Speaker 4: Hong Kong to import a whole range of different kinds

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Speaker 4: of goods. So she was importing cheap pals and now

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Speaker 4: coats and a whole range of things that were overtly Chinese,

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Speaker 4: and she very quickly made enough money that she was

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Speaker 4: able to quit her day job. And she was one

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Speaker 4: of a group of these small scale importers who really

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Speaker 4: led the way in not only importing from China, but

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Speaker 4: the result was that they were selling China to American consumers.

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Speaker 4: They were helping the larger diplomatic thaw by easing American

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Speaker 4: consumers and therefore American voters into engaging with China in

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Speaker 4: a very new way. And so in the early nineteen seventies,

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Speaker 4: one of the really important results of these importers was

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Speaker 4: not only in the diplomatic and economic realms, but in

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Speaker 4: the cultural shift in sort of allowing for an acceptance

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Speaker 4: of engagement with China, and that I think has a

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Speaker 4: really important longer term impact on the way that the

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Speaker 4: trade relationship unfolded. So I traced the story of Veronica

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Speaker 4: Yap and a few other importers who by the mid

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Speaker 4: nineteen seventies, while they continued to import malcoats and continue

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Speaker 4: to import things that were overtly Chinese, also began to

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Speaker 4: import things that had no real connection to China at all.

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Speaker 4: So Veronica Yap, for example, imported these really amazing nineteen

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Speaker 4: seventies high heeled men's shoes and my really seventies stuff

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Speaker 4: that had no connection to China other than the label

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Speaker 4: saying made in China. And in order for that acceptance

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Speaker 4: of engagement on everyday granular level with China, in order

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Speaker 4: for that to occur, it necessitated the large scale, celebratory

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Speaker 4: cultural transformation of engagement with China that was certainly there

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Speaker 4: from the start of the nineteen seventies and very much

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Speaker 4: continued throughout the seventies as well. So there's this real

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Speaker 4: dynamic occurring whereby American importers and retailers, those selling Chinese

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Speaker 4: goods begin this much larger transformation in what it means

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Speaker 4: to even trade with China, because, as you mentioned at

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Speaker 4: the beginning of the segment, for centuries, not just American

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Speaker 4: traders but foreign traders had looked to China and seen

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Speaker 4: in the China market a promise of selling to China.

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Speaker 4: You know, in the early twentieth century, a very well

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Speaker 4: known American ad man, his name's Carl Crow, a Maverick

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Speaker 4: businessman of his own with his own fantastic story. He

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Speaker 4: wrote a best selling book in the United States called

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Speaker 4: four hundred Million Customers. It won the National Book Award.

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Speaker 4: It was this really big moment in thinking through what

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Speaker 4: the China market represented, and so he sort of crystallized

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Speaker 4: this idea that China represented four hundred million customers. And

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Speaker 4: yet thirty odd years are after Carl Crow's book. In

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Speaker 4: this nineteen seventies moment, I began to see that, yes,

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Speaker 4: you have your Boeings and your Westinghouses wanting to sell

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Speaker 4: to China, sort of treading the path of the Carl

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Speaker 4: Crow vision of selling your goods to China. But I

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Speaker 4: began to see also the actions of people like Veronica

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Speaker 4: Yap and other importers and retailers began to reconfigure what

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Speaker 4: it means to speak of the China market and what

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Speaker 4: it means to speak of US China trade.

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Speaker 3: So you just laid out the sort of cultural diplomacy

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Speaker 3: via textile imports very well, but it still sort of

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Speaker 3: leaves a little bit of tension between diplomacy and geopolitical

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Speaker 3: aims versus economic ambitions. And one of the things I

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Speaker 3: thought was interesting in your book is you sort of

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Speaker 3: lay out a difference in mindset between the US and China,

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Speaker 3: which is very often Chinese leaders are sort of putting

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Speaker 3: diplomacy or geopolitical goals before business. So if you agreed

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Speaker 3: to do what we want in terms of politics, then

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Speaker 3: we'll trade more with you. But for the US, it's

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Speaker 3: very much business before diplomacy. So let's build up our

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Speaker 3: economic relationship and then we'll see how all the other

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Speaker 3: stuff goes. How were they sort of able to surmount

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Speaker 3: that difference of perspective in order to get the economic

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Speaker 3: relationship really going.

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Speaker 4: Yeah, well, this was one of the things that was

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Speaker 4: so surprising to me about how I make sense of

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Speaker 4: the diplomacy of this trade relationship, and I had assumed

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Speaker 4: that the trade relationship would, from the US perspective, be

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Speaker 4: understood as something that would assist the larger diplomatic aim

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Speaker 4: because in this period, the diplomacy of the period is

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Speaker 4: really what was driving the relationship, and it's certainly what

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Speaker 4: has driven scholarship on the topic. So it's a period

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Speaker 4: where the two countries sought to re work how they

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Speaker 4: can have full diplomatic normalization. And the big sticking point

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Speaker 4: was Taiwan's So how can the United States and China

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Speaker 4: have embassies and a full diplomatic relationship and what did

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Speaker 4: that mean for Taiwan? So that was the big question,

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Speaker 4: and that's usually how people think about nineteen seventies US

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Speaker 4: China relations. They don't focus on the trade relationship. And

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Speaker 4: a very significant reason for that is that the trade

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Speaker 4: numbers were really low. But precisely because the trade numbers

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Speaker 4: were low is why it's really important, because when we

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Speaker 4: look at the trade not in terms of sort of

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Speaker 4: the quantity of trade or the level of trade, but

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Speaker 4: in terms of qualitative changes, that's where it matters. And

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Speaker 4: so if I come back to this point that I

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Speaker 4: made earlier about unpacking the assumptions of your actors at

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Speaker 4: the time, the US actors that I look at the

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Speaker 4: US diplomats and at the executive level, so Nixon, Ford, Kater,

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Speaker 4: they all assumed that the trade relationship that they had

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Speaker 4: reopened with China, that that would assist the larger diplomatic

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Speaker 4: aims that they had, which is full normalization with China.

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Speaker 4: And so because trade was understood as a tool to

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Speaker 4: assist this larger diplomatic imperative, it was sort of seen

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Speaker 4: as a secondary thing that would ease What really mattered

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Speaker 4: to them was this normalization, and that therefore coincided with

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Speaker 4: very different, as if outlined Tracy, a very different assumption

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Speaker 4: on the part of Chinese policymakers, who, as the archival

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Speaker 4: documents reveal, who took a very overt and very different

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Speaker 4: approach towards the relationship between trade and diplomacy. They said, no,

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Speaker 4: we're working towards normalization with you United States, but you

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Speaker 4: only get trade benefits with US after we have improvements

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Speaker 4: in those diplomatic conversations, So only after we can have

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Speaker 4: concrete steps towards normalization. But where the sticking point lay

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Speaker 4: was in Chinese sales of goods to the United States,

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Speaker 4: because even though Chinese leaders said no, we're going to

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Speaker 4: take a very different approach, trade comes after improvements, not before.

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Speaker 4: There was a distinction where they said, okay, we'll allow

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Speaker 4: for our sales of our goods to the United States.

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Speaker 4: That wasn't the sticky point. That was eased partly because

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Speaker 4: it gave them cash to buy other things from other

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Speaker 4: countries and so, in other words, imports to the United

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Speaker 4: States of Chinese goods became a space that was within

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Speaker 4: Chinese leaders political interests, but it also became one within

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Speaker 4: the US policymakers interests too, because of that assumption that

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Speaker 4: they had, which is, let's use trade to help the

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Speaker 4: larger diplomatic situation, and because the numbers were so low,

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Speaker 4: it didn't seem to nutter that, you know, helping China

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Speaker 4: sell some of its textiles to the United States that

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Speaker 4: wouldn't have a big or was perceived to not have,

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Speaker 4: you know, a particularly negative consequence. Of course, the story

379
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Speaker 4: is far different to that, but the political assumption was

380
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Speaker 4: something that I myself really wanted to denormalize and denaturalize

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Speaker 4: and unpack.

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Speaker 2: So when people think about the history, there's the male era,

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Speaker 2: there's the dung era opening up. Okay, so maybe that

384
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Speaker 2: was an important shift, but there was more to it.

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Speaker 2: But the other thing you said, which I thought I

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Speaker 2: wanted to go back to, is that capitalism in the

387
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Speaker 2: United States was not some fixed, permanent state. That the

388
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Speaker 2: US was also undergoing a transition. And there was the

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Speaker 2: inflation of the nineteen seventies, and there were the wars,

390
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Speaker 2: and there was the fact that Nixon went off the

391
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Speaker 2: gold standard in nineteen seventy one, and that was a

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Speaker 2: big deal. Talk to us about the state of flux

393
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Speaker 2: that America found itself in the nineteen seventies, such that

394
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Speaker 2: both for diplomatic and I guess trade or sort of

395
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Speaker 2: commercial reasons, there was this impulse to figure out more

396
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Speaker 2: about what could be done with the China market.

397
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Speaker 4: Yeah, I mean, this is such an import a part

398
00:24:00,520 --> 00:24:04,120
Speaker 4: of the story. Right as you say, Joe Nixon ending

399
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Speaker 4: a gold standard, the end of Breton Woods. It occurred,

400
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Speaker 4: you know, within a month of Nixon's announcement of his

401
00:24:10,800 --> 00:24:13,800
Speaker 4: about to go to China. And so they're often paired

402
00:24:13,840 --> 00:24:18,159
Speaker 4: as these two Nixon shocks are prepaired because they were

403
00:24:18,200 --> 00:24:22,000
Speaker 4: shocks because of their style rather than the substance underpinning them.

404
00:24:22,560 --> 00:24:26,639
Speaker 4: But when you look at American business people and American corporations,

405
00:24:27,200 --> 00:24:31,320
Speaker 4: these two Nixon shocks actually worked together, and so they're

406
00:24:31,359 --> 00:24:34,080
Speaker 4: how I begin the book is with these two shocks

407
00:24:34,119 --> 00:24:39,679
Speaker 4: and their lasting and very unintended consequences. So something like

408
00:24:39,880 --> 00:24:42,600
Speaker 4: the ending of the Breton Woods system, but also by

409
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Speaker 4: sort of the mid nineteen seventies, US Congress passes the

410
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Speaker 4: nineteen seventy four Trade Act, and some of these key

411
00:24:50,080 --> 00:24:56,040
Speaker 4: legislative changes are crucial to the ways that American policy

412
00:24:56,080 --> 00:25:01,600
Speaker 4: makers sought to encourage the development of American manufacturing and

413
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Speaker 4: finance and the relationship between those two things. So we

414
00:25:05,920 --> 00:25:10,960
Speaker 4: speak today of sort of neoliberalism or of globalization, but

415
00:25:11,080 --> 00:25:14,239
Speaker 4: these are very much processes that were the products of

416
00:25:14,400 --> 00:25:17,960
Speaker 4: deliberate decisions, and in the book, I suddainly try and

417
00:25:18,040 --> 00:25:20,880
Speaker 4: pull out some of those core decisions that had these

418
00:25:20,920 --> 00:25:25,080
Speaker 4: long lasting repercussions. So the end of Breton Woods and

419
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Speaker 4: the sort of the freeing up therefore of capital was

420
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Speaker 4: crucial to the capacity eventually of US corporations to invest

421
00:25:33,119 --> 00:25:37,560
Speaker 4: their money overseas and have offshore manufacturing. It's hard to

422
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Speaker 4: imagine today, and I always stress it is, you know,

423
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Speaker 4: in twenty twenty four. We take for granted the fact

424
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Speaker 4: that we have sort of outsourced manufacturing and supply chain

425
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Speaker 4: networks and all the rest of it. But in the

426
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Speaker 4: nineteen seventies, these dynamics were very much only developing. There's

427
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Speaker 4: nothing about that that was certain American businesses, as you mentioned, Joe,

428
00:25:59,160 --> 00:26:02,399
Speaker 4: there's new signify inflation, they very much felt like they

429
00:26:02,400 --> 00:26:05,080
Speaker 4: were under attack from a whole range of different spaces.

430
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Speaker 4: Labor unions were very very active in this period, and

431
00:26:08,840 --> 00:26:11,159
Speaker 4: so there was nothing guaranteed in the world that we

432
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Speaker 4: live today, but there were certain steps, both legislative as

433
00:26:15,000 --> 00:26:18,639
Speaker 4: well as within the corporate world that did lead to

434
00:26:19,280 --> 00:26:21,960
Speaker 4: what we now have of of sort of offshore manufacturing

435
00:26:22,040 --> 00:26:25,040
Speaker 4: and other things. So just to give you an example,

436
00:26:25,200 --> 00:26:27,199
Speaker 4: j C. Penny is one of the big sort of

437
00:26:27,200 --> 00:26:29,919
Speaker 4: retailing companies that I look at in the book, and

438
00:26:30,000 --> 00:26:33,000
Speaker 4: they had in sort of the early nineteen seventies nineteen

439
00:26:33,040 --> 00:26:37,800
Speaker 4: seventy three, only about ten percent of their entire stock

440
00:26:38,280 --> 00:26:41,360
Speaker 4: was goods that were made not in the United States.

441
00:26:42,119 --> 00:26:43,920
Speaker 4: And jac Penny, I mean, it's big now, but it

442
00:26:44,000 --> 00:26:46,760
Speaker 4: was it was really, really, really dominant in the market

443
00:26:46,840 --> 00:26:48,480
Speaker 4: in the nineteen seventies. I think it was the second

444
00:26:48,520 --> 00:26:51,960
Speaker 4: largest retailer in the period, and you're having gone through

445
00:26:52,040 --> 00:26:54,480
Speaker 4: their company archives and their records.

446
00:26:55,040 --> 00:26:55,840
Speaker 3: And j C.

447
00:26:56,000 --> 00:26:59,720
Speaker 4: Penny's company plan outlined in nineteen seventy three what their

448
00:26:59,760 --> 00:27:02,240
Speaker 4: goals were going to be for the next five years.

449
00:27:02,880 --> 00:27:05,520
Speaker 4: And one of the key goals in response, and it

450
00:27:05,560 --> 00:27:08,760
Speaker 4: was very much in response to Nixon's ending of the

451
00:27:08,800 --> 00:27:12,200
Speaker 4: Bred and Wood system, and the gold standard was to say, Okay,

452
00:27:12,280 --> 00:27:15,200
Speaker 4: we're in flux right now. Things are challenging right now,

453
00:27:15,480 --> 00:27:19,920
Speaker 4: but our five year plan is to increase the amount

454
00:27:20,200 --> 00:27:24,960
Speaker 4: of goods that we sell in our stores that's manufactured overseas. So,

455
00:27:24,960 --> 00:27:28,280
Speaker 4: in other words, we want to strategically and deliberately choose

456
00:27:28,359 --> 00:27:33,000
Speaker 4: to turn to outsourced manufacturing. And within that company plan,

457
00:27:33,080 --> 00:27:35,400
Speaker 4: they listed a range of countries that they thought would

458
00:27:35,400 --> 00:27:38,600
Speaker 4: be good to get cheap labor from, and China was

459
00:27:38,720 --> 00:27:42,120
Speaker 4: listed amongst those spaces. And this is very early days

460
00:27:42,200 --> 00:27:45,080
Speaker 4: right nineteen seventy three. Like China, they've only been trading

461
00:27:45,080 --> 00:27:47,200
Speaker 4: with each other for about eighteen months, stuff to twenty

462
00:27:47,200 --> 00:27:49,960
Speaker 4: odd years of isolation, and jcpenny is listing China. It's

463
00:27:49,960 --> 00:27:54,040
Speaker 4: a potential space with which they could engage, and that

464
00:27:54,119 --> 00:27:57,960
Speaker 4: really tells you something about the very deliberate and overt

465
00:27:58,200 --> 00:28:02,359
Speaker 4: but also encouraged ways in which outsourced manufacturing was a

466
00:28:02,400 --> 00:28:06,399
Speaker 4: product of decisions. Similarly, if we turned to the Trade

467
00:28:06,440 --> 00:28:09,800
Speaker 4: Act of nineteen seventy four, just briefly, is this really

468
00:28:09,880 --> 00:28:16,200
Speaker 4: important again legislative moment where Congress said, after a number

469
00:28:16,200 --> 00:28:20,560
Speaker 4: of years in which Congress had introduced legislation that would

470
00:28:20,600 --> 00:28:24,159
Speaker 4: have limited the roles of manufacturing corporations and limited the

471
00:28:24,160 --> 00:28:30,000
Speaker 4: capacity of manufacturing multinational corporations to invest overseas a range

472
00:28:30,040 --> 00:28:32,400
Speaker 4: of bills, including the Mills Bills and the Burt Hark

473
00:28:32,480 --> 00:28:35,960
Speaker 4: Bill in the early nineteen seventies, by nineteen seventy four,

474
00:28:36,119 --> 00:28:39,440
Speaker 4: Congress passed this Trade Act of nineteen seventy four, in

475
00:28:39,480 --> 00:28:44,560
Speaker 4: which they chose to limit their own legislative powers after

476
00:28:45,000 --> 00:28:47,840
Speaker 4: the early seventies, where their own members had tried to

477
00:28:47,880 --> 00:28:50,400
Speaker 4: sort of curtail of what they saw as a liberal

478
00:28:50,480 --> 00:28:53,440
Speaker 4: international order. With the Trade Act of nineteen seventy four,

479
00:28:53,560 --> 00:28:57,200
Speaker 4: one of the consequences of it was to decrease Congresses

480
00:28:57,920 --> 00:29:02,240
Speaker 4: powers in making trade decisions, in imposing tariffs and other things.

481
00:29:02,720 --> 00:29:04,520
Speaker 4: So what the Trade Act did was it it gave

482
00:29:04,760 --> 00:29:08,440
Speaker 4: the powers some powers of tariff making and other sort

483
00:29:08,480 --> 00:29:12,320
Speaker 4: of conditions on trade. They gave those powers to the president,

484
00:29:12,360 --> 00:29:16,240
Speaker 4: to the executive branch. And this is really really significant

485
00:29:16,240 --> 00:29:18,960
Speaker 4: for a number of reasons, not least of which is

486
00:29:18,960 --> 00:29:21,280
Speaker 4: that this is happening right at the heart or of

487
00:29:21,320 --> 00:29:25,040
Speaker 4: the Watergate scandal. So faith and trust in the executive

488
00:29:25,080 --> 00:29:28,080
Speaker 4: office and in the president is at its lowest. And

489
00:29:28,160 --> 00:29:33,080
Speaker 4: yet Congress voted and passed this trade legislation that increased

490
00:29:33,120 --> 00:29:36,920
Speaker 4: the capacity of the president to impose restrictions and whatever

491
00:29:36,960 --> 00:29:42,440
Speaker 4: else on trade, precisely because of the assumption that the

492
00:29:42,840 --> 00:29:47,720
Speaker 4: capacity to uphold the liberal international trading order would be

493
00:29:47,760 --> 00:29:51,120
Speaker 4: far more protected and far more guaranteed with the office

494
00:29:51,240 --> 00:29:54,120
Speaker 4: of the executive the president than it was with this

495
00:29:54,160 --> 00:29:58,840
Speaker 4: sort of unruly Congress, which was sort of introducing labor

496
00:29:58,880 --> 00:30:01,800
Speaker 4: backed policies and introducing sort of early, sort of in

497
00:30:01,840 --> 00:30:04,960
Speaker 4: the early seventies sort of legislation that might have been

498
00:30:05,000 --> 00:30:08,640
Speaker 4: a threat to this movement to offshore manufacturing. And it's

499
00:30:08,680 --> 00:30:13,400
Speaker 4: precisely that increase in power that Donald Trump has been

500
00:30:13,440 --> 00:30:16,760
Speaker 4: able to impose the tariffs that he has. It's precisely

501
00:30:16,800 --> 00:30:19,240
Speaker 4: that change from the Trade Act of nineteen seventy four

502
00:30:19,680 --> 00:30:22,040
Speaker 4: that Joe Biden, too has been able to continue that,

503
00:30:22,520 --> 00:30:25,040
Speaker 4: and so in the seventies, the assumption was the president

504
00:30:25,080 --> 00:30:28,120
Speaker 4: is going to uphold and protect free trade and liberal

505
00:30:28,120 --> 00:30:31,320
Speaker 4: international trade, and that certainly was the case for a

506
00:30:31,400 --> 00:30:34,480
Speaker 4: number of decades, but as we're living through today, that

507
00:30:34,560 --> 00:30:37,880
Speaker 4: assumption is no longer something to be guaranteed.

508
00:30:53,160 --> 00:30:55,960
Speaker 3: I'm glad you brought up Trump and Biden because I

509
00:30:56,000 --> 00:30:59,440
Speaker 3: wanted to ask you about the current state of affairs.

510
00:31:00,680 --> 00:31:05,040
Speaker 3: Do you think there's any path to maybe going back

511
00:31:05,120 --> 00:31:08,000
Speaker 3: to that sort of time in the nineteen thirties or

512
00:31:08,040 --> 00:31:12,120
Speaker 3: even earlier where China was regarded as a potential market

513
00:31:12,440 --> 00:31:16,040
Speaker 3: for consumers. And one of the reasons I ask is

514
00:31:16,040 --> 00:31:17,840
Speaker 3: because I think you mentioned in your book, but when

515
00:31:17,920 --> 00:31:21,760
Speaker 3: China joined the World Trade Organization in I guess it

516
00:31:21,800 --> 00:31:23,880
Speaker 3: was two thousand and one or something like that, I

517
00:31:23,880 --> 00:31:27,200
Speaker 3: think part of the narrative then was this idea that

518
00:31:27,320 --> 00:31:30,760
Speaker 3: they could be customers for Western goods. And of course,

519
00:31:30,880 --> 00:31:33,760
Speaker 3: in the years since then, that idea has sort of

520
00:31:33,920 --> 00:31:36,760
Speaker 3: fallen away again, and we are very much used to

521
00:31:36,920 --> 00:31:41,360
Speaker 3: talking about China as a competitor for manufactured goods and

522
00:31:41,400 --> 00:31:43,800
Speaker 3: a cheap source of labor and all that stuff you've

523
00:31:43,840 --> 00:31:46,200
Speaker 3: been discussing is there any way we could go back

524
00:31:46,240 --> 00:31:49,560
Speaker 3: to a place where maybe it's regarded as more of

525
00:31:49,600 --> 00:31:51,320
Speaker 3: a market to sell things into.

526
00:31:51,800 --> 00:31:53,160
Speaker 4: There are a couple of things I want to say

527
00:31:53,200 --> 00:31:55,680
Speaker 4: that The first is first and fomust. China is a

528
00:31:55,760 --> 00:31:59,400
Speaker 4: major consumer market. It consumes products that many of its

529
00:31:59,440 --> 00:32:03,400
Speaker 4: own workers make. But the bigger question that you're asking

530
00:32:03,560 --> 00:32:05,520
Speaker 4: right a sort of how can we is there a

531
00:32:05,520 --> 00:32:09,080
Speaker 4: possibility of going back to a different kind of trade order.

532
00:32:09,600 --> 00:32:13,080
Speaker 4: I think one of the major problems that we're living

533
00:32:13,280 --> 00:32:17,200
Speaker 4: with and through is that in many ways we're not

534
00:32:17,280 --> 00:32:21,080
Speaker 4: so much as going back as remaining, at least rhetorically

535
00:32:21,360 --> 00:32:24,560
Speaker 4: back in the early twentieth century when it comes to

536
00:32:24,880 --> 00:32:29,160
Speaker 4: US political conversations about trade. So even to this day,

537
00:32:29,640 --> 00:32:34,120
Speaker 4: Biden speaks in terms of his tariffs protecting American jobs,

538
00:32:34,560 --> 00:32:37,400
Speaker 4: and Donald Trump even more so in terms of sort

539
00:32:37,440 --> 00:32:40,000
Speaker 4: of China is stealing American jobs and we've got to

540
00:32:40,000 --> 00:32:43,080
Speaker 4: protect them. The problem with that thinking, and it ties

541
00:32:43,200 --> 00:32:47,640
Speaker 4: back to seeing China as a space to sell to it,

542
00:32:47,680 --> 00:32:50,960
Speaker 4: is that it doesn't take into account the very profound

543
00:32:51,200 --> 00:32:56,520
Speaker 4: transformations in how manufacturing and finance and trade more broadly

544
00:32:57,040 --> 00:33:01,560
Speaker 4: operate and have operated since the nineteen seventy that the

545
00:33:01,600 --> 00:33:05,400
Speaker 4: ways that corporations operate and the ways that a good

546
00:33:05,560 --> 00:33:10,000
Speaker 4: that is labeled made in China operates, we know, contains

547
00:33:10,320 --> 00:33:14,320
Speaker 4: a really significant set of other dynamics underpinning it. That

548
00:33:14,360 --> 00:33:17,680
Speaker 4: a good labeled made in China has involved many other

549
00:33:17,720 --> 00:33:20,880
Speaker 4: countries along the way. So in the age of COVID

550
00:33:20,880 --> 00:33:23,000
Speaker 4: and all the rest of it, we're familiar right with

551
00:33:23,040 --> 00:33:25,600
Speaker 4: this idea of made in China as representing a very

552
00:33:25,640 --> 00:33:30,480
Speaker 4: sort of intertwined global system. And yet politically and rhetorically,

553
00:33:31,120 --> 00:33:34,960
Speaker 4: the conversations about trade and the conversations about China remain

554
00:33:35,120 --> 00:33:38,440
Speaker 4: very bound by the nation state. They remain bound by

555
00:33:38,520 --> 00:33:43,040
Speaker 4: very early twentieth century notions of made in China represents China,

556
00:33:43,120 --> 00:33:45,400
Speaker 4: and that's a threat, and made in the USA is

557
00:33:45,440 --> 00:33:49,520
Speaker 4: the solution, and that's going to support American jobs, when

558
00:33:49,600 --> 00:33:53,520
Speaker 4: really the reality of trade is such that the central

559
00:33:53,680 --> 00:33:58,160
Speaker 4: power and the central space of profit moves far more

560
00:33:58,280 --> 00:34:01,920
Speaker 4: fluidly between and among nation states. That it's not just

561
00:34:02,040 --> 00:34:05,840
Speaker 4: made in China anymore, but that a corporation made it,

562
00:34:05,760 --> 00:34:07,880
Speaker 4: that it's Apple, or it's Gap, or it's any of

563
00:34:07,920 --> 00:34:10,399
Speaker 4: any of the brands. That they are the ones who

564
00:34:10,440 --> 00:34:13,480
Speaker 4: need to be understood as central to these dynamic It's

565
00:34:13,520 --> 00:34:17,600
Speaker 4: not just anymore about a nation state, but the kinds

566
00:34:17,600 --> 00:34:20,120
Speaker 4: of labels that we're familiar with that say made in

567
00:34:20,880 --> 00:34:25,560
Speaker 4: X place. They are a product of late nineteenth century trade.

568
00:34:26,040 --> 00:34:29,480
Speaker 4: There are a product in fact of the UK of

569
00:34:29,520 --> 00:34:34,160
Speaker 4: Britain in the very late nineteenth century looking out at

570
00:34:34,200 --> 00:34:37,120
Speaker 4: the world and seeing a threat from the industrial power

571
00:34:37,520 --> 00:34:40,719
Speaker 4: or the industrialization of Germany. And so in the late

572
00:34:40,800 --> 00:34:44,719
Speaker 4: nineteenth century, the UK introduced legislation that would say, we

573
00:34:44,760 --> 00:34:48,040
Speaker 4: want to limit goods coming from Germany because of its

574
00:34:48,120 --> 00:34:52,440
Speaker 4: industrial might, and we're going to do so by labeling

575
00:34:52,480 --> 00:34:57,120
Speaker 4: products from Germany with made in Germany. And the idea was, well,

576
00:34:57,160 --> 00:35:01,279
Speaker 4: if you know, British consumers see made in Germany, they're

577
00:35:01,280 --> 00:35:02,600
Speaker 4: not going to want to buy it, and that's gonna

578
00:35:02,600 --> 00:35:05,200
Speaker 4: be good for us, because we want to serve stymy

579
00:35:05,239 --> 00:35:09,120
Speaker 4: their powers. But what's really really important, right, So there's

580
00:35:09,160 --> 00:35:12,480
Speaker 4: a very common thread here, and that is nationalism, and

581
00:35:12,520 --> 00:35:14,600
Speaker 4: that is sort of wanting to create this sort of

582
00:35:14,640 --> 00:35:18,160
Speaker 4: this threat. But really, really importantly, when I looked into

583
00:35:18,200 --> 00:35:20,759
Speaker 4: this history, I was like, Okay, that's really interesting. But

584
00:35:20,800 --> 00:35:24,000
Speaker 4: then I looked at the legislation and I looked at

585
00:35:24,120 --> 00:35:28,279
Speaker 4: what it was that the British had passed and they

586
00:35:28,880 --> 00:35:32,640
Speaker 4: in the law said we're going to know if it's

587
00:35:32,640 --> 00:35:36,680
Speaker 4: coming from Germany because of where the ship left. This

588
00:35:36,800 --> 00:35:40,600
Speaker 4: is in the law they said, if the ship leaves Germany,

589
00:35:40,760 --> 00:35:43,040
Speaker 4: then we're going to know that all the stuff on

590
00:35:43,120 --> 00:35:45,600
Speaker 4: that ship was made in Germany. And that's how we

591
00:35:45,640 --> 00:35:49,440
Speaker 4: will know to put the label made in Germany. And

592
00:35:49,840 --> 00:35:54,120
Speaker 4: that reflects a very very different way in which trade

593
00:35:54,280 --> 00:35:58,520
Speaker 4: operated compared to today. We know that trade operates differently. We

594
00:35:58,640 --> 00:36:03,120
Speaker 4: know that we can't don't make an economic decision or

595
00:36:03,120 --> 00:36:05,680
Speaker 4: a trade based decision based on sort of the ship

596
00:36:06,040 --> 00:36:08,640
Speaker 4: that the goods are left from. We know that things

597
00:36:08,680 --> 00:36:14,279
Speaker 4: operate very differently, and yet the labeling itself and the

598
00:36:14,360 --> 00:36:20,200
Speaker 4: politics around these labels has remained very static. In many ways,

599
00:36:20,239 --> 00:36:23,960
Speaker 4: we're still in the late nineteenth century way of thinking

600
00:36:24,000 --> 00:36:28,360
Speaker 4: about trade and manufacturing and goods. It's the same reason

601
00:36:28,400 --> 00:36:31,719
Speaker 4: that we're still seeing tarots as being wheeled out as

602
00:36:31,800 --> 00:36:35,080
Speaker 4: the one way which Biden as much as Trump is

603
00:36:35,120 --> 00:36:38,880
Speaker 4: seeking to sort of control trade. It's very very nineteenth

604
00:36:38,920 --> 00:36:41,759
Speaker 4: century way of thinking, despite the fact that we know

605
00:36:41,880 --> 00:36:43,360
Speaker 4: it operates very very differently.

606
00:36:43,640 --> 00:36:46,120
Speaker 2: Yeah, the idea of like, oh, it comes from X place,

607
00:36:46,200 --> 00:36:49,200
Speaker 2: therefore it's from X is. It seems like we sort

608
00:36:49,200 --> 00:36:51,759
Speaker 2: of understand the flaws and then we try to, like, well,

609
00:36:51,800 --> 00:36:54,040
Speaker 2: as it's sixty percent, this was it forty percent?

610
00:36:54,080 --> 00:36:54,200
Speaker 4: This?

611
00:36:54,280 --> 00:36:57,440
Speaker 2: Where's the value add? And obviously very difficult. I just

612
00:36:57,480 --> 00:36:59,720
Speaker 2: have one last question. You know, it's funny I'm reading.

613
00:37:00,239 --> 00:37:03,560
Speaker 2: I pulled up a story while you're talking nineteen seventy

614
00:37:03,600 --> 00:37:06,480
Speaker 2: two by The New York Times fashion writer Bernardine Morris

615
00:37:06,760 --> 00:37:10,760
Speaker 2: about Veronica Yap and her introduction of these various Chinese

616
00:37:10,760 --> 00:37:14,520
Speaker 2: styles and they're sold at sax Fifth Avenue and Bloomingdale's.

617
00:37:14,880 --> 00:37:18,160
Speaker 2: But he uses in the article uses the word China hand.

618
00:37:18,280 --> 00:37:20,640
Speaker 2: So Veronica Yap is referred to as a China hand.

619
00:37:20,719 --> 00:37:22,759
Speaker 2: And you hear about that today, someone with a lot

620
00:37:22,760 --> 00:37:26,000
Speaker 2: of familiarity, who knows both countries very well and could

621
00:37:26,040 --> 00:37:29,120
Speaker 2: sort of facilitate trade and dialogue, et cetera. Can you

622
00:37:29,200 --> 00:37:33,000
Speaker 2: talk a little bit about that first generation of traders

623
00:37:33,120 --> 00:37:36,120
Speaker 2: identifying goods made in China that might appeal to the

624
00:37:36,200 --> 00:37:40,080
Speaker 2: US fashion market. But then the next level is, okay,

625
00:37:40,120 --> 00:37:44,160
Speaker 2: not just stereotypically or typically Chinese goods, but just any

626
00:37:44,200 --> 00:37:46,840
Speaker 2: good You mentioned shoes that could theoretically be made in

627
00:37:46,960 --> 00:37:50,160
Speaker 2: China more cheaply or more efficiently than somewhere else. And

628
00:37:50,200 --> 00:37:53,760
Speaker 2: that's sort of like the beginning of the huge boom,

629
00:37:53,800 --> 00:37:56,719
Speaker 2: which is anything can theoretically be made in China. What

630
00:37:56,920 --> 00:37:59,560
Speaker 2: was the role of the Veronica Yapps of the world

631
00:37:59,680 --> 00:38:03,120
Speaker 2: is that time of setting the stage for the next

632
00:38:03,200 --> 00:38:07,120
Speaker 2: generation that wasn't just selling sort of Chinese style jackets

633
00:38:07,160 --> 00:38:10,560
Speaker 2: and so forth, but in sort of identifying China as

634
00:38:10,680 --> 00:38:15,560
Speaker 2: this huge potential production market for more and more and

635
00:38:15,640 --> 00:38:18,799
Speaker 2: more and more advanced goods that type, eventually getting to

636
00:38:18,800 --> 00:38:21,799
Speaker 2: the point where we are today where there significant concerns

637
00:38:21,840 --> 00:38:25,160
Speaker 2: about China being at the technological frontier of manufacturing.

638
00:38:25,840 --> 00:38:28,440
Speaker 4: Yeah. I mean, so it operated in multiple ways. So

639
00:38:28,480 --> 00:38:31,440
Speaker 4: it operated in terms, as I mentioned earlier, of the

640
00:38:31,440 --> 00:38:36,600
Speaker 4: cultural transformation of accepting regular everyday goods that were made

641
00:38:36,640 --> 00:38:41,120
Speaker 4: in China bah exactly with that label. But it also

642
00:38:41,160 --> 00:38:44,640
Speaker 4: operated at as you mentioned, an expertise level. This is

643
00:38:44,680 --> 00:38:48,480
Speaker 4: a new generation of American business people who have been

644
00:38:48,560 --> 00:38:51,400
Speaker 4: shut out of the China market. They're competing with the

645
00:38:51,400 --> 00:38:54,560
Speaker 4: Brits and with the West Germans and the Japanese who

646
00:38:54,640 --> 00:38:57,800
Speaker 4: had been trading with China much longer throughout the nineteen

647
00:38:57,880 --> 00:39:01,120
Speaker 4: sixties because of their governments that have ended the trade

648
00:39:01,120 --> 00:39:04,799
Speaker 4: embargo that the United States continued to uphold. And so

649
00:39:04,920 --> 00:39:08,440
Speaker 4: the Americans were late comers to the China market, and

650
00:39:08,520 --> 00:39:13,560
Speaker 4: so the importers began to create a set of conversations

651
00:39:13,560 --> 00:39:18,080
Speaker 4: and expertise amongst themselves. This sort of cultivated China hand,

652
00:39:18,120 --> 00:39:20,440
Speaker 4: if you will, in which they explained to one another,

653
00:39:20,719 --> 00:39:22,960
Speaker 4: here's how you trade with China, and in this phrase,

654
00:39:23,560 --> 00:39:27,960
Speaker 4: doing business with China was ubiquitous. It's a real trope

655
00:39:27,960 --> 00:39:30,480
Speaker 4: within the literature, and I began to see it, and

656
00:39:30,480 --> 00:39:34,200
Speaker 4: perhaps this is the consequence of my earlier stage of

657
00:39:34,200 --> 00:39:37,440
Speaker 4: being a literature undergraduate. I saw this as itself a

658
00:39:37,480 --> 00:39:41,120
Speaker 4: body of literature, as a genre of writing, because it

659
00:39:41,160 --> 00:39:44,000
Speaker 4: was a huge number of hamphlets and books and what

660
00:39:44,160 --> 00:39:47,560
Speaker 4: have you about how to trade with China, and in

661
00:39:47,880 --> 00:39:53,560
Speaker 4: providing that expertise, it actually created a set of expectations

662
00:39:53,600 --> 00:39:57,960
Speaker 4: and ideas about what China represents and what American business

663
00:39:57,960 --> 00:40:01,520
Speaker 4: people wanting to get involved should expect. And one of

664
00:40:01,600 --> 00:40:05,680
Speaker 4: the key and most striking things was the advice which

665
00:40:05,719 --> 00:40:09,360
Speaker 4: said you might lose money. In fact, you probably will

666
00:40:09,719 --> 00:40:15,040
Speaker 4: lose money. Very very few business people and corporations made

667
00:40:15,120 --> 00:40:18,240
Speaker 4: much of a profit from trade with China in this period.

668
00:40:18,280 --> 00:40:20,160
Speaker 4: Some of the larger companies were so big that they

669
00:40:20,160 --> 00:40:23,760
Speaker 4: could absorb the loss. JC Penny absorbed the loss, for example.

670
00:40:24,200 --> 00:40:27,040
Speaker 4: But part of the advice was to companies like Ford

671
00:40:27,080 --> 00:40:31,319
Speaker 4: Motors or to Philip Morris, a cigarette company, and their

672
00:40:31,320 --> 00:40:35,000
Speaker 4: advice that they were given was, Okay, you want to

673
00:40:35,040 --> 00:40:37,640
Speaker 4: sell to China. You want to sell your cigarettes, or

674
00:40:37,680 --> 00:40:40,239
Speaker 4: you want to sell your cars. Sure, but in order

675
00:40:40,280 --> 00:40:43,240
Speaker 4: to get there, you need to buy from China first.

676
00:40:43,800 --> 00:40:46,359
Speaker 4: And so the advice that was coming in to these

677
00:40:47,040 --> 00:40:53,720
Speaker 4: huge titans of American capitalism was buy the rugs, buy

678
00:40:54,080 --> 00:40:58,360
Speaker 4: the porcelain, buy the tea, and so you have Coca Cola,

679
00:40:58,440 --> 00:41:02,400
Speaker 4: for example, buying tea from China, not selling folks or

680
00:41:02,640 --> 00:41:06,120
Speaker 4: setting up its bottling plans that came later. And the

681
00:41:06,480 --> 00:41:09,920
Speaker 4: advice and therefore actions that were being taken on an

682
00:41:09,960 --> 00:41:14,120
Speaker 4: economic level were importing from China. It was to encourage

683
00:41:14,480 --> 00:41:17,600
Speaker 4: a whole range of different stuff coming from China into

684
00:41:17,640 --> 00:41:21,160
Speaker 4: the United States. And that's set in motion a dynamic

685
00:41:21,719 --> 00:41:24,439
Speaker 4: in which with the exception of I think one year

686
00:41:24,440 --> 00:41:27,160
Speaker 4: and nineteen mid nineteen eighties, and it was due to

687
00:41:27,239 --> 00:41:31,360
Speaker 4: the recession. US imports of goods from China has continued

688
00:41:31,400 --> 00:41:33,600
Speaker 4: to grow for the rest of the twentieth century. And

689
00:41:33,719 --> 00:41:37,440
Speaker 4: that dynamic started in the nineteen seventies. And as I

690
00:41:37,480 --> 00:41:40,960
Speaker 4: mentioned earlier, that was that dynamic that didn't really raise

691
00:41:41,560 --> 00:41:45,360
Speaker 4: big question marks at a political level because of the

692
00:41:45,400 --> 00:41:48,760
Speaker 4: assumption that trade would assist the diplomacy, but also because

693
00:41:48,800 --> 00:41:52,759
Speaker 4: the numbers were low. But it's structural change that I

694
00:41:52,760 --> 00:41:55,680
Speaker 4: think is really really important, and that structural change is

695
00:41:55,719 --> 00:41:58,719
Speaker 4: what matters. There was one group who did see the

696
00:41:58,719 --> 00:42:01,839
Speaker 4: repercussions of this. There was one group who said, we're

697
00:42:01,880 --> 00:42:04,239
Speaker 4: looking at what's going on here, and we can see

698
00:42:04,239 --> 00:42:06,640
Speaker 4: the writing on the wall, and that was American labor

699
00:42:07,280 --> 00:42:10,480
Speaker 4: right from the get go, organized American labor. And it's

700
00:42:10,520 --> 00:42:12,520
Speaker 4: a complex dynamic, and it's one that I sort of

701
00:42:12,719 --> 00:42:16,600
Speaker 4: don't present as a simplistic story of workers versus corporations

702
00:42:16,640 --> 00:42:19,240
Speaker 4: or workers versus the government. But it was a complex

703
00:42:19,280 --> 00:42:22,920
Speaker 4: story in which there were concerns being raised right from

704
00:42:22,920 --> 00:42:25,880
Speaker 4: the get go about what this might mean for ordinary Americans,

705
00:42:26,440 --> 00:42:30,520
Speaker 4: but precisely because of political assumptions that labor was an

706
00:42:30,560 --> 00:42:34,680
Speaker 4: impediment or sometimes an irritant to larger geopolitical concerns. It

707
00:42:34,760 --> 00:42:37,880
Speaker 4: was not a central and in fact, one story that

708
00:42:37,920 --> 00:42:40,759
Speaker 4: I tell it was suppressed as a consequence, and so

709
00:42:40,800 --> 00:42:43,920
Speaker 4: this is a dynamic in which certain parts of the

710
00:42:44,000 --> 00:42:46,760
Speaker 4: US economy were prioritized over others.

711
00:42:47,120 --> 00:42:49,040
Speaker 2: That was fantastic. We could probably do a whole hour

712
00:42:49,120 --> 00:42:50,960
Speaker 2: on labor. We have to run because they're going to

713
00:42:51,080 --> 00:42:52,799
Speaker 2: kick us out of the studio. But Elizabeth, thank you

714
00:42:52,880 --> 00:42:54,719
Speaker 2: so much for coming on. That was fantastic.

715
00:42:55,000 --> 00:42:56,680
Speaker 4: It was a real pleasure to be here. Thanks for

716
00:42:56,719 --> 00:43:04,640
Speaker 4: the opportunity.

717
00:43:09,440 --> 00:43:12,040
Speaker 2: Tracy. I thought that was a really fascinating conversation. And

718
00:43:12,120 --> 00:43:14,120
Speaker 2: I think the first thing that just sort of jumps

719
00:43:14,120 --> 00:43:17,640
Speaker 2: out to me as being important is that, if nothing else,

720
00:43:17,880 --> 00:43:21,960
Speaker 2: the story of Chinese development, in China's integration with the

721
00:43:21,960 --> 00:43:25,640
Speaker 2: rest of the global economy is not some like switch

722
00:43:25,719 --> 00:43:29,640
Speaker 2: that was flipped when Deng Chopeng took over after a moth.

723
00:43:29,719 --> 00:43:29,959
Speaker 4: Yeah.

724
00:43:30,000 --> 00:43:32,799
Speaker 3: Absolutely, I mean you have to have two participants to

725
00:43:32,920 --> 00:43:35,560
Speaker 3: every trade relation, and I think it's very true that

726
00:43:35,640 --> 00:43:39,359
Speaker 3: we tend to view China's economic opening as this sort

727
00:43:39,360 --> 00:43:40,640
Speaker 3: of unilateral thing.

728
00:43:40,840 --> 00:43:41,279
Speaker 4: Almost so.

729
00:43:41,440 --> 00:43:44,200
Speaker 3: Yes, Kissinger was involved in the nineteen seventies on the

730
00:43:44,200 --> 00:43:46,759
Speaker 3: political side, but very much so when it comes to

731
00:43:46,760 --> 00:43:50,480
Speaker 3: the actual trade relationship. We think about the liberalization stemming

732
00:43:50,520 --> 00:43:55,359
Speaker 3: from China, and I thought Elizabeth's point about, well, there

733
00:43:55,360 --> 00:43:57,600
Speaker 3: are two sides to this, and a lot was going

734
00:43:57,640 --> 00:44:00,640
Speaker 3: on in the US in the nineteen seventies in terms

735
00:44:00,719 --> 00:44:04,000
Speaker 3: of economic development and the way the economy was sort

736
00:44:04,000 --> 00:44:08,080
Speaker 3: of evolving, and that that played a huge role too.

737
00:44:08,200 --> 00:44:11,120
Speaker 3: I also think the timeline is really interesting here, So

738
00:44:11,280 --> 00:44:13,520
Speaker 3: the idea that in the nineteen thirties, you know, you

739
00:44:13,640 --> 00:44:16,800
Speaker 3: had I think it was an ad executive shright writing

740
00:44:16,800 --> 00:44:19,840
Speaker 3: a book about China and four hundred million customers, and

741
00:44:19,880 --> 00:44:23,279
Speaker 3: then thirty years later or forty years later, it's more

742
00:44:23,280 --> 00:44:24,400
Speaker 3: of a market for labor.

743
00:44:24,760 --> 00:44:26,960
Speaker 2: That point is really wild to me too, because that

744
00:44:27,040 --> 00:44:30,879
Speaker 2: book four hundred million customers, Like you could totally imagine

745
00:44:31,120 --> 00:44:34,680
Speaker 2: some book having been written like nineteen ninety four right

746
00:44:34,840 --> 00:44:37,879
Speaker 2: by some like Nike executive called like a billion customers

747
00:44:38,320 --> 00:44:39,839
Speaker 2: that was like, oh, this is and I'm sure that

748
00:44:39,840 --> 00:44:42,600
Speaker 2: book probably exists. I don't know who wrote it, but

749
00:44:42,640 --> 00:44:46,080
Speaker 2: it is funny that there has always been literally basically

750
00:44:46,320 --> 00:44:49,880
Speaker 2: for almost a century now, this dream of the huge

751
00:44:50,000 --> 00:44:54,200
Speaker 2: Chinese consumer market, and yet that basically for the most part,

752
00:44:54,280 --> 00:44:57,279
Speaker 2: and there are obviously exceptions, the big opportunities have been

753
00:44:57,320 --> 00:44:59,239
Speaker 2: on the sort of supply and production side.

754
00:44:59,320 --> 00:45:01,719
Speaker 3: Absolutely. The other thing that I thought was kind of

755
00:45:01,719 --> 00:45:04,600
Speaker 3: funny was the discussion of the you know, made in

756
00:45:04,880 --> 00:45:09,080
Speaker 3: whatever country labels and the idea of how we still

757
00:45:09,120 --> 00:45:12,120
Speaker 3: have them today and yet they are not particularly well

758
00:45:12,160 --> 00:45:15,680
Speaker 3: suited to global supply chains. And I was thinking back

759
00:45:15,719 --> 00:45:19,760
Speaker 3: to in the midst of all these supply chain disruptions,

760
00:45:20,000 --> 00:45:24,200
Speaker 3: I remember someone it might have been like an official

761
00:45:24,320 --> 00:45:27,160
Speaker 3: branch of the US government, to just study where they

762
00:45:27,360 --> 00:45:30,480
Speaker 3: looked at a bunch of different businesses as base cases

763
00:45:30,520 --> 00:45:32,879
Speaker 3: for the global supply chain. And I remember they looked

764
00:45:32,880 --> 00:45:35,080
Speaker 3: at this one company in particular, I think it made

765
00:45:35,080 --> 00:45:39,319
Speaker 3: hot tubs or saunas or something, and the saunas or

766
00:45:39,320 --> 00:45:42,040
Speaker 3: the hot tubs were always pitched as made in America,

767
00:45:42,360 --> 00:45:44,280
Speaker 3: like they made a big deal of it in their marketing.

768
00:45:44,600 --> 00:45:47,959
Speaker 3: But then this report had a diagram that showed how

769
00:45:48,040 --> 00:45:50,440
Speaker 3: the hot tubs were actually put together and where all

770
00:45:50,480 --> 00:45:53,800
Speaker 3: the components came from, and it was like everywhere you

771
00:45:53,840 --> 00:45:57,640
Speaker 3: could imagine in the world, Vietnam, China, there was a

772
00:45:57,680 --> 00:46:00,920
Speaker 3: piece coming from like all sides of the basically and

773
00:46:00,960 --> 00:46:04,560
Speaker 3: then being assembled somewhere in Montana or something like that.

774
00:46:04,800 --> 00:46:07,960
Speaker 2: Not surprising, but funny. I also thought like something that

775
00:46:08,080 --> 00:46:10,640
Speaker 2: came up which I hadn't really appreciated it all before,

776
00:46:10,680 --> 00:46:13,759
Speaker 2: but the idea of like fashion and style being sort

777
00:46:13,800 --> 00:46:16,640
Speaker 2: of at the very forefront of that. And I you know,

778
00:46:16,680 --> 00:46:18,719
Speaker 2: I mentioned it on the show, but like, you know,

779
00:46:18,800 --> 00:46:23,000
Speaker 2: going back and reading about Veronika Yap and the idea

780
00:46:23,000 --> 00:46:26,319
Speaker 2: that and it makes sense, right the first consumer excitement

781
00:46:26,920 --> 00:46:29,560
Speaker 2: and you know, Elizabeth Tyled her book Made in China,

782
00:46:29,640 --> 00:46:31,680
Speaker 2: was like this idea of like, oh, this is really exciting.

783
00:46:31,719 --> 00:46:33,960
Speaker 2: This is a style of jacket, this is a style

784
00:46:34,000 --> 00:46:36,919
Speaker 2: of baby carrier that they use in China that's made

785
00:46:36,920 --> 00:46:39,960
Speaker 2: in China, and how like that was sort of along

786
00:46:40,080 --> 00:46:43,040
Speaker 2: with the Nixon in China moments, like a key step

787
00:46:43,080 --> 00:46:45,799
Speaker 2: in the opening and these first few business people that

788
00:46:45,880 --> 00:46:48,880
Speaker 2: went over there and sort of discovered this opportunity and

789
00:46:48,920 --> 00:46:51,120
Speaker 2: then taught other business people about that.

790
00:46:51,640 --> 00:46:53,239
Speaker 3: Yeah, absolutely, shall we leave it there.

791
00:46:53,360 --> 00:46:54,040
Speaker 2: Let's leave it there.

792
00:46:54,239 --> 00:46:57,040
Speaker 3: This has been another episode of the All Thoughts podcast.

793
00:46:57,160 --> 00:47:00,280
Speaker 3: I'm Tracy Alloway. You can follow me at Tracy Alloway.

794
00:47:00,080 --> 00:47:02,319
Speaker 2: And I'm Joe Wisenthal. You can follow me at The

795
00:47:02,320 --> 00:47:06,280
Speaker 2: Stalwart Follow our guest Elizabeth Ingleson. She's at Liz Ingleson.

796
00:47:06,440 --> 00:47:10,239
Speaker 2: Follow our producers Kerman Rodriguez at Kerman Arman, dash Ol

797
00:47:10,239 --> 00:47:13,640
Speaker 2: Bennett at Dashbot and Keilbrooks at Kelbrooks. Thank you to

798
00:47:13,680 --> 00:47:16,680
Speaker 2: our producer Moses ONEm From our odlots content. Go to

799
00:47:16,719 --> 00:47:19,560
Speaker 2: Bloomberg dot com slash odd lots, where have transcripts, a

800
00:47:19,600 --> 00:47:21,920
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801
00:47:21,920 --> 00:47:24,360
Speaker 2: of these topics twenty four to seven in the discord

802
00:47:24,400 --> 00:47:27,759
Speaker 2: with fellow listeners discord dot gg slash.

803
00:47:27,440 --> 00:47:30,120
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804
00:47:30,320 --> 00:47:32,799
Speaker 3: like it when we take a historic look at us

805
00:47:32,880 --> 00:47:35,600
Speaker 3: China trade, then please leave us a positive review on

806
00:47:35,680 --> 00:47:38,920
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807
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810
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811
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