1 00:00:00,160 --> 00:00:03,240 Speaker 1: If we never ever have had guests bringing treats for us, 2 00:00:03,279 --> 00:00:06,160 Speaker 1: and now this is two days in a row. This 3 00:00:06,240 --> 00:00:09,639 Speaker 1: is incredible, happened? This is no two days in a 4 00:00:09,720 --> 00:00:13,480 Speaker 1: row guests bringing in sweets for us, which which makes 5 00:00:13,560 --> 00:00:13,960 Speaker 1: us very. 6 00:00:13,880 --> 00:00:15,960 Speaker 2: Popular in our row because then we'll share them with 7 00:00:16,000 --> 00:00:18,560 Speaker 2: a thank you so much. 8 00:00:19,800 --> 00:00:23,200 Speaker 3: I can't definitely does this bring you guys back to 9 00:00:23,239 --> 00:00:23,680 Speaker 3: Hong Kong? 10 00:00:23,720 --> 00:00:23,919 Speaker 1: You know? 11 00:00:24,239 --> 00:00:24,479 Speaker 3: Yes? 12 00:00:25,040 --> 00:00:27,920 Speaker 4: Yeah, I remember every year. I actually kind of miss it, 13 00:00:28,040 --> 00:00:31,560 Speaker 4: like all the zodiac theme things every year, like you 14 00:00:31,560 --> 00:00:33,239 Speaker 4: would walk around the streets and they'd be all the 15 00:00:33,280 --> 00:00:37,520 Speaker 4: pastries and things, but also the little gold statues in 16 00:00:37,640 --> 00:00:40,199 Speaker 4: like the shape of a dog or a bear, not 17 00:00:40,200 --> 00:00:42,680 Speaker 4: a bear of a pig, or like a dragon and stuff. 18 00:00:42,760 --> 00:00:46,639 Speaker 4: I missed that. We don't get that so much more. Joe, 19 00:00:46,680 --> 00:00:51,520 Speaker 4: do you know what your zodiac animal is in China? 20 00:00:52,360 --> 00:00:59,080 Speaker 4: I used to monkey, monkey, monkey, and I'm a bore. 21 00:00:59,560 --> 00:01:02,760 Speaker 2: I'm very hello, yes, what are you? 22 00:01:02,880 --> 00:01:06,080 Speaker 3: I'm read it? So this last year was my year? 23 00:01:06,880 --> 00:01:07,720 Speaker 4: Did you have a good year? 24 00:01:08,120 --> 00:01:14,920 Speaker 3: I think so I got, But. 25 00:01:14,840 --> 00:01:17,840 Speaker 4: I'm here to carman? What Chinese zodiac animal? Are you? 26 00:01:18,040 --> 00:01:18,520 Speaker 3: The horse? 27 00:01:19,760 --> 00:01:20,400 Speaker 4: A good one too? 28 00:01:23,120 --> 00:01:30,479 Speaker 2: I did a deadlift one? Okay, so many Uh, this 29 00:01:30,520 --> 00:01:32,440 Speaker 2: isn't after school Special, except. 30 00:01:32,080 --> 00:01:34,640 Speaker 4: I've decided I'm going to base my entire personality going 31 00:01:34,680 --> 00:01:37,880 Speaker 4: forward on campaigning for a strategic pork reserve in the US. 32 00:01:38,000 --> 00:01:39,720 Speaker 2: Where's the best with imposta? 33 00:01:39,880 --> 00:01:42,479 Speaker 4: These are the important question? Is it robots taking over 34 00:01:42,520 --> 00:01:43,080 Speaker 4: the world? No. 35 00:01:43,160 --> 00:01:46,039 Speaker 1: I think that like in a couple of years, the 36 00:01:46,120 --> 00:01:48,320 Speaker 1: AI will do a really good job of making the 37 00:01:48,320 --> 00:01:51,800 Speaker 1: odd launch podcast. And people say, I don't really need 38 00:01:51,840 --> 00:01:53,480 Speaker 1: to listen to Joe and Tracy anymore. 39 00:01:53,680 --> 00:01:59,360 Speaker 2: We do have the perfect welcome to lots more. Will 40 00:01:59,400 --> 00:02:02,280 Speaker 2: we catch up with friends about what's going on right now. 41 00:02:02,400 --> 00:02:05,639 Speaker 4: Because even when ad thoughts is over, there's always lots 42 00:02:05,680 --> 00:02:06,880 Speaker 4: more and we. 43 00:02:06,920 --> 00:02:09,360 Speaker 2: Really do have the perfect guest. 44 00:02:11,639 --> 00:02:14,239 Speaker 1: I'm always sort of skeptical of like, like when people 45 00:02:14,320 --> 00:02:16,080 Speaker 1: talk about the end of the dollar, it sort of 46 00:02:16,080 --> 00:02:17,520 Speaker 1: seems like crank stuff to me. 47 00:02:18,000 --> 00:02:20,720 Speaker 4: We have had this conversation so many times. And yes, 48 00:02:20,800 --> 00:02:24,040 Speaker 4: a lot of the people who like having conversations about 49 00:02:24,120 --> 00:02:27,240 Speaker 4: the end of dollar dominance, they are crank adjacent many 50 00:02:27,240 --> 00:02:30,120 Speaker 4: of them. Many of them are firmly in crank territory. 51 00:02:30,280 --> 00:02:33,560 Speaker 4: But I do think it is true if you look 52 00:02:33,960 --> 00:02:36,960 Speaker 4: at what's happening in certain parts of the financial system, like, 53 00:02:37,080 --> 00:02:41,959 Speaker 4: there are attempts being made, even if they're not officially 54 00:02:42,120 --> 00:02:44,960 Speaker 4: called we are trying to move away from the dollar. 55 00:02:45,080 --> 00:02:47,119 Speaker 4: They are called things like, well, we want a more 56 00:02:47,160 --> 00:02:51,079 Speaker 4: resilient financial system, or we want one where we are 57 00:02:51,120 --> 00:02:54,520 Speaker 4: not as tied or as reliant on what's happening to 58 00:02:54,560 --> 00:02:58,560 Speaker 4: the dollar exposed exactly right. So the efforts are there, 59 00:02:58,720 --> 00:03:01,639 Speaker 4: they are underway. Does it mean that things are going 60 00:03:01,680 --> 00:03:05,560 Speaker 4: to change in the next like year, Absolutely not. I 61 00:03:05,560 --> 00:03:07,680 Speaker 4: don't think so. But I don't think they can be 62 00:03:07,760 --> 00:03:09,400 Speaker 4: disregarded in total. 63 00:03:09,760 --> 00:03:12,600 Speaker 1: Well, in the studio with us, we have someone who 64 00:03:12,960 --> 00:03:16,600 Speaker 1: is definitely not a crank or crank and Jason. Former 65 00:03:16,680 --> 00:03:20,640 Speaker 1: guest Zoe Lu You've a great piece China wants to 66 00:03:20,720 --> 00:03:24,919 Speaker 1: ditch the dollar in Noema magazine, and you know this 67 00:03:24,960 --> 00:03:27,480 Speaker 1: is of course we've done episodes on China and the dollar. 68 00:03:27,800 --> 00:03:30,720 Speaker 1: They want to dedollarize, et cetera. I actually find it 69 00:03:30,760 --> 00:03:32,760 Speaker 1: kind of compelling. Maybe there's something going on here. 70 00:03:33,360 --> 00:03:36,200 Speaker 3: Wow. First of all, I do not get to choose 71 00:03:36,240 --> 00:03:41,240 Speaker 3: the title, and I've spoken like a true journalist. 72 00:03:41,520 --> 00:03:45,560 Speaker 1: All journalists have had this. Although I've generally been pretty 73 00:03:45,560 --> 00:03:46,040 Speaker 1: involved in. 74 00:03:46,000 --> 00:03:48,480 Speaker 4: Titles, it's much less of a thing than it used 75 00:03:48,520 --> 00:03:50,800 Speaker 4: to be. If you were working on a newspaper for many, 76 00:03:50,840 --> 00:03:53,800 Speaker 4: many years, it was the sub editors who would choose 77 00:03:53,840 --> 00:03:56,440 Speaker 4: the headline. I'm sorry, Zoe, we've totally interrupted you and 78 00:03:56,520 --> 00:03:58,680 Speaker 4: hijack the conversation talk about journalists. 79 00:03:58,680 --> 00:04:00,800 Speaker 3: No, no, no, no. I actually, do you appreciate your 80 00:04:00,880 --> 00:04:04,400 Speaker 3: explaining of this, because sometimes I get people emailing me 81 00:04:04,480 --> 00:04:06,800 Speaker 3: saying that, well, the title of your article, you're saying 82 00:04:06,840 --> 00:04:09,680 Speaker 3: that China is trying to ditch the dollar. But in reality, 83 00:04:09,760 --> 00:04:11,960 Speaker 3: when we finish reading our article, it turned out that 84 00:04:12,040 --> 00:04:13,920 Speaker 3: you are not saying that China is going to ditch 85 00:04:13,960 --> 00:04:17,440 Speaker 3: the dollar. The bottom line of my argument is that 86 00:04:17,800 --> 00:04:22,279 Speaker 3: for their art, economic and geopolitical reasons for countries like 87 00:04:22,360 --> 00:04:27,279 Speaker 3: China to try to reduce its exposure to the dollar 88 00:04:27,279 --> 00:04:30,839 Speaker 3: based system. And the reason I'm saying this is because 89 00:04:30,960 --> 00:04:33,560 Speaker 3: just think about it. You can imagine China as the 90 00:04:34,560 --> 00:04:36,840 Speaker 3: factory of the world, and you are buying a lot 91 00:04:36,839 --> 00:04:39,440 Speaker 3: of commodities using one currency, and you are trying to 92 00:04:39,480 --> 00:04:43,200 Speaker 3: sell your commodities are in the same currency. This is 93 00:04:43,240 --> 00:04:46,400 Speaker 3: the story of China's rice. This is how China accumulated 94 00:04:46,720 --> 00:04:51,719 Speaker 3: at one point for trillion for exchange reserves denominated in dollar, 95 00:04:52,279 --> 00:04:56,039 Speaker 3: but every time when Chinese exporters importers doing a transaction, 96 00:04:56,200 --> 00:04:58,640 Speaker 3: it has to go through the entire banking system, which 97 00:04:58,720 --> 00:05:03,440 Speaker 3: is not denominated in the Chinese currency. This is why 98 00:05:03,480 --> 00:05:07,360 Speaker 3: the Chinese financiers are grumpy about grumpy about right. They 99 00:05:07,360 --> 00:05:09,520 Speaker 3: are saying that, well, you know, we're the largest trading 100 00:05:09,560 --> 00:05:11,800 Speaker 3: punder with more than one hundred and twenty country them 101 00:05:11,839 --> 00:05:15,080 Speaker 3: the world, and yet our currency is a very minimum. 102 00:05:15,640 --> 00:05:20,520 Speaker 4: How much of the urge to maybe diversify a little 103 00:05:20,560 --> 00:05:25,160 Speaker 4: bit comes from waning economic growth? And I'm very conscious 104 00:05:25,160 --> 00:05:27,560 Speaker 4: that we are recording this in a week. You know, 105 00:05:27,600 --> 00:05:30,039 Speaker 4: we are here on January twenty fifth. It has been 106 00:05:30,160 --> 00:05:33,760 Speaker 4: a terrible week for both the Chinese economy and its 107 00:05:33,880 --> 00:05:38,279 Speaker 4: financial assets. There's been a lot of ink spilt about 108 00:05:38,400 --> 00:05:40,960 Speaker 4: the crash in Chinese stocks. I think the CSI three 109 00:05:41,040 --> 00:05:44,719 Speaker 4: hundred index is down something like forty percent over the 110 00:05:44,760 --> 00:05:48,599 Speaker 4: past three years. There's a lot of conversation about structural 111 00:05:48,640 --> 00:05:51,960 Speaker 4: weakness in China's economy at the moment. How much of 112 00:05:52,000 --> 00:05:55,919 Speaker 4: this urge to maybe dedollarize is too strong a word, 113 00:05:56,040 --> 00:06:01,120 Speaker 4: but sort of diversify currency options is part of this 114 00:06:01,320 --> 00:06:05,360 Speaker 4: economic evolution that makes a lot of sense tracy. 115 00:06:05,360 --> 00:06:08,880 Speaker 3: In fact, if we go back all the way to 116 00:06:08,920 --> 00:06:12,080 Speaker 3: the early two thousands, that was actually the very first 117 00:06:12,080 --> 00:06:15,599 Speaker 3: time when the Chinese officials was talking about seriously talking 118 00:06:15,640 --> 00:06:19,039 Speaker 3: about diversifying their foreign exchange reserve holdings. So from that 119 00:06:19,200 --> 00:06:23,640 Speaker 3: time on, with the growing of the Chinese foreign exchange 120 00:06:23,640 --> 00:06:27,520 Speaker 3: reserve accumulation, the conversation has been focused has been focused 121 00:06:27,520 --> 00:06:31,920 Speaker 3: on how to reduce the opportunity cost of investing all 122 00:06:32,320 --> 00:06:37,040 Speaker 3: the foreign exchange asset in US treasuries. But things started 123 00:06:37,080 --> 00:06:41,359 Speaker 3: to change around two thousand, after twenty fourteen, part of 124 00:06:41,360 --> 00:06:46,359 Speaker 3: the reason was because of the West's threatening of kicking 125 00:06:46,440 --> 00:06:50,240 Speaker 3: Russia off the Swift system. Now at that time the 126 00:06:50,279 --> 00:06:53,680 Speaker 3: West did not go with the nuclear option with Russia, 127 00:06:53,760 --> 00:06:56,720 Speaker 3: but it did sort of provided it did provide a 128 00:06:56,760 --> 00:07:00,000 Speaker 3: wake up call for present putting as well as the Chinese. 129 00:07:00,560 --> 00:07:04,160 Speaker 3: And one year later, it was around twenty fifteen that 130 00:07:04,400 --> 00:07:09,320 Speaker 3: was a launch of CIPS, China's cross border interbank payment system. 131 00:07:09,680 --> 00:07:13,600 Speaker 3: And at that time, again the idea was to facilitate 132 00:07:13,840 --> 00:07:16,640 Speaker 3: broader use of the Internet of the reman be in 133 00:07:16,680 --> 00:07:21,040 Speaker 3: the international system. But then systematically people started to realize, well, 134 00:07:21,120 --> 00:07:26,000 Speaker 3: this can be a hatch or a insurance policy. Then 135 00:07:26,320 --> 00:07:30,520 Speaker 3: things really started to get worse from Chinese perspective around 136 00:07:30,600 --> 00:07:34,600 Speaker 3: two southern eighteen with the escalation of US China trade 137 00:07:34,640 --> 00:07:39,760 Speaker 3: war during the Trump administration, and you have Chinese financial regulators, 138 00:07:40,200 --> 00:07:44,280 Speaker 3: even the people the vice chairman of China's Securities Regulatory Commission, 139 00:07:44,320 --> 00:07:46,600 Speaker 3: funcing how he came out and saying that, well, we 140 00:07:46,600 --> 00:07:50,920 Speaker 3: should be prepared for the so called forced decoupling, meaning 141 00:07:51,000 --> 00:07:53,600 Speaker 3: China was being kicked out of the US led global 142 00:07:53,600 --> 00:07:58,320 Speaker 3: financial system. And obviously with Russia's invasion of Ukraine and 143 00:07:58,480 --> 00:08:01,960 Speaker 3: present puddings more against uk in and the freeze of 144 00:08:02,040 --> 00:08:05,040 Speaker 3: Russian reserves and kicking out of kicking Russia out of 145 00:08:05,080 --> 00:08:08,640 Speaker 3: the swift system, this is really the moment where China realized, 146 00:08:09,160 --> 00:08:11,560 Speaker 3: you know, we could be the next Russia. And by 147 00:08:11,560 --> 00:08:13,160 Speaker 3: the way, China is not the only country in the 148 00:08:13,200 --> 00:08:16,600 Speaker 3: world of facing that kind of insecurity. You have countries 149 00:08:16,720 --> 00:08:20,440 Speaker 3: like Saudi Arabia started to worry, and at one point 150 00:08:20,480 --> 00:08:22,800 Speaker 3: there was even floating the idea that Saudi Arabia was 151 00:08:22,840 --> 00:08:27,520 Speaker 3: considering moving. The trading of shifting is part of the 152 00:08:27,560 --> 00:08:31,000 Speaker 3: transactions of oil or denominating the oil price pricing in 153 00:08:31,040 --> 00:08:33,120 Speaker 3: the Remanbi so this is where I think a lot 154 00:08:33,160 --> 00:08:35,640 Speaker 3: of things have been underestimated. 155 00:08:36,280 --> 00:08:38,680 Speaker 1: I'm glad who brought up oil. Actually I should mention 156 00:08:39,800 --> 00:08:43,000 Speaker 1: we talked to Zoe last year. I think it was 157 00:08:43,160 --> 00:08:46,920 Speaker 1: maybe last August. She's the author of Sovereign Funds, How 158 00:08:46,920 --> 00:08:50,960 Speaker 1: the CPC finances its global ambitions. She's the Maurice R. 159 00:08:51,000 --> 00:08:55,280 Speaker 1: Greenberg Fellow at the Council on Foreign Relations. Perfect guests literally, 160 00:08:55,520 --> 00:08:57,360 Speaker 1: But actually I'm glad you brought up oil because I 161 00:08:57,360 --> 00:09:00,560 Speaker 1: thought one of the most fascinating aspects of your piece 162 00:09:00,760 --> 00:09:03,480 Speaker 1: on China and the dollar, and I had never seen 163 00:09:03,559 --> 00:09:06,800 Speaker 1: anyone put this together, which is that if China is 164 00:09:06,840 --> 00:09:09,920 Speaker 1: going to be I don't know, if it's a dominant 165 00:09:10,000 --> 00:09:12,760 Speaker 1: provider of rare earth metals, and we talk about this 166 00:09:12,800 --> 00:09:15,040 Speaker 1: all the time in the context of like batteries and 167 00:09:15,120 --> 00:09:18,240 Speaker 1: clean tech and certain needs for high tech, et cetera. 168 00:09:18,520 --> 00:09:20,680 Speaker 1: And there's you know, this talk a dependence on China 169 00:09:20,720 --> 00:09:22,360 Speaker 1: for all these things. If China is going to be 170 00:09:22,360 --> 00:09:24,560 Speaker 1: I don't know, maybe the Saudi Arabia of some of 171 00:09:24,600 --> 00:09:28,360 Speaker 1: these commodities, then this is an opportunity to create brand 172 00:09:28,400 --> 00:09:31,520 Speaker 1: new markets that aren't not from day one. You know, 173 00:09:31,559 --> 00:09:33,280 Speaker 1: It's like saudis like a bulkhead. 174 00:09:33,480 --> 00:09:33,680 Speaker 3: Yeah. 175 00:09:33,720 --> 00:09:36,000 Speaker 1: Yeah, Like Saudi Arabia is like okay, maybe if they're 176 00:09:36,000 --> 00:09:38,480 Speaker 1: all these years, maybe it'll trade a little bit more 177 00:09:38,480 --> 00:09:41,800 Speaker 1: oil and some other currency. But China could create a 178 00:09:41,840 --> 00:09:44,360 Speaker 1: new market for these and not and have it be 179 00:09:44,760 --> 00:09:46,079 Speaker 1: undollarized from day one. 180 00:09:46,679 --> 00:09:51,720 Speaker 3: I think that is an excellent point to summarize my argument, 181 00:09:52,200 --> 00:09:56,360 Speaker 3: and I wish you were my editor right at the 182 00:09:56,400 --> 00:10:01,079 Speaker 3: top of very much. So this is how I think 183 00:10:01,120 --> 00:10:05,240 Speaker 3: about the relationship between energy and finance. Right right now, 184 00:10:05,480 --> 00:10:08,160 Speaker 3: we are living through a moment of the so called 185 00:10:08,240 --> 00:10:10,640 Speaker 3: energy transition, but this is actually not the very first 186 00:10:10,640 --> 00:10:14,160 Speaker 3: time we leave. The human society lived through this from 187 00:10:14,240 --> 00:10:19,400 Speaker 3: fire to coal to oil, and the next thing could 188 00:10:19,520 --> 00:10:22,960 Speaker 3: be renewable or clean energy. Could it be a variety 189 00:10:23,000 --> 00:10:26,200 Speaker 3: of renewable resources or clean energy sources. And the danger 190 00:10:26,240 --> 00:10:30,160 Speaker 3: of this is that when we move from an oil 191 00:10:30,240 --> 00:10:33,640 Speaker 3: denominated global economy, which is about eighty percent of the 192 00:10:33,679 --> 00:10:37,679 Speaker 3: global economy now is a fueld by oil. Right so, 193 00:10:38,120 --> 00:10:43,800 Speaker 3: oil is one commodity that has one single market. It 194 00:10:43,840 --> 00:10:45,719 Speaker 3: does not matter where you are trading it, whether you're 195 00:10:45,760 --> 00:10:48,480 Speaker 3: in Texas, you are in Dubai, or in Singapore or 196 00:10:48,480 --> 00:10:51,920 Speaker 3: Shanghai or London. At least for most of the time, 197 00:10:52,600 --> 00:10:56,520 Speaker 3: there is only one global oil market price change here 198 00:10:56,559 --> 00:11:01,120 Speaker 3: it moves over there. But renewables is totally different because 199 00:11:01,400 --> 00:11:06,560 Speaker 3: it's a very much decentralized and distributed system. And even 200 00:11:06,559 --> 00:11:08,960 Speaker 3: for natural gas is the same thing. Right, there is 201 00:11:09,080 --> 00:11:13,559 Speaker 3: no single global market for natural gas. So from this perspective, 202 00:11:13,600 --> 00:11:19,559 Speaker 3: this decentralized and fragmented market provide opportunity for the emergence 203 00:11:19,640 --> 00:11:23,120 Speaker 3: of a different trading hub, different trading system, and different 204 00:11:23,200 --> 00:11:27,920 Speaker 3: pricing mechanism. And this is where China see energy transition 205 00:11:28,080 --> 00:11:33,320 Speaker 3: as an opportunity to reduce their dependence on the dollar system. 206 00:11:34,040 --> 00:11:38,280 Speaker 3: And China actually has the market power in this regards 207 00:11:38,440 --> 00:11:41,480 Speaker 3: because it is already one of It is the world's 208 00:11:41,559 --> 00:11:45,520 Speaker 3: largest import of a lot of commodities, and it also 209 00:11:45,520 --> 00:11:49,959 Speaker 3: dominates a lot of the processing capacity for critical minerals. 210 00:11:50,120 --> 00:11:53,320 Speaker 3: So from that perspective, you see China has access to 211 00:11:53,760 --> 00:11:57,160 Speaker 3: the resources, has the processing capacity. They also have the 212 00:11:57,200 --> 00:11:59,880 Speaker 3: manufacturing capacity in the transition through. 213 00:12:00,760 --> 00:12:03,839 Speaker 4: Yeah, I didn't realize this. So I knew China had 214 00:12:04,280 --> 00:12:08,440 Speaker 4: rare earth capacity, I didn't realize it also has the 215 00:12:08,520 --> 00:12:13,800 Speaker 4: tungsten capital of the world in in Ganjo. Am I 216 00:12:13,840 --> 00:12:17,040 Speaker 4: pronouncing that right, very right in Ganjo. And it's funny 217 00:12:17,040 --> 00:12:19,520 Speaker 4: because I've been to Ganjo on my way to Guylan, 218 00:12:19,600 --> 00:12:22,400 Speaker 4: but the sitting, Yeah, but this was like I mean, 219 00:12:22,440 --> 00:12:25,240 Speaker 4: it must have been like two thousand and four or 220 00:12:25,280 --> 00:12:28,840 Speaker 4: something when my mother was working in Beijing, and you know, 221 00:12:28,960 --> 00:12:31,440 Speaker 4: I was at university at the time, and rare earth 222 00:12:31,440 --> 00:12:35,080 Speaker 4: metals were not on my mind, So the importance of 223 00:12:35,120 --> 00:12:38,320 Speaker 4: that particular city of flew over my head at that time. 224 00:12:38,400 --> 00:12:42,120 Speaker 4: But Tungsten capital of the world, as you point out. 225 00:12:41,800 --> 00:12:44,320 Speaker 3: The example that you pointed out is very important to 226 00:12:44,360 --> 00:12:49,320 Speaker 3: Tracy because Ganjo is the it is the location where 227 00:12:49,480 --> 00:12:52,199 Speaker 3: you I cannot believe you actually have been there because 228 00:12:52,360 --> 00:12:55,679 Speaker 3: I have never been there. Many tourists would not even no. 229 00:12:56,200 --> 00:12:58,200 Speaker 4: It was a way stop on the way to Guilan. 230 00:12:58,360 --> 00:13:01,240 Speaker 4: And I remember I've had a lot of of adventures 231 00:13:01,280 --> 00:13:04,120 Speaker 4: in getting lost in foreign places, but this was one 232 00:13:04,160 --> 00:13:06,880 Speaker 4: of the places where we genuinely got lost because we 233 00:13:06,880 --> 00:13:09,440 Speaker 4: were only there for a night and we really struggled 234 00:13:09,440 --> 00:13:11,880 Speaker 4: to find a restaurant to eat in and no one 235 00:13:12,120 --> 00:13:14,880 Speaker 4: back then spoke English, and you know, we didn't have 236 00:13:14,960 --> 00:13:17,440 Speaker 4: translator apps and things like that, so I remember we 237 00:13:17,480 --> 00:13:19,400 Speaker 4: went to a restaurant and we ordered something and I 238 00:13:19,440 --> 00:13:22,160 Speaker 4: think we got back. I think we thought we were 239 00:13:22,280 --> 00:13:24,679 Speaker 4: ordering like chicken or beef, and we got I'm pretty 240 00:13:24,679 --> 00:13:27,280 Speaker 4: sure it was pan fried scorpions. In the end, this 241 00:13:27,400 --> 00:13:32,560 Speaker 4: was one of my like only like no, no, but 242 00:13:32,600 --> 00:13:35,760 Speaker 4: anyway it was. It was not a tourist destination, as 243 00:13:35,800 --> 00:13:37,840 Speaker 4: you point out. It was really a way stop on 244 00:13:37,880 --> 00:13:40,840 Speaker 4: the way to Gwaelan, which is definitely a tourist destination 245 00:13:40,920 --> 00:13:42,120 Speaker 4: and is beautiful. 246 00:13:42,280 --> 00:13:45,360 Speaker 3: Very much so. But Gun Joe is important in the 247 00:13:45,440 --> 00:13:53,920 Speaker 3: sense that it has China's a second rare metals exchange mechanism, 248 00:13:54,120 --> 00:13:57,160 Speaker 3: and the whole idea behind setting up this is rare 249 00:13:57,240 --> 00:14:03,720 Speaker 3: mineral exchange mechanism has been to increase the pricing power 250 00:14:03,920 --> 00:14:06,760 Speaker 3: of the reman be in a lot of these critical 251 00:14:06,760 --> 00:14:10,439 Speaker 3: minerals very much relevant for the energy transition, and China 252 00:14:10,480 --> 00:14:13,040 Speaker 3: not only have one. China not only has one, but 253 00:14:13,200 --> 00:14:18,440 Speaker 3: has another one in ne Mango Can Oh sorry no, 254 00:14:18,840 --> 00:14:20,920 Speaker 3: I was just pointing out the name of the city. 255 00:14:20,960 --> 00:14:23,560 Speaker 3: I believe it's abouttle rare earth mineral and just a 256 00:14:23,560 --> 00:14:26,560 Speaker 3: small segue about rare earth. This is another aspect of 257 00:14:26,560 --> 00:14:30,280 Speaker 3: why Chinese finance seers have been grumpy. They're saying that, Well, 258 00:14:30,320 --> 00:14:34,840 Speaker 3: you know, China, it is the largest rare mineral exporting 259 00:14:34,840 --> 00:14:36,480 Speaker 3: country in the world for a lamp period the time, 260 00:14:36,600 --> 00:14:40,600 Speaker 3: but they have been exporting rare earth at an extremely 261 00:14:40,680 --> 00:14:43,920 Speaker 3: cheap price. The idea is, you sell rare earth is 262 00:14:43,960 --> 00:14:46,960 Speaker 3: a very important mineral, but you sell it dirt cheap. 263 00:14:47,360 --> 00:14:49,920 Speaker 3: In Chinese word, rare earth is called a heat tool. 264 00:14:50,040 --> 00:14:52,920 Speaker 3: It's like a rare earth means the two too. It's like, 265 00:14:53,120 --> 00:14:56,240 Speaker 3: literally it means dirt. So you are selling something precious 266 00:14:56,480 --> 00:14:58,960 Speaker 3: at the price of a dirt. So this is why 267 00:14:59,000 --> 00:15:02,440 Speaker 3: we are really interesting in sort of increasing the pricing 268 00:15:02,480 --> 00:15:03,640 Speaker 3: power of their meanbi. 269 00:15:03,520 --> 00:15:06,520 Speaker 4: Wait, but is that just to try to get market share? 270 00:15:06,560 --> 00:15:10,760 Speaker 4: Because I think about rare earth's and I think finite resources, 271 00:15:11,040 --> 00:15:13,960 Speaker 4: a lot of people are struggling to get them or 272 00:15:14,400 --> 00:15:18,080 Speaker 4: reliable access to them. Why would you sell it cheap? 273 00:15:19,040 --> 00:15:22,600 Speaker 3: That is an excellent question. For a long period of time, 274 00:15:22,760 --> 00:15:25,880 Speaker 3: rare earth as a metal, it didn't have a lot 275 00:15:25,960 --> 00:15:29,800 Speaker 3: of applications. In the transition to renewables. Like if we 276 00:15:29,800 --> 00:15:32,680 Speaker 3: were having this conversation back in let's say two thousand 277 00:15:32,680 --> 00:15:37,000 Speaker 3: and seven, the market is definitely very different from what 278 00:15:37,040 --> 00:15:40,480 Speaker 3: we are saying today. So from that perspective, yes, having 279 00:15:40,520 --> 00:15:44,720 Speaker 3: market share is important, but the problem is the demand 280 00:15:44,880 --> 00:15:47,800 Speaker 3: is not necessarily as high as it is today. 281 00:15:47,920 --> 00:15:50,080 Speaker 4: Oh I see, Okay, So a lot of the discussion 282 00:15:50,120 --> 00:15:54,320 Speaker 4: around the shortage of rare earth metals is still very hypothetical, 283 00:15:54,560 --> 00:15:55,000 Speaker 4: very much so. 284 00:16:08,800 --> 00:16:11,880 Speaker 1: Something that has come up on a couple of episodes 285 00:16:11,920 --> 00:16:13,840 Speaker 1: we've done, but I don't think we've talked about it 286 00:16:13,920 --> 00:16:18,880 Speaker 1: with you is the Belton Road initiative and the degree 287 00:16:18,880 --> 00:16:23,280 Speaker 1: to which that has or hasn't actually been particularly effective 288 00:16:23,480 --> 00:16:28,000 Speaker 1: at creating a renmend B network that rival or a 289 00:16:28,040 --> 00:16:30,320 Speaker 1: renmen be system. And I think what was it, like 290 00:16:30,720 --> 00:16:34,760 Speaker 1: a lot of the lending is still dollarized, right Terseay? Yeah, 291 00:16:34,840 --> 00:16:37,160 Speaker 1: what is going on with that? And how did how 292 00:16:37,200 --> 00:16:40,000 Speaker 1: do you see like you know, obviously the geopolitics ort 293 00:16:40,000 --> 00:16:42,520 Speaker 1: of building relationships. Of course we've seen the emergence and 294 00:16:42,640 --> 00:16:45,880 Speaker 1: growing of the formal like bricks group of countries. How 295 00:16:45,880 --> 00:16:48,480 Speaker 1: does that How do some of these endeavors play into 296 00:16:49,040 --> 00:16:50,800 Speaker 1: China's currency strategy in your view? 297 00:16:51,400 --> 00:16:56,120 Speaker 3: So, the Belt on the Road initiative initially started as 298 00:16:56,280 --> 00:17:01,320 Speaker 3: a way for Chinese leaders in particular Season to address 299 00:17:01,400 --> 00:17:05,640 Speaker 3: China's domestic overcapacity problem, right is after the financial during 300 00:17:05,640 --> 00:17:08,120 Speaker 3: the financial crisis, China, due to the fort tralling, remenbe 301 00:17:08,119 --> 00:17:12,280 Speaker 3: stimulate and then it creates a lot of domestic overcapacity. Therefore, 302 00:17:12,520 --> 00:17:15,760 Speaker 3: using President czimping his own word, he said, you know, 303 00:17:15,880 --> 00:17:18,639 Speaker 3: China's overcapacity problem is a problem for us, but it 304 00:17:18,720 --> 00:17:21,720 Speaker 3: could be beneficial for other countries. So that was the contact, 305 00:17:21,720 --> 00:17:24,240 Speaker 3: that was the background. But it's in reality, it's not 306 00:17:24,280 --> 00:17:27,760 Speaker 3: necessarily how it was imagined. Right, You're right. A lot 307 00:17:27,760 --> 00:17:33,520 Speaker 3: of the lending have been denominated in dollars. However, Chinese financiers, 308 00:17:33,560 --> 00:17:38,080 Speaker 3: including Presidence MP himself as the leader, have been evasioning 309 00:17:38,520 --> 00:17:42,399 Speaker 3: having bri Beldroom Road Initiative as a vehicle or a 310 00:17:42,440 --> 00:17:46,800 Speaker 3: mechanism to broaden the use of remenbe along Beldom Road 311 00:17:46,880 --> 00:17:51,520 Speaker 3: initiative countries. And they even created a sovereign funds to 312 00:17:51,680 --> 00:17:54,800 Speaker 3: help broadening the use of remenb and that sovereign funds 313 00:17:54,840 --> 00:17:58,280 Speaker 3: is called the Silk Road Fund, and it was launched 314 00:17:58,280 --> 00:18:01,840 Speaker 3: around to south end it if I remember it correctly, 315 00:18:01,920 --> 00:18:05,320 Speaker 3: it should be around two thousand fourteen, two thousand fifteen 316 00:18:05,560 --> 00:18:08,760 Speaker 3: ish if I remember it correctly, And at one of 317 00:18:08,800 --> 00:18:12,560 Speaker 3: those Bolt and Road initiative International Corporation Forum, President City 318 00:18:12,680 --> 00:18:14,600 Speaker 3: things that I'm going to give it, you know, another 319 00:18:14,680 --> 00:18:17,680 Speaker 3: capital injection, and this time the capital injection is going 320 00:18:17,720 --> 00:18:20,720 Speaker 3: to be denominated like the capital injection is going to 321 00:18:20,720 --> 00:18:23,679 Speaker 3: be in I mean B. The whole purpose is to 322 00:18:23,720 --> 00:18:27,439 Speaker 3: broaden the use of REMENB through this initiative. And what 323 00:18:27,560 --> 00:18:31,159 Speaker 3: is fascinating is once President made the announcement, the Chinese 324 00:18:31,240 --> 00:18:33,720 Speaker 3: Central Banker at that time came out and saying that 325 00:18:33,880 --> 00:18:36,399 Speaker 3: this is a great idea and we are going to 326 00:18:36,520 --> 00:18:40,800 Speaker 3: use the socro defund as a mechanism to facilitate the 327 00:18:41,040 --> 00:18:45,040 Speaker 3: reminbi internationalization initiative. But the important part here is to 328 00:18:45,119 --> 00:18:50,159 Speaker 3: remember is the is not really internationalization. It's not that 329 00:18:50,280 --> 00:18:52,960 Speaker 3: they are removing capital controls or anything like that. They 330 00:18:52,960 --> 00:18:57,720 Speaker 3: are doing this through creating a relatively regional space for 331 00:18:58,600 --> 00:19:02,840 Speaker 3: Chinese importers acts orders to make transactions right. And in 332 00:19:02,880 --> 00:19:06,720 Speaker 3: this particular context is also very important because Seal Croade Fund, 333 00:19:06,840 --> 00:19:10,000 Speaker 3: the creation of the Seal Code of Fund was using 334 00:19:10,320 --> 00:19:15,399 Speaker 3: China's foreign exchange reserves managed by State Administration of a 335 00:19:15,440 --> 00:19:19,119 Speaker 3: Foreign exchange or safe which was which is the foreign 336 00:19:19,160 --> 00:19:23,800 Speaker 3: exchange reserve management arm of the People's Bank of China, 337 00:19:24,160 --> 00:19:26,679 Speaker 3: and in order to create the Seal Crode Fund, the 338 00:19:26,720 --> 00:19:32,440 Speaker 3: PBOC created a special entity called Buttomwood and although capitalizing 339 00:19:32,520 --> 00:19:37,040 Speaker 3: the Sellcrode Fund was bottom with initial mission, it then 340 00:19:37,200 --> 00:19:41,000 Speaker 3: later went on to create additional investment funds played a 341 00:19:41,119 --> 00:19:43,879 Speaker 3: very important role in stabilizing China's stock market. 342 00:19:44,119 --> 00:19:46,920 Speaker 4: Yeah, I remember this. I think it came up in 343 00:19:47,119 --> 00:19:50,440 Speaker 4: another one of our episodes, although I cannot remember which one. 344 00:19:50,520 --> 00:19:54,359 Speaker 4: Since you brought up she listening to you lay out 345 00:19:54,680 --> 00:19:59,359 Speaker 4: why China wants this type of diversification, it makes a 346 00:19:59,359 --> 00:20:01,960 Speaker 4: lot of sense. And I think this is in many 347 00:20:02,000 --> 00:20:06,920 Speaker 4: ways an underappreciated aspect of Shishin Ping and the CCPs, 348 00:20:07,000 --> 00:20:12,879 Speaker 4: that like, they are good at identifying problems and vulnerabilities, 349 00:20:13,440 --> 00:20:17,960 Speaker 4: it's just that sometimes they're bad at maybe identifying solutions. 350 00:20:18,480 --> 00:20:21,520 Speaker 4: And sometimes I think Dan Wang, another one of our guests, 351 00:20:21,520 --> 00:20:24,120 Speaker 4: pointed this out in his annual letter. And I'm probably 352 00:20:24,280 --> 00:20:28,000 Speaker 4: paraphrasing here, but like, sometimes the solution is more painful 353 00:20:28,200 --> 00:20:30,600 Speaker 4: than the problem itself. And you could make that argument 354 00:20:30,640 --> 00:20:33,439 Speaker 4: for things like housing, what happened in the for profit 355 00:20:33,600 --> 00:20:38,080 Speaker 4: education space, the tech crackdown, all of those things. What 356 00:20:38,240 --> 00:20:42,280 Speaker 4: is the mechanism or the scenario in which China's attempt 357 00:20:42,359 --> 00:20:46,719 Speaker 4: to diversify away from the dollar ends up harming it 358 00:20:47,200 --> 00:20:49,560 Speaker 4: in some way. Like essentially, what are the risks here? 359 00:20:49,600 --> 00:20:51,360 Speaker 4: I feel like they need to be discussed. 360 00:20:52,080 --> 00:20:55,560 Speaker 3: So let me take a step back by explaining what 361 00:20:55,640 --> 00:21:00,400 Speaker 3: are the risk What are the motivations for China totempt 362 00:21:00,760 --> 00:21:05,840 Speaker 3: to reduce exposure? Right? In addition to economic reasons, there 363 00:21:05,880 --> 00:21:10,600 Speaker 3: are what I consider as very important geopolitical vulnerabilities that 364 00:21:10,840 --> 00:21:14,680 Speaker 3: has direct financial security implication, and I describe it as 365 00:21:14,680 --> 00:21:17,160 Speaker 3: the three eyes. I know that last time we talked 366 00:21:17,160 --> 00:21:18,080 Speaker 3: about the four d s. 367 00:21:19,920 --> 00:21:23,720 Speaker 1: Any great comment or has to have their thing or 368 00:21:23,800 --> 00:21:27,439 Speaker 1: guest recently Jason Cummins from Resident REVN. Howard the three ends. 369 00:21:28,040 --> 00:21:29,520 Speaker 1: So we like they say, all right, what are the 370 00:21:29,560 --> 00:21:30,080 Speaker 1: three eyes? 371 00:21:30,320 --> 00:21:36,040 Speaker 3: So the three eyes is under rising geopolitical tension, exposed 372 00:21:36,119 --> 00:21:42,160 Speaker 3: countries like China to ill liquidity challenge. It's exposed countries 373 00:21:42,240 --> 00:21:46,680 Speaker 3: like China to insecure challenge, and they find the other 374 00:21:46,720 --> 00:21:52,320 Speaker 3: part would because of insecurity, because of ill liquidity. China 375 00:21:52,560 --> 00:21:57,320 Speaker 3: is building an alternative to to ensure against a lot 376 00:21:57,359 --> 00:22:00,880 Speaker 3: of these vulnerabilities. Right, So those are the three and 377 00:22:01,280 --> 00:22:04,840 Speaker 3: the mechanism for China to achieve. This is to create 378 00:22:04,880 --> 00:22:08,000 Speaker 3: an alternative system. It can be summarized as the split. 379 00:22:08,280 --> 00:22:11,000 Speaker 3: You have settlement and payment, that's the S and a P. 380 00:22:11,680 --> 00:22:16,680 Speaker 3: You have liquidity, which is l and liquidity. The whole 381 00:22:16,720 --> 00:22:20,440 Speaker 3: idea of liquidity is to create international demand for the 382 00:22:20,560 --> 00:22:24,200 Speaker 3: reminbi and the remanbi asset. Right, and then I would 383 00:22:24,280 --> 00:22:28,159 Speaker 3: be creating a sort of this international international system to 384 00:22:28,280 --> 00:22:32,560 Speaker 3: increase the insurance. And then the key part would be 385 00:22:32,840 --> 00:22:36,520 Speaker 3: the trading. The whole idea of China being not just 386 00:22:36,560 --> 00:22:39,560 Speaker 3: the world factory but also a very important player in 387 00:22:39,640 --> 00:22:44,520 Speaker 3: global commodities market. Now the backfire scenario would be at 388 00:22:44,640 --> 00:22:47,520 Speaker 3: the T scenario. Now you have all this plumbing system. 389 00:22:47,640 --> 00:22:49,960 Speaker 3: You know, the settlement, the payment, A lot of these 390 00:22:49,960 --> 00:22:51,920 Speaker 3: are the plumbing. Yes, you can make it the argument 391 00:22:52,040 --> 00:22:54,720 Speaker 3: to say that the transaction volume on the swift on 392 00:22:54,800 --> 00:22:58,080 Speaker 3: the Chinese CIPS system is still very low. But the 393 00:22:58,119 --> 00:23:02,560 Speaker 3: point is it's approved of concept. The idea is you 394 00:23:02,640 --> 00:23:04,840 Speaker 3: buy insurance, you hope that you don't need it, but 395 00:23:04,960 --> 00:23:08,280 Speaker 3: in case you need it, you have it ready to go. Right, 396 00:23:08,720 --> 00:23:12,239 Speaker 3: and if the worst case scenario for China would be 397 00:23:12,880 --> 00:23:18,359 Speaker 3: with the continued supply chain diversification, you started to say, okay, 398 00:23:18,400 --> 00:23:22,159 Speaker 3: so what the implication for global currency system would be 399 00:23:22,440 --> 00:23:26,280 Speaker 3: China started to build its own trading system, whereas a 400 00:23:26,400 --> 00:23:29,159 Speaker 3: denominating year may be whereas the rest of the world 401 00:23:29,240 --> 00:23:32,920 Speaker 3: is trading an entirely different currency. Now, if in that 402 00:23:33,000 --> 00:23:37,600 Speaker 3: scenario you have a currency war, and for central bankers, 403 00:23:37,640 --> 00:23:41,159 Speaker 3: experience would be foreign exchange reserves are one day in 404 00:23:41,160 --> 00:23:43,840 Speaker 3: the central bank, but the next day could be gone. 405 00:23:44,000 --> 00:23:47,760 Speaker 3: China lived through this around two sixteen twenty seventeen. Within 406 00:23:47,840 --> 00:23:51,360 Speaker 3: one year, foreign exchange reserves decreased from four tillion dollars 407 00:23:51,440 --> 00:23:55,440 Speaker 3: to three trillion dollars. Right, so this experience is sort 408 00:23:55,480 --> 00:24:02,120 Speaker 3: of very insecure from Chinese financier's perspective. Therefore, if the 409 00:24:02,280 --> 00:24:07,399 Speaker 3: entire global trading system is split into two parts, to 410 00:24:07,520 --> 00:24:11,000 Speaker 3: whom is China going to export in order to accumulate 411 00:24:11,240 --> 00:24:16,000 Speaker 3: all the foreign exchange reserves? That back China's remy be 412 00:24:16,119 --> 00:24:17,960 Speaker 3: internationalization operation. 413 00:24:19,359 --> 00:24:22,679 Speaker 1: I just have one more question about the current state 414 00:24:22,840 --> 00:24:25,800 Speaker 1: of things in China. We got to slew data recently. 415 00:24:26,080 --> 00:24:29,399 Speaker 1: Not great, still slump, but a second year in a 416 00:24:29,480 --> 00:24:33,640 Speaker 1: row of declining population. I believe more deaths than birds 417 00:24:34,040 --> 00:24:37,479 Speaker 1: and a little bit worse than expected. This is another 418 00:24:37,640 --> 00:24:40,680 Speaker 1: top demographics or another topic kind of like the dollar 419 00:24:40,720 --> 00:24:42,280 Speaker 1: ridge with a lot of people have a lot of 420 00:24:42,320 --> 00:24:45,280 Speaker 1: opinions and things to say, and I never really know 421 00:24:45,320 --> 00:24:48,159 Speaker 1: how serious is What do you think of as the 422 00:24:48,440 --> 00:24:54,240 Speaker 1: economic implications or any implications of a shrinking population? 423 00:24:55,640 --> 00:24:58,600 Speaker 3: First of all, I would say that currently perhaps we 424 00:24:58,640 --> 00:25:02,320 Speaker 3: are living through a mood swing of the Chinese economy 425 00:25:02,400 --> 00:25:06,159 Speaker 3: because you know, during the around twenty twenty two, before 426 00:25:06,240 --> 00:25:09,919 Speaker 3: China officially exited the zero COVID policies, you know, a 427 00:25:09,920 --> 00:25:13,600 Speaker 3: lot of people in the West were anticipating in China's 428 00:25:13,720 --> 00:25:17,880 Speaker 3: a rapid snap back. But obviously the economy, the recovery 429 00:25:17,880 --> 00:25:21,200 Speaker 3: of the economy has been disappointing. Therefore, we are now 430 00:25:21,560 --> 00:25:26,520 Speaker 3: becoming having this very much doom Seer's mood and demographics 431 00:25:26,600 --> 00:25:29,040 Speaker 3: is one of the fourties that we talked about, and 432 00:25:29,560 --> 00:25:32,919 Speaker 3: I think in the short run, perhaps the challenge is 433 00:25:32,960 --> 00:25:35,800 Speaker 3: even even bigger than the long term implication. Now, the 434 00:25:35,840 --> 00:25:38,560 Speaker 3: long term implication is that, well, you know, the labor 435 00:25:38,640 --> 00:25:42,880 Speaker 3: premium that is China benefited from has shrinked. Obviously, that's 436 00:25:42,960 --> 00:25:45,520 Speaker 3: one argument that you can say. But you know, China 437 00:25:45,600 --> 00:25:48,399 Speaker 3: is also spending a lot of money and investing in 438 00:25:48,520 --> 00:25:51,520 Speaker 3: artificial intelligence, robotics and all that. And I guess what 439 00:25:51,840 --> 00:25:54,840 Speaker 3: Japan is a good example. Instead of labor, instead of 440 00:25:54,880 --> 00:26:00,960 Speaker 3: relaxing the immigration policy, they use robotics, right, So I 441 00:26:01,000 --> 00:26:04,800 Speaker 3: do think the short run implication is more severe because 442 00:26:05,240 --> 00:26:10,200 Speaker 3: shrinking population the reason why birth rate goes lower. Part 443 00:26:10,200 --> 00:26:12,719 Speaker 3: of the reason is because well, perhaps people are no 444 00:26:12,800 --> 00:26:17,880 Speaker 3: longer getting married as often as the family formation rate. 445 00:26:18,000 --> 00:26:21,800 Speaker 3: The marriage ratio declined, and it has a severe implication 446 00:26:21,840 --> 00:26:25,600 Speaker 3: for the housing market because the demount for housing decrease 447 00:26:25,800 --> 00:26:30,119 Speaker 3: and housing remen constitute about thirty percent of China's GDP, 448 00:26:30,680 --> 00:26:34,320 Speaker 3: and without housing market recovery, it is very difficult for 449 00:26:34,400 --> 00:26:37,040 Speaker 3: the Chinese economy to recover in the short run. 450 00:26:38,280 --> 00:26:40,720 Speaker 4: I have just one more question, and it's not that important, 451 00:26:40,760 --> 00:26:43,400 Speaker 4: but I'm going to ask it. Last time you were 452 00:26:43,440 --> 00:26:46,600 Speaker 4: on the show, you gave us one of the greatest 453 00:26:46,640 --> 00:26:50,000 Speaker 4: gifts in all LOTS history, which is knowledge of the 454 00:26:50,040 --> 00:26:54,320 Speaker 4: existence of idiot sunflower seeds, which has become one of 455 00:26:54,320 --> 00:26:57,400 Speaker 4: my all time favorite companies, like both for the business itself, 456 00:26:57,480 --> 00:27:00,959 Speaker 4: but also for what it says about the development of 457 00:27:01,000 --> 00:27:05,080 Speaker 4: the Chinese economy and what's happening now under Sheshan Ping. 458 00:27:06,000 --> 00:27:10,200 Speaker 4: Give me a new uh wormhole to go down in 459 00:27:10,240 --> 00:27:14,200 Speaker 4: the Chinese currency market, or the economy, or rare earth metals, 460 00:27:14,240 --> 00:27:15,879 Speaker 4: any of those. I'm up for it. 461 00:27:16,119 --> 00:27:17,320 Speaker 2: I think we can get obsessed with. 462 00:27:19,160 --> 00:27:21,760 Speaker 3: This is a good question. I was trying to look 463 00:27:21,880 --> 00:27:25,880 Speaker 3: through the Chinese economy. I'm trying to find like company 464 00:27:26,200 --> 00:27:29,200 Speaker 3: icons that can correspond to a different era. I have 465 00:27:30,040 --> 00:27:33,520 Speaker 3: the idea the watermelon seed that is won stunflower seed, 466 00:27:34,080 --> 00:27:37,280 Speaker 3: but I have been struggling to find another one. And 467 00:27:37,640 --> 00:27:41,679 Speaker 3: since we were talking about energy transition and potential Chinese 468 00:27:41,720 --> 00:27:45,120 Speaker 3: potential challenge to the dollar based the system, I'm going 469 00:27:45,119 --> 00:27:47,960 Speaker 3: to see Bui D. It's a good choice. 470 00:27:48,000 --> 00:27:48,159 Speaker 1: You know. 471 00:27:48,200 --> 00:27:52,520 Speaker 3: It just stands for bewed your dream right. And if 472 00:27:52,560 --> 00:27:55,800 Speaker 3: you look at how buid the rise of Bui D 473 00:27:55,920 --> 00:27:59,919 Speaker 3: and to what extent it challenges a lot of foreign 474 00:28:00,040 --> 00:28:05,399 Speaker 3: ev makers, it shows that perhaps the Chinese market is 475 00:28:05,520 --> 00:28:08,760 Speaker 3: extremely competitive and there are still reasons to be hopeful 476 00:28:08,760 --> 00:28:12,640 Speaker 3: for the Chinese economy, especially for the high tech sector. However, 477 00:28:12,840 --> 00:28:16,560 Speaker 3: I would offer another cautious piece here, which is if 478 00:28:16,600 --> 00:28:19,879 Speaker 3: you look at bid and who's the largest shareholders of 479 00:28:20,880 --> 00:28:24,680 Speaker 3: his publicly listed shares, you will find Central Roisin owns 480 00:28:24,680 --> 00:28:27,359 Speaker 3: more than ten percent of his publicly listed shares. 481 00:28:27,560 --> 00:28:29,280 Speaker 4: Yeah, it's funny you bring it up, because Joe and 482 00:28:29,280 --> 00:28:31,680 Speaker 4: I were actually talking about this earlier in the week. 483 00:28:31,880 --> 00:28:35,320 Speaker 4: Bid shares have also fallen a lot. And it's this 484 00:28:35,560 --> 00:28:42,600 Speaker 4: incredibly promising company that I think has overtaken Tesla to become, yeah, 485 00:28:42,680 --> 00:28:47,760 Speaker 4: to become the biggest maker of electric vehicles. But investors 486 00:28:47,760 --> 00:28:51,000 Speaker 4: are really down on its outlooks. I think in part because, 487 00:28:51,040 --> 00:28:53,400 Speaker 4: like the government has basically said, this is a really 488 00:28:53,440 --> 00:28:55,400 Speaker 4: important part of our economy and we want to be 489 00:28:55,480 --> 00:28:58,200 Speaker 4: leaders in the EV market, and so there's a lot 490 00:28:58,240 --> 00:29:01,800 Speaker 4: of pressure on them to invest, especially if one of 491 00:29:01,800 --> 00:29:05,120 Speaker 4: their dominant shareholders is actually a public entity. You know, 492 00:29:05,160 --> 00:29:07,880 Speaker 4: they're all sort of working together for the future development 493 00:29:07,920 --> 00:29:12,120 Speaker 4: of the Chinese economy. So that means reinvestment capex, it 494 00:29:12,160 --> 00:29:15,680 Speaker 4: doesn't necessarily mean dividends and share buybacks. 495 00:29:15,960 --> 00:29:21,000 Speaker 1: Also, maybe the dollar system is under some sort of threat, 496 00:29:21,440 --> 00:29:24,640 Speaker 1: but the English system. If the leader of your domestic 497 00:29:24,720 --> 00:29:28,360 Speaker 1: manufacturing is build your dreams, then I think the network 498 00:29:28,360 --> 00:29:32,000 Speaker 1: effects of the English language are still extremely very much so. 499 00:29:36,800 --> 00:29:39,880 Speaker 4: Lots More is produced by Carmen Rodriguez and Dashel Bennett, 500 00:29:39,880 --> 00:29:42,240 Speaker 4: with help from Moses Ondom and Kale Brooks. 501 00:29:42,600 --> 00:29:44,680 Speaker 2: Our sound engineer is Blake Maples. 502 00:29:44,720 --> 00:29:47,040 Speaker 1: Sage Bauman is the head of Bloomberg Podcasts. 503 00:29:47,280 --> 00:29:50,400 Speaker 4: Please rate, review, and subscribe to Odd, Lots and Lots 504 00:29:50,400 --> 00:29:53,440 Speaker 4: More on your favorite podcast platforms. 505 00:29:53,240 --> 00:29:55,840 Speaker 1: And remember that Bloomberg subscribers can listen to all of 506 00:29:55,880 --> 00:29:59,680 Speaker 1: our podcasts and free by connecting through Apple Podcasts. Thanks 507 00:29:59,680 --> 00:30:00,360 Speaker 1: for the let snake