1 00:00:02,400 --> 00:00:06,600 Speaker 1: We're used to hearing US China economic relations discussed in 2 00:00:06,640 --> 00:00:11,280 Speaker 1: the context of the latest presidential tweet or a summary 3 00:00:11,280 --> 00:00:15,560 Speaker 1: of Donald Trump's calls with President she Jin Pen. At 4 00:00:15,560 --> 00:00:19,720 Speaker 1: the most a broader historical reference might hearken back to 5 00:00:19,840 --> 00:00:23,799 Speaker 1: President Obama or on a good day, China's opening to 6 00:00:23,840 --> 00:00:27,400 Speaker 1: the West in the late seventies. What if that doesn't 7 00:00:27,440 --> 00:00:32,000 Speaker 1: go remotely broad enough. What lessons to the eighteenth and 8 00:00:32,240 --> 00:00:37,440 Speaker 1: nineteen centuries hold for trade relations between China and the West. 9 00:00:37,880 --> 00:00:41,640 Speaker 1: Can we into it from the past, whether we're in 10 00:00:41,680 --> 00:00:45,120 Speaker 1: a trade skirmish or a trade war. And by the way, 11 00:00:45,320 --> 00:00:49,040 Speaker 1: back in the day, a trade war really was a war. 12 00:00:59,080 --> 00:01:02,160 Speaker 1: Welcome to bench of a show about the global economy. 13 00:01:02,560 --> 00:01:07,080 Speaker 1: I'm Daniel Moss, economics writer and editor at Bloomberg Opinion 14 00:01:07,319 --> 00:01:11,199 Speaker 1: in New York, and I'm scot landman and economics editor 15 00:01:11,280 --> 00:01:15,440 Speaker 1: with Bloomberg News in Washington. When we talk about China 16 00:01:15,560 --> 00:01:19,600 Speaker 1: and quote unquote the West, we need to remember that 17 00:01:19,920 --> 00:01:24,120 Speaker 1: the West, it's mostly a proxy for Great Britain, the 18 00:01:24,200 --> 00:01:28,560 Speaker 1: pre industrial power of that time. The US was certainly 19 00:01:28,600 --> 00:01:32,240 Speaker 1: on the scene, but very much in a supporting role. 20 00:01:33,200 --> 00:01:38,559 Speaker 1: Now that's reversed. But how much has really changed. Reading 21 00:01:38,600 --> 00:01:42,839 Speaker 1: Stephen Platt's newly published history of the Opium Wars, I'm 22 00:01:42,880 --> 00:01:47,080 Speaker 1: struck by how similar some of the economic undercurrents are 23 00:01:47,200 --> 00:01:49,960 Speaker 1: to today. A couple of things that jump out, at 24 00:01:50,000 --> 00:01:53,480 Speaker 1: least at the start of the book. China restricts but 25 00:01:53,640 --> 00:01:58,280 Speaker 1: nevertheless prospers from trade, and there's a foreign merchant class 26 00:01:58,720 --> 00:02:04,880 Speaker 1: almost begging Western governments, please don't have feigned China. And 27 00:02:04,920 --> 00:02:08,079 Speaker 1: we're fortunate to have the author with us on Benchmark. 28 00:02:08,440 --> 00:02:11,480 Speaker 1: Stephen Platt is a professor of Chinese history at the 29 00:02:11,600 --> 00:02:15,080 Speaker 1: University of Massachusetts at Amherst. The full name of his 30 00:02:15,160 --> 00:02:19,040 Speaker 1: book is Imperial Twilight, the Opium War and the End 31 00:02:19,160 --> 00:02:23,400 Speaker 1: of China's Last Golden Age. Steve, Welcome to Benchmark, and 32 00:02:23,520 --> 00:02:26,560 Speaker 1: congratulations on the book. Thank you. It's great to be here. 33 00:02:26,639 --> 00:02:30,800 Speaker 1: Thanks for having me so in the broad sweep of history. 34 00:02:31,360 --> 00:02:34,160 Speaker 1: How much of the back and forth between the US 35 00:02:34,280 --> 00:02:39,160 Speaker 1: and China resonates with you and why it resonates deeply? 36 00:02:39,320 --> 00:02:41,519 Speaker 1: And I think one of the most important things is 37 00:02:41,560 --> 00:02:44,919 Speaker 1: to think about how it resonates in the Chinese context. 38 00:02:45,280 --> 00:02:48,200 Speaker 1: I think with all this talk of trade war today 39 00:02:48,200 --> 00:02:52,359 Speaker 1: that has a particular meaning for Americans, but um in China. 40 00:02:52,400 --> 00:02:56,120 Speaker 1: I mean China's modern relations with the West began with 41 00:02:57,200 --> 00:03:00,239 Speaker 1: absolutely literal trade war, the Opium War. That this is 42 00:03:00,280 --> 00:03:03,040 Speaker 1: seen as the opening of the modern age, the forcing 43 00:03:03,080 --> 00:03:06,680 Speaker 1: open of Chinese ports um. And for that reason, I 44 00:03:06,720 --> 00:03:10,480 Speaker 1: think issues of trade negotiating, issues of trade war tapped 45 00:03:10,480 --> 00:03:13,720 Speaker 1: into far deeper nationalist responses in China than they do 46 00:03:13,720 --> 00:03:17,880 Speaker 1: in the United States. Right now, what were the opium walls? 47 00:03:18,000 --> 00:03:21,840 Speaker 1: What do they have to do with trite great question, um, Well, 48 00:03:22,000 --> 00:03:23,960 Speaker 1: from one perspective, I mean the reason that they are 49 00:03:24,000 --> 00:03:26,400 Speaker 1: called the opium wars, and it's really the first one 50 00:03:26,480 --> 00:03:30,480 Speaker 1: from eight forty two that centers on opium UM. The 51 00:03:30,560 --> 00:03:35,320 Speaker 1: war was provoked by a Chinese crackdown on British drug 52 00:03:35,360 --> 00:03:39,800 Speaker 1: dealers UM who had been smuggling opium which was produced 53 00:03:39,840 --> 00:03:42,240 Speaker 1: in Britain's colony in India, and they were carrying it 54 00:03:42,320 --> 00:03:44,960 Speaker 1: to the Chinese coast and selling it there. And it 55 00:03:45,080 --> 00:03:48,240 Speaker 1: was in response to this crackdown that Britain ultimately went 56 00:03:48,280 --> 00:03:49,960 Speaker 1: to war. So the critics of it called it the 57 00:03:49,960 --> 00:03:53,400 Speaker 1: opium War UM. They charged that Britain was trying to 58 00:03:53,800 --> 00:03:56,680 Speaker 1: expand the market for drug dealers. Those who were in 59 00:03:56,760 --> 00:03:58,760 Speaker 1: favor of the war and these were the champions of it. 60 00:03:58,920 --> 00:04:01,560 Speaker 1: They denied that had anything particular to do with opium, 61 00:04:01,560 --> 00:04:02,880 Speaker 1: and as they saw it, this was a way of 62 00:04:02,960 --> 00:04:06,640 Speaker 1: opening China to foreign trade, UM, to free trade, ironically, 63 00:04:07,200 --> 00:04:09,560 Speaker 1: um every trade at the point of a gun. Up 64 00:04:09,640 --> 00:04:12,840 Speaker 1: until that point, China had restricted Western trade to the 65 00:04:12,880 --> 00:04:15,120 Speaker 1: one single city of Kenton down in the south, and 66 00:04:15,160 --> 00:04:17,320 Speaker 1: just a little tiny compound outside of the city was 67 00:04:17,360 --> 00:04:19,599 Speaker 1: the only place where the British and Americans could trade. 68 00:04:19,960 --> 00:04:23,359 Speaker 1: The Opium War forced open five cities along China's coast 69 00:04:23,440 --> 00:04:26,720 Speaker 1: to foreign trade, again in hopes that the British would 70 00:04:26,720 --> 00:04:28,880 Speaker 1: be able to and you know, here's where we get 71 00:04:28,920 --> 00:04:31,080 Speaker 1: modern residences, and hopes that the British would be able 72 00:04:31,160 --> 00:04:34,479 Speaker 1: to address their longstanding trade imbalance with China by getting 73 00:04:34,520 --> 00:04:37,719 Speaker 1: China to buy more British goods UM in these other cities. 74 00:04:38,560 --> 00:04:40,760 Speaker 1: What happens, though, is in and this is why we 75 00:04:40,800 --> 00:04:44,000 Speaker 1: refer to Opium War's plural um, that this gets repeated 76 00:04:44,120 --> 00:04:46,640 Speaker 1: over and over. Um. There's another one by Britain, there's 77 00:04:46,640 --> 00:04:50,760 Speaker 1: the other by France and other countries. Um. And these wars, 78 00:04:50,800 --> 00:04:54,200 Speaker 1: which are trade wars, each one results in the opening 79 00:04:54,200 --> 00:04:58,599 Speaker 1: of more and more and more Chinese ports to foreign trade, Um. 80 00:04:58,720 --> 00:05:01,960 Speaker 1: And this aim that if they could just get these 81 00:05:02,040 --> 00:05:05,159 Speaker 1: ports opened, that the Chinese would buy all kinds of 82 00:05:05,200 --> 00:05:07,800 Speaker 1: British and American goods. Um. The you know, this never 83 00:05:07,839 --> 00:05:10,559 Speaker 1: really comes true, so that the war becomes a service 84 00:05:10,600 --> 00:05:14,800 Speaker 1: self fulfilling prophecy and repeats itself over and over. Now, Steve, 85 00:05:15,000 --> 00:05:18,680 Speaker 1: I know you're a historian and you've intensively studied what 86 00:05:18,920 --> 00:05:22,400 Speaker 1: happened in the Opium Wars in the nineteenth century. But 87 00:05:22,920 --> 00:05:27,200 Speaker 1: history is important for understanding our world today. And I'm 88 00:05:27,240 --> 00:05:32,040 Speaker 1: wondering if you substitute the US for the UK, how 89 00:05:32,080 --> 00:05:36,600 Speaker 1: would you compare the hand that America has today versus 90 00:05:36,839 --> 00:05:40,480 Speaker 1: what was held by Britain and the Western Powers back 91 00:05:40,520 --> 00:05:43,359 Speaker 1: in the eighteen hundreds. Oh, we have a much stronger 92 00:05:43,400 --> 00:05:48,160 Speaker 1: hand now. Um. The trade was far far more limited 93 00:05:48,600 --> 00:05:53,280 Speaker 1: in the eighteenth than early nineteenth centuries. Back then, the 94 00:05:53,320 --> 00:05:56,320 Speaker 1: trade was extremely important for both sides. Um. Great Britain 95 00:05:56,360 --> 00:05:58,320 Speaker 1: got all of its tea from China. That was the 96 00:05:58,320 --> 00:06:00,760 Speaker 1: only place in the world they could buy it. And 97 00:06:01,279 --> 00:06:04,080 Speaker 1: largely they were selling cotton goods and they were carrying 98 00:06:04,120 --> 00:06:07,400 Speaker 1: silver to pay for it. Um. China desperately needed that silver. 99 00:06:07,480 --> 00:06:10,480 Speaker 1: It had a growing population, and the silver inflow from 100 00:06:10,480 --> 00:06:14,000 Speaker 1: Britain helped to from Britain and America helped to stabilize 101 00:06:14,040 --> 00:06:17,560 Speaker 1: the economy. Back then, the Emperor of China could sort 102 00:06:17,600 --> 00:06:20,560 Speaker 1: of posture and imagine that China didn't really need foreign 103 00:06:20,560 --> 00:06:24,159 Speaker 1: trade and confusion. Scholars were loath to admit that foreign 104 00:06:24,200 --> 00:06:27,240 Speaker 1: trade was actually necessary for China. Um. They like to 105 00:06:27,240 --> 00:06:28,919 Speaker 1: talk about how easy it would be to shut it 106 00:06:28,960 --> 00:06:32,000 Speaker 1: down and just you know, stop wasting Chinese money on 107 00:06:32,080 --> 00:06:35,040 Speaker 1: foreign goods. Today, the U S and China are so 108 00:06:35,160 --> 00:06:39,039 Speaker 1: deeply integrated that it's impossible to draw the line exactly 109 00:06:39,080 --> 00:06:42,320 Speaker 1: where where US trade gives off it or where is 110 00:06:42,360 --> 00:06:45,080 Speaker 1: our US profits leave off in Chinese profits pick up. 111 00:06:45,680 --> 00:06:48,279 Speaker 1: You could draw battle lines in the nineteenth century that 112 00:06:48,360 --> 00:06:51,760 Speaker 1: you can't draw now. But the basic impulse is still there. 113 00:06:52,120 --> 00:06:54,600 Speaker 1: It's um this, I mean, the impulse behind the Opium 114 00:06:54,640 --> 00:06:56,640 Speaker 1: War is the same impulse we have now in the US. 115 00:06:56,760 --> 00:07:01,440 Speaker 1: This this resentment about Chinese trade practices, about China dictating 116 00:07:01,440 --> 00:07:04,640 Speaker 1: trade on its own terms, about the imbalance, about the 117 00:07:04,720 --> 00:07:08,479 Speaker 1: Chinese not buying enough American goods. Um. So the complaints 118 00:07:08,520 --> 00:07:12,080 Speaker 1: have always been there. Um. Back then they addressed to 119 00:07:12,120 --> 00:07:14,640 Speaker 1: trade imbalanced by by bringing in opium, which turned out 120 00:07:14,640 --> 00:07:16,280 Speaker 1: to be the one thing that the Chinese would buy 121 00:07:16,320 --> 00:07:20,880 Speaker 1: in unlimited amounts. Today, I think the hand of the 122 00:07:20,960 --> 00:07:23,200 Speaker 1: United States is much stronger visa of each China because 123 00:07:23,280 --> 00:07:25,760 Speaker 1: China is well aware of how necessary American trade is 124 00:07:25,800 --> 00:07:28,080 Speaker 1: for it, and there's there's no way to pretend that 125 00:07:28,120 --> 00:07:30,200 Speaker 1: they could simply do without US trade. Where the two 126 00:07:30,280 --> 00:07:33,960 Speaker 1: largest economies in the world, and we're deeply intertwined, So 127 00:07:34,320 --> 00:07:37,120 Speaker 1: in a certain sense, it's far riskier to both sides 128 00:07:37,160 --> 00:07:40,080 Speaker 1: to be going down the road of trade war threats. Um. 129 00:07:40,120 --> 00:07:42,840 Speaker 1: It's you know, it's it's certainly not going to turn 130 00:07:42,840 --> 00:07:45,640 Speaker 1: into a literal war like the Opium War did. Um. 131 00:07:45,680 --> 00:07:47,880 Speaker 1: But at the same time, it seems impossible to pick 132 00:07:47,920 --> 00:07:51,240 Speaker 1: out some way to harm or gain advantage from the 133 00:07:51,280 --> 00:07:55,360 Speaker 1: other side without harming yourself. Steve, I haven't read all 134 00:07:55,400 --> 00:07:58,440 Speaker 1: of the book, but in the opening chapters several things 135 00:07:58,880 --> 00:08:02,680 Speaker 1: jump out at me. You portray a China in the 136 00:08:02,800 --> 00:08:08,040 Speaker 1: late seventeenth and early eighteenth century that benefited enormously from 137 00:08:08,120 --> 00:08:12,760 Speaker 1: trade with the West, yet imposed tight restrictions that the 138 00:08:12,840 --> 00:08:17,600 Speaker 1: Western merchants chafed under. And yet and yet those Western 139 00:08:17,720 --> 00:08:24,160 Speaker 1: merchants were absolutely paranoid that their home governments would somehow 140 00:08:24,240 --> 00:08:28,680 Speaker 1: annoy the Chinese and that window into trade would be 141 00:08:28,720 --> 00:08:34,439 Speaker 1: shut off once again. How does that resonate today? Well, 142 00:08:34,600 --> 00:08:37,040 Speaker 1: back then, I mean, one of the things that was 143 00:08:37,080 --> 00:08:40,640 Speaker 1: so remarkable about the Opium War is that there were 144 00:08:40,760 --> 00:08:42,840 Speaker 1: a period of at least eighty years there were Britain 145 00:08:42,880 --> 00:08:46,120 Speaker 1: already had a military advantage over China and could have 146 00:08:46,360 --> 00:08:49,199 Speaker 1: gone to war over markets if it had desired to, 147 00:08:49,280 --> 00:08:52,160 Speaker 1: but they didn't. And part of this was the perception 148 00:08:52,200 --> 00:08:55,560 Speaker 1: of China's strength. In the late eighteenth century. China was 149 00:08:55,600 --> 00:09:00,000 Speaker 1: seen as just impossibly unified, prosperous. It was the largest 150 00:09:00,040 --> 00:09:02,720 Speaker 1: empire in the world. It had roughly a third of 151 00:09:02,720 --> 00:09:05,960 Speaker 1: the world's population lived in China then, and the view 152 00:09:06,080 --> 00:09:09,079 Speaker 1: of Americans and British in the late eighteen third ninete 153 00:09:09,240 --> 00:09:14,199 Speaker 1: centuries was that um basically, if they were to cause 154 00:09:14,320 --> 00:09:17,680 Speaker 1: any trouble at all in China, that the emperor could 155 00:09:17,720 --> 00:09:19,640 Speaker 1: just wave his hand and shut them out of the 156 00:09:19,720 --> 00:09:21,920 Speaker 1: China trade forever, and they would lose all of their 157 00:09:21,920 --> 00:09:24,640 Speaker 1: access to tea. Um. They would lose this you know, really, 158 00:09:24,840 --> 00:09:27,000 Speaker 1: I mean for the British Empire is really the lifeblood 159 00:09:27,000 --> 00:09:30,360 Speaker 1: of the empire it kept in India afloat. So the 160 00:09:30,400 --> 00:09:33,240 Speaker 1: merchants themselves were quite terrified of trying to change anything 161 00:09:33,240 --> 00:09:36,800 Speaker 1: in China because again this this view of Chinese power. 162 00:09:37,960 --> 00:09:41,040 Speaker 1: As China began to slide, however, and in the early 163 00:09:41,120 --> 00:09:46,040 Speaker 1: nineteenth century, China was weakened by internal forces that again 164 00:09:46,120 --> 00:09:51,000 Speaker 1: resonate a lot today. I mean, the big ones were overpopulation, um, 165 00:09:51,200 --> 00:09:56,920 Speaker 1: official corruption, um, sectarian descent. Theyre a large uprising of 166 00:09:56,960 --> 00:10:00,720 Speaker 1: the white lotus sect. These weakn to China to a 167 00:10:00,800 --> 00:10:03,440 Speaker 1: point where the Opium War suddenly seemed to be possible. 168 00:10:03,480 --> 00:10:06,680 Speaker 1: The residence today, I think is again we're always served 169 00:10:06,679 --> 00:10:09,120 Speaker 1: shifting back and forth between and and you know, if 170 00:10:09,200 --> 00:10:12,400 Speaker 1: you if you follow the China watchers, either China is 171 00:10:12,440 --> 00:10:15,600 Speaker 1: this unstoppable juggernaut that's destined to rule the world and 172 00:10:15,640 --> 00:10:18,760 Speaker 1: we better behave ourselves and watch out, or it's viewed 173 00:10:18,800 --> 00:10:20,959 Speaker 1: as being on the verge of collapse because of all 174 00:10:20,960 --> 00:10:24,560 Speaker 1: of its internal problems and internal contradictions. And obviously both 175 00:10:24,559 --> 00:10:26,720 Speaker 1: of these can be somewhat true at the same time. 176 00:10:27,400 --> 00:10:30,000 Speaker 1: And the view from the early nineteenth century is that 177 00:10:30,120 --> 00:10:33,640 Speaker 1: even at a time when China seemed immensely powerful um, 178 00:10:34,040 --> 00:10:37,080 Speaker 1: there were huge problems within its society, which ultimately the 179 00:10:37,080 --> 00:10:40,280 Speaker 1: British were able to take advantage of. So was the 180 00:10:40,360 --> 00:10:44,800 Speaker 1: paranoia among business people that foreign governments would antagonize China, 181 00:10:45,000 --> 00:10:48,520 Speaker 1: justified in chapter three side a prominent director of the 182 00:10:48,559 --> 00:10:51,760 Speaker 1: East India Company as saying that it was quote most 183 00:10:51,800 --> 00:10:56,040 Speaker 1: advisable to let the government of China alone. Yeah, things 184 00:10:56,400 --> 00:11:01,240 Speaker 1: generally worked best in that era when relations between China 185 00:11:01,320 --> 00:11:05,000 Speaker 1: and the West were left to businessmen, the merchants trading 186 00:11:05,000 --> 00:11:08,840 Speaker 1: with each other. That the actual merchants of Great Britain 187 00:11:08,960 --> 00:11:12,400 Speaker 1: and America and the Chinese merchants of Canton who traded 188 00:11:12,440 --> 00:11:15,320 Speaker 1: with them had very friendly relations for the most part. 189 00:11:15,320 --> 00:11:17,800 Speaker 1: That this was actually a very peaceful meeting of civilizations. 190 00:11:17,800 --> 00:11:21,160 Speaker 1: There wasn't this great sort of clash of civilizations that 191 00:11:21,200 --> 00:11:24,319 Speaker 1: we think about between China and the West. And when 192 00:11:24,559 --> 00:11:27,960 Speaker 1: trade was in their hands it went quite smoothly. The 193 00:11:28,040 --> 00:11:31,679 Speaker 1: problems come when when Britain tries to send diplomats over 194 00:11:31,800 --> 00:11:34,920 Speaker 1: to China to meet with the with the emperor and 195 00:11:34,960 --> 00:11:36,880 Speaker 1: then they get asked to cow tow, which is this 196 00:11:37,240 --> 00:11:40,000 Speaker 1: sort of ceremony of kneeling nine times and banging your 197 00:11:40,000 --> 00:11:42,280 Speaker 1: head on the ground um and the British would refuse 198 00:11:42,360 --> 00:11:44,880 Speaker 1: to do that, and then tensions would arise from that. 199 00:11:45,320 --> 00:11:49,360 Speaker 1: But whenever problems arose, generally if the government, if the 200 00:11:49,400 --> 00:11:53,439 Speaker 1: government's in Beijing and London backed off and left things 201 00:11:53,480 --> 00:11:56,480 Speaker 1: to the merchants of Canton, they would right themselves again. 202 00:11:56,640 --> 00:11:59,120 Speaker 1: So I mean, certainly in the eighteenth and nineteenth centuries 203 00:11:59,640 --> 00:12:02,120 Speaker 1: up to the Opium War, um, the legitimate trade this 204 00:12:02,240 --> 00:12:03,960 Speaker 1: I'm not talking about the smuggling trade here, but the 205 00:12:04,040 --> 00:12:07,560 Speaker 1: legitimate trade was a real stabilizing force in international affairs. 206 00:12:08,600 --> 00:12:13,359 Speaker 1: Briefly described for Steve what the East India Company actually 207 00:12:13,679 --> 00:12:17,199 Speaker 1: was and in its heyday it sounds like it may 208 00:12:17,200 --> 00:12:22,200 Speaker 1: have resembled Walmart, Apple or Boeing in essence, was it 209 00:12:22,440 --> 00:12:26,920 Speaker 1: more powerful and from the Chinese perspective, more relevant than 210 00:12:26,960 --> 00:12:30,400 Speaker 1: a state? Great question. I mean, I guess it's Walmart 211 00:12:30,440 --> 00:12:32,600 Speaker 1: with an army if you want to think about it 212 00:12:32,640 --> 00:12:34,920 Speaker 1: that way. Um, the East India Company, it was a 213 00:12:35,040 --> 00:12:38,719 Speaker 1: it was a private company with shareholders that paid dividends um, 214 00:12:38,800 --> 00:12:42,560 Speaker 1: that conquered India. It had its own military. Um. The 215 00:12:43,040 --> 00:12:46,040 Speaker 1: if you look at the East India Company in India, however, 216 00:12:46,120 --> 00:12:48,720 Speaker 1: it looks very different than the East India Company in China. 217 00:12:49,200 --> 00:12:52,800 Speaker 1: In India, that's where the East India Company was, was 218 00:12:52,840 --> 00:12:57,520 Speaker 1: a force of conquest and control, establishing colonies there in China. 219 00:12:57,559 --> 00:12:59,880 Speaker 1: They had a small staff you know about about twenty 220 00:13:00,120 --> 00:13:04,800 Speaker 1: East India Company representatives in Canton and these were basically 221 00:13:04,840 --> 00:13:07,520 Speaker 1: just accountants. They were being counters, They were quiet, They 222 00:13:07,520 --> 00:13:10,440 Speaker 1: had no visions of empire or conquest um. They just 223 00:13:10,480 --> 00:13:13,840 Speaker 1: wanted to keep track of the tea sales. They essentially 224 00:13:13,920 --> 00:13:19,080 Speaker 1: were Britain for the Chinese. Um that the Chinese government 225 00:13:19,160 --> 00:13:22,920 Speaker 1: did not want relations with British officials. They wanted the 226 00:13:22,920 --> 00:13:25,520 Speaker 1: the so called Taipan, the head of the of the 227 00:13:25,559 --> 00:13:29,160 Speaker 1: British merchants at Canton effectively was the representative of the 228 00:13:29,160 --> 00:13:31,520 Speaker 1: British government, even though the East India Company was a 229 00:13:31,520 --> 00:13:35,800 Speaker 1: private company. And the point where everything goes wrong in 230 00:13:35,960 --> 00:13:39,160 Speaker 1: Canton um is in eighteen thirty four when the East 231 00:13:39,200 --> 00:13:42,160 Speaker 1: India Company, which up until that point had had a 232 00:13:42,200 --> 00:13:45,560 Speaker 1: monopoly on all British trade to China um loses that 233 00:13:45,600 --> 00:13:48,720 Speaker 1: monopoly in Britain. It's derailed by free trade activists in 234 00:13:48,760 --> 00:13:51,280 Speaker 1: Great Britain who who think that the monopoly of the 235 00:13:51,320 --> 00:13:54,520 Speaker 1: East India Company is stifling the expansion of trade in China. 236 00:13:55,040 --> 00:13:57,880 Speaker 1: UM and their arguments succeed. Parliament takes away the East 237 00:13:57,920 --> 00:14:02,360 Speaker 1: India Companies uh uh monopoly in China, and starting from 238 00:14:02,400 --> 00:14:05,560 Speaker 1: eighteen thirty four onwards, any British firm that has a 239 00:14:05,600 --> 00:14:07,760 Speaker 1: shift that it can send to China can get into 240 00:14:07,800 --> 00:14:10,480 Speaker 1: the tea and the opium trade. UM. And this is 241 00:14:10,480 --> 00:14:14,440 Speaker 1: where the chaos starts coming in. So as horrible as 242 00:14:14,440 --> 00:14:17,000 Speaker 1: the East India Company was in India, and I hesitate 243 00:14:17,080 --> 00:14:19,840 Speaker 1: to say anything good about this company whatsoever, UM, it 244 00:14:19,920 --> 00:14:23,320 Speaker 1: actually served as as a as a stabilizing force in China. 245 00:14:23,400 --> 00:14:26,600 Speaker 1: And the best relations between Britain and China took place 246 00:14:26,640 --> 00:14:31,400 Speaker 1: through the East India Company and the Chinese merchants of Canton. Steve, 247 00:14:31,520 --> 00:14:34,760 Speaker 1: let's talk about one of the interesting characters in your book. 248 00:14:35,080 --> 00:14:38,840 Speaker 1: His name is Lord McCartney, and his mission to Beijing 249 00:14:38,880 --> 00:14:43,280 Speaker 1: to establish a permanent diplomatic presence ended in failure. The 250 00:14:43,320 --> 00:14:47,239 Speaker 1: Emperor told him China had no need for British manufactured goods. 251 00:14:47,240 --> 00:14:51,640 Speaker 1: But McCartney succeeded in one area. He saw weaknesses in 252 00:14:51,680 --> 00:14:55,840 Speaker 1: the regime that others just didn't really tune into. Today, 253 00:14:55,880 --> 00:14:58,800 Speaker 1: it's fashionable to think of China as kind of a 254 00:14:58,880 --> 00:15:03,280 Speaker 1: juggernaut that will surpass the US. Tell us a little 255 00:15:03,280 --> 00:15:05,680 Speaker 1: bit about him and what you think he might make 256 00:15:05,720 --> 00:15:10,640 Speaker 1: of China today. Well, Lord McCartney, he was this. Um, 257 00:15:10,680 --> 00:15:13,800 Speaker 1: he was Great Britain's very first ambassador to China. There 258 00:15:13,800 --> 00:15:16,200 Speaker 1: would only be two of them prior to the Opium War. 259 00:15:16,280 --> 00:15:18,440 Speaker 1: And in this era, being an ambassador meant that you 260 00:15:18,520 --> 00:15:21,040 Speaker 1: traveled over to the country and then you came back. Um. 261 00:15:21,080 --> 00:15:22,920 Speaker 1: He had actually hoped to be able to stay on 262 00:15:23,000 --> 00:15:25,640 Speaker 1: in Beijing, but the Emperor wouldn't let him. Um. He 263 00:15:25,680 --> 00:15:28,840 Speaker 1: had this there, this famous embassy that was just a 264 00:15:28,920 --> 00:15:34,280 Speaker 1: miserable failure. Um. They dithered over ceremony about whether he 265 00:15:34,320 --> 00:15:36,520 Speaker 1: would perform the Kau Tao. UM. And he had all 266 00:15:36,600 --> 00:15:39,280 Speaker 1: kinds of demands for the Chinese government that um, that 267 00:15:39,360 --> 00:15:41,520 Speaker 1: China should open more reports. UM. I mean in a 268 00:15:41,520 --> 00:15:45,280 Speaker 1: certain sense, the Opium War which came in the eighteen forties, 269 00:15:45,400 --> 00:15:48,640 Speaker 1: McCartney came in seventeen nineties. Um. So the Opium War 270 00:15:48,960 --> 00:15:52,720 Speaker 1: forty years later was essentially forcing on China the things 271 00:15:52,760 --> 00:15:56,040 Speaker 1: that McCartney had asked for in his embassy. Um. You know, 272 00:15:56,080 --> 00:15:58,080 Speaker 1: they wanted an island off shore that they could use 273 00:15:58,120 --> 00:16:01,880 Speaker 1: as a warehouse, etcetera, etcetera. So he was famously dismissed 274 00:16:01,920 --> 00:16:04,280 Speaker 1: from Beijing. The Emperor sent an edict to the King 275 00:16:04,320 --> 00:16:07,280 Speaker 1: of England saying, we have no need for your country's manufacturers. 276 00:16:07,640 --> 00:16:11,040 Speaker 1: Please don't bother us anymore. Um. And it was really 277 00:16:11,160 --> 00:16:14,960 Speaker 1: in his sort of humiliated resentment after this trip that 278 00:16:15,040 --> 00:16:17,560 Speaker 1: he started writing down everything that he thought was wrong 279 00:16:17,600 --> 00:16:20,800 Speaker 1: with China, and he had her reports. I've still not 280 00:16:20,840 --> 00:16:23,200 Speaker 1: been able to track out exactly and track down exactly 281 00:16:23,240 --> 00:16:26,440 Speaker 1: where he was getting all his information, But his view 282 00:16:26,560 --> 00:16:29,640 Speaker 1: was that despite the fact that Westerners saw China as 283 00:16:30,120 --> 00:16:34,000 Speaker 1: impossibly prosperous, um and powerful, than in fact it was 284 00:16:34,080 --> 00:16:37,560 Speaker 1: decaying from the inside. At that time, China's government was 285 00:16:37,640 --> 00:16:40,960 Speaker 1: the Qing dynasty, which was ruled by Manchoos who were 286 00:16:41,040 --> 00:16:44,600 Speaker 1: racially different from the Chinese. So the the vast majority 287 00:16:44,600 --> 00:16:47,640 Speaker 1: of the population who are Han Chinese were essentially subjects 288 00:16:47,640 --> 00:16:50,520 Speaker 1: of the Manchoos. And as McCartney saw it, he said, 289 00:16:50,520 --> 00:16:53,680 Speaker 1: they a revolution is going to come and the Chinese 290 00:16:53,680 --> 00:16:55,840 Speaker 1: are going to rise up and overthrow the Man choose. 291 00:16:56,320 --> 00:16:58,880 Speaker 1: He predicted it would come before his own death, which 292 00:16:58,920 --> 00:17:01,480 Speaker 1: didn't actually come true, but At the same time, he 293 00:17:01,560 --> 00:17:04,720 Speaker 1: was the first one to inject this sort of uh 294 00:17:04,800 --> 00:17:08,280 Speaker 1: note of skepticism about about China's power, that if you 295 00:17:08,320 --> 00:17:10,840 Speaker 1: look behind the surface, that there's a there are actually 296 00:17:10,920 --> 00:17:14,920 Speaker 1: real problems there. And somebody wrote recently that the China 297 00:17:15,000 --> 00:17:17,399 Speaker 1: bears in the US have all gone into hiding right now, 298 00:17:17,440 --> 00:17:20,240 Speaker 1: that China just at this particular moment, seems to be 299 00:17:20,320 --> 00:17:23,240 Speaker 1: such a jugger in such an unstoppable juggernaut, um, that 300 00:17:23,320 --> 00:17:26,119 Speaker 1: its economy is doing so well. It's so the government 301 00:17:26,200 --> 00:17:31,119 Speaker 1: is so confident, she jimping, the president is consolidating his 302 00:17:31,160 --> 00:17:35,120 Speaker 1: power so effectively that again we're entering into an era 303 00:17:35,359 --> 00:17:41,479 Speaker 1: that of this vision of China as being unified, powerful, prosperous, 304 00:17:41,520 --> 00:17:45,440 Speaker 1: but obviously people who live there and people who insightful 305 00:17:45,480 --> 00:17:48,600 Speaker 1: reporting um, even if they're somewhat quieted at this time, 306 00:17:48,840 --> 00:17:51,760 Speaker 1: point out that the government still faces enormous problems there. 307 00:17:52,200 --> 00:17:55,600 Speaker 1: And again the root of some of these problems traced 308 00:17:55,720 --> 00:17:57,919 Speaker 1: right back to the same ones in the nineteenth century, 309 00:17:58,000 --> 00:18:01,760 Speaker 1: especially the problem of of official corrupt and resentment of 310 00:18:01,800 --> 00:18:05,120 Speaker 1: people on the ground of officials who squeeze them for bribes, 311 00:18:06,960 --> 00:18:10,800 Speaker 1: problems of overpopulation, of managing such a huge population um 312 00:18:11,119 --> 00:18:16,520 Speaker 1: that these echo again, Steve, you describe a massive pirate 313 00:18:17,320 --> 00:18:21,920 Speaker 1: insurrection off the Chinese coast that the regime spent many 314 00:18:22,040 --> 00:18:26,600 Speaker 1: years trying to suppress. When we look at China's efforts 315 00:18:26,640 --> 00:18:32,200 Speaker 1: to project power into the South China Sea, how much 316 00:18:33,000 --> 00:18:37,720 Speaker 1: of China's strategic framework has been shaped by that pirate experience. 317 00:18:38,800 --> 00:18:41,919 Speaker 1: The pirate experience is just part of a much bigger picture, 318 00:18:41,960 --> 00:18:46,000 Speaker 1: which is China's naval insecurity. So the Qing dynasty again, 319 00:18:46,000 --> 00:18:49,119 Speaker 1: this this government of Manchu's was really a land power 320 00:18:49,560 --> 00:18:52,320 Speaker 1: that their biggest words were fought in Central Asia to 321 00:18:52,359 --> 00:18:58,320 Speaker 1: conquer territory, and they generally did not maintain an effective navy, 322 00:18:58,760 --> 00:19:02,040 Speaker 1: largely because after they conquered Taiwan in the seventeenth century, 323 00:19:02,040 --> 00:19:04,840 Speaker 1: there was no real threat to them along their coast whatsoever. 324 00:19:05,359 --> 00:19:08,480 Speaker 1: And in the early nineteenth century they were suddenly faced 325 00:19:08,520 --> 00:19:11,439 Speaker 1: with a new problem, which was this pirate insurrection that 326 00:19:11,480 --> 00:19:14,600 Speaker 1: you mentioned, This massive fleet of pirates, you know, larger 327 00:19:14,680 --> 00:19:19,080 Speaker 1: than the Spanish armada, raiding the coast, conquering territory, um 328 00:19:19,119 --> 00:19:23,920 Speaker 1: taxing the populations, and the chink dynasty, and it managed 329 00:19:24,000 --> 00:19:28,840 Speaker 1: to suppress them, but quite desperately because their actual naval 330 00:19:28,840 --> 00:19:32,560 Speaker 1: ships were not capable of fighting these fighting the pirates, 331 00:19:32,640 --> 00:19:36,720 Speaker 1: these Chinese pirates. So the way China did manage to 332 00:19:36,760 --> 00:19:40,359 Speaker 1: suppress those pirates, Um, they made some improvements to their 333 00:19:40,480 --> 00:19:44,840 Speaker 1: naval forces, but ultimately they relied on amnesty or the 334 00:19:44,880 --> 00:19:46,719 Speaker 1: promise of a settled life in China. And they told 335 00:19:46,800 --> 00:19:48,879 Speaker 1: them if they turned themselves in that they could some 336 00:19:48,960 --> 00:19:51,080 Speaker 1: of them would get they would get commissions in the 337 00:19:51,160 --> 00:19:54,520 Speaker 1: Chinese navy. Um, they could live on land peacefully and 338 00:19:54,640 --> 00:19:57,160 Speaker 1: ultimately and they sort of won them back. Um, this 339 00:19:57,240 --> 00:20:00,080 Speaker 1: is you know, this is part of the culture of 340 00:20:00,160 --> 00:20:03,199 Speaker 1: the Empire, that China is such a desirable place to 341 00:20:03,240 --> 00:20:06,119 Speaker 1: live in at the center of civilization and prosperity, that 342 00:20:06,160 --> 00:20:08,879 Speaker 1: who would not want to be welcomed back into the fold. 343 00:20:09,640 --> 00:20:13,840 Speaker 1: So they succeed with the pirates. But then comes the 344 00:20:13,880 --> 00:20:18,760 Speaker 1: Opium War and just this disastrous mismatch between the British, 345 00:20:18,800 --> 00:20:22,439 Speaker 1: who have the Royal Navy, the most powerful modern naval 346 00:20:22,480 --> 00:20:25,720 Speaker 1: force in the world, against China, which has a long 347 00:20:25,760 --> 00:20:29,840 Speaker 1: and vulnerable coastline and no effective navy whatsoever. So the 348 00:20:29,840 --> 00:20:33,160 Speaker 1: Opium War was a completely one sided war. Um fought 349 00:20:33,160 --> 00:20:36,800 Speaker 1: on water for the most part, and it's the memory 350 00:20:36,840 --> 00:20:41,040 Speaker 1: of this weakness UM that ultimately leads to the rise 351 00:20:41,080 --> 00:20:44,360 Speaker 1: of naval power today that China does not very consciously 352 00:20:44,400 --> 00:20:46,400 Speaker 1: does not want to be pushed around as it had 353 00:20:46,440 --> 00:20:49,800 Speaker 1: been in the past. UM. And today this is this 354 00:20:49,920 --> 00:20:52,800 Speaker 1: is taking this is taking place with the essentially claiming 355 00:20:52,840 --> 00:20:59,560 Speaker 1: the entire South China Sea, which debate the actual reality 356 00:20:59,600 --> 00:21:02,680 Speaker 1: of the man Apps involved as much as we want UM. 357 00:21:02,800 --> 00:21:05,840 Speaker 1: The story that's coming from the government is that this 358 00:21:05,920 --> 00:21:09,400 Speaker 1: is territory that belongs to China, where Chinese sailors used 359 00:21:09,400 --> 00:21:12,400 Speaker 1: to go all the time, and we must protect it, UM, 360 00:21:12,440 --> 00:21:14,520 Speaker 1: and we must bring it back into the fold. And 361 00:21:14,720 --> 00:21:18,040 Speaker 1: this chip that's left on the country's shoulder from the 362 00:21:18,040 --> 00:21:20,919 Speaker 1: Opium Wars of the nineteenth century of being bullied by 363 00:21:20,920 --> 00:21:24,120 Speaker 1: by Western naval powers UM has sort of come full 364 00:21:24,119 --> 00:21:27,120 Speaker 1: circle now and now they have the fleet UM, and 365 00:21:27,560 --> 00:21:29,919 Speaker 1: you know, the U S. The U. S. Navy is 366 00:21:29,960 --> 00:21:32,080 Speaker 1: at this point the only one that can match it 367 00:21:32,119 --> 00:21:34,800 Speaker 1: in terms of power in the Pacific, oh ye, in 368 00:21:34,840 --> 00:21:38,760 Speaker 1: the South China Sea. Steve, it sounds like you're saying, 369 00:21:39,200 --> 00:21:45,120 Speaker 1: in terms of explaining the current economic underpinnings of China's 370 00:21:45,119 --> 00:21:50,240 Speaker 1: economic relationships, the Opium War was at least as important 371 00:21:50,359 --> 00:21:55,000 Speaker 1: as World War Two, the Communist Revolution, and Dungs opening 372 00:21:55,040 --> 00:21:58,960 Speaker 1: to the West. It is um and certainly in the 373 00:21:59,040 --> 00:22:01,960 Speaker 1: eyes of China. As current president Ji Jimping, you know, 374 00:22:02,000 --> 00:22:04,600 Speaker 1: the Opium War is sort of the origin point for 375 00:22:04,680 --> 00:22:08,679 Speaker 1: what he calls China's struggle for national rejuvenation, and in 376 00:22:08,760 --> 00:22:11,200 Speaker 1: speeches he prefers in the past he was the hundred 377 00:22:11,240 --> 00:22:13,280 Speaker 1: and seventy years struggle. Now it would be the hundred 378 00:22:13,320 --> 00:22:16,240 Speaker 1: and seventy five years struggle UM of the Chinese people, 379 00:22:16,600 --> 00:22:20,119 Speaker 1: UM to recover from the Opium War, essentially the Opium 380 00:22:20,119 --> 00:22:22,480 Speaker 1: War and everything that it brought, the exploitations of the 381 00:22:22,560 --> 00:22:25,399 Speaker 1: nineteenth century. This is something that he has taken a 382 00:22:25,480 --> 00:22:31,359 Speaker 1: step beyond what earlier Chinese leaders have grappled with. It 383 00:22:31,400 --> 00:22:34,040 Speaker 1: wasn't really until the nineteen twenties and thirties in China 384 00:22:34,119 --> 00:22:37,840 Speaker 1: in the Republic that this war became known in Chinese 385 00:22:37,880 --> 00:22:40,360 Speaker 1: as the Opium War, and that it became a sort 386 00:22:40,400 --> 00:22:44,720 Speaker 1: of a centerpiece for nationalist education as representing UM the 387 00:22:44,760 --> 00:22:47,960 Speaker 1: moment when China was dragged kicking and screaming into the 388 00:22:47,960 --> 00:22:52,200 Speaker 1: world of imperialism, the moment when China, when the Grand 389 00:22:52,200 --> 00:22:55,359 Speaker 1: Old China was laid low by an upstart Western power, 390 00:22:56,040 --> 00:22:59,240 Speaker 1: and that century of humiliation keeps getting extended, and that 391 00:22:59,320 --> 00:23:02,600 Speaker 1: they went into the Japanese invasion than in the early 392 00:23:02,680 --> 00:23:06,360 Speaker 1: PRC THEUS, it sort of ended in nine and now 393 00:23:06,440 --> 00:23:09,240 Speaker 1: the PRC came, the Communists came to power, so we 394 00:23:09,280 --> 00:23:12,119 Speaker 1: can put that behind us, but she Didnping is very 395 00:23:12,200 --> 00:23:16,480 Speaker 1: much continuing it. And his vision, which is so central 396 00:23:16,560 --> 00:23:19,639 Speaker 1: to what he calls the Chinese dream and what his 397 00:23:19,640 --> 00:23:21,560 Speaker 1: his vision for the future of China is, is that 398 00:23:22,160 --> 00:23:25,680 Speaker 1: his vision is to recover the greatness that China had 399 00:23:25,800 --> 00:23:29,480 Speaker 1: prior to the Opium War, to recapture that lost era. 400 00:23:30,119 --> 00:23:32,920 Speaker 1: And in doing that, it's not just a matter of 401 00:23:33,080 --> 00:23:36,200 Speaker 1: the economic power of China. It's not just a matter 402 00:23:36,280 --> 00:23:38,959 Speaker 1: of sort of the respect of China or its influence 403 00:23:39,040 --> 00:23:43,359 Speaker 1: in Asia. It's also very specifically about China's relationship to 404 00:23:43,400 --> 00:23:47,280 Speaker 1: the West. And as he sees it, the Opium War 405 00:23:47,800 --> 00:23:51,359 Speaker 1: was for the moment when the Chinese started looking to 406 00:23:51,480 --> 00:23:54,400 Speaker 1: the West for how you become strong. They started looking 407 00:23:54,400 --> 00:23:58,280 Speaker 1: towards Western models, either adopting Western weapons or later on 408 00:23:58,640 --> 00:24:02,040 Speaker 1: a Western political structure with the Republic, And as he 409 00:24:02,119 --> 00:24:05,280 Speaker 1: sees it, this is something that that China will finally 410 00:24:05,280 --> 00:24:07,159 Speaker 1: get passed, and he looks at the world now he 411 00:24:07,200 --> 00:24:10,240 Speaker 1: sees that Britain has already declined. Um he believes that 412 00:24:10,280 --> 00:24:13,359 Speaker 1: the United States is declining, and that the future belongs 413 00:24:13,400 --> 00:24:17,000 Speaker 1: to China. And so going back to the Opium War 414 00:24:17,520 --> 00:24:20,800 Speaker 1: and trying to recapture the moment the era before that 415 00:24:20,920 --> 00:24:24,840 Speaker 1: is a way of taking a sort of washing away 416 00:24:24,880 --> 00:24:28,280 Speaker 1: that entire long era where China, where China was humiliated 417 00:24:28,359 --> 00:24:34,480 Speaker 1: before Western power. Steve really appreciate you joining us. Congratulations 418 00:24:34,520 --> 00:24:39,280 Speaker 1: on the book and sketching the deep historical context of 419 00:24:39,320 --> 00:24:42,560 Speaker 1: today's economic relations. Thanks so much for having me. This 420 00:24:42,640 --> 00:24:49,520 Speaker 1: is really enjoyable. Benchmark will be back next week. Until then, 421 00:24:49,640 --> 00:24:52,359 Speaker 1: you can find us on the Bloomberg terminal, Bloomberg dot 422 00:24:52,440 --> 00:24:57,600 Speaker 1: com or Bloomberg app, and podcast destinations such as Apple Podcasts, Spotify, 423 00:24:57,880 --> 00:25:00,520 Speaker 1: or wherever you listen. We'd love it you took the 424 00:25:00,560 --> 00:25:03,520 Speaker 1: time to rate and review the show so more listeners 425 00:25:03,560 --> 00:25:06,280 Speaker 1: can find us. You can also check us out on Twitter, 426 00:25:06,680 --> 00:25:11,879 Speaker 1: follow me at Scott Landman Dan You're at Moss Underscore Eco, 427 00:25:12,520 --> 00:25:15,080 Speaker 1: and our guest is at s T E p h 428 00:25:15,200 --> 00:25:19,480 Speaker 1: E n R p l A t T. Benchmark is 429 00:25:19,480 --> 00:25:22,879 Speaker 1: produced by topor foreheads. The head of Bloomberg Podcasts is 430 00:25:22,880 --> 00:25:26,120 Speaker 1: Francesca Levy. Thanks for listening, See you next time.