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Speaker 1: All right, Well, let's get to our next guest to

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Speaker 1: talk about that very subject of Taiwan and Nancy Pelosi.

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Speaker 1: We've got Richard McGregor CD at the Loewis Institute. Richard,

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Speaker 1: thank you for joining us. I mean, at the end

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Speaker 1: of the day, what's the upside for Nancy Pelosi to

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Speaker 1: conduct this mission, if you can call it that? And secondly,

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Speaker 1: does it risk effectively destabilizing or the arguably the most

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Speaker 1: important conflict in the world right now, and that's Ukraine,

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Speaker 1: which could result in China turning from putative Moscow ally

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Speaker 1: to a real one. Well, I think, you know, there's

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Speaker 1: the personal upside for her. This is obviously a legacy trip.

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Speaker 1: She's unlikely to bespeaker for much longer. Many Republicans in

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Speaker 1: particular and some Democrats are urging her on. So in

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Speaker 1: that respect, she reflects a significant amount of the of

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Speaker 1: the viewpoint in Congress itself. I wouldn't say it's so

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Speaker 1: much destabilized as a situation. I do think it gives

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Speaker 1: China an opportunity which the US doesn't welcome to, to

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Speaker 1: just show how far it's come since the last Taiwan crisis.

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Speaker 1: You know, it can conduct a military operations now live

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Speaker 1: fire exercises which surround Taiwan, something they couldn't do before.

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Speaker 1: So this gives China to make a point to show

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Speaker 1: how the balance of power around Taiwan has absolutely been

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Speaker 1: absolutely transformed in its favor. Ah And I think that

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Speaker 1: that's the point that I want to make. So how

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Speaker 1: about that question that was raised in the South China

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Speaker 1: Morning post, confident superpower or insecure Richard? I know you

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Speaker 1: spent a lot of time in Beijing and wrote a

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Speaker 1: fabulous book about the party. Which one is it? In

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Speaker 1: your view? Well, it's always been a mixture of one

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Speaker 1: and the other. But I think the sort of insecure

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Speaker 1: superpower sort of you know, pushes them to to sort

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Speaker 1: of exceed um what they've previously been able to do.

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Speaker 1: And I think frankly they they you know, if you

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Speaker 1: had to ask me one or the other. China is

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Speaker 1: increasingly confident. Obviously the last year with COVID zero has

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Speaker 1: struck that a little bit. But China is increasingly confident

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Speaker 1: it has America's measure, particularly in terms of the military

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Speaker 1: balance in the region. So I would not underestimate China's

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Speaker 1: growing power, Richard. You didn't address the last part of

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Speaker 1: my question, which was does this actually turn Beijing more

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Speaker 1: into a Russia ally now or could it turn in

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Speaker 1: that direction in your view as a consequence of this,

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Speaker 1: I think they had already decided that it doesn't affect

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Speaker 1: that materially. In my view, China was squirming initially in

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Speaker 1: the early days of the Russia invasion of Ukraine, but

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Speaker 1: they picked They've got their lines pretty much right since then.

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Speaker 1: From their perspective, you know, this is a long term

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Speaker 1: partner ship because they see long term benefits from aligning

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Speaker 1: with Russia in many areas in terms of energy, food stuffs, imports,

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Speaker 1: and gathering as many friends on their side and the

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Speaker 1: contest with the United States. So it might, you know,

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Speaker 1: reaffirm that slightly, but I don't think it makes a

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Speaker 1: material difference. Neil Ferguson was on our area yesterday on

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Speaker 1: this program in fact, and one of the things that

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Speaker 1: he was saying was that probably what China would would

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Speaker 1: likely do is to is to find a way to

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Speaker 1: clamp down on the semiconductor industry in Taiwan. Is that

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Speaker 1: something that that they can do, um and and what

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Speaker 1: sort of form would that take? You know, I think

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Speaker 1: that's a bit of a weird thing to say, if

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Speaker 1: I might put it like that, China clam I'm not

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Speaker 1: quite sure clamping down on the semiconductor industry means. But

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Speaker 1: if you look at the market share of t s

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Speaker 1: MC and U M c UH, you know, six of

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Speaker 1: the foundry market. If China is clamping down on that,

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Speaker 1: they're clamping down on themselves, because these are all imports

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Speaker 1: and the sorts of things that China assembles and then

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Speaker 1: exports or users itself. So I don't I think any

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Speaker 1: exercise that China has for Taiwan is not designed to

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Speaker 1: damage TIM and TSMC one day into the far distant future.

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Speaker 1: They might like to think they would control it, but

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Speaker 1: I don't think they want to clamp down on it.

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Speaker 1: Richard gives you a particular with the fall out of

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Speaker 1: this is in the medium term, you know, I think

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Speaker 1: it is right to talk about the medium term. I

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Speaker 1: think we're going to see an accumulation of measures. It's

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Speaker 1: not going to be said of one whiz bang sort

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Speaker 1: of form of retaliation. It's going to be military, it's cyber,

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Speaker 1: it's political, it's trade. We've already seen some of these measures. Initially.

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Speaker 1: I think the Chinese response is going to roll out

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Speaker 1: over months, not just weeks, really quickly, Richard. Some people

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Speaker 1: think Russia's weaker after its escapade in Ukraine. Is China

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Speaker 1: weaker now than it was a year ago because of

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Speaker 1: COVID and other factors, Well, it's less steady than it

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Speaker 1: was a year ago. A year ago we had a

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Speaker 1: Chinese state propaganda which had some degree of credibility about

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Speaker 1: how they had handled COVID better. I don't think they

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Speaker 1: could say that anymore. And they're still in the throes

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Speaker 1: of struggling to deal with this, whereas other countries have

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Speaker 1: moved on. Um, you know, the death rate is still lower.

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Speaker 1: All right, Richard, thank you so much for joining us.

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Speaker 1: Old friend Richard McGregor, senior fellow at the Lowie Institute,

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Speaker 1: with us here live on Bloomberg Daybreak Asia