1 00:00:16,160 --> 00:00:18,680 Speaker 1: The second half of the last decade was a lot 2 00:00:19,200 --> 00:00:23,320 Speaker 1: terrorist attacks across Europe. Braxt the global impact of Donald 3 00:00:23,360 --> 00:00:26,560 Speaker 1: Trump's election in the US so many of us looking 4 00:00:26,600 --> 00:00:28,760 Speaker 1: forward to reliving the Roaring twenties. 5 00:00:33,640 --> 00:00:35,960 Speaker 2: But well that didn't quite go as planned. 6 00:00:36,520 --> 00:00:39,600 Speaker 3: Iran says it will take revenge for the US killing 7 00:00:39,800 --> 00:00:42,960 Speaker 3: of its most powerful military commanding, rowing concern as the 8 00:00:42,960 --> 00:00:45,920 Speaker 3: tool from that deadly coronavirus now grows breaking. 9 00:00:45,960 --> 00:00:47,760 Speaker 2: You stay at home, that is the order. 10 00:00:47,760 --> 00:00:48,040 Speaker 4: Tonight. 11 00:00:48,159 --> 00:00:50,680 Speaker 5: Russia has launched a military assault on Ukraine. 12 00:00:50,760 --> 00:00:53,479 Speaker 6: The war in Ukraine has begun. 13 00:00:54,640 --> 00:00:58,200 Speaker 1: Shifts in everything from geopolitics to trade and public health 14 00:00:58,480 --> 00:01:01,920 Speaker 1: also meant changes to the political order in several countries. 15 00:01:02,480 --> 00:01:06,680 Speaker 6: Joseph R. Biden Junior is elected the forty sixth President 16 00:01:06,720 --> 00:01:07,720 Speaker 6: of the United States. 17 00:01:07,760 --> 00:01:10,600 Speaker 7: British Prime Minister Boris Johnson resigning today. 18 00:01:10,720 --> 00:01:13,040 Speaker 3: It Lee is said to elect a far right leader. 19 00:01:13,160 --> 00:01:16,679 Speaker 6: President Raja Taya Bertawan has claimed victory. Luis Naso Lula 20 00:01:16,880 --> 00:01:20,800 Speaker 6: Silva has been voted in as Brazil's next president. 21 00:01:20,920 --> 00:01:23,240 Speaker 1: As well as changes to the global economy and the 22 00:01:23,280 --> 00:01:27,320 Speaker 1: boom underway in artificial intelligence. All this has happened as 23 00:01:27,400 --> 00:01:29,920 Speaker 1: companies in the US and around the world realize just 24 00:01:29,959 --> 00:01:33,600 Speaker 1: how reliant they've become on strong but narrow trade routes. 25 00:01:34,160 --> 00:01:37,120 Speaker 1: Bloomberg dispatch reporters around the world to see how the 26 00:01:37,160 --> 00:01:40,600 Speaker 1: situation is changing on the ground and what conclusions can 27 00:01:40,680 --> 00:01:44,600 Speaker 1: be drawn. Malcolm Scott, Jenny Leonard and Brendan Murray are 28 00:01:44,640 --> 00:01:52,400 Speaker 1: here to make sense of it all. I'm Roslin Matheson 29 00:01:52,600 --> 00:02:00,640 Speaker 1: in for Wes Kasova today on The Big Takeo's changed 30 00:02:00,680 --> 00:02:03,320 Speaker 1: a lot over the past three years. So could a 31 00:02:03,400 --> 00:02:11,840 Speaker 1: shift in global trade be the start of a great reset? Brendan, 32 00:02:11,919 --> 00:02:14,840 Speaker 1: your Big Take print stories all about the great reset 33 00:02:14,919 --> 00:02:18,440 Speaker 1: as companies change up their supply chains. But what made 34 00:02:18,480 --> 00:02:20,320 Speaker 1: you and your colleagues want to write about this? 35 00:02:20,919 --> 00:02:23,359 Speaker 5: Well, there were two reasons, really, and the first had 36 00:02:23,360 --> 00:02:26,400 Speaker 5: to do with the lack of available data. Trade data 37 00:02:26,440 --> 00:02:29,639 Speaker 5: are notoriously backward looking. Most of the numbers we get 38 00:02:29,639 --> 00:02:31,600 Speaker 5: from the government come out with a month or two legs, 39 00:02:31,639 --> 00:02:33,880 Speaker 5: so they don't really do us much good. They're good 40 00:02:33,919 --> 00:02:36,600 Speaker 5: at telling us what happened in the rearview mirror, but 41 00:02:36,680 --> 00:02:39,760 Speaker 5: not good at watching what's changing in real time. The 42 00:02:39,800 --> 00:02:42,680 Speaker 5: second catalyst has to do with the pandemic lockdowns when 43 00:02:42,720 --> 00:02:45,480 Speaker 5: reporters and editors got really good at doing what they 44 00:02:45,520 --> 00:02:48,080 Speaker 5: do from the confines of their own home. But what 45 00:02:48,120 --> 00:02:51,639 Speaker 5: we wanted to do was send a dozen Bloomberg reporters 46 00:02:51,639 --> 00:02:53,399 Speaker 5: out in the field to see what was really going 47 00:02:53,400 --> 00:02:54,120 Speaker 5: on on the ground. 48 00:02:54,720 --> 00:02:57,280 Speaker 1: And we've got a really interesting array of examples that 49 00:02:57,320 --> 00:02:59,639 Speaker 1: we'll talk about in greater detail. But Mal, can we 50 00:02:59,639 --> 00:03:02,280 Speaker 1: talk a bit more about the Great Reset itself? What 51 00:03:02,320 --> 00:03:06,240 Speaker 1: we mean by that were basically talking about events mostly 52 00:03:06,280 --> 00:03:07,239 Speaker 1: since twenty twenty. 53 00:03:08,240 --> 00:03:11,440 Speaker 7: The economic drivers of this great reset, or the sort 54 00:03:11,440 --> 00:03:14,839 Speaker 7: of slow rewiring of the global economy, they have been 55 00:03:14,880 --> 00:03:16,960 Speaker 7: around for a while. You know, China's been on this 56 00:03:17,080 --> 00:03:20,960 Speaker 7: industrialization path for a couple of generations. Now it's really 57 00:03:20,960 --> 00:03:24,400 Speaker 7: a political catalyst that's made us really come to this 58 00:03:24,480 --> 00:03:26,960 Speaker 7: point now where we are talking about this as a reset. 59 00:03:27,440 --> 00:03:30,880 Speaker 7: You know, Donald Trump's presidency brought his protectionist policies to 60 00:03:30,919 --> 00:03:33,400 Speaker 7: the fore China bashing became a sport in the US. 61 00:03:33,760 --> 00:03:38,720 Speaker 8: Not only has China declined to adopt Promise reforms, it 62 00:03:38,760 --> 00:03:43,960 Speaker 8: has embraced an economic model dependent on massive market barriers, 63 00:03:44,760 --> 00:03:51,920 Speaker 8: heavy stage subsidies, currency manipulation, product dumping, force, technology transfers, 64 00:03:52,440 --> 00:03:58,400 Speaker 8: and the theft of intellectual property. And also trade secrets 65 00:03:58,400 --> 00:04:00,600 Speaker 8: on a grand scale. 66 00:04:00,960 --> 00:04:04,480 Speaker 7: And then President Biden has really sustained much of that, 67 00:04:04,760 --> 00:04:07,080 Speaker 7: if dialing back on some of the rhetoric, but those 68 00:04:07,240 --> 00:04:10,080 Speaker 7: punitive tariffs they're still in place, they haven't gone anywhere. 69 00:04:10,320 --> 00:04:12,720 Speaker 7: And then he's lay it on even doubled down on 70 00:04:12,760 --> 00:04:16,720 Speaker 7: this reshuring narrative that's really driving not only the US 71 00:04:16,800 --> 00:04:19,200 Speaker 7: but others to rethink their supply chains. And at the 72 00:04:19,200 --> 00:04:23,560 Speaker 7: same time, China's perceived economic coercion of trade partners that 73 00:04:23,600 --> 00:04:25,920 Speaker 7: it's tried to slap on the wrists such as Australia 74 00:04:26,160 --> 00:04:29,039 Speaker 7: when countries don't do it as it would please. That 75 00:04:29,120 --> 00:04:33,120 Speaker 7: seems to have really backfired, and that's really accelerating rather 76 00:04:33,200 --> 00:04:37,200 Speaker 7: than detracting from this push to reshure, revisit supply chains, 77 00:04:37,240 --> 00:04:39,880 Speaker 7: diversify from China. 78 00:04:40,960 --> 00:04:43,320 Speaker 1: What's interesting mail to hear you talk about the political 79 00:04:43,360 --> 00:04:45,640 Speaker 1: imperatives here, and I want to bring in, Jenny, do 80 00:04:45,760 --> 00:04:48,279 Speaker 1: you see this as purely just down to the trajectory 81 00:04:48,760 --> 00:04:51,920 Speaker 1: of the relationship between US and China or what else 82 00:04:52,000 --> 00:04:52,719 Speaker 1: might be at play? 83 00:04:53,320 --> 00:04:55,720 Speaker 4: Well, it has a lot to deal with the trajectory 84 00:04:55,760 --> 00:04:59,000 Speaker 4: of the US China ties. Obviously, it's started in the 85 00:04:59,000 --> 00:05:02,040 Speaker 4: Trump administration we have seen sort of the through line 86 00:05:02,279 --> 00:05:05,000 Speaker 4: to the Biden years. But you know, populism in US 87 00:05:05,080 --> 00:05:10,279 Speaker 4: politics means now in both parties that politicians want things 88 00:05:10,320 --> 00:05:11,880 Speaker 4: to be made in America again. 89 00:05:12,200 --> 00:05:17,120 Speaker 9: Tonight, I'm announcing new standards require all construction materials using 90 00:05:17,200 --> 00:05:22,240 Speaker 9: federalist infrastructure projects to be made in America. 91 00:05:22,560 --> 00:05:27,080 Speaker 4: And so that, apart from the US China relationship, is 92 00:05:27,120 --> 00:05:30,360 Speaker 4: what we will see going into the twenty twenty four 93 00:05:30,400 --> 00:05:33,480 Speaker 4: election and presumably also going forward. 94 00:05:34,279 --> 00:05:36,359 Speaker 1: We were always going to be at this point or 95 00:05:36,440 --> 00:05:39,200 Speaker 1: was it just expedited by those sort of events of 96 00:05:39,200 --> 00:05:40,000 Speaker 1: the past few years. 97 00:05:40,000 --> 00:05:45,080 Speaker 5: In particular, global trade had basically plateaued about five or 98 00:05:45,080 --> 00:05:48,320 Speaker 5: ten years before Donald Trump came into office, and companies 99 00:05:48,320 --> 00:05:51,159 Speaker 5: were already starting to kind of back away from China 100 00:05:51,240 --> 00:05:54,320 Speaker 5: seeing that they were overly concentrated there. So it was 101 00:05:54,400 --> 00:05:57,960 Speaker 5: already in motion before put the trade war, the terif 102 00:05:58,520 --> 00:06:01,760 Speaker 5: that Donald Trump launched again in China. President Trump tonight 103 00:06:01,839 --> 00:06:04,680 Speaker 5: escalating his trade war with China, threatening new tariffs that 104 00:06:04,680 --> 00:06:07,200 Speaker 5: they're coming soon and they are sweeping. And then the 105 00:06:07,240 --> 00:06:10,279 Speaker 5: pandemic and then you layer on Russia's war in Ukraine 106 00:06:10,560 --> 00:06:13,760 Speaker 5: and all of those things accelerated the risk calculation that 107 00:06:13,839 --> 00:06:17,080 Speaker 5: companies were going through. If you're a company now and 108 00:06:17,120 --> 00:06:20,240 Speaker 5: you're looking at eighty percent of your production is in China, 109 00:06:20,320 --> 00:06:23,040 Speaker 5: you better be thinking about cutting that, say, in half, 110 00:06:23,200 --> 00:06:26,280 Speaker 5: or at least by a third if the political situation 111 00:06:26,520 --> 00:06:27,720 Speaker 5: deterior tanny further. 112 00:06:28,560 --> 00:06:31,120 Speaker 1: It's interesting to hear you talk a bit about Ukraine 113 00:06:31,480 --> 00:06:34,120 Speaker 1: as well, because when we talk about this, it's really 114 00:06:34,360 --> 00:06:36,320 Speaker 1: the entire world that's affected. I was trying to think 115 00:06:36,360 --> 00:06:38,159 Speaker 1: of any country that may not be affected by this 116 00:06:38,200 --> 00:06:40,280 Speaker 1: that I sort of came up with North Korea and 117 00:06:40,320 --> 00:06:44,080 Speaker 1: not much else. Brenda, Let's talk about Western nations first. 118 00:06:44,360 --> 00:06:46,240 Speaker 1: In that in some of the research and the work 119 00:06:46,279 --> 00:06:48,599 Speaker 1: that we did for this story, is there an example 120 00:06:49,080 --> 00:06:51,960 Speaker 1: where you could highlight the particular impact that we're seeing 121 00:06:51,960 --> 00:06:53,240 Speaker 1: on what you think is the West. 122 00:06:53,800 --> 00:06:56,919 Speaker 5: So Italy is a really good example, stemming from the 123 00:06:57,000 --> 00:07:01,880 Speaker 5: Russian War in Ukraine, not necessarily the China situation. So 124 00:07:02,080 --> 00:07:05,920 Speaker 5: in southern Italy, we dispatched a reporter to an Adriatic 125 00:07:05,960 --> 00:07:10,040 Speaker 5: seaport called Brindisey. This is an ancient Roman city with 126 00:07:10,240 --> 00:07:14,320 Speaker 5: ruins from the thirteenth century. Today it's become a busy 127 00:07:14,400 --> 00:07:19,400 Speaker 5: gateway for natural gas imports from suppliers all over the Mediterranean. 128 00:07:19,920 --> 00:07:22,560 Speaker 5: That's a big change from just a few years ago 129 00:07:22,720 --> 00:07:26,160 Speaker 5: when natural gas used to flow north to south through Italy, 130 00:07:26,480 --> 00:07:30,600 Speaker 5: originally from Russia. That gas pipeline has literally been reversed 131 00:07:30,640 --> 00:07:34,320 Speaker 5: and it's now handling imports in a northward direction from 132 00:07:34,440 --> 00:07:37,480 Speaker 5: countries in North Africa and elsewhere that are trying to 133 00:07:37,520 --> 00:07:39,120 Speaker 5: replace those Russian supplies. 134 00:07:40,640 --> 00:07:42,560 Speaker 1: And Jenny, do you see much of an impact in 135 00:07:42,600 --> 00:07:45,640 Speaker 1: the US itself. I mean, the US has been obviously 136 00:07:45,680 --> 00:07:48,880 Speaker 1: a champion of trying to get companies to redesign their 137 00:07:48,880 --> 00:07:51,680 Speaker 1: supply chains. For all the work so far that's gone 138 00:07:51,720 --> 00:07:55,400 Speaker 1: on under the Biden administration in particular, has anything worked. 139 00:07:56,120 --> 00:07:59,920 Speaker 4: Obviously, the Biden administration has really zeroed in on semiconduct 140 00:08:00,480 --> 00:08:05,080 Speaker 4: clean energy technology, raw materials. They've passed multiple laws over 141 00:08:05,120 --> 00:08:08,480 Speaker 4: the last two years that include billions and subsidies for 142 00:08:08,600 --> 00:08:12,080 Speaker 4: these sectors to incentivize coming to the US, which is 143 00:08:12,280 --> 00:08:15,120 Speaker 4: a much more expensive place to build a fab and 144 00:08:15,160 --> 00:08:18,560 Speaker 4: then in the end make semiconductors. Those laws will take 145 00:08:18,640 --> 00:08:22,400 Speaker 4: years to bear fruit, and we've seen TSMC, the big 146 00:08:22,720 --> 00:08:26,240 Speaker 4: Taiwanese semiconductor company that was sort of the big hope 147 00:08:26,760 --> 00:08:29,480 Speaker 4: to build a fab in Arizona said that it's going 148 00:08:29,520 --> 00:08:33,240 Speaker 4: to push back its production timeline until twenty twenty five, which, 149 00:08:33,240 --> 00:08:36,480 Speaker 4: of course politically is not so convenient for the Biden 150 00:08:36,520 --> 00:08:40,000 Speaker 4: administration because they would love to send the President or 151 00:08:40,040 --> 00:08:43,320 Speaker 4: the Commerce secretary to a ribbon cutting ceremony before the 152 00:08:43,400 --> 00:08:46,680 Speaker 4: election in November and say, hey, look, we've said we 153 00:08:46,760 --> 00:08:49,440 Speaker 4: will make trips in America, and here's the first trip 154 00:08:49,480 --> 00:08:52,600 Speaker 4: made in America. And that really seems like that's really 155 00:08:52,600 --> 00:08:53,679 Speaker 4: not in the offing anymore. 156 00:08:54,480 --> 00:08:57,440 Speaker 1: And now there are impacts also in emerging markets. We 157 00:08:57,559 --> 00:09:00,160 Speaker 1: have looked across the breadth of emerging markets and some 158 00:09:00,200 --> 00:09:02,640 Speaker 1: interesting examples in the story also about that. 159 00:09:03,760 --> 00:09:06,559 Speaker 7: The unifying theme that we've sort of come across, and 160 00:09:06,640 --> 00:09:08,880 Speaker 7: of course we're hearing from the bottom up in this story, 161 00:09:08,880 --> 00:09:11,280 Speaker 7: but also the top down in academia land, is that 162 00:09:11,600 --> 00:09:13,880 Speaker 7: the emerging markets they don't want to get caught in 163 00:09:13,880 --> 00:09:16,080 Speaker 7: the middle of this. They want to benefit from it. 164 00:09:16,320 --> 00:09:19,440 Speaker 7: They're coalescing around this concept of the global South. They're 165 00:09:19,440 --> 00:09:21,800 Speaker 7: taking a transactional view. They don't want to pick sides 166 00:09:21,920 --> 00:09:24,880 Speaker 7: any confrontation, be it the US and Russia, be it 167 00:09:25,280 --> 00:09:29,200 Speaker 7: the economic confrontation of the US and China, so some 168 00:09:29,240 --> 00:09:32,080 Speaker 7: winners are being created. Our story looks at a couple 169 00:09:32,160 --> 00:09:35,720 Speaker 7: of examples where specific locations seem to be doing pretty 170 00:09:35,720 --> 00:09:38,760 Speaker 7: well out of this rewiring of the global economy. So 171 00:09:38,840 --> 00:09:42,240 Speaker 7: in Morocco, just about a half an hour's drive inland 172 00:09:42,240 --> 00:09:45,560 Speaker 7: from Tangier, there's a port that's really doing well, the 173 00:09:45,600 --> 00:09:49,560 Speaker 7: Tangier Tech City that's being developed with Chinese and Moroccan 174 00:09:49,600 --> 00:09:53,720 Speaker 7: government support. South of the US border with Mexico, truckers 175 00:09:53,760 --> 00:09:56,880 Speaker 7: there are struggling to keep up with demand as the 176 00:09:56,920 --> 00:10:00,720 Speaker 7: rerouting of demand from the US means that they're buying 177 00:10:00,720 --> 00:10:06,520 Speaker 7: more from Mexico. Our Bloomberg Economics economist estimates that the 178 00:10:06,600 --> 00:10:09,280 Speaker 7: tariff goods are down about one hundred and fifty billion 179 00:10:09,360 --> 00:10:13,240 Speaker 7: dollars relative to their pre trade war trend from China. 180 00:10:13,800 --> 00:10:17,160 Speaker 7: Mexico's filled about ninety billion of that gap. So there 181 00:10:17,200 --> 00:10:22,000 Speaker 7: are winners, But the real overwhelming danger longer term is 182 00:10:22,040 --> 00:10:27,160 Speaker 7: that these sort of protectionist policies, the reassuring policies, in 183 00:10:27,200 --> 00:10:29,400 Speaker 7: the ends, they may make it harder for the next 184 00:10:29,440 --> 00:10:31,760 Speaker 7: batch of economies to get onto that first couple of 185 00:10:31,880 --> 00:10:34,440 Speaker 7: rungs of the development ladder, and that shuts off an 186 00:10:34,440 --> 00:10:37,080 Speaker 7: avenue of growth. And development for countries with vast and 187 00:10:37,160 --> 00:10:40,760 Speaker 7: rapidly growing populations. Now, that's not going to be good 188 00:10:40,880 --> 00:10:42,239 Speaker 7: for the emerging world. 189 00:10:42,679 --> 00:10:44,600 Speaker 5: I think one of the caveats there that we should 190 00:10:44,600 --> 00:10:48,760 Speaker 5: address is that this is not easy. Vietnam Thailand do 191 00:10:48,920 --> 00:10:52,400 Speaker 5: not have the infrastructure to flip a switch and start 192 00:10:52,480 --> 00:10:55,440 Speaker 5: producing goods like China does. So this is going to 193 00:10:55,440 --> 00:10:59,520 Speaker 5: be a costly and time consuming process, and it's going 194 00:10:59,559 --> 00:11:02,480 Speaker 5: to mean a lot of dislocation for workers. It's going 195 00:11:02,559 --> 00:11:04,280 Speaker 5: to mean a lot of risk in the investment that 196 00:11:04,360 --> 00:11:07,520 Speaker 5: goes into these countries. But ultimately, I think what we're 197 00:11:07,520 --> 00:11:10,760 Speaker 5: seeing are the very early signs, the very early days 198 00:11:10,800 --> 00:11:13,040 Speaker 5: of a process that we'll see play out for a 199 00:11:13,080 --> 00:11:13,560 Speaker 5: long time. 200 00:11:15,800 --> 00:11:19,040 Speaker 1: And Jenny, just to Male's point about these countries saying 201 00:11:19,320 --> 00:11:21,240 Speaker 1: they don't want to have to pick aside and also 202 00:11:21,800 --> 00:11:25,080 Speaker 1: concern that their own development will be affected as a 203 00:11:25,120 --> 00:11:28,880 Speaker 1: result of this. It's not like a narrative that China 204 00:11:28,880 --> 00:11:31,280 Speaker 1: and other countries seem to seize on because it can 205 00:11:31,320 --> 00:11:34,600 Speaker 1: get some good traction. But does the US administration see 206 00:11:34,640 --> 00:11:36,080 Speaker 1: that and how are they're going to be able to 207 00:11:36,080 --> 00:11:36,600 Speaker 1: counter it? 208 00:11:37,240 --> 00:11:40,480 Speaker 4: I think the Biden administration does see that, but it's 209 00:11:40,720 --> 00:11:44,840 Speaker 4: very hard to counter that narrative because when I talked 210 00:11:44,880 --> 00:11:48,560 Speaker 4: about the US populism, you know, anti trade sentiment that 211 00:11:48,679 --> 00:11:52,240 Speaker 4: sort of feeds into politics here. That is going to continue, 212 00:11:52,240 --> 00:11:55,040 Speaker 4: and that is what I'm hearing from some people who 213 00:11:55,160 --> 00:11:58,600 Speaker 4: are advising the administration on how to counter that narrative. 214 00:11:59,120 --> 00:12:01,679 Speaker 4: They would love to have a positive trade agenda. They 215 00:12:01,679 --> 00:12:05,120 Speaker 4: would love to have something like a TPP. 216 00:12:05,920 --> 00:12:09,760 Speaker 1: A major victory for President Obama and his economic agenda 217 00:12:09,840 --> 00:12:12,920 Speaker 1: as the US, Japan, and ten other countries have approved 218 00:12:13,040 --> 00:12:15,360 Speaker 1: the Trans Pacific Partnership. 219 00:12:15,080 --> 00:12:19,520 Speaker 4: That President Trump withdrew from his first week in office, 220 00:12:19,840 --> 00:12:23,560 Speaker 4: and nobody really in the US seems to be wanting 221 00:12:23,600 --> 00:12:26,800 Speaker 4: to go back to that agreement. So the Biden administration 222 00:12:26,880 --> 00:12:29,559 Speaker 4: came up with a different approach, which is called the 223 00:12:30,040 --> 00:12:31,199 Speaker 4: ipav US. 224 00:12:31,240 --> 00:12:34,040 Speaker 3: President Joe Biden has signed up a dozen countries to 225 00:12:34,160 --> 00:12:38,320 Speaker 3: help challenge Chinese dominance in Asia. During a tour of 226 00:12:38,320 --> 00:12:42,559 Speaker 3: the continent, he announced the Indo Pacific Economic Framework, saying. 227 00:12:42,280 --> 00:12:44,920 Speaker 4: That has lots of pillars, but is not supposed to 228 00:12:44,920 --> 00:12:48,439 Speaker 4: be a trade agreement because it's not. It's also not 229 00:12:48,559 --> 00:12:51,360 Speaker 4: going to get the benefits on the market opening and 230 00:12:51,400 --> 00:12:54,760 Speaker 4: tariff reduction that the TPP countries we're looking for. You 231 00:12:54,840 --> 00:12:58,560 Speaker 4: see a lot of sticks from this administration, as we 232 00:12:58,600 --> 00:13:02,559 Speaker 4: have from the Trump administrations, saying more tariffs, more restrictions, 233 00:13:03,280 --> 00:13:07,040 Speaker 4: subsidies in the US, incentivize you or penalize you if 234 00:13:07,040 --> 00:13:09,920 Speaker 4: you're not doing this. So what is the carrot? Where's 235 00:13:09,960 --> 00:13:13,920 Speaker 4: the carrot coming from? For Vietnam, for Japan, for other 236 00:13:13,960 --> 00:13:17,000 Speaker 4: countries that are part of the now loosely agreed to 237 00:13:17,120 --> 00:13:22,040 Speaker 4: IPF agreement, Because that's missing. I think they have a 238 00:13:22,160 --> 00:13:26,680 Speaker 4: harder time convincing these other countries. We're not trying to 239 00:13:26,720 --> 00:13:29,040 Speaker 4: have you choose, but you know this is the right way, 240 00:13:29,360 --> 00:13:31,560 Speaker 4: and I think that's going to play out over the 241 00:13:31,559 --> 00:13:32,199 Speaker 4: next couple. 242 00:13:32,040 --> 00:13:34,840 Speaker 2: Of years after the break. 243 00:13:35,000 --> 00:13:47,520 Speaker 1: How have the US China tensions affected international trade? Let's 244 00:13:47,520 --> 00:13:51,440 Speaker 1: talk a bit specifically about China and this question now 245 00:13:51,480 --> 00:13:55,360 Speaker 1: of decoupling or diversification. Now, let's go back a little 246 00:13:55,360 --> 00:13:57,040 Speaker 1: bit and talk about how we even got to this 247 00:13:57,240 --> 00:14:01,640 Speaker 1: point where so many companies and countries found their supply 248 00:14:01,760 --> 00:14:03,600 Speaker 1: chain so dependent on China. 249 00:14:04,000 --> 00:14:04,920 Speaker 2: How did that happen? 250 00:14:05,960 --> 00:14:08,640 Speaker 7: China opened in the late seventies, there was those reforms 251 00:14:08,720 --> 00:14:12,440 Speaker 7: led by Dengshaupin. At that stage, China's share of global 252 00:14:12,440 --> 00:14:15,600 Speaker 7: trade was less than one percent. Zoom through the eighties 253 00:14:15,640 --> 00:14:18,800 Speaker 7: and nineties, rapid growth in China's manufacturing sector along with 254 00:14:18,840 --> 00:14:22,440 Speaker 7: its overall economy. But this all got super turbocharged by 255 00:14:22,440 --> 00:14:25,520 Speaker 7: the entry into the WTO in two thousand and one. 256 00:14:25,560 --> 00:14:29,640 Speaker 7: That entry coincided with the revolution in communications technology that 257 00:14:29,720 --> 00:14:33,880 Speaker 7: allowed mega companies, big global companies to track their diversified 258 00:14:34,080 --> 00:14:37,560 Speaker 7: supply chains, you know, with stuff like the Internet, and 259 00:14:37,920 --> 00:14:41,240 Speaker 7: we could communicate with suppliers through things like email for 260 00:14:41,280 --> 00:14:43,600 Speaker 7: the first time. And the labor force in China was 261 00:14:43,640 --> 00:14:47,760 Speaker 7: in that sweet spot. The education system had created, you know, 262 00:14:47,920 --> 00:14:50,440 Speaker 7: a skilled labor force by that stage, so there was 263 00:14:50,520 --> 00:14:54,240 Speaker 7: just a secret source. Come into the mid twenty tens, 264 00:14:54,560 --> 00:14:56,680 Speaker 7: and all of a sudden, the world started to wake 265 00:14:56,760 --> 00:15:00,480 Speaker 7: up to the fact that, wow, China's really eating everyone's 266 00:15:00,520 --> 00:15:04,720 Speaker 7: lunch here, and in the process, manufacturing sectors elsewhere around 267 00:15:04,720 --> 00:15:08,200 Speaker 7: the world were being hollowed out. Then in twenty fifteen, 268 00:15:08,320 --> 00:15:10,600 Speaker 7: China sort of stuck its head above the parapet a 269 00:15:10,600 --> 00:15:13,800 Speaker 7: little bit with the China twenty twenty five Industrial Plan 270 00:15:14,200 --> 00:15:17,280 Speaker 7: that identified these ten industries in which it wanted to 271 00:15:17,480 --> 00:15:20,800 Speaker 7: become globally competitive over the next decade. So now just 272 00:15:20,840 --> 00:15:23,280 Speaker 7: two years from where we are today. That sort of 273 00:15:23,440 --> 00:15:26,480 Speaker 7: was the economic backdrop to what then happened on the 274 00:15:26,480 --> 00:15:27,240 Speaker 7: political front. 275 00:15:27,920 --> 00:15:31,160 Speaker 1: Brendan, I'm curious your perspective here on this. I mean, 276 00:15:31,200 --> 00:15:34,160 Speaker 1: we've talked about the Great Reset and that beginning, but 277 00:15:34,240 --> 00:15:37,000 Speaker 1: for many companies it's just not easy just to say 278 00:15:37,360 --> 00:15:40,000 Speaker 1: that's it, We're going to change our supply chains. But 279 00:15:40,080 --> 00:15:42,240 Speaker 1: are there also a lot of companies that simply don't 280 00:15:42,240 --> 00:15:42,600 Speaker 1: want to. 281 00:15:43,800 --> 00:15:46,480 Speaker 5: Well, the companies that are having the most difficulty are 282 00:15:46,480 --> 00:15:49,560 Speaker 5: the ones that want to sell into the Chinese market. 283 00:15:50,040 --> 00:15:53,200 Speaker 5: You can produce lots of goods and expensively there and 284 00:15:53,280 --> 00:15:56,360 Speaker 5: export them. But China has you know, upwards of a 285 00:15:56,400 --> 00:15:59,640 Speaker 5: billion or more people now that are increasingly in the 286 00:15:59,640 --> 00:16:02,400 Speaker 5: middle class, even affluent. They've got a lot of money 287 00:16:02,400 --> 00:16:05,440 Speaker 5: to spend on Tesla's and Swiss watches and other things 288 00:16:05,440 --> 00:16:07,880 Speaker 5: that we report on weekend and week out at Bloomberg. 289 00:16:08,000 --> 00:16:10,880 Speaker 5: So there's definitely a reluctance. You see it in the 290 00:16:10,880 --> 00:16:13,560 Speaker 5: big the Wall Street banks that want to finance a 291 00:16:13,600 --> 00:16:17,280 Speaker 5: lot of the infrastructure and economic development that China still 292 00:16:17,320 --> 00:16:20,160 Speaker 5: has to do. It's a you know, you can't live 293 00:16:20,200 --> 00:16:22,520 Speaker 5: with it, you can't live without it kind of arrangement 294 00:16:22,600 --> 00:16:25,440 Speaker 5: with China. Now, a lot of companies are finding out 295 00:16:25,480 --> 00:16:29,120 Speaker 5: that if you do leave China or speak in a 296 00:16:29,160 --> 00:16:31,920 Speaker 5: way that isn't pleasing to the Chinese government, then you know, 297 00:16:31,920 --> 00:16:34,560 Speaker 5: there will be repercussions for that. So they're trying to 298 00:16:34,720 --> 00:16:37,200 Speaker 5: walk a fine line. Very few of them are just 299 00:16:37,320 --> 00:16:39,400 Speaker 5: pulling up their tent stakes and leaving. 300 00:16:39,960 --> 00:16:42,240 Speaker 4: You know, what's interesting is that I think some of 301 00:16:42,280 --> 00:16:47,400 Speaker 4: the firms are more impacted maybe by choosing Ping's policies 302 00:16:47,760 --> 00:16:51,040 Speaker 4: than by what the Biden administration is putting forward as 303 00:16:51,160 --> 00:16:54,960 Speaker 4: policies to sort of lure them back home. They're spooked by, 304 00:16:55,640 --> 00:16:58,200 Speaker 4: you know, a crackdown on the US due diligence sector. 305 00:16:58,800 --> 00:17:01,680 Speaker 4: Micron we've seen the Chinese go after well. 306 00:17:01,760 --> 00:17:05,080 Speaker 5: Chinese regulators vowed to ban some domestic purchases of chips 307 00:17:05,080 --> 00:17:07,640 Speaker 5: made by US firm Micron Technology. 308 00:17:07,960 --> 00:17:10,240 Speaker 4: The Chinese sort of promising this is just the first 309 00:17:10,400 --> 00:17:15,560 Speaker 4: step in a way. Having this uncertainty in the Chinese 310 00:17:15,640 --> 00:17:18,480 Speaker 4: market is something that they're also trying to grapple with 311 00:17:18,960 --> 00:17:23,760 Speaker 4: more so than actually heeding the Biden administration policies. But 312 00:17:23,840 --> 00:17:26,800 Speaker 4: of course we're also seeing policies that the White House 313 00:17:26,840 --> 00:17:29,840 Speaker 4: has been working on for two years now, trying to 314 00:17:30,000 --> 00:17:33,359 Speaker 4: limit the investment in certain sectors in China. 315 00:17:33,680 --> 00:17:36,080 Speaker 6: The US is now planning to place a limit on 316 00:17:36,200 --> 00:17:40,360 Speaker 6: exports of American chip making equipment to China. The latest 317 00:17:40,359 --> 00:17:43,720 Speaker 6: move is aimed at halting China's advances in the realm 318 00:17:43,760 --> 00:17:47,520 Speaker 6: of semiconductor production and protecting American. 319 00:17:47,040 --> 00:17:52,520 Speaker 4: Firms, possibly creating a chilling effect for these companies thinking 320 00:17:53,400 --> 00:17:55,639 Speaker 4: do we really want to put our money there? Do 321 00:17:55,680 --> 00:17:58,800 Speaker 4: we really want to put our NoHo there? The US 322 00:17:58,800 --> 00:18:01,360 Speaker 4: does not believe that there's a private sector in China 323 00:18:01,440 --> 00:18:04,280 Speaker 4: that all the know how, all the money, everything you 324 00:18:04,359 --> 00:18:07,080 Speaker 4: do there goes to the military, and that of course 325 00:18:07,119 --> 00:18:10,080 Speaker 4: could be used against the US military if there is 326 00:18:10,119 --> 00:18:13,520 Speaker 4: a conflict. So those are also underlying factors that some 327 00:18:13,560 --> 00:18:15,159 Speaker 4: of the firms are grappling with. 328 00:18:15,640 --> 00:18:18,720 Speaker 1: It's really interesting, Jenny, with seeing of course, lots of 329 00:18:18,720 --> 00:18:22,560 Speaker 1: comments from officials in China of late sort of reassuring 330 00:18:22,560 --> 00:18:25,520 Speaker 1: on the private sector. Not a lot of specifics in 331 00:18:25,560 --> 00:18:28,000 Speaker 1: any of that so far, but certainly trying to send 332 00:18:28,000 --> 00:18:30,840 Speaker 1: a message again and meeting of course with sort of 333 00:18:31,040 --> 00:18:32,639 Speaker 1: executives from US companies. 334 00:18:33,000 --> 00:18:36,119 Speaker 9: As tensions between the US and China remain at an 335 00:18:36,119 --> 00:18:37,000 Speaker 9: all time high. 336 00:18:37,480 --> 00:18:41,560 Speaker 6: Microsoft co founder Bill Gates has met President Jijing Ping. 337 00:18:42,040 --> 00:18:44,960 Speaker 4: And that's happening all the while. They're cracking down on 338 00:18:45,000 --> 00:18:47,440 Speaker 4: some of these sectors. In the White House, which is 339 00:18:47,520 --> 00:18:50,400 Speaker 4: usually pretty quiet on the China front, has actually been 340 00:18:50,440 --> 00:18:54,400 Speaker 4: seizing on that, saying they're seeing a concerning pattern and 341 00:18:54,720 --> 00:18:58,560 Speaker 4: sort of sending the message to the business community. Maybe 342 00:18:58,600 --> 00:19:01,280 Speaker 4: the Chinese are trying to play at both sides here. 343 00:19:01,920 --> 00:19:04,000 Speaker 4: It's up to you what you do, but you know, 344 00:19:04,560 --> 00:19:06,520 Speaker 4: you see the risks here. So that's sort of an 345 00:19:06,640 --> 00:19:10,000 Speaker 4: interesting new development that we've seen over the last three months, 346 00:19:10,040 --> 00:19:11,520 Speaker 4: i would say, coming from the White House. 347 00:19:12,400 --> 00:19:14,480 Speaker 1: And of course none of this is happening in a vacuum. 348 00:19:14,520 --> 00:19:17,440 Speaker 1: We've been talking about some of the policies that we've 349 00:19:17,440 --> 00:19:20,399 Speaker 1: seen from China. But Mal, I'm curious, how does China 350 00:19:20,600 --> 00:19:23,200 Speaker 1: see all of this? What is the impact that you've 351 00:19:23,200 --> 00:19:26,000 Speaker 1: seen so far for any on the economy of China. 352 00:19:27,040 --> 00:19:30,880 Speaker 7: China isn't sitting back, abashed and tail between its legs. 353 00:19:30,920 --> 00:19:33,120 Speaker 7: It continues to press ahead with plans to develop these 354 00:19:33,160 --> 00:19:36,760 Speaker 7: industries such as AI evs, where companies such as BYD 355 00:19:36,920 --> 00:19:40,679 Speaker 7: and making great strides effectively doing that via skirting the 356 00:19:40,800 --> 00:19:44,200 Speaker 7: US they're not trying to sell evs in America. That's 357 00:19:44,240 --> 00:19:46,240 Speaker 7: just too tough. But let's sell them to the rest 358 00:19:46,240 --> 00:19:47,040 Speaker 7: of the world instead. 359 00:19:47,320 --> 00:19:50,560 Speaker 1: China's waging a war not in the Pacific, but non 360 00:19:50,600 --> 00:19:54,359 Speaker 1: Australian roads. Its manufacturers are locked in a heated race 361 00:19:54,400 --> 00:19:57,200 Speaker 1: to bring the cheapest electric vehicle to our market. 362 00:19:57,480 --> 00:20:00,000 Speaker 7: They're plowing ahead on that front. But by the same 363 00:20:00,359 --> 00:20:03,000 Speaker 7: they're also aware that just as the rest of the 364 00:20:03,000 --> 00:20:06,159 Speaker 7: world is maybe a little bit too reliant on China, 365 00:20:06,680 --> 00:20:09,320 Speaker 7: China's economy was perhaps a little bit too reliant on 366 00:20:09,400 --> 00:20:12,120 Speaker 7: the rest of the world. So since around mid twenty twenty, 367 00:20:12,480 --> 00:20:15,960 Speaker 7: we've heard more from Chijinping and others about this duel 368 00:20:16,119 --> 00:20:20,399 Speaker 7: circulation growth model. The duel being let's stick with the 369 00:20:20,400 --> 00:20:23,720 Speaker 7: global engagement, let's continue to do that, but let's back 370 00:20:23,760 --> 00:20:28,400 Speaker 7: it with additional domestic demand. And also let's assemble more 371 00:20:28,400 --> 00:20:31,800 Speaker 7: of those components, or produce rather more of those components ourselves. 372 00:20:32,000 --> 00:20:35,639 Speaker 7: So there were assembling products that are made from components 373 00:20:35,640 --> 00:20:38,879 Speaker 7: that are also made in China, so that value added, 374 00:20:38,920 --> 00:20:42,600 Speaker 7: that all important valu added stays at home. And then 375 00:20:42,640 --> 00:20:45,000 Speaker 7: the third thing they're doing is just as the US 376 00:20:45,040 --> 00:20:48,560 Speaker 7: and other Western like minded countries are trying to diversify 377 00:20:48,720 --> 00:20:51,120 Speaker 7: away from China a little bit. So China is trying 378 00:20:51,160 --> 00:20:54,000 Speaker 7: to back away from its reliance on those markets, and 379 00:20:54,040 --> 00:20:58,400 Speaker 7: it's having some success. It's diversifying its customer base and 380 00:20:58,880 --> 00:21:02,320 Speaker 7: selling more sense to its Southeast Asian neighbors. 381 00:21:03,840 --> 00:21:06,120 Speaker 2: Coming up, what follows the Great Reset. 382 00:21:15,200 --> 00:21:18,560 Speaker 1: We've talked a lot in this conversation about the Great Reset, 383 00:21:18,760 --> 00:21:20,800 Speaker 1: but I want to just come into something a bit 384 00:21:20,800 --> 00:21:23,159 Speaker 1: more specifically, and this is something Jenny, you've touched on 385 00:21:23,680 --> 00:21:26,320 Speaker 1: so far in the conversation, which is the US election, 386 00:21:26,520 --> 00:21:29,400 Speaker 1: which is coming up late next year. And you could 387 00:21:29,480 --> 00:21:32,600 Speaker 1: argue that Joe Biden has been a more protectionist president 388 00:21:32,840 --> 00:21:36,280 Speaker 1: than his predecessor, Donald Trump. But equally, is the US 389 00:21:36,280 --> 00:21:39,360 Speaker 1: political climate at this point where no one can afford 390 00:21:39,400 --> 00:21:42,399 Speaker 1: to not be seen to be protectionist sort. 391 00:21:42,160 --> 00:21:45,160 Speaker 4: Of yes, I think when it comes to the US 392 00:21:45,320 --> 00:21:51,399 Speaker 4: China relationship, there's multiple layers of concerns, from national security 393 00:21:51,720 --> 00:21:54,040 Speaker 4: to human rights, which we've seen a lot in the 394 00:21:54,200 --> 00:21:58,840 Speaker 4: apparel sector. You know, Shinjug, the Western Chinese region, there's 395 00:21:58,840 --> 00:22:01,600 Speaker 4: a whole lot that was passed that sort of now 396 00:22:01,880 --> 00:22:05,000 Speaker 4: bans Catton coming in and other products coming in from 397 00:22:05,000 --> 00:22:08,040 Speaker 4: that region. So if you look to twenty twenty four, 398 00:22:08,240 --> 00:22:11,520 Speaker 4: former President Trump, who's running for reelection, is promising a 399 00:22:11,600 --> 00:22:15,879 Speaker 4: full decoupling from China. Now he sort of thinks that 400 00:22:16,119 --> 00:22:19,000 Speaker 4: he hasn't done everything he could have done in his 401 00:22:19,080 --> 00:22:21,240 Speaker 4: four years in the White House, so now he is 402 00:22:21,320 --> 00:22:25,440 Speaker 4: really going at it in part two, promising a full decoupling. 403 00:22:25,880 --> 00:22:28,800 Speaker 4: And so everyone sort of on the Republican side is 404 00:22:28,840 --> 00:22:33,080 Speaker 4: measuring their stance based on what Trump has already done, 405 00:22:33,760 --> 00:22:36,920 Speaker 4: what Trump is promising. You don't really hear anyone who 406 00:22:37,000 --> 00:22:41,800 Speaker 4: is pro business, pro engaging with China on the Republican side. 407 00:22:41,840 --> 00:22:44,920 Speaker 4: And of course President Biden, who's running for reelection, has 408 00:22:44,960 --> 00:22:48,199 Speaker 4: similar views and has continued some of the policies that 409 00:22:48,200 --> 00:22:51,479 Speaker 4: we've seen from the Trump administration. So on China, I 410 00:22:51,520 --> 00:22:55,200 Speaker 4: think we will see the protectionism going forward. 411 00:22:55,760 --> 00:22:57,679 Speaker 5: I think another thing to keep a close eye on 412 00:22:57,800 --> 00:23:00,760 Speaker 5: as we go through the campaign season and rhetoric kind 413 00:23:00,760 --> 00:23:05,399 Speaker 5: of flies around, is any pushback that this decoupling that 414 00:23:05,440 --> 00:23:08,760 Speaker 5: we would get from the Republican candidates gets from the 415 00:23:08,800 --> 00:23:13,200 Speaker 5: business community. Because tariffs were not a popular strategy. Donald 416 00:23:13,200 --> 00:23:15,680 Speaker 5: Trump got a lot of political mileage out of them 417 00:23:15,720 --> 00:23:19,040 Speaker 5: from his base, but tariffs were not popular, and if 418 00:23:19,040 --> 00:23:21,720 Speaker 5: the pandemic didn't come along, we might have been looking 419 00:23:21,800 --> 00:23:24,560 Speaker 5: at more tariffs and phase of inflation that might have 420 00:23:24,600 --> 00:23:29,080 Speaker 5: been caused by tariffs. Decoupling from the Chinese economy sounds 421 00:23:29,119 --> 00:23:32,359 Speaker 5: like a really good hawkish approach, But I bet if 422 00:23:32,400 --> 00:23:35,000 Speaker 5: you asked the big corporate donors if they would like that, 423 00:23:35,119 --> 00:23:36,480 Speaker 5: you'd get a different answer. 424 00:23:38,800 --> 00:23:41,160 Speaker 1: And Jenny, you were talking of course about how other 425 00:23:41,200 --> 00:23:43,639 Speaker 1: allies have supported the US in this better sense of 426 00:23:43,640 --> 00:23:46,440 Speaker 1: Aneya's also at the pace of it and perhaps being 427 00:23:46,520 --> 00:23:49,760 Speaker 1: driven avertly by US foreign policy. And you know, going 428 00:23:49,800 --> 00:23:51,920 Speaker 1: back to what Mao was talking about the global South 429 00:23:51,960 --> 00:23:54,520 Speaker 1: countries are feeling caught in the middle, and India is 430 00:23:54,560 --> 00:23:55,760 Speaker 1: a really interesting case. 431 00:23:56,240 --> 00:23:57,840 Speaker 2: Brenda, can you talk a bit more about India. 432 00:23:58,240 --> 00:23:59,840 Speaker 5: Yeah, So, India, like you said, is one of these 433 00:24:00,000 --> 00:24:04,919 Speaker 5: really interesting examples. It wants to be the beneficiary of 434 00:24:05,320 --> 00:24:08,000 Speaker 5: the de risking that companies are doing from China. It 435 00:24:08,040 --> 00:24:11,919 Speaker 5: wants to make iPhones and other high tech equipment, and 436 00:24:11,960 --> 00:24:15,120 Speaker 5: it wants to benefit from this shift away from China economically. 437 00:24:15,520 --> 00:24:19,199 Speaker 5: But on the geopolitical side, it's portraying itself as a 438 00:24:19,320 --> 00:24:23,800 Speaker 5: neutral in the sort of China Russia axis against the West. 439 00:24:24,280 --> 00:24:25,960 Speaker 5: It will see how long it can kind of stay 440 00:24:25,960 --> 00:24:28,320 Speaker 5: in the middle there. For the story that we're talking about, 441 00:24:28,400 --> 00:24:30,679 Speaker 5: we had a reporter go to a factory outside of 442 00:24:30,680 --> 00:24:34,199 Speaker 5: New Delhi that's getting the financial support from the Modi government. 443 00:24:34,359 --> 00:24:37,680 Speaker 5: It's this facility where we learned that even the CFO 444 00:24:37,760 --> 00:24:40,800 Speaker 5: who we talked to said, we're doing very well. We're 445 00:24:40,840 --> 00:24:43,520 Speaker 5: making mobile phones, but it's going to take years and 446 00:24:43,600 --> 00:24:48,000 Speaker 5: years and so this process it's complicated. The infrastructure, even 447 00:24:48,040 --> 00:24:50,400 Speaker 5: in a place like India is not up to par 448 00:24:50,520 --> 00:24:54,000 Speaker 5: with China. So all this talk about racing to catch 449 00:24:54,080 --> 00:24:57,359 Speaker 5: up to China or replace China is a really difficult process. 450 00:24:58,040 --> 00:25:02,200 Speaker 7: Even as India does see to be the next China. Ironically, 451 00:25:02,240 --> 00:25:07,600 Speaker 7: that's boosting, not reducing its reliance on shipments from China, 452 00:25:08,080 --> 00:25:11,280 Speaker 7: because as they seek to boost the manufacturing sector, they 453 00:25:11,320 --> 00:25:14,760 Speaker 7: need to be buying those components or the machines that 454 00:25:14,840 --> 00:25:16,679 Speaker 7: make the components from China. 455 00:25:17,760 --> 00:25:21,399 Speaker 1: Do you smail any other unintended consequences of this great 456 00:25:21,600 --> 00:25:24,480 Speaker 1: reset when you look around the world. 457 00:25:24,520 --> 00:25:28,440 Speaker 7: I mean from an economics perspective, they abound. We're trying 458 00:25:28,440 --> 00:25:31,720 Speaker 7: to tackle this big inflation shock, and many of these 459 00:25:31,760 --> 00:25:34,239 Speaker 7: measures are only going to make the goods that we 460 00:25:34,400 --> 00:25:38,360 Speaker 7: buy more expensive, so that's going to get tougher. There's 461 00:25:38,400 --> 00:25:43,720 Speaker 7: the misallocation of resources as governments try to pick winners. Historically, 462 00:25:43,720 --> 00:25:46,320 Speaker 7: that's not proved to be a good idea. You know, 463 00:25:46,920 --> 00:25:50,840 Speaker 7: if we're all pushing to reshore and manufacture these certain 464 00:25:50,960 --> 00:25:54,080 Speaker 7: so called strategic products, it probably won't be too long 465 00:25:54,160 --> 00:25:57,200 Speaker 7: until there's a glood of those things and we're all 466 00:25:57,200 --> 00:25:59,760 Speaker 7: talking about the misallocation of resources that happened. 467 00:26:00,240 --> 00:26:03,720 Speaker 5: I think one of the most basic unintended consequences that 468 00:26:03,760 --> 00:26:06,520 Speaker 5: we could see play out is there's all this talk 469 00:26:06,560 --> 00:26:11,560 Speaker 5: about reshoring, near shoring, bringing production back home to create 470 00:26:11,680 --> 00:26:14,399 Speaker 5: manufacturing jobs, when a lot of those jobs are just 471 00:26:14,480 --> 00:26:17,919 Speaker 5: going to be automated. The technology is such now that 472 00:26:18,240 --> 00:26:21,080 Speaker 5: you don't need one thousand people in a factory to 473 00:26:21,240 --> 00:26:23,560 Speaker 5: make a car anymore. You need some robots and a 474 00:26:23,560 --> 00:26:27,960 Speaker 5: few hundred. We visited a company in County Kerry, Ireland 475 00:26:28,200 --> 00:26:32,240 Speaker 5: that's making products for Ikea. By the way of three 476 00:26:32,320 --> 00:26:35,720 Speaker 5: D printing, there's no need for Chinese production or production 477 00:26:35,800 --> 00:26:38,919 Speaker 5: anywhere else. It just happens without any sort of supply 478 00:26:39,040 --> 00:26:42,200 Speaker 5: chain at all. So those are the kinds of advances 479 00:26:42,240 --> 00:26:45,080 Speaker 5: that we're seeing that could make the next several decades 480 00:26:45,280 --> 00:26:45,960 Speaker 5: really interesting. 481 00:26:48,160 --> 00:26:50,720 Speaker 2: Where do you see the great reset going? 482 00:26:50,840 --> 00:26:52,760 Speaker 1: If you think about what the world might look like 483 00:26:52,840 --> 00:26:54,960 Speaker 1: in five years from now or ten years from now, 484 00:26:55,280 --> 00:26:58,160 Speaker 1: do you see a radically different global economy. 485 00:26:58,800 --> 00:27:01,640 Speaker 5: I think the length and the degree of the transformation 486 00:27:01,920 --> 00:27:04,680 Speaker 5: is going to depend on whether the US China conflict 487 00:27:05,040 --> 00:27:08,200 Speaker 5: goes from a cold war situation to a hot one. 488 00:27:08,800 --> 00:27:11,680 Speaker 5: It will transform very quickly if we're in some sort 489 00:27:11,720 --> 00:27:14,680 Speaker 5: of military conflict with China, and the decoupling will happen 490 00:27:14,720 --> 00:27:17,399 Speaker 5: almost over night. The short answer is it's going to 491 00:27:17,400 --> 00:27:20,720 Speaker 5: be a slow, costly process, but we're going to see 492 00:27:20,760 --> 00:27:23,320 Speaker 5: the world change before our own eyes over the next 493 00:27:23,359 --> 00:27:23,960 Speaker 5: decade or two. 494 00:27:24,440 --> 00:27:29,280 Speaker 4: You know, Brendan mentioned the China situation, which of course 495 00:27:29,440 --> 00:27:33,159 Speaker 4: has to do with Taiwan, which is the center of 496 00:27:33,240 --> 00:27:36,520 Speaker 4: the global semiconductor industry. I think it's going to be 497 00:27:36,520 --> 00:27:39,840 Speaker 4: really interesting to watch their Taiwan is also having a 498 00:27:39,840 --> 00:27:43,920 Speaker 4: presidential election in early twenty twenty four. They really want 499 00:27:44,080 --> 00:27:49,879 Speaker 4: the semiconductor industry to remain centered on Taiwan because that 500 00:27:50,040 --> 00:27:52,280 Speaker 4: gives them a little bit of what they call the 501 00:27:52,320 --> 00:27:56,920 Speaker 4: silicon shield. So I'm watching that election very closely. 502 00:27:57,920 --> 00:28:01,160 Speaker 2: Brendan, Malcolm, Jenny, thank you for joining me today. 503 00:28:01,440 --> 00:28:05,159 Speaker 1: Thanks for ros Thank you Ross, thank you, thanks for 504 00:28:05,240 --> 00:28:07,040 Speaker 1: listening to us here at The Big Take. It's a 505 00:28:07,160 --> 00:28:12,000 Speaker 1: daily podcast from Bloomberg and iHeartRadio. For more shows from iHeartRadio, 506 00:28:12,240 --> 00:28:16,920 Speaker 1: visit the iHeartRadio app, Apple Podcasts, or wherever you listen, and. 507 00:28:16,880 --> 00:28:18,399 Speaker 2: We'd love to hear from you. 508 00:28:18,440 --> 00:28:21,040 Speaker 1: Email us with questions or comments to Big Take at 509 00:28:21,040 --> 00:28:25,040 Speaker 1: Bloomberg dot net. The supervising producer of the Big Take 510 00:28:25,160 --> 00:28:29,879 Speaker 1: is Vicky Virgolina. Our senior producer is Katherine Fink Fderica 511 00:28:29,960 --> 00:28:34,440 Speaker 1: Romanello is our producer. Our associate producer is Zena ab Zidiki. 512 00:28:35,160 --> 00:28:39,840 Speaker 1: Raphael am Silly is our engineer. Original music by Leo Sidrin. 513 00:28:40,400 --> 00:28:43,600 Speaker 1: I'm Roslin Matheson in for Wes Kosova. We'll be back 514 00:28:43,640 --> 00:28:44,960 Speaker 1: tomorrow with another Big Take.