WEBVTT - The US and China’s High-Stakes Diplomacy 0:00:00.240 --> 0:00:07.200 Bloomberg Audio Studios, podcasts, radio news. 0:00:08.039 --> 0:00:10.680 The world has waited for months for a lasting trade 0:00:10.760 --> 0:00:14.040 deal between China and the US, one that could potentially 0:00:14.120 --> 0:00:17.320 cool the tariff war that's been raging between both countries 0:00:17.680 --> 0:00:21.960 in President Trump's second term. On Monday, representatives from the 0:00:22.079 --> 0:00:25.279 US and China hold up in a mansion near Buckingham 0:00:25.320 --> 0:00:29.440 Palace in London to hammer that potential deal out, and 0:00:29.520 --> 0:00:34.960 on Tuesday they were still there. Brendon Murray runs Bloomberg's 0:00:35.000 --> 0:00:38.040 trade coverage. He and other reporters have spent the last 0:00:38.080 --> 0:00:40.960 two days looking for any signs of how the talks 0:00:41.040 --> 0:00:41.680 might be going. 0:00:41.960 --> 0:00:44.680 We've seen a lot of delivery food being brought to 0:00:44.720 --> 0:00:49.479 Lancaster House Otto Lingi both days, the upscale deli and 0:00:49.560 --> 0:00:52.760 dessert chain, but other than that, there's not much information 0:00:52.840 --> 0:00:53.360 coming out. 0:00:53.640 --> 0:00:57.040 So lunch being brought in good sign, bad sign. 0:00:57.520 --> 0:01:01.440 Well, yesterday's lunch was six bags was twelve, so we 0:01:01.520 --> 0:01:04.160 think maybe one side bought lunch for the other. But 0:01:04.959 --> 0:01:08.880 moments after that we saw the Chinese delegation leave for 0:01:08.959 --> 0:01:11.080 a lunch break, so apparently they weren't into it. 0:01:11.560 --> 0:01:14.360 Around five point thirty pm local time, the two sides 0:01:14.400 --> 0:01:16.880 took a break, and a person familiar with the matter 0:01:16.959 --> 0:01:19.680 told Bloomberg they were planning to resume talks at eight 0:01:19.720 --> 0:01:24.200 pm Tuesday night. US Commerce Secretary Howard Lutnik said later 0:01:24.360 --> 0:01:27.520 that the talks went quote really, really well, and then 0:01:27.560 --> 0:01:30.679 while he hoped the negotiations would end this evening, they 0:01:30.720 --> 0:01:35.080 could stretch into Wednesday morning. And Bloomberg's John lu says 0:01:35.280 --> 0:01:38.199 there's still a lot at stake as both sides try 0:01:38.240 --> 0:01:39.560 to find common ground. 0:01:40.120 --> 0:01:44.520 Can the United States accept a China that is three 0:01:44.560 --> 0:01:48.320 times as large economically and has the world's most cutting 0:01:48.400 --> 0:01:52.080 edge technology. Until that day comes, and it may never come, 0:01:52.560 --> 0:01:57.919 we will have trade wars. 0:01:58.320 --> 0:02:00.960 I'm Sarah Holder, and this is the Big Take from 0:02:01.000 --> 0:02:04.800 Bloomberg News Today. On the show inside the latest trade 0:02:04.880 --> 0:02:08.720 negotiations between the US and China, I speak with Bloomberg 0:02:08.760 --> 0:02:11.760 Trade editor Brendan Murray, who's on the ground in London, 0:02:12.240 --> 0:02:15.000 and Big Take Asia host Juan ha sits down with 0:02:15.120 --> 0:02:19.320 John Lu who's been covering developments from Beijing. Could these 0:02:19.360 --> 0:02:21.839 talks mark a pivotal turning point in the tariff war 0:02:21.880 --> 0:02:25.000 between the US and China and what could relations between 0:02:25.000 --> 0:02:31.640 the two countries look like after they're done. 0:02:32.960 --> 0:02:33.120 Well? 0:02:33.120 --> 0:02:36.400 Brendan, You've been covering these negotiations closely over the past 0:02:36.400 --> 0:02:39.240 few months as tensions between the US and China have 0:02:39.639 --> 0:02:43.360 escalated and de escalated. When I spoke with you just 0:02:43.480 --> 0:02:46.120 last week, we talked about how the deal they'd reached 0:02:46.160 --> 0:02:49.160 in Geneva in May was on shaky ground, and how that, 0:02:49.360 --> 0:02:52.320 plus the lack of progress on other tariff deals more 0:02:52.320 --> 0:02:55.799 than halfway through the self imposed ninety day pause, had 0:02:55.800 --> 0:03:00.520 put new pressure on Donald Trump's credibility at home. How 0:03:00.560 --> 0:03:03.720 has that ticking clock played into these talks this week 0:03:03.760 --> 0:03:04.200 in London. 0:03:04.639 --> 0:03:06.640 Well, the focus for the past couple weeks for the 0:03:06.680 --> 0:03:10.560 Trump administration has really been on China. It's been almost 0:03:10.560 --> 0:03:14.040 exactly a month since they emerged from talks in Geneva, 0:03:14.040 --> 0:03:17.200 Switzerland with what they called a deal, which was essentially 0:03:17.240 --> 0:03:20.840 a ceasefire in the very high crippling tariffs that they 0:03:20.880 --> 0:03:24.000 were imposing on each other. They brought those down to 0:03:24.040 --> 0:03:27.720 a significant degree, the US to thirty percent, China brought 0:03:27.720 --> 0:03:30.160 its tariffs down to ten percent, and they said, let's 0:03:30.160 --> 0:03:33.720 spend the next ninety days talking through these difficulties that 0:03:33.760 --> 0:03:37.760 we're having, reaching agreements on specific issues. But what's happened 0:03:37.800 --> 0:03:42.080 In the meantime, is China has shown the world how 0:03:42.240 --> 0:03:46.880 much leverage it has. China controls most of the world's 0:03:46.960 --> 0:03:49.920 rare earth minerals. These are things that make electric car 0:03:50.000 --> 0:03:54.720 batteries and lasers and all sorts of advanced manufactured goods, 0:03:54.800 --> 0:03:58.400 and China controls most of the supply of them and 0:03:58.400 --> 0:04:01.880 the processing of them. And what's happened and is China has, 0:04:02.000 --> 0:04:08.240 either deliberately or through its bureaucratic process of permitting export 0:04:08.320 --> 0:04:13.120 licenses for those goods, has shown the world how much 0:04:13.400 --> 0:04:18.360 pain it can inflict on auto supply change aerospace supply 0:04:18.480 --> 0:04:22.680 chains if it slows the export of those minerals. And 0:04:22.760 --> 0:04:27.520 the US recently has said, look, you're not complying with 0:04:27.600 --> 0:04:30.760 the agreement that we made in Geneva. We expected those 0:04:31.200 --> 0:04:34.680 permits and those rare earth minerals to start flowing to 0:04:34.800 --> 0:04:38.560 us sooner than that. Let's get back to the negotiating table. 0:04:38.760 --> 0:04:43.400 That's what led Donald Trump to urge Hijinping to get 0:04:43.400 --> 0:04:46.240 on the phone and say, we need to have a 0:04:46.279 --> 0:04:48.760 talk about this because this is going to hurt our economy. 0:04:49.120 --> 0:04:51.600 And it's not just the US. The European companies are 0:04:51.640 --> 0:04:55.680 complaining about it. Indian automakers are also in trouble. If 0:04:55.760 --> 0:05:01.320 China withholds these very important critical minerals really could become 0:05:01.400 --> 0:05:05.640 a worldwide issue. The US, in the meantime started to 0:05:05.680 --> 0:05:10.719 make moves to put controls on things like software for chips, 0:05:10.760 --> 0:05:16.520 for jet engine parts, for nuclear reactor materials, some chemicals. 0:05:16.760 --> 0:05:19.960 So the US struck back and said, hey, we have 0:05:20.040 --> 0:05:23.560 stuff that you need too, and so China has an 0:05:23.600 --> 0:05:25.880 interest in seeing that stuff moved to them too. 0:05:26.839 --> 0:05:29.599 So how did they get back to the negotiating table. 0:05:29.640 --> 0:05:32.440 Who was more instrumental in getting these talks actually planned 0:05:32.839 --> 0:05:33.360 in London? 0:05:33.560 --> 0:05:36.520 Well, Donald Trump has been urging Shijimpang to have a 0:05:36.560 --> 0:05:41.640 talk for months now. That urgency has increased recently in 0:05:41.720 --> 0:05:44.359 part because of the dragging of the feet that the 0:05:44.560 --> 0:05:47.880 US would say that China has done with the rare 0:05:47.920 --> 0:05:51.800 earth mineral those exports. And so the two leaders got 0:05:51.839 --> 0:05:54.880 on the phone and the team's got the go ahead 0:05:54.880 --> 0:05:57.480 to meet here in the UK. It's a bit of 0:05:57.520 --> 0:06:00.839 a neutral territory. They're at a venue right now that's 0:06:00.960 --> 0:06:03.560 not a US government site, not a Chinese government site. 0:06:03.600 --> 0:06:07.160 It's neutral ground where they can hash out these differences. 0:06:07.839 --> 0:06:11.160 Heading into these talks the US's main priority was securing 0:06:11.279 --> 0:06:15.279 access to China's rare earth minerals, and China's goal was 0:06:15.320 --> 0:06:19.200 to get semiconductor trips from US tech companies like Nvidia. 0:06:19.320 --> 0:06:22.640 But those are big concessions, and Brendan says meeting in 0:06:22.680 --> 0:06:24.880 the middle was always going to be difficult. 0:06:25.680 --> 0:06:28.719 The problem for the US and for China for that matter, 0:06:28.920 --> 0:06:32.760 is at what point do these products that are shipped 0:06:32.760 --> 0:06:37.440 around the world cross over into the realm of national security. 0:06:37.920 --> 0:06:42.159 At what point should the US say we shouldn't ship 0:06:42.320 --> 0:06:47.320 China our most sophisticated chips for AI because those could 0:06:47.360 --> 0:06:52.560 be used for supercomputing in defense applications and those sorts 0:06:52.560 --> 0:06:56.400 of things, and vice versa. China would say we wouldn't 0:06:56.440 --> 0:06:59.400 want the US Defense Department to get a hold of 0:06:59.480 --> 0:07:03.480 our best critical minerals to be used in a military way. 0:07:03.600 --> 0:07:06.960 So the two countries are walking a very fine line 0:07:07.000 --> 0:07:11.239 between national security and economic security, and the line between 0:07:11.280 --> 0:07:14.680 those two is getting blurrier and blurrier by the day. 0:07:15.640 --> 0:07:18.160 How are they trying to balance those concerns and what 0:07:18.160 --> 0:07:22.520 would a deal actually look like that would satisfy each party. 0:07:22.800 --> 0:07:26.880 I think a deal that would allow both countries to 0:07:27.040 --> 0:07:30.640 maintain a certain amount of trade, but not so much 0:07:30.760 --> 0:07:34.880 trade that it impedes the other's ability to accomplish its 0:07:34.880 --> 0:07:39.200 domestic goal. President Trump wants to reshore manufacturing, and one 0:07:39.200 --> 0:07:41.920 way to do that is to put high tariffs on 0:07:42.040 --> 0:07:46.160 Chinese imports and to force some of that production back home. 0:07:46.480 --> 0:07:51.080 China has an interest in exporting what it makes. It's 0:07:51.120 --> 0:07:53.720 still the factory of the world to the rest of 0:07:53.720 --> 0:07:56.640 the world, and if it's not to the US, it 0:07:56.680 --> 0:07:59.840 could be to other countries, to Vietnam or India or 0:07:59.840 --> 0:08:03.560 other places where those products would be welcome if they're 0:08:03.600 --> 0:08:06.840 not welcome in the US anymore. So, their two sides 0:08:06.880 --> 0:08:10.240 seem to be aiming for some sort of a re 0:08:10.880 --> 0:08:14.920 drawn arrangement where they can say, we'll trade with you, 0:08:15.040 --> 0:08:18.400 but only up to a certain point. We'll make sure 0:08:18.440 --> 0:08:22.440 that we diversify where we're getting our imports from or 0:08:22.560 --> 0:08:27.200 exporting two and reduce the dependency on each other. Is 0:08:27.320 --> 0:08:30.520 ultimately what both sides want to do if what we 0:08:30.560 --> 0:08:34.920 are looking at is the battle for global economic supremacy 0:08:35.000 --> 0:08:36.439 over the next decade or two. 0:08:36.880 --> 0:08:39.320 And then there is the last chess piece in these talks, 0:08:39.480 --> 0:08:41.880 the piece that Trump touted as a bargaining Chip on 0:08:41.920 --> 0:08:45.480 the campaign trail and enacted when he took office. 0:08:45.640 --> 0:08:49.800 Tariffs Tariffs are something that you keep on until the 0:08:49.960 --> 0:08:53.160 very last moment of a trade negotiation. They are your 0:08:53.240 --> 0:08:56.240 leverage and you don't give them up at round one 0:08:56.559 --> 0:09:00.400 like we are now. So the tariffs that China bases 0:09:00.800 --> 0:09:03.880 for their products coming into the US are this twenty 0:09:03.920 --> 0:09:09.320 percent based on fentanyl and border security that initially Canada 0:09:09.320 --> 0:09:12.960 and Mexico also we're hit with, and the ten percent 0:09:13.000 --> 0:09:16.560 reciprocal rate that everyone else is dealing with as well, 0:09:16.920 --> 0:09:20.680 and China has brought its tariff of US products down 0:09:20.720 --> 0:09:22.960 to ten percent. So there is a bit of a 0:09:23.000 --> 0:09:26.559 mismatch there, but it's a mismatch that both sides can 0:09:26.640 --> 0:09:28.000 live with for the time being. 0:09:28.559 --> 0:09:31.520 The two sides haven't come to an agreement yet, formal 0:09:31.760 --> 0:09:35.800 or informal, but Brendan says once they do, both countries 0:09:35.920 --> 0:09:38.000 expect to see the results pretty quickly. 0:09:38.559 --> 0:09:41.880 China would want to demonstrate that it's acting in good faith. 0:09:42.280 --> 0:09:45.719 The US said it wasn't after the Geneva agreement, so 0:09:45.880 --> 0:09:48.640 the US will want to see fairly quick action out 0:09:48.640 --> 0:09:51.240 of China, and China will want to see the US 0:09:51.320 --> 0:09:54.000 back off of its threats of its own export controls. 0:09:56.520 --> 0:09:59.760 After the break, my Colleaguejan Ha sits down with Bloomberg's 0:09:59.800 --> 0:10:02.440 job Lou to talk about the factors that could be 0:10:02.520 --> 0:10:06.240 shaping China's thinking as the country's representatives sit at the 0:10:06.280 --> 0:10:07.199 negotiating table. 0:10:16.200 --> 0:10:17.679 John, thanks so much for joining us. 0:10:17.880 --> 0:10:19.120 Sure, it's wonderful to be here. 0:10:19.360 --> 0:10:22.160 I really wanted to get your read of the mood 0:10:22.240 --> 0:10:24.560 on the ground in China right now. You know, the 0:10:24.640 --> 0:10:27.679 last time we took a temperature check, people were largely 0:10:27.720 --> 0:10:31.599 supportive of President she standing his ground in these negotiations. 0:10:32.160 --> 0:10:35.120 Has that changed No, I think that remains the fact. 0:10:35.240 --> 0:10:37.520 There's a lot of support, a groundswell. I think I 0:10:37.559 --> 0:10:40.839 would even say that wants China to stand up and 0:10:40.840 --> 0:10:44.720 fight these tariffs. There is a broad view that the 0:10:44.760 --> 0:10:49.520 actions that the Trump administration have taken our prejudice. They're unfair, 0:10:49.640 --> 0:10:53.040 they're unjust. I think what's even added to it has 0:10:53.120 --> 0:10:57.679 been these moves to void student visas. A lot of 0:10:57.960 --> 0:11:01.760 Chinese kids, a lot of Chinese families spent years working 0:11:01.880 --> 0:11:05.079 very hard saving money for the opportunity for that one person, 0:11:05.320 --> 0:11:07.680 one child, to be able to go to an Ivy 0:11:07.760 --> 0:11:09.880 League school and change the course of their lives and 0:11:09.880 --> 0:11:13.240 now they're being denied that possibility, and there is a 0:11:13.280 --> 0:11:16.080 lot of angst about that, and so there's a lot 0:11:16.120 --> 0:11:20.160 of support for she standing up to the Trump administration. 0:11:20.200 --> 0:11:21.800 But at the same time, I think there's also a 0:11:21.880 --> 0:11:25.680 lot of worry. I think the fact that we've seen 0:11:26.280 --> 0:11:30.000 deflation CPI in China be negative for four months in 0:11:30.040 --> 0:11:31.840 a row, I think that speaks to how people are 0:11:31.880 --> 0:11:34.400 trying to save more, spend less, and that is a 0:11:34.440 --> 0:11:38.080 reflection of concern, not feeling a great deal of confidence 0:11:38.080 --> 0:11:42.760 about the future. Exports have been really important for the 0:11:42.880 --> 0:11:45.560 Chinese economy over the last couple of years because consumption. 0:11:45.640 --> 0:11:48.600 Domestic consumption has been so weak, and it's been weak 0:11:48.640 --> 0:11:52.080 because of the collapse of property prices. Households are feeling poor, 0:11:52.120 --> 0:11:56.040 they're spending less, and so exports has really been the 0:11:56.200 --> 0:11:59.080 major driver of growth for China's economy over the last 0:11:59.080 --> 0:12:02.520 two or three years. That has come down substantially. Exports 0:12:02.559 --> 0:12:05.120 from China to the United States fell by thirty four 0:12:05.160 --> 0:12:07.400 point four percent in the month of May. 0:12:07.559 --> 0:12:08.319 That's got to hurt. 0:12:08.480 --> 0:12:11.760 That's the biggest drop since February of twenty twenty. So 0:12:11.800 --> 0:12:14.880 that's at the start of COVID now. 0:12:14.880 --> 0:12:18.000 Before the talks were confirmed, Trump took to his Truth 0:12:18.040 --> 0:12:21.160 social platform last week to post that quote, she is 0:12:21.440 --> 0:12:23.920 very tough and extremely hard to make a deal with. 0:12:24.720 --> 0:12:27.240 He really wanted to get on that phone with President She, 0:12:27.720 --> 0:12:29.880 and it seemed to be a strategic decision for she. 0:12:30.480 --> 0:12:32.600 Was he holding out and what was the message that 0:12:32.640 --> 0:12:33.440 he was trying to send? 0:12:33.880 --> 0:12:37.240 So I would start by saying, we don't know. But 0:12:37.360 --> 0:12:39.160 at the same time, I think there are some things 0:12:39.200 --> 0:12:42.640 about President Jipin deciding to get on the phone with 0:12:42.720 --> 0:12:49.280 President Trump that suggests one there could be more concern 0:12:49.679 --> 0:12:53.199 about the economy from the perspective of the Chinese leadership, 0:12:53.880 --> 0:12:59.000 and maybe that was the additional motivating factor for President 0:12:59.080 --> 0:13:01.920 She to do something that it was unorthodox, that was 0:13:02.000 --> 0:13:06.000 not something that Chinese leaders have done in the past. 0:13:06.080 --> 0:13:09.720 They prefer for any deals to be struck, to be 0:13:10.440 --> 0:13:13.880 negotiated and the details worked out by lower level officials, 0:13:13.880 --> 0:13:16.640 and then President She would come in and sign a 0:13:16.679 --> 0:13:19.680 document put a ribbon on it. That is the preferred 0:13:19.679 --> 0:13:22.960 method of doing business. And so agreeing to the phone 0:13:23.000 --> 0:13:26.680 call suggests that something else is there. It could be 0:13:26.800 --> 0:13:30.079 more concerned about the economy. It could also be that 0:13:30.360 --> 0:13:34.720 potentially the Chinese leadership saw some opportunity, some opening, some 0:13:35.600 --> 0:13:38.080 chance for she to get on the phone and maybe 0:13:38.480 --> 0:13:41.560 get a concession that the lower level officials would not 0:13:41.600 --> 0:13:44.000 have been able to get from the American side. 0:13:44.160 --> 0:13:47.520 Certainly for the US, resuming exports of China's rare earth's 0:13:47.559 --> 0:13:50.520 mineral is really key in these talks, and turning the 0:13:50.520 --> 0:13:53.240 flow of these rare earth exports on and off seems 0:13:53.240 --> 0:13:55.840 to be a big leverage for China right now. Will 0:13:55.880 --> 0:13:58.800 we see China increasingly play hardball on that to get 0:13:58.840 --> 0:14:01.120 the trade deal it wants, certainly from the US, but 0:14:01.200 --> 0:14:03.360 also potentially from other global partners. 0:14:03.640 --> 0:14:06.600 I think China is willing to play hardball, but I 0:14:06.640 --> 0:14:08.960 think there is an understanding in Beijing that the more 0:14:09.000 --> 0:14:12.439 you use the rare earth card, the more it actually 0:14:12.480 --> 0:14:15.000 gets other countries starting to think about, well, I can't 0:14:15.000 --> 0:14:17.360 depend on China for rare earths. I gotta have my 0:14:17.440 --> 0:14:19.880 own minds, I gotta have my own processing. And so 0:14:20.000 --> 0:14:23.760 the more that Beijing uses it, potentially the less powerful 0:14:23.800 --> 0:14:27.720 it becomes. Although the caveat there is you don't build 0:14:28.000 --> 0:14:31.120 rare earth refineries and rare earth minds overnight, so it's 0:14:31.240 --> 0:14:32.560 going to be a period of time. 0:14:34.280 --> 0:14:36.840 On the other side, China is hoping that the US 0:14:36.960 --> 0:14:40.560 doesn't play hardball when it comes to semiconductor chips. But 0:14:40.600 --> 0:14:43.800 if the US is willing to compromise there and ease 0:14:43.880 --> 0:14:47.920 restrictions on semiconductor exports, John says, it could open the 0:14:47.920 --> 0:14:49.120 door to other deals. 0:14:50.880 --> 0:14:53.600 If the Trump administration is going to show that it's 0:14:53.640 --> 0:14:57.400 willing to negotiate on these sanctions, it brings up the 0:14:57.440 --> 0:15:00.880 possibility that the Trump administration might, I'd also be willing 0:15:01.200 --> 0:15:05.800 for the right price to negotiate the other sanctions that 0:15:05.880 --> 0:15:08.960 were put in place by the Biden administration, sanctions that 0:15:09.000 --> 0:15:13.400 are more targeted at more fundamental technologies, and so that 0:15:13.520 --> 0:15:16.520 I think is another important aspect of what happens next. 0:15:17.400 --> 0:15:20.560 Now, you mentioned at the top that these tensions we're 0:15:20.600 --> 0:15:23.160 seeing right now between the US and China, they're not 0:15:23.240 --> 0:15:27.560 only about trade. We've also seen the Trump administration revoke 0:15:27.680 --> 0:15:30.960 Chinese student visas and looking at limiting intrigue to the 0:15:31.080 --> 0:15:34.280 US for Chinese students in critical maths, science and tech fields. 0:15:34.720 --> 0:15:37.440 How is all of that contributing to the tone around 0:15:37.520 --> 0:15:38.520 these negotiations. 0:15:39.000 --> 0:15:42.920 So the Chinese leadership is not elected, there are no elections. 0:15:43.680 --> 0:15:46.960 But at the same time, the Chinese leadership is very 0:15:47.000 --> 0:15:50.840 sensitive to public opinion. It's maybe even more so sensitive 0:15:50.880 --> 0:15:52.920 because there are no elections, right They have to keep 0:15:53.040 --> 0:15:54.720 track of how people are feeling. And so when you 0:15:54.800 --> 0:15:58.880 have student visas being canceled and parents being upset and 0:15:58.960 --> 0:16:04.280 that affects entire family, that's something that strikes accord with 0:16:04.560 --> 0:16:08.440 the Chinese government. There is another issue, I think, which 0:16:08.480 --> 0:16:12.720 is Taiwan, and that is the number one issue when 0:16:12.720 --> 0:16:15.360 it comes to the US China relationship if you ask 0:16:15.400 --> 0:16:18.920 anybody in Beijing. And before these most recent talks, there 0:16:19.000 --> 0:16:21.480 was a report by Reuters that the Trump administration was 0:16:21.560 --> 0:16:25.040 planning a very large weapons sale to Taiwan. We don't 0:16:25.080 --> 0:16:28.000 know if that came up during these talks, but one 0:16:28.040 --> 0:16:30.600 thing that Beijing would be very eager for is some 0:16:31.320 --> 0:16:34.760 displayed by the American side of adhering to the One 0:16:34.840 --> 0:16:39.640 China principle, not supporting Taiwanese independence, not supporting the current 0:16:39.680 --> 0:16:44.200 Taiwan administration, which the Chinese side views as being extremely 0:16:44.480 --> 0:16:46.560 pro independence and hostile. 0:16:47.520 --> 0:16:50.640 What do we think China wants beyond the tariff negotiations 0:16:50.640 --> 0:16:53.080 that are happening this week, What more does China want 0:16:53.120 --> 0:16:53.560 out of this. 0:16:53.800 --> 0:16:57.920 I think fundamentally, what China wants is space to maneuver 0:16:58.480 --> 0:17:01.800 economically and diplomatic in the world. Right now, on a 0:17:01.840 --> 0:17:05.720 per capita basis, the average Chinese citizen is making only 0:17:05.720 --> 0:17:08.520 about a third or a quarter as much as the 0:17:08.640 --> 0:17:12.400 average American person is, so China is still relatively poor. 0:17:13.040 --> 0:17:16.479 The goal of the Chinese government of Xijipin is to 0:17:16.520 --> 0:17:19.919 move China from middle income to high income, and to 0:17:20.040 --> 0:17:24.240 do that, they need technology and they need trade, and 0:17:24.320 --> 0:17:26.479 so that's what they want. They want to have a 0:17:26.520 --> 0:17:29.920 world in which China has access to technology that can 0:17:29.960 --> 0:17:33.240 fuel its economic growth, that can move its standard of 0:17:33.320 --> 0:17:36.639 living up. And they want access to markets so that 0:17:36.680 --> 0:17:39.280 the goods that Chinese companies produce have a place that 0:17:39.320 --> 0:17:40.240 they can be sold into. 0:17:45.960 --> 0:17:48.760 This is the Big Take from Bloomberg News. I'm Sarah Holder. 0:17:49.160 --> 0:17:51.640 To get more from The Big Take and unlimited access 0:17:51.680 --> 0:17:55.360 to all of Bloomberg dot Com, subscribe today at Bloomberg 0:17:55.400 --> 0:17:58.920 dot com slash podcast offer. If you liked this episode, 0:17:59.080 --> 0:18:01.600 make sure to follow and review The Big Take wherever 0:18:01.680 --> 0:18:04.240 you listen to podcasts. It helps people find the show. 0:18:04.840 --> 0:18:07.160 Thanks for listening. We'll be back tomorrow.