1 00:00:05,120 --> 00:00:08,720 Speaker 1: On this episode of NEWTS World. On Thursday, July sixth, 2 00:00:09,280 --> 00:00:13,080 Speaker 1: Treasury Secretary Janet Yellen traveled to China to me was 3 00:00:13,160 --> 00:00:17,840 Speaker 1: Jijinpan's new top economic advisors. One of Yellen's top goals 4 00:00:18,239 --> 00:00:20,880 Speaker 1: was to understand what is happening in the Chinese economy, 5 00:00:21,160 --> 00:00:24,800 Speaker 1: which has rebounded slower than expected this year after China 6 00:00:24,840 --> 00:00:29,920 Speaker 1: lifted nearly three years of stringent pandemic measures. Yellen returned 7 00:00:29,920 --> 00:00:33,280 Speaker 1: to Washington on Sunday with no announcements of breakthroughs or 8 00:00:33,360 --> 00:00:36,479 Speaker 1: agreements between the United States and China, but agreed to 9 00:00:36,560 --> 00:00:41,320 Speaker 1: keep open a line of communication here to discuss Treasury 10 00:00:41,360 --> 00:00:44,920 Speaker 1: Secretary Yellen's recent visit to China. I'm really pleased to 11 00:00:45,000 --> 00:00:49,720 Speaker 1: welcome my two guests, Michael Falkender, America First Policy Institute's 12 00:00:49,760 --> 00:00:54,320 Speaker 1: Chief economist, and Steve Yates, America First Policy Institute's Senior 13 00:00:54,360 --> 00:00:57,760 Speaker 1: Fellow and Chair of China Policy Institute. And I have 14 00:00:57,840 --> 00:01:00,840 Speaker 1: to say one of my guides many years ago when 15 00:01:00,880 --> 00:01:03,160 Speaker 1: we went to China, and he kept trying to explain 16 00:01:03,200 --> 00:01:05,280 Speaker 1: about what was going on. It was one of the 17 00:01:05,319 --> 00:01:17,640 Speaker 1: great educations of my life. Michael and Steve, thank you 18 00:01:17,760 --> 00:01:19,960 Speaker 1: both for joining me on NEWTS world. 19 00:01:20,160 --> 00:01:21,319 Speaker 2: Great to be with you. Thank you. 20 00:01:21,640 --> 00:01:24,000 Speaker 1: I want you to free associate for a second and 21 00:01:24,160 --> 00:01:27,680 Speaker 1: tell me what was your reaction to what you saw 22 00:01:27,720 --> 00:01:31,080 Speaker 1: about Yelling and China. Steve, I'm going to start with you. 23 00:01:31,440 --> 00:01:33,920 Speaker 2: There are two big takeaways to me that I think 24 00:01:33,959 --> 00:01:36,720 Speaker 2: are the signals of the Chinese audience and our allies 25 00:01:37,280 --> 00:01:42,200 Speaker 2: we'll see. Number one was the visual of the secretary's 26 00:01:42,840 --> 00:01:47,120 Speaker 2: three time bow toward a premiere. This is something that 27 00:01:47,240 --> 00:01:50,840 Speaker 2: is not in communist culture, definitely not something that's in 28 00:01:50,880 --> 00:01:54,960 Speaker 2: the protocol handbook. It seemed to be almost instinctive and compulsive, 29 00:01:55,320 --> 00:01:59,520 Speaker 2: but what it was was a distinct body language signal 30 00:01:59,720 --> 00:02:04,040 Speaker 2: of submission and obedience, and that is I think the 31 00:02:04,120 --> 00:02:07,680 Speaker 2: exact opposite message we should be sending to a nation 32 00:02:07,880 --> 00:02:11,000 Speaker 2: that has poisoned us with COVID and is poisoning us 33 00:02:11,040 --> 00:02:13,919 Speaker 2: with fentanyl, and go down the list of other kinds 34 00:02:13,960 --> 00:02:16,840 Speaker 2: of things, and Americans should bow to no one given 35 00:02:16,960 --> 00:02:21,840 Speaker 2: the contribution we've made to their livelihoods. No country has 36 00:02:21,919 --> 00:02:24,560 Speaker 2: done more for the Chinese people and the history of 37 00:02:24,600 --> 00:02:26,960 Speaker 2: all of China than has the United States of America. 38 00:02:27,400 --> 00:02:29,880 Speaker 2: So that was the big first one. The second one 39 00:02:29,919 --> 00:02:33,320 Speaker 2: was where she said we are de risking, and we 40 00:02:33,360 --> 00:02:36,799 Speaker 2: are going to rebalance our relations with China, but we're 41 00:02:36,840 --> 00:02:40,440 Speaker 2: not decoupling because that would be disastrous for both of 42 00:02:40,480 --> 00:02:44,480 Speaker 2: our countries. And I just think that's historically flawed. But 43 00:02:44,560 --> 00:02:46,960 Speaker 2: it's also not what a lot of our colleagues and 44 00:02:46,960 --> 00:02:49,480 Speaker 2: friends are calling for. Our friend Bob Litthheiser as a 45 00:02:49,520 --> 00:02:54,480 Speaker 2: new book that outlines strategic decoupling, which begins with pharmaceuticals 46 00:02:54,480 --> 00:02:58,160 Speaker 2: and other kind of strategic areas, that absolutely we should 47 00:02:58,160 --> 00:03:01,880 Speaker 2: be decoupling from our dependence on China. But this old 48 00:03:02,080 --> 00:03:05,280 Speaker 2: saw of pulling up these black and white canards. I mean, 49 00:03:05,320 --> 00:03:07,840 Speaker 2: you live through this, mister speaker, in the nineteen nineties, 50 00:03:07,840 --> 00:03:10,040 Speaker 2: when people are trying to tell you US China relations 51 00:03:10,280 --> 00:03:12,600 Speaker 2: were all black or all white. It's just not the 52 00:03:12,639 --> 00:03:15,160 Speaker 2: way the world is. But those are the two things. 53 00:03:15,240 --> 00:03:20,040 Speaker 2: The bow and that decoupling is potentially disastrous or impossible. 54 00:03:20,080 --> 00:03:22,520 Speaker 2: I just thought those were both losers for the United States. 55 00:03:22,960 --> 00:03:24,160 Speaker 1: Michael, what was your reaction? 56 00:03:24,840 --> 00:03:27,200 Speaker 3: I had very similar reaction to Stephen, that the bow 57 00:03:27,360 --> 00:03:29,000 Speaker 3: is the thing that this trip is going to be 58 00:03:29,080 --> 00:03:31,480 Speaker 3: most remembered for. The notion that we would send the 59 00:03:31,520 --> 00:03:36,480 Speaker 3: Treasury Secretary over and immediately this act of weakness to 60 00:03:36,640 --> 00:03:40,480 Speaker 3: her peer and giving the suggestion that we are somewhat, 61 00:03:40,480 --> 00:03:44,160 Speaker 3: as Steve said, subservient to the Chinese, when in fact, 62 00:03:44,240 --> 00:03:46,360 Speaker 3: they need us just as much as we need them 63 00:03:46,400 --> 00:03:49,280 Speaker 3: when it comes to our economic relationship. The second thing 64 00:03:49,360 --> 00:03:52,880 Speaker 3: is that there was no seeming agenda for this meeting, 65 00:03:53,120 --> 00:03:55,680 Speaker 3: which is why coming out of it with nothing other 66 00:03:55,720 --> 00:03:58,880 Speaker 3: than we're going to continue talking seems striking to me, 67 00:03:59,080 --> 00:04:01,760 Speaker 3: you know, as opposed to to I served as Assistant 68 00:04:01,760 --> 00:04:04,960 Speaker 3: Secretary of the Treasury during the Trump administration, and Secretary 69 00:04:05,040 --> 00:04:08,160 Speaker 3: Manuchin went over there with a very clear agenda that 70 00:04:08,200 --> 00:04:12,800 Speaker 3: we were going to completely refocus the trading relationship, and 71 00:04:12,800 --> 00:04:16,799 Speaker 3: that we were going to address things like intellectual property theft, 72 00:04:16,880 --> 00:04:21,200 Speaker 3: currency manipulation, and force technology transfers. And we came up 73 00:04:21,240 --> 00:04:23,920 Speaker 3: with a robust Phase one trade agreement, and I saw 74 00:04:24,000 --> 00:04:26,839 Speaker 3: nothing from the reporting that came out of Secretary Yellen's 75 00:04:26,880 --> 00:04:30,600 Speaker 3: visit to chastise the Chinese for their flagrant violations of 76 00:04:30,640 --> 00:04:33,520 Speaker 3: that agreement. Instead, it seemed to be that we're going 77 00:04:33,600 --> 00:04:36,680 Speaker 3: to continue allowing you to engage in some of the 78 00:04:36,720 --> 00:04:40,159 Speaker 3: behavior that we find reprehensible, and we are in no 79 00:04:40,279 --> 00:04:46,440 Speaker 3: way preparing ourselves for the potential of China invading Taiwan 80 00:04:47,040 --> 00:04:50,200 Speaker 3: and the economic implications it's going to have when the 81 00:04:50,240 --> 00:04:52,440 Speaker 3: most advanced semiconductors in the world are all of a 82 00:04:52,480 --> 00:04:55,440 Speaker 3: sudden controlled by the Chinese. They sent a message before 83 00:04:55,480 --> 00:04:57,640 Speaker 3: she even went that they were going to crack down 84 00:04:57,640 --> 00:05:02,599 Speaker 3: on critical mineral exports. And what that tells me is 85 00:05:02,640 --> 00:05:05,760 Speaker 3: that if and when they do invade Taiwan, they are 86 00:05:05,760 --> 00:05:08,560 Speaker 3: going to hold his hostage on semiconductors, and we are 87 00:05:08,560 --> 00:05:11,719 Speaker 3: in no way prepared for that. And Secretary Yellen did 88 00:05:11,839 --> 00:05:14,760 Speaker 3: nothing to dissuade the Chinese from engaging in that kind 89 00:05:14,800 --> 00:05:15,159 Speaker 3: of action. 90 00:05:15,800 --> 00:05:19,760 Speaker 1: Somebody challenged me earlier today about saying that the Biden 91 00:05:19,800 --> 00:05:23,120 Speaker 1: administration had been soft on China, and they were citing 92 00:05:23,240 --> 00:05:26,520 Speaker 1: various things that we'd done, various bills that have been passed, 93 00:05:26,520 --> 00:05:26,920 Speaker 1: et cetera. 94 00:05:27,680 --> 00:05:28,320 Speaker 2: How would you. 95 00:05:28,320 --> 00:05:33,320 Speaker 1: To describe or explain what it means to say that 96 00:05:33,400 --> 00:05:36,440 Speaker 1: this administration is weak in its approach to China. 97 00:05:37,200 --> 00:05:39,719 Speaker 2: Well, I have some sympathy for people trying to get 98 00:05:39,720 --> 00:05:42,560 Speaker 2: a clear signal on what the Biden administration's policies are. 99 00:05:42,600 --> 00:05:46,159 Speaker 2: Because the president, with all of the wonderful gifts on 100 00:05:46,200 --> 00:05:49,800 Speaker 2: display these days, he can say anything at any given time, 101 00:05:49,880 --> 00:05:52,760 Speaker 2: and some of the things he says are quite tough. 102 00:05:53,320 --> 00:05:55,800 Speaker 2: The problem is that there's kind of a cleanup on 103 00:05:55,800 --> 00:05:59,440 Speaker 2: Aisle nine every time where a senior administration official tries 104 00:05:59,480 --> 00:06:03,640 Speaker 2: to riple it into English what the President supposedly meant, 105 00:06:04,080 --> 00:06:07,440 Speaker 2: and every single time the correction goes in the direction 106 00:06:07,960 --> 00:06:10,799 Speaker 2: of engagement weakness and kind of back to the warm 107 00:06:10,880 --> 00:06:14,200 Speaker 2: bath of conventional thinking on China. And that's kind of 108 00:06:14,240 --> 00:06:17,839 Speaker 2: the rhetoric that was littered throughout Secretary Yellen's visit, all 109 00:06:17,839 --> 00:06:20,560 Speaker 2: of this talk about there's enough room in the world 110 00:06:20,680 --> 00:06:23,680 Speaker 2: for two great nations. We don't see this through the 111 00:06:23,800 --> 00:06:27,919 Speaker 2: lens of strategic competition. I mean, these are old slogans 112 00:06:27,920 --> 00:06:30,760 Speaker 2: that are used to kind of reframe things, to ignore, 113 00:06:31,120 --> 00:06:34,040 Speaker 2: say a genocide against the Wigers, to ignore the threats 114 00:06:34,040 --> 00:06:38,359 Speaker 2: against Taiwan that Mike was talking about. And so every 115 00:06:38,400 --> 00:06:40,600 Speaker 2: time there is something tough, for instance, the President has 116 00:06:40,600 --> 00:06:44,320 Speaker 2: said we will defend Taiwan if attacked by China, and 117 00:06:44,560 --> 00:06:48,200 Speaker 2: every single time, like four or five times, a senior 118 00:06:48,240 --> 00:06:50,560 Speaker 2: White House official has said, well, no, we're not changing 119 00:06:50,600 --> 00:06:53,920 Speaker 2: policy and we support the status quo. And so the 120 00:06:53,960 --> 00:06:57,120 Speaker 2: mixed messages is one area of weakness, but the ardent 121 00:06:57,279 --> 00:07:00,960 Speaker 2: suitor image of having the National Security Advisor, the Secretary 122 00:07:01,000 --> 00:07:04,040 Speaker 2: of State, the Secretary of Treasury, allegedly the climate z 123 00:07:04,080 --> 00:07:07,560 Speaker 2: are John Kerry on the way soon, all in pursuit 124 00:07:07,880 --> 00:07:11,760 Speaker 2: of President Biden having a meeting with sigenping on the 125 00:07:11,840 --> 00:07:15,920 Speaker 2: margins of APEX or the margins of other kinds of gatherings. 126 00:07:16,320 --> 00:07:19,480 Speaker 2: It's all America going to China to ask none of 127 00:07:19,560 --> 00:07:22,840 Speaker 2: China taking accountability or kind of having an equal partnership 128 00:07:22,840 --> 00:07:23,200 Speaker 2: in any. 129 00:07:23,120 --> 00:07:25,840 Speaker 1: Of this sectary state Blncoln was just there. Why do 130 00:07:25,880 --> 00:07:29,800 Speaker 1: you think they pushed the meeting with sectary treasury yelling 131 00:07:29,920 --> 00:07:32,960 Speaker 1: so quickly after Blincoln was there? 132 00:07:33,560 --> 00:07:37,040 Speaker 2: Well, there's a long history of Secretaries of the Treasury. 133 00:07:37,200 --> 00:07:39,800 Speaker 2: Minuchin might have been an exception to this in the 134 00:07:39,880 --> 00:07:44,240 Speaker 2: sense of the negotiator for the senior economic dialogues and 135 00:07:44,280 --> 00:07:48,040 Speaker 2: the strategic economic dialogues that we've had with China from 136 00:07:48,400 --> 00:07:51,440 Speaker 2: the Bush years all the way up to the present. 137 00:07:51,680 --> 00:07:55,840 Speaker 2: Usually it's the Secretary of the Treasury that carries somewhat 138 00:07:55,960 --> 00:07:59,320 Speaker 2: the Wall Street and Chamber of Commerce talking points. The 139 00:07:59,360 --> 00:08:03,160 Speaker 2: Trump and Minutes was a kind of rest stop in 140 00:08:03,240 --> 00:08:07,720 Speaker 2: that trajectory. But Yellen, right, now is giving the exact 141 00:08:07,760 --> 00:08:10,360 Speaker 2: same talking points at the Business Roundtable and the Chamber 142 00:08:10,400 --> 00:08:12,960 Speaker 2: of Commerce would have given in nineteen ninety six, two 143 00:08:13,040 --> 00:08:15,760 Speaker 2: thousand and six or twenty sixteen, And so I think 144 00:08:15,800 --> 00:08:17,840 Speaker 2: that's why they wanted it to go quickly, and they 145 00:08:17,880 --> 00:08:19,280 Speaker 2: knew the Chinese would say yes to her. 146 00:08:19,680 --> 00:08:23,000 Speaker 1: Michael, from your background, your experience with in the Department 147 00:08:23,000 --> 00:08:27,080 Speaker 1: of the Treasury, what's our normal pattern dealing with the 148 00:08:27,320 --> 00:08:28,480 Speaker 1: Chinese dictator show? 149 00:08:29,240 --> 00:08:32,360 Speaker 3: I think Steve is correct that traditionally it has been 150 00:08:32,520 --> 00:08:36,920 Speaker 3: to facilitate ongoing trade. Whether it was the Bush administration, 151 00:08:36,960 --> 00:08:39,320 Speaker 3: whether it was the Clinton or the Obama administration, it 152 00:08:39,480 --> 00:08:42,920 Speaker 3: was a view that opening up China, bringing them into 153 00:08:42,960 --> 00:08:46,640 Speaker 3: the West would somehow change their behavior. And I must 154 00:08:46,679 --> 00:08:49,160 Speaker 3: admit I've said in a couple of other audiences that 155 00:08:49,320 --> 00:08:54,000 Speaker 3: I don't begrudge the Clinton or the Bushes of taking 156 00:08:54,040 --> 00:08:56,840 Speaker 3: a chance on bringing them into the Western world and 157 00:08:56,880 --> 00:09:00,160 Speaker 3: seeing if it would change behavior. What I do fall 158 00:09:00,160 --> 00:09:03,960 Speaker 3: the Biden administration for is that it's finally time we 159 00:09:04,040 --> 00:09:06,640 Speaker 3: admit that that failed. The Chinese are not going to 160 00:09:06,640 --> 00:09:10,480 Speaker 3: alter their behavior, and particularly activities of Hijinping to demonstrate 161 00:09:10,480 --> 00:09:12,200 Speaker 3: that he is going to be dictator for life, he 162 00:09:12,240 --> 00:09:15,360 Speaker 3: wants to rule over Asia, and that he is going 163 00:09:15,400 --> 00:09:18,120 Speaker 3: to regress when it comes to some of the economic 164 00:09:18,200 --> 00:09:21,160 Speaker 3: changes that they had implemented. So it's time for us 165 00:09:21,200 --> 00:09:25,000 Speaker 3: to take seriously the Chinese position that they are looking 166 00:09:25,040 --> 00:09:29,040 Speaker 3: to be the dominant power both militarily and economically in Asia, 167 00:09:29,679 --> 00:09:33,199 Speaker 3: and we therefore need to double down on the activities 168 00:09:33,240 --> 00:09:36,120 Speaker 3: that Secretary Manuch led during the Trump administration to hold 169 00:09:36,160 --> 00:09:39,320 Speaker 3: the Chinese accountable. That means we need to reform the WTO, 170 00:09:39,480 --> 00:09:43,640 Speaker 3: if not remove China from participation in the WTO. We 171 00:09:43,679 --> 00:09:47,760 Speaker 3: need to leverage trading sanctions in order to change behavior 172 00:09:47,800 --> 00:09:52,439 Speaker 3: and to encourage the American economy, particularly in national security 173 00:09:52,600 --> 00:09:57,520 Speaker 3: and healthcare related sectors, disengage from our dependence upon their 174 00:09:57,640 --> 00:10:01,240 Speaker 3: supply chains. And so while I see Secretary Yellen's trip 175 00:10:01,280 --> 00:10:05,360 Speaker 3: as a return to what had occurred under previous administrations, 176 00:10:06,160 --> 00:10:08,800 Speaker 3: I think that because China has so changed their behavior 177 00:10:08,840 --> 00:10:10,920 Speaker 3: in the past couple of years, the reversion to that 178 00:10:11,080 --> 00:10:24,360 Speaker 3: historical behavior is particularly damaging today. 179 00:10:25,200 --> 00:10:27,880 Speaker 1: Hi, this is newt In my new book March the Majority, 180 00:10:27,960 --> 00:10:31,439 Speaker 1: The Real Story of the Republican Revolution, I offer strategies 181 00:10:31,440 --> 00:10:35,160 Speaker 1: and insights for everyday citizens and for season politicians. It's 182 00:10:35,200 --> 00:10:38,240 Speaker 1: both a guide for political success and for winning back 183 00:10:38,320 --> 00:10:41,520 Speaker 1: the majority. 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It strikes 192 00:11:17,920 --> 00:11:23,240 Speaker 1: me that Jijinping is a different phenomena than anybody who've 193 00:11:23,240 --> 00:11:27,559 Speaker 1: seen since mal Somebody told me that at the very 194 00:11:27,600 --> 00:11:32,079 Speaker 1: moment that Yellen is arriving in Beijing, the Chinese Communists 195 00:11:32,200 --> 00:11:35,320 Speaker 1: are picking a fight in the Philippines, or either of 196 00:11:35,360 --> 00:11:38,480 Speaker 1: you read into that, because apparently they deliberately went out 197 00:11:38,520 --> 00:11:41,000 Speaker 1: of their way to try to occupy some islands that 198 00:11:41,040 --> 00:11:44,480 Speaker 1: are claimed by the Philippines. That involves a great deal 199 00:11:44,480 --> 00:11:47,560 Speaker 1: of I think natural gas and oil. It's almost like 200 00:11:47,640 --> 00:11:51,880 Speaker 1: they're deliberately poking sometimes around Taiwan, sometimes around the South 201 00:11:52,000 --> 00:11:55,600 Speaker 1: China Sea floating a spy balloon over the US. There's 202 00:11:55,640 --> 00:12:00,400 Speaker 1: just a constant process of trying to acculture us to 203 00:12:00,480 --> 00:12:01,839 Speaker 1: accept their aggressiveness. 204 00:12:02,360 --> 00:12:06,040 Speaker 2: You're right, we've had a couple of breaks with past behavior. 205 00:12:06,559 --> 00:12:09,480 Speaker 2: I do agree completely that Chijinping is a different kind 206 00:12:09,480 --> 00:12:12,320 Speaker 2: of top communists. It's not that the other ones were 207 00:12:12,360 --> 00:12:15,600 Speaker 2: angels or saints. They were much more careful about what 208 00:12:15,679 --> 00:12:18,200 Speaker 2: they were doing, and they didn't want to show the 209 00:12:18,240 --> 00:12:22,400 Speaker 2: dirty laundry out in public. Chijinping seems to have no 210 00:12:22,640 --> 00:12:27,800 Speaker 2: bashfulness about showing his fangs. And when we had big summetry, 211 00:12:28,240 --> 00:12:31,160 Speaker 2: both sides would kind of take care not to conduct 212 00:12:31,480 --> 00:12:36,080 Speaker 2: military exercises or do anything that would hurt the spirit 213 00:12:36,160 --> 00:12:39,320 Speaker 2: of the gathering, at least briefly while the two sides 214 00:12:39,320 --> 00:12:43,240 Speaker 2: were getting together. And every single time there is an 215 00:12:43,320 --> 00:12:47,520 Speaker 2: engagement with the top American leader. Now China's doing something provocative, 216 00:12:47,880 --> 00:12:50,040 Speaker 2: and I don't think it's by accident. I think that 217 00:12:50,080 --> 00:12:53,080 Speaker 2: they're doing it knowing they can do it with impunity, 218 00:12:53,480 --> 00:12:56,280 Speaker 2: and it makes them look bold and it makes us 219 00:12:56,320 --> 00:12:59,360 Speaker 2: look weak. The thing I think that confuses some people 220 00:12:59,400 --> 00:13:02,800 Speaker 2: are concerned people's obviously we don't want a fight We're 221 00:13:02,800 --> 00:13:06,240 Speaker 2: not looking to have a war or a conflict with China. 222 00:13:06,280 --> 00:13:10,320 Speaker 2: My goodness. We've invested trillions of dollars and tied our 223 00:13:10,360 --> 00:13:13,320 Speaker 2: future to them in significant ways. That's not what you 224 00:13:13,440 --> 00:13:16,800 Speaker 2: do with an enemy. But the problem is in return, 225 00:13:17,160 --> 00:13:19,840 Speaker 2: they still see us the way they see us engage 226 00:13:19,840 --> 00:13:23,479 Speaker 2: in this provocative behavior. So yes, the adventurism in Southeast 227 00:13:23,480 --> 00:13:29,040 Speaker 2: Asia goes on unabated, the significant uptick in air and 228 00:13:29,320 --> 00:13:35,440 Speaker 2: sea sorties around Taiwan, the constant cyber bombardment of Taiwan, 229 00:13:35,600 --> 00:13:39,200 Speaker 2: and our allies in our military in the Pacific is 230 00:13:39,240 --> 00:13:43,080 Speaker 2: always ongoing. And they don't stop from doing military drills 231 00:13:43,200 --> 00:13:46,000 Speaker 2: or other kinds of things while they are meeting with 232 00:13:46,040 --> 00:13:48,440 Speaker 2: American officials. And it wasn't even that long ago that 233 00:13:48,480 --> 00:13:50,920 Speaker 2: they were stomping on the people of Hong Kong. And 234 00:13:50,920 --> 00:13:54,360 Speaker 2: they still have political prisoners there and we're still meeting. 235 00:13:54,640 --> 00:13:57,640 Speaker 2: And I don't think Janet Yellen said, hey, should the 236 00:13:57,679 --> 00:14:00,920 Speaker 2: former founder and publisher of the Apple Daily in Hong 237 00:14:01,040 --> 00:14:04,560 Speaker 2: Kong be released from political prison in Hong Kong and 238 00:14:04,679 --> 00:14:07,600 Speaker 2: restore Hong Kong to an international financial hub. I think 239 00:14:07,640 --> 00:14:10,400 Speaker 2: that's in the rear view mirror for this administration. And 240 00:14:10,440 --> 00:14:11,320 Speaker 2: the Chinese know that. 241 00:14:11,800 --> 00:14:12,880 Speaker 1: Michael, what's your take? 242 00:14:13,559 --> 00:14:15,439 Speaker 3: You know, the thing I fear the most is that 243 00:14:15,600 --> 00:14:18,920 Speaker 3: for the Biden administration, China is kind of very equivalent 244 00:14:18,960 --> 00:14:22,640 Speaker 3: of Iran. From the Obama administration more than anything else, 245 00:14:22,640 --> 00:14:26,680 Speaker 3: it seemed like Barack Obama wanted his international legacy to 246 00:14:26,760 --> 00:14:30,640 Speaker 3: be a deal with Iran, and I view many of 247 00:14:30,680 --> 00:14:32,920 Speaker 3: the same people doing many of the same things to 248 00:14:32,960 --> 00:14:37,360 Speaker 3: try to get an accommodation for China. The second thing 249 00:14:37,400 --> 00:14:40,520 Speaker 3: I see is that the priority of this administration seems 250 00:14:40,560 --> 00:14:44,360 Speaker 3: to be climate more than anything else, and I just 251 00:14:44,400 --> 00:14:48,000 Speaker 3: think that that's foolish because the notion that Chijinping is 252 00:14:48,040 --> 00:14:50,600 Speaker 3: going to allow hundreds of millions of his people to 253 00:14:50,680 --> 00:14:55,720 Speaker 3: continue languishing in poverty because he's concerned about global warming 254 00:14:55,760 --> 00:14:59,000 Speaker 3: conditions is just false. The Chinese have been very clear 255 00:14:59,040 --> 00:15:02,360 Speaker 3: that they are not going to negotiate on reducing their 256 00:15:02,400 --> 00:15:05,200 Speaker 3: carbon emissions. The fact that they're opening a coal fired 257 00:15:05,240 --> 00:15:08,880 Speaker 3: power plant approximately one per week somewhere in their country 258 00:15:09,000 --> 00:15:12,960 Speaker 3: demonstrates that they're not at all interested in pulling back 259 00:15:13,560 --> 00:15:17,120 Speaker 3: on their carbon footprint. And yet the most important priority, 260 00:15:17,160 --> 00:15:20,280 Speaker 3: seemingly of the Biden administration is to lay the groundwork 261 00:15:20,320 --> 00:15:22,800 Speaker 3: for former Secretary carry to go over and come to 262 00:15:22,880 --> 00:15:26,280 Speaker 3: some kind of climate accord. Our, willingness to give up 263 00:15:26,360 --> 00:15:32,000 Speaker 3: on national security issues, on trading security, all chasing this 264 00:15:32,960 --> 00:15:36,760 Speaker 3: panacea of a grand bargain on global warming again just 265 00:15:36,880 --> 00:15:40,960 Speaker 3: strikes me of the same fantasticalism that the Obama administration 266 00:15:41,080 --> 00:15:42,440 Speaker 3: suffered from in Iran. 267 00:15:43,000 --> 00:15:47,840 Speaker 1: Frankly, anytime John Kerry goes anywhere, I worry he may 268 00:15:47,880 --> 00:15:52,240 Speaker 1: be the most deluded person ever to serve as Secretary 269 00:15:52,240 --> 00:15:55,840 Speaker 1: of State, which is not a small statement. But I've 270 00:15:55,840 --> 00:15:58,240 Speaker 1: known John a long time, and in the time I've 271 00:15:58,280 --> 00:16:00,640 Speaker 1: known him, he's never once been in touch with planet. 272 00:16:00,880 --> 00:16:04,680 Speaker 1: And it's amazing to me how he retains substantial political 273 00:16:04,720 --> 00:16:08,920 Speaker 1: clout despite clearly being out of touch with the world. 274 00:16:09,600 --> 00:16:10,800 Speaker 1: It's kind of remarkable. 275 00:16:10,920 --> 00:16:13,640 Speaker 3: But he's keeping contact with the person that Bob Gates 276 00:16:13,640 --> 00:16:16,880 Speaker 3: said had made a correct foreign policy decision in fifty years. 277 00:16:16,960 --> 00:16:18,520 Speaker 3: So those two go well together. 278 00:16:19,280 --> 00:16:21,520 Speaker 1: You're right. I hadn't thought of it that way, that 279 00:16:21,840 --> 00:16:25,280 Speaker 1: maybe there's a perfect marriage between being totally out of 280 00:16:25,360 --> 00:16:28,480 Speaker 1: touch with reality and just being wrong, which seemed to 281 00:16:28,520 --> 00:16:30,800 Speaker 1: be the way the two of them operate. You know, 282 00:16:30,880 --> 00:16:33,520 Speaker 1: you mentioned earlier, and I think At the same time 283 00:16:33,600 --> 00:16:38,800 Speaker 1: Yellen was in Beijing, ji Jinping was addressing the Eastern 284 00:16:38,840 --> 00:16:43,360 Speaker 1: Command and basically exhorting them to be ready to invade 285 00:16:43,440 --> 00:16:49,160 Speaker 1: Taiwan whenever necessary. How seriously do you two take the 286 00:16:49,240 --> 00:16:52,040 Speaker 1: threat to actually militarily occupy Taiwan. 287 00:16:52,680 --> 00:16:55,320 Speaker 2: We've lived with this our whole lives. It has never 288 00:16:55,400 --> 00:16:58,360 Speaker 2: been zero and thankfully to today, it has not been 289 00:16:58,400 --> 00:17:01,760 Speaker 2: one hundred percent. Sort of in the spirit of former 290 00:17:01,800 --> 00:17:04,320 Speaker 2: Secretary of Rumsfeld, this is just not something we get 291 00:17:04,359 --> 00:17:08,240 Speaker 2: to know. We have to plan around the capabilities that 292 00:17:08,280 --> 00:17:12,359 Speaker 2: are definitely there. No one can impose their rationality onto 293 00:17:12,359 --> 00:17:15,840 Speaker 2: how shegen Pin thinks. I don't believe our intelligence community knows. 294 00:17:16,000 --> 00:17:19,080 Speaker 2: I am certain our diplomatic community doesn't know. I am 295 00:17:19,080 --> 00:17:23,240 Speaker 2: certain our president doesn't know what Egen Ping really has planned. 296 00:17:23,400 --> 00:17:26,040 Speaker 2: And perhaps most of the Chinese people don't know. But 297 00:17:26,160 --> 00:17:28,879 Speaker 2: what we do see and we can verify, is they 298 00:17:28,920 --> 00:17:32,919 Speaker 2: are doctrinating their children from kindergarten all the way to 299 00:17:32,960 --> 00:17:38,560 Speaker 2: adulthood to speak in war tones about this nationalistic claim 300 00:17:38,760 --> 00:17:42,639 Speaker 2: of Taiwan and the evil United States has been injuring 301 00:17:42,800 --> 00:17:47,440 Speaker 2: the spirit of China. So they've begun the battle. Preparation 302 00:17:47,520 --> 00:17:51,960 Speaker 2: of the information space in a very serious way. They 303 00:17:52,160 --> 00:17:57,920 Speaker 2: began decoupling their financial institutions. They started looking through tech 304 00:17:58,000 --> 00:18:01,560 Speaker 2: with the attack on Ali Baba and jack Ma, They've 305 00:18:01,640 --> 00:18:05,199 Speaker 2: gone through education, and they're starting to find ways to 306 00:18:05,440 --> 00:18:08,600 Speaker 2: prepare in advance in case the United States found a 307 00:18:08,640 --> 00:18:10,960 Speaker 2: bag of sanctions we wanted to use if they've got 308 00:18:11,000 --> 00:18:14,520 Speaker 2: too aggressive with Taiwan. Learning from the Russia Ukraine example, 309 00:18:15,000 --> 00:18:17,840 Speaker 2: so I think that they are getting fully prepared. What 310 00:18:17,960 --> 00:18:20,960 Speaker 2: that puts them in the position of is a great luxury. 311 00:18:21,440 --> 00:18:25,160 Speaker 2: They don't have to invade to have almost the same 312 00:18:25,200 --> 00:18:29,600 Speaker 2: crippling impact. If they can create a coercive environment that 313 00:18:29,840 --> 00:18:33,760 Speaker 2: leads to capitulation from the United States or from the 314 00:18:33,800 --> 00:18:36,600 Speaker 2: people of Taiwan, they win without having to fire a shot. 315 00:18:36,800 --> 00:18:38,680 Speaker 2: And that comes straight out of the playbook of the 316 00:18:38,760 --> 00:18:39,240 Speaker 2: Art of war. 317 00:18:39,680 --> 00:18:41,880 Speaker 1: See I think, didn't you spend a year in Taiwan 318 00:18:41,920 --> 00:18:44,520 Speaker 1: as a missionary. 319 00:18:43,400 --> 00:18:45,480 Speaker 2: Two years back in the nineteen eighties. 320 00:18:45,960 --> 00:18:48,479 Speaker 1: So you have some sense of affection, and I know 321 00:18:48,520 --> 00:18:51,159 Speaker 1: you've been over there more recently. How concerned are you 322 00:18:51,920 --> 00:18:55,720 Speaker 1: that just the sheer exhaustion of this kind of pressure 323 00:18:56,240 --> 00:18:59,240 Speaker 1: that the people of Taiwan may decide looking at the 324 00:18:59,280 --> 00:19:03,160 Speaker 1: damage being done in Ukraine that some kind of accommodation 325 00:19:03,240 --> 00:19:07,480 Speaker 1: with Beijing is a better future than the risk of destruction. 326 00:19:08,280 --> 00:19:11,399 Speaker 2: Well, I've always been concerned about that, especially since the 327 00:19:11,480 --> 00:19:16,080 Speaker 2: advent of a leader in Taiwan who actively pursued a 328 00:19:16,320 --> 00:19:20,520 Speaker 2: peace deal and an active accommodation with China. He served 329 00:19:20,520 --> 00:19:24,120 Speaker 2: two terms and was replaced by the current president of Taiwan, 330 00:19:24,520 --> 00:19:26,880 Speaker 2: And so there is a strain in Taiwan that has 331 00:19:26,960 --> 00:19:30,600 Speaker 2: sought that kind of accommodation. It is a distinct minority now, 332 00:19:30,840 --> 00:19:33,080 Speaker 2: And the blessing and the curse that the taiwan people 333 00:19:33,160 --> 00:19:36,400 Speaker 2: have is they've lived with this threat for so long 334 00:19:36,480 --> 00:19:39,760 Speaker 2: they don't feel it as intensely as people who are 335 00:19:39,800 --> 00:19:43,400 Speaker 2: shocked by recent news coverage in the rest of the world, 336 00:19:43,880 --> 00:19:46,920 Speaker 2: and they've gone about their everyday lives. They don't have 337 00:19:47,040 --> 00:19:50,359 Speaker 2: a feeling of crisis. Now, that might be delusional, but 338 00:19:50,440 --> 00:19:52,480 Speaker 2: at the other hand, what are they supposed to do. 339 00:19:52,880 --> 00:19:56,080 Speaker 2: They've been put in a diplomatic and economic box to 340 00:19:56,160 --> 00:19:58,439 Speaker 2: a degree by the rest of the world, and so 341 00:19:58,520 --> 00:20:02,520 Speaker 2: they don't have the same perspective and sense that the 342 00:20:02,560 --> 00:20:05,239 Speaker 2: rest of the world might in this regard. But on 343 00:20:05,280 --> 00:20:08,840 Speaker 2: the other front, they are in the leading edge of 344 00:20:09,119 --> 00:20:14,320 Speaker 2: cybersecurity and other kinds of technologies to try to endure. 345 00:20:14,880 --> 00:20:17,400 Speaker 2: And the one thing I'd say from an historical perspective, 346 00:20:17,880 --> 00:20:22,399 Speaker 2: the Japanese occupied Taiwan for fifty years and the Taiwanese 347 00:20:22,440 --> 00:20:26,040 Speaker 2: came out with their identity intact. The CAMT under Tan 348 00:20:26,080 --> 00:20:29,199 Speaker 2: Kaishak imposed martial law for twenty five years, and the 349 00:20:29,240 --> 00:20:33,639 Speaker 2: Taiwanese people came out with their identity intact. I don't 350 00:20:33,720 --> 00:20:36,920 Speaker 2: give good odds for the CCP being able to control 351 00:20:36,920 --> 00:20:40,680 Speaker 2: and occupy Taiwan for any enduring period of time. They're 352 00:20:40,720 --> 00:20:44,040 Speaker 2: hard to people to govern and old. But the problem 353 00:20:44,119 --> 00:20:47,240 Speaker 2: is the cost going through that period, and I don't 354 00:20:47,240 --> 00:20:49,440 Speaker 2: think they have a full sense of it, and our 355 00:20:49,520 --> 00:20:51,760 Speaker 2: people are not prepared for that, and that's what gives 356 00:20:51,800 --> 00:20:52,760 Speaker 2: me great concern. 357 00:20:53,359 --> 00:20:56,920 Speaker 1: Do they in their own historic memory do they see 358 00:20:56,960 --> 00:20:59,280 Speaker 1: themselves as being part of China or do they see 359 00:20:59,320 --> 00:21:03,040 Speaker 1: themselves as an island people who are off the coast. 360 00:21:03,680 --> 00:21:06,879 Speaker 2: Well, there's two broad forces that make them more in 361 00:21:06,960 --> 00:21:10,320 Speaker 2: that latter category. One is, as I mentioned, the fifty 362 00:21:10,400 --> 00:21:14,960 Speaker 2: years of Japanese occupation, they have at least as much 363 00:21:15,119 --> 00:21:19,680 Speaker 2: Japanese American identity in them as they do Chinese, and 364 00:21:20,119 --> 00:21:23,720 Speaker 2: because they are a full democracy and they have aboriginal 365 00:21:23,800 --> 00:21:28,800 Speaker 2: tribes integrated into their legislature, presidential appointees, and others, they 366 00:21:28,840 --> 00:21:32,159 Speaker 2: have some not a complete, but some sense, as we 367 00:21:32,240 --> 00:21:36,800 Speaker 2: Americans do, of a country being defined by a common geography, 368 00:21:37,160 --> 00:21:40,280 Speaker 2: common values, and a common purpose, not ethnicity. And that 369 00:21:40,400 --> 00:21:44,159 Speaker 2: makes them very, very different from China, and very different, 370 00:21:44,240 --> 00:21:47,600 Speaker 2: especially from the People's Republic of China. And perhaps it's 371 00:21:47,760 --> 00:21:51,280 Speaker 2: most racist leader, Shi Jinping, who has put this form 372 00:21:51,320 --> 00:21:55,000 Speaker 2: of racism into its very diplomacy, trying to target and 373 00:21:55,200 --> 00:21:59,680 Speaker 2: recruit ethnically Chinese people in our country and our allies. 374 00:21:59,680 --> 00:22:02,640 Speaker 2: Country trees to be more loyal to the motherland than 375 00:22:02,640 --> 00:22:04,760 Speaker 2: they are to the country in which they're citizens. 376 00:22:05,160 --> 00:22:09,600 Speaker 1: I take it that the taiwan experience of Japanese occupation 377 00:22:10,640 --> 00:22:13,640 Speaker 1: was dramatically better than the Korean response. 378 00:22:13,800 --> 00:22:17,800 Speaker 2: Hundred percent, hundred percent. Most of their key institutions, from 379 00:22:17,920 --> 00:22:22,440 Speaker 2: education to infrastructure to commerce were built during that era, 380 00:22:22,880 --> 00:22:25,240 Speaker 2: and a lot of it endures to today, and it 381 00:22:25,280 --> 00:22:28,680 Speaker 2: has seen as a far more positive foundation on which 382 00:22:28,720 --> 00:22:30,120 Speaker 2: their democracy was built. 383 00:22:30,440 --> 00:22:35,400 Speaker 1: Michael, I can take us beyond the narrowly Chinese definition 384 00:22:35,840 --> 00:22:39,800 Speaker 1: of this conversation. There's also been an effort which China 385 00:22:39,800 --> 00:22:43,040 Speaker 1: has been part of to create an alternative to the 386 00:22:43,119 --> 00:22:47,160 Speaker 1: dollar as an international currency. I think they just cut 387 00:22:47,160 --> 00:22:50,040 Speaker 1: a deal with Brazil to do some trade that would 388 00:22:50,080 --> 00:22:54,440 Speaker 1: be denominated in yuan rather than in dollars. How seriously 389 00:22:55,160 --> 00:22:59,800 Speaker 1: do you take their capacity to be a currency competitor, 390 00:22:59,800 --> 00:23:02,920 Speaker 1: if you will, with the American dollar as the world 391 00:23:02,960 --> 00:23:04,560 Speaker 1: reserve currency. 392 00:23:04,680 --> 00:23:04,920 Speaker 2: Yeah. 393 00:23:04,960 --> 00:23:08,359 Speaker 3: So I testified to the House Financial Services Committee about 394 00:23:08,359 --> 00:23:11,320 Speaker 3: this topic about three weeks ago, and the way that 395 00:23:11,359 --> 00:23:15,960 Speaker 3: we discussed it was there's essentially three elements about being 396 00:23:16,000 --> 00:23:20,439 Speaker 3: the world's reserve currency. Number one is what currency in 397 00:23:20,480 --> 00:23:24,040 Speaker 3: which trade takes place, and so that's why China's wanting 398 00:23:24,080 --> 00:23:26,040 Speaker 3: to get more of their trade to take place in 399 00:23:26,160 --> 00:23:29,320 Speaker 3: you on, so that you would then hold reserve Banks 400 00:23:29,359 --> 00:23:32,600 Speaker 3: would then hold reserve currency to facilitate that trade. So 401 00:23:33,760 --> 00:23:36,280 Speaker 3: part of that is the development of the payment system. 402 00:23:36,720 --> 00:23:40,159 Speaker 3: The US financial system is the most sophisticated, broad based 403 00:23:40,200 --> 00:23:44,200 Speaker 3: in the world, and so China's activities in the financial 404 00:23:44,280 --> 00:23:47,760 Speaker 3: technology sector to try to displace the speed and cost 405 00:23:47,840 --> 00:23:51,520 Speaker 3: of engaging in international trade is part of that strategy. 406 00:23:51,680 --> 00:23:56,280 Speaker 3: The second is, if I'm holding assets denominated a foreign 407 00:23:56,280 --> 00:24:00,280 Speaker 3: currency against Chwo's country do I want financial claims, and 408 00:24:00,359 --> 00:24:03,640 Speaker 3: so that's why it's important to have the underlying fiscal 409 00:24:03,680 --> 00:24:05,920 Speaker 3: strength of the country be strong. And this is where 410 00:24:05,960 --> 00:24:08,840 Speaker 3: I focused my testimony to the House is that the 411 00:24:08,840 --> 00:24:12,199 Speaker 3: more that we run massive budget deficits and in the 412 00:24:12,280 --> 00:24:17,960 Speaker 3: process demonstrate and irresponsibility towards being the world's reserve currency, 413 00:24:18,000 --> 00:24:21,000 Speaker 3: the more that we invite other nations to potentially try 414 00:24:21,080 --> 00:24:25,520 Speaker 3: to displace us. But then the third thing is is 415 00:24:25,560 --> 00:24:28,879 Speaker 3: there an ability to freely transact in that currency? And 416 00:24:28,960 --> 00:24:32,280 Speaker 3: this is where China is probably not a threat, is 417 00:24:32,280 --> 00:24:35,640 Speaker 3: that as long as there are capital controls on outflows 418 00:24:36,200 --> 00:24:40,200 Speaker 3: from China, it doesn't serve the purpose as a reserve currency, 419 00:24:40,280 --> 00:24:42,040 Speaker 3: because what you need to be able to do is 420 00:24:42,080 --> 00:24:45,200 Speaker 3: have free flow of capital dollars nominated asset. The benefit 421 00:24:45,240 --> 00:24:47,000 Speaker 3: that it has is that it's a store of value 422 00:24:47,040 --> 00:24:49,359 Speaker 3: between when there's an initial trade and when there's going 423 00:24:49,400 --> 00:24:51,080 Speaker 3: to be a future trade. You need something that's going 424 00:24:51,119 --> 00:24:53,600 Speaker 3: to store value in the interim. But if you can't 425 00:24:53,640 --> 00:24:55,840 Speaker 3: ever get your money out of that country because of 426 00:24:55,880 --> 00:24:59,399 Speaker 3: the capital controls, then it doesn't really well serve its purpose. 427 00:24:59,400 --> 00:25:01,880 Speaker 3: And I think that xin Ping wants more control over 428 00:25:01,920 --> 00:25:05,480 Speaker 3: his economy, then he wants to be the world's reserve currency. 429 00:25:05,800 --> 00:25:09,000 Speaker 3: Because he will not lighten those capital controls, it won't happen. 430 00:25:09,560 --> 00:25:12,680 Speaker 3: Final thing on that is, there's been discussion about moving 431 00:25:12,720 --> 00:25:17,679 Speaker 3: to a commodity backed currency to displace the dollar. The 432 00:25:17,760 --> 00:25:20,560 Speaker 3: problem you have there is that you need to force 433 00:25:20,680 --> 00:25:25,399 Speaker 3: conversion in times of conflict or times of strife. And 434 00:25:25,480 --> 00:25:28,680 Speaker 3: so even if China said, fine, don't have R and 435 00:25:28,720 --> 00:25:33,320 Speaker 3: B backed securities, but have oil backed securities that we 436 00:25:33,440 --> 00:25:37,199 Speaker 3: will convert if there were to be any kind of 437 00:25:37,200 --> 00:25:41,359 Speaker 3: international conflict, I don't trust that the Chinese wouldn't suspend conversion. 438 00:25:41,840 --> 00:25:44,880 Speaker 3: And if you cannot ensure conversion, then it's no good 439 00:25:44,920 --> 00:25:46,840 Speaker 3: even having a commodity backed currency. 440 00:25:46,880 --> 00:25:47,640 Speaker 2: And so for those. 441 00:25:47,440 --> 00:25:50,800 Speaker 3: Reasons, I don't see China as an immediate or even 442 00:25:50,840 --> 00:25:53,280 Speaker 3: intermediate threat displacing the dollar. 443 00:25:53,800 --> 00:25:58,000 Speaker 1: What is the net value to the American people of 444 00:25:58,119 --> 00:26:00,879 Speaker 1: having the world reserve currency, which I think for one 445 00:26:00,920 --> 00:26:03,880 Speaker 1: hundred years was the British pound and then gradually after 446 00:26:03,920 --> 00:26:07,040 Speaker 1: World War Two clearly shifted to be the dollar. What's 447 00:26:07,080 --> 00:26:10,040 Speaker 1: the net advantage? Why is there something to pay attention to? 448 00:26:10,760 --> 00:26:14,200 Speaker 3: Primary benefit is that it lowers are cost of capital, 449 00:26:14,359 --> 00:26:17,040 Speaker 3: so to the extent that we are, for instance, running 450 00:26:17,040 --> 00:26:20,080 Speaker 3: budget deficits, we are able to issue debt and interest 451 00:26:20,119 --> 00:26:22,760 Speaker 3: rates that are lower than what we likely otherwise would 452 00:26:22,760 --> 00:26:25,320 Speaker 3: have issued. At the fact that all these reserve banks 453 00:26:25,320 --> 00:26:29,000 Speaker 3: are holding dollar denominated assets means there's trillions of dollars 454 00:26:29,040 --> 00:26:32,960 Speaker 3: in foreign banks that have to purchase treasuries in order 455 00:26:32,960 --> 00:26:36,760 Speaker 3: to facilitate that trade. And so that built in demand 456 00:26:36,960 --> 00:26:40,320 Speaker 3: for our debt lowers interest rates relative to what they 457 00:26:40,400 --> 00:26:43,359 Speaker 3: otherwise would have been. There are losers in the United 458 00:26:43,400 --> 00:26:47,439 Speaker 3: States from it, so anybody looking to sell abroad, it 459 00:26:47,520 --> 00:26:50,119 Speaker 3: means that our currency is higher value in it, so 460 00:26:50,160 --> 00:26:54,440 Speaker 3: it makes dollars denominated goods more expensive. So US importers 461 00:26:54,560 --> 00:26:57,719 Speaker 3: benefit from the dollars worlds was our currency, but US 462 00:26:57,720 --> 00:27:01,359 Speaker 3: exporters are made worse off from admit But overall, the 463 00:27:01,400 --> 00:27:04,680 Speaker 3: primary benefit is lowering the interest rates at which both 464 00:27:04,720 --> 00:27:06,359 Speaker 3: consumers and the government borrows. 465 00:27:06,400 --> 00:27:25,680 Speaker 1: At One of the things that's fascinating that came up 466 00:27:25,920 --> 00:27:31,240 Speaker 1: the American First Policy Institute report back in April, the 467 00:27:31,280 --> 00:27:36,080 Speaker 1: ownership of US agricultural land by the Chinese Communist and 468 00:27:36,160 --> 00:27:40,960 Speaker 1: its affiliates has gone from thirteen thousand acres in twenty 469 00:27:41,080 --> 00:27:44,919 Speaker 1: ten to three hundred and fifty two thousand acres and 470 00:27:45,040 --> 00:27:48,080 Speaker 1: twenty twenty and I gather that has risen even further 471 00:27:48,200 --> 00:27:51,040 Speaker 1: since then, and there are some indications that they have 472 00:27:51,080 --> 00:27:56,320 Speaker 1: a particular fascination with farmland around American military bases. Is 473 00:27:56,359 --> 00:27:59,560 Speaker 1: this a serious issue and should the US government be 474 00:27:59,600 --> 00:28:01,439 Speaker 1: intervened to stop it? 475 00:28:01,440 --> 00:28:03,719 Speaker 2: It is a serious issue. It kind of is a 476 00:28:03,720 --> 00:28:06,840 Speaker 2: litmus test for those that are capable of having an 477 00:28:06,880 --> 00:28:09,879 Speaker 2: open mind of have the Chinese already declared a Cold 478 00:28:09,880 --> 00:28:13,320 Speaker 2: war on us? Because during the Cold War, there's not 479 00:28:13,440 --> 00:28:18,280 Speaker 2: a question of would any Americans sell their farmland to 480 00:28:18,520 --> 00:28:22,119 Speaker 2: the Soviets and would we have looked very carefully at 481 00:28:22,320 --> 00:28:25,680 Speaker 2: where they were getting land should those transactions occur, But 482 00:28:25,720 --> 00:28:29,199 Speaker 2: we do have kind of this instinctive notion built in 483 00:28:29,359 --> 00:28:31,879 Speaker 2: now that well, farmers should be able to sell to 484 00:28:31,880 --> 00:28:34,960 Speaker 2: whoever they want. And I'm sympathetic to farmers wanting to 485 00:28:35,000 --> 00:28:37,760 Speaker 2: feed the world and sell the family farm if they 486 00:28:37,760 --> 00:28:39,800 Speaker 2: want to. At the same time, a lot of these 487 00:28:39,840 --> 00:28:42,200 Speaker 2: farmers are patriots and they don't want the Communist Party 488 00:28:42,240 --> 00:28:44,640 Speaker 2: to be their neighbor. This is something that has been 489 00:28:44,800 --> 00:28:47,360 Speaker 2: very active in the States that there are governors and 490 00:28:47,400 --> 00:28:53,160 Speaker 2: state legislatures, and not just Republicans. The California Assembly passed 491 00:28:53,320 --> 00:28:56,800 Speaker 2: a bill that would have blocked all international ownership of 492 00:28:56,840 --> 00:29:00,680 Speaker 2: agricultural land. It was vetoed by the governor. And that's 493 00:29:00,720 --> 00:29:04,480 Speaker 2: not a state in which Republicans sadly have any influence. 494 00:29:04,840 --> 00:29:08,480 Speaker 2: And so this is something that has taken hold. It's tangible, 495 00:29:08,680 --> 00:29:11,040 Speaker 2: something hits at a fundamental about what it means to 496 00:29:11,080 --> 00:29:13,720 Speaker 2: be an American, the American farmer and land. And yes, 497 00:29:13,760 --> 00:29:19,040 Speaker 2: they've picked conspicuously locations near missile silos or bases or 498 00:29:19,040 --> 00:29:22,440 Speaker 2: communications posts to do this. And I think from the 499 00:29:22,480 --> 00:29:25,480 Speaker 2: grassroots up, Americans are trying to rebuild a foundation for 500 00:29:25,560 --> 00:29:28,000 Speaker 2: a different approach to China. I think that could be 501 00:29:28,080 --> 00:29:31,520 Speaker 2: helpful to guide the institution you know very well, mister Speaker, 502 00:29:31,520 --> 00:29:34,600 Speaker 2: and the House of Representatives constant effort of herding cats, 503 00:29:34,920 --> 00:29:37,959 Speaker 2: and then that institution has to struggle to rally that 504 00:29:38,120 --> 00:29:42,200 Speaker 2: other institution, the Senate, which is not known for rapid 505 00:29:42,320 --> 00:29:45,560 Speaker 2: policy action, to actually represent the interests of the states. 506 00:29:45,800 --> 00:29:49,800 Speaker 2: If the States move in a way to protect ag 507 00:29:50,040 --> 00:29:52,720 Speaker 2: land and define kind of what the rules of the 508 00:29:52,800 --> 00:29:57,080 Speaker 2: road are for agland, that will be a major pressure 509 00:29:57,120 --> 00:30:00,240 Speaker 2: point to I think move in a positive direction. Oh, 510 00:30:00,240 --> 00:30:02,720 Speaker 2: I mean, it's not really fair to ask the average 511 00:30:02,720 --> 00:30:05,600 Speaker 2: everyday farmer to have any idea who he's doing business with. 512 00:30:06,080 --> 00:30:10,640 Speaker 2: The Chinese LLCs and cutout corporations are a tricky bunch. 513 00:30:11,040 --> 00:30:13,880 Speaker 2: I think that the government needs to do some serious 514 00:30:13,880 --> 00:30:18,520 Speaker 2: things to help our citizens be responsible and work with 515 00:30:18,560 --> 00:30:21,240 Speaker 2: them to know who they're doing business with, and along 516 00:30:21,320 --> 00:30:24,880 Speaker 2: the way, I think protect our strategic assets like land. 517 00:30:25,480 --> 00:30:29,320 Speaker 1: The Biden administration has actually intervened on behalf of the 518 00:30:29,440 --> 00:30:33,880 Speaker 1: Chinese Communists against a state law that would block them. 519 00:30:34,320 --> 00:30:37,080 Speaker 2: Yeah, there's a couple of angles that have come in 520 00:30:37,240 --> 00:30:41,719 Speaker 2: against and one of them is a completely fallacious notion 521 00:30:42,160 --> 00:30:45,560 Speaker 2: that this is ethnic targeting and that they tie it 522 00:30:45,800 --> 00:30:49,520 Speaker 2: to some kind of plotted surge in Asian hate. Now 523 00:30:49,520 --> 00:30:53,440 Speaker 2: that's a whole other podcast conversation about what groups are 524 00:30:53,520 --> 00:30:57,880 Speaker 2: actually engaged in what attacks against others. But this issue 525 00:30:57,960 --> 00:31:02,320 Speaker 2: about the Communist Party and ties to their intelligence services 526 00:31:02,760 --> 00:31:06,440 Speaker 2: engaging in transactions and influence operations in the United States 527 00:31:06,760 --> 00:31:09,400 Speaker 2: that has nothing to do with ethnicity. That has to 528 00:31:09,440 --> 00:31:13,480 Speaker 2: do with American national security, and this something that I 529 00:31:13,480 --> 00:31:15,920 Speaker 2: think Americans can understand and deal with. But the Biden 530 00:31:15,960 --> 00:31:19,880 Speaker 2: administration very early on shut down the Department of Justices 531 00:31:20,000 --> 00:31:24,080 Speaker 2: China initiative on this basis of I think false charges 532 00:31:24,080 --> 00:31:27,280 Speaker 2: of racism, and some of these court cases pushing back 533 00:31:27,360 --> 00:31:30,560 Speaker 2: on the state laws did the same. We are working 534 00:31:30,600 --> 00:31:33,840 Speaker 2: at AFPI with a number of different state legislatures to 535 00:31:33,880 --> 00:31:37,080 Speaker 2: find other ways to define the tools and define the 536 00:31:37,120 --> 00:31:41,240 Speaker 2: problem and hopefully insulate against these fallacious notions. 537 00:31:41,720 --> 00:31:45,680 Speaker 1: I was right struck when Secretary of Blincoln went to 538 00:31:45,760 --> 00:31:51,760 Speaker 1: China that Blincoln had been the manager of the University 539 00:31:51,800 --> 00:31:55,480 Speaker 1: of Pennsylvania Biden Center. In the University of Pennsylvania. Biden 540 00:31:55,560 --> 00:31:59,560 Speaker 1: Center got millions and millions of dollars from the University 541 00:31:59,600 --> 00:32:03,000 Speaker 1: of pennsylv at a time when the university was I believe, 542 00:32:03,440 --> 00:32:08,160 Speaker 1: the largest recipient of Chinese communist money of any university 543 00:32:08,240 --> 00:32:10,880 Speaker 1: United States. And of course the University of Delaware has 544 00:32:10,920 --> 00:32:15,640 Speaker 1: also magically gotten millions of dollars in money from communist China. 545 00:32:16,240 --> 00:32:19,400 Speaker 1: And then it turns out that there are nine other 546 00:32:20,280 --> 00:32:24,040 Speaker 1: Biden administration staffers in the White House who worked for 547 00:32:24,560 --> 00:32:29,120 Speaker 1: the penn Biden Center. Now isn't it a little weird 548 00:32:29,920 --> 00:32:33,440 Speaker 1: to have a Secretary of State who I believe was 549 00:32:33,480 --> 00:32:36,719 Speaker 1: paid over a million dollars a year by a university 550 00:32:37,120 --> 00:32:40,360 Speaker 1: being funded by the Chinese Communist to now show up 551 00:32:40,400 --> 00:32:45,080 Speaker 1: in Beijing, doesn't it probably to some extent weaken his leverage, 552 00:32:45,120 --> 00:32:46,160 Speaker 1: if I may put it that way. 553 00:32:46,840 --> 00:32:49,720 Speaker 2: I'll talk quickly about the China angle. But Mike lives 554 00:32:49,760 --> 00:32:53,560 Speaker 2: in the university environment and knows this sort of area 555 00:32:53,720 --> 00:32:57,640 Speaker 2: very very well on what's going on with Chinese influence 556 00:32:57,640 --> 00:33:01,160 Speaker 2: and universities, whether it's the money, the people, etc. But 557 00:33:01,720 --> 00:33:04,160 Speaker 2: from a China point of view, especially under the Communist 558 00:33:04,160 --> 00:33:08,360 Speaker 2: Party of China one thousand percent, if they have funded 559 00:33:08,480 --> 00:33:11,600 Speaker 2: any part of your life, according to them, they own you, 560 00:33:11,760 --> 00:33:14,240 Speaker 2: and you owe your allegiance to them, and they expect 561 00:33:14,320 --> 00:33:18,680 Speaker 2: you to follow instructions. And so far there's very little 562 00:33:18,720 --> 00:33:22,440 Speaker 2: evidence that any of these very obedient children in Chinese 563 00:33:22,480 --> 00:33:26,240 Speaker 2: and we'd say guy Heidze have strayed from this course. 564 00:33:26,800 --> 00:33:32,120 Speaker 2: So everyone that took filthy lucre through undeniably a tremendously 565 00:33:32,280 --> 00:33:35,880 Speaker 2: smelly kind of operation in an institute that was not 566 00:33:36,200 --> 00:33:40,600 Speaker 2: known for generating mass quantities of public policy research and 567 00:33:40,720 --> 00:33:45,120 Speaker 2: driving debate and key areas of reform in Pennsylvania, the 568 00:33:45,240 --> 00:33:49,520 Speaker 2: United States, or international policy. This was a vanity institute 569 00:33:49,920 --> 00:33:53,120 Speaker 2: and it sure looks like a shell company in a 570 00:33:53,120 --> 00:33:55,520 Speaker 2: lot of different ways. But I digress. But on the 571 00:33:55,560 --> 00:33:58,880 Speaker 2: academic side, I wish the University of Pennsylvania were the 572 00:33:58,920 --> 00:34:02,760 Speaker 2: only one that susceptible to this kind of malign influence, 573 00:34:03,080 --> 00:34:05,959 Speaker 2: but sadly it's just one of many. But Mike, you 574 00:34:06,040 --> 00:34:06,640 Speaker 2: live in this. 575 00:34:06,600 --> 00:34:09,000 Speaker 3: World, yeah, so I want to be careful. I've been 576 00:34:09,040 --> 00:34:11,560 Speaker 3: a university professor since two thousand and two, and I 577 00:34:11,800 --> 00:34:15,840 Speaker 3: was a visiting professor at the University of Pennsylvania in 578 00:34:15,840 --> 00:34:19,799 Speaker 3: twenty seventeen. They are an extraordinary institution. Some of my 579 00:34:19,880 --> 00:34:24,400 Speaker 3: best friends are faculty there. It's striking to me that 580 00:34:24,520 --> 00:34:28,160 Speaker 3: President Trump is an alump of the University of Pennsylvania. 581 00:34:28,200 --> 00:34:30,320 Speaker 3: So I don't know the extent to which Vice President 582 00:34:30,360 --> 00:34:32,719 Speaker 3: Biden was brought in as kind of a finger in 583 00:34:32,760 --> 00:34:37,120 Speaker 3: the eye to President Trump. Upon taking office. There was 584 00:34:37,160 --> 00:34:42,400 Speaker 3: a rumor that the president of the University of Pennsylvania 585 00:34:42,600 --> 00:34:45,680 Speaker 3: had set herself up to be education secretary in a 586 00:34:45,719 --> 00:34:50,400 Speaker 3: Clinton administration, So I think there are deep connections there. 587 00:34:51,160 --> 00:34:54,560 Speaker 3: I am a former university administrator. I was an associate 588 00:34:54,600 --> 00:34:58,920 Speaker 3: dean before I became assistant secretary, so it's not unusual 589 00:34:59,040 --> 00:35:03,360 Speaker 3: to bring on high profile people with an understanding that 590 00:35:03,400 --> 00:35:06,879 Speaker 3: their job is to raise money. The question is why 591 00:35:07,080 --> 00:35:11,120 Speaker 3: is the university raising so much money from China? Because, 592 00:35:11,120 --> 00:35:14,160 Speaker 3: as Steve said, people don't give money for free. They 593 00:35:14,200 --> 00:35:17,160 Speaker 3: want things in return. So what is it that the 594 00:35:17,239 --> 00:35:21,120 Speaker 3: Chinese thought that they were getting in return? And is 595 00:35:21,160 --> 00:35:24,160 Speaker 3: it anything similar to what Bisma thought they were getting. 596 00:35:24,280 --> 00:35:26,920 Speaker 1: Yeah, my hunch is that they're very different because I 597 00:35:26,960 --> 00:35:30,640 Speaker 1: think in the Ukrainian tradition, as long as they had 598 00:35:30,680 --> 00:35:31,840 Speaker 1: the name, they didn't really. 599 00:35:31,680 --> 00:35:35,319 Speaker 3: Care, whereas the Chinese want a bit more than a name. 600 00:35:35,520 --> 00:35:38,080 Speaker 1: I think the Chinese tend to have a longer range 601 00:35:38,520 --> 00:35:42,239 Speaker 1: planning process than the guys who are crooks at Barisma Head. 602 00:35:42,680 --> 00:35:46,080 Speaker 1: But anyway, that's another story. Doesn't Mike can say? I 603 00:35:46,160 --> 00:35:48,560 Speaker 1: really want to thank you for joining me. The work 604 00:35:48,600 --> 00:35:51,480 Speaker 1: that's being done at the American First Policy Institute, I 605 00:35:51,480 --> 00:35:55,279 Speaker 1: think is really remarkable to an amazing team that has 606 00:35:55,320 --> 00:35:58,399 Speaker 1: been assembled. I want to thank you for helping all 607 00:35:58,440 --> 00:36:02,200 Speaker 1: of us better understand Treasury Secretary Yellen's trip to China. 608 00:36:02,600 --> 00:36:04,960 Speaker 1: Maybe when she has a few minutes, she can train 609 00:36:05,040 --> 00:36:07,440 Speaker 1: the rest of us on how to cowtow in an 610 00:36:07,480 --> 00:36:10,359 Speaker 1: appropriate way so that we can all build the right 611 00:36:10,440 --> 00:36:14,680 Speaker 1: kind of psychologic latitude towards our future Chinese masters. But 612 00:36:14,880 --> 00:36:17,520 Speaker 1: in the meantime, I hope in the future we can 613 00:36:17,560 --> 00:36:19,480 Speaker 1: have both of you come back to your experts on 614 00:36:19,600 --> 00:36:22,080 Speaker 1: so many different areas. And I'd love to have both 615 00:36:22,080 --> 00:36:23,960 Speaker 1: of you back in the future. And thank you for 616 00:36:24,000 --> 00:36:24,720 Speaker 1: helping us today. 617 00:36:25,040 --> 00:36:26,440 Speaker 3: Great privilege to be with you. 618 00:36:26,480 --> 00:36:27,120 Speaker 2: Thanks so much. 619 00:36:30,719 --> 00:36:33,960 Speaker 1: Thank you to my guests Michael Falkender and Steve Yates 620 00:36:33,960 --> 00:36:37,480 Speaker 1: from America First Policy Institute. You can learn more about 621 00:36:37,680 --> 00:36:41,120 Speaker 1: Secretary Treasury Yellen's visit to China on our show page 622 00:36:41,440 --> 00:36:45,279 Speaker 1: at newsworld dot com. Newtsworld is produced by gingridh three 623 00:36:45,320 --> 00:36:50,719 Speaker 1: sixty and iHeartMedia. Our executive producer is Guarnsey Sloan. Our 624 00:36:50,800 --> 00:36:55,000 Speaker 1: researcher is Rachel Peterson. The artwork for the show was 625 00:36:55,040 --> 00:36:58,239 Speaker 1: created by Steve Penley. Special thanks to the team at 626 00:36:58,239 --> 00:37:02,000 Speaker 1: Gingrich three sixty. You've been enjoying Newtsworld, I hope you'll 627 00:37:02,000 --> 00:37:04,879 Speaker 1: go to Apple Podcast and both rate us with five 628 00:37:04,920 --> 00:37:08,600 Speaker 1: stars and give us a review so others can learn 629 00:37:08,640 --> 00:37:11,799 Speaker 1: what it's all about. Right now, listeners of news World 630 00:37:12,120 --> 00:37:15,880 Speaker 1: can sign up for my three free weekly columns at 631 00:37:15,960 --> 00:37:20,759 Speaker 1: gingrishree sixty dot com slash newsletter. I'm Newt Gingrich. This 632 00:37:20,960 --> 00:37:21,640 Speaker 1: is NEWTS world.