WEBVTT - China On The Ropes. Gordon Chang talks to Armstrong & Getty 0:00:01.560 --> 0:00:03.920 When you're ready to ride Metro, we want you to 0:00:03.960 --> 0:00:06.560 know we're ready for you. Here are just a few 0:00:06.559 --> 0:00:08.399 of the people at Metro to tell you how we're 0:00:08.400 --> 0:00:13.360 doing our part to keep writers safe. We're cleaning before 0:00:14.240 --> 0:00:18.360 you have found halfs out of suns of statist no masks, 0:00:18.840 --> 0:00:22.200 no Metro need one. We have a few extras at Metro. 0:00:22.520 --> 0:00:25.079 We're doing our part to keep the DC area moving. 0:00:25.320 --> 0:00:27.720 Find out more at well Notta dot com slash doing 0:00:27.720 --> 0:00:33.760 our part. My judgment, the economic consequences are so small, 0:00:34.040 --> 0:00:37.880 but the possible improvement in trade and exports and open 0:00:37.960 --> 0:00:41.960 markets from the United States, this is worthwhile doing. That's 0:00:42.000 --> 0:00:46.400 the gamble. That's the gamble to me. The biggest differences 0:00:46.479 --> 0:00:48.479 uh In the United States we have an electure for 0:00:48.520 --> 0:00:52.440 a couple of years and politicians are answerable immediately to 0:00:52.440 --> 0:00:55.800 the voters, whereas in China they can wait a long time, 0:00:56.120 --> 0:00:59.080 and you don't have a media intentionally whipping up fear 0:00:59.160 --> 0:01:02.240 and angst, some of which may be justified, was certainly 0:01:02.240 --> 0:01:06.400 not all. Gordon Chang joins this. Gordon is an author 0:01:06.440 --> 0:01:10.480 and calumnist, an authority on Asian affairs, and a realist. 0:01:10.600 --> 0:01:13.360 You can find him at Gordon g Chang, and he's 0:01:13.360 --> 0:01:16.480 also calumnist at The Daily Beast. Gordon welcome, How are you, sir? 0:01:17.160 --> 0:01:19.080 I'm fine, thank you, and thank you so much. It's 0:01:19.080 --> 0:01:24.000 our pleasure. Why is the Trump administration willing to endure 0:01:24.080 --> 0:01:28.840 the pain of tariffs, the controversy, etcetera. What is the goal? Well, 0:01:28.840 --> 0:01:30.880 there are a number of goals. You know, President Trump 0:01:30.920 --> 0:01:34.360 talks about evening out the trade deficit, but also I've 0:01:34.360 --> 0:01:36.960 got to remember that the tariffs and question are imposed 0:01:37.000 --> 0:01:38.840 under Section three or one of the Trade Act of 0:01:38.920 --> 0:01:42.120 nineteen seventy four. These are remedies for the theft of 0:01:42.280 --> 0:01:46.759 US intellectual property, and China each year steals somewhere between 0:01:46.800 --> 0:01:49.720 a hundred and fifty to six hundred billion dollars of 0:01:49.920 --> 0:01:53.080 US i P, probably in the speed of four hundred 0:01:53.120 --> 0:01:56.200 billion dollar range. This is a grievous moon to the 0:01:56.240 --> 0:02:00.000 American economy and we've got to stop it. So Um, 0:02:00.120 --> 0:02:02.960 that's why we have what people call a trade war. 0:02:03.120 --> 0:02:04.960 And by the way, the Chinese have been waging this 0:02:05.040 --> 0:02:08.919 trade war against the US for decades. We've been oblivious, um, 0:02:09.080 --> 0:02:12.520 and fortunately we have a president who is now willing 0:02:12.560 --> 0:02:16.280 to take the Chinese. On previous presidents have not been. Yeah, 0:02:16.360 --> 0:02:19.440 it reminds me it's at the economic version of when 0:02:19.440 --> 0:02:22.840 we were attacked by al Qaeda and hey, look, they've 0:02:22.840 --> 0:02:25.680 been at war with us for decades. We just ignored 0:02:25.760 --> 0:02:27.519 the fact that they were at war with us. Same 0:02:27.560 --> 0:02:29.440 thing with this trade war. China has been in a 0:02:29.520 --> 0:02:33.080 trade war and and and kicking our ass for years 0:02:33.120 --> 0:02:36.919 and now we're finally responding. Yes, So that's that's absolutely 0:02:36.960 --> 0:02:39.320 true when you look at the persistent theft of US 0:02:39.360 --> 0:02:44.320 intellectual property, also just violations of China's World Trade Organization 0:02:44.440 --> 0:02:47.800 obligations to the United States under sees and paying the 0:02:47.800 --> 0:02:52.320 current ruler um. Both ip theft and trade violations have 0:02:52.400 --> 0:02:56.120 gotten worse, and obviously something has to be done about it. 0:02:56.440 --> 0:02:58.880 And we can't think that we can get out of 0:02:58.960 --> 0:03:02.320 decades of miss guy to trade policy without costs. This 0:03:02.360 --> 0:03:05.440 will cost the American people, but it's a cost that 0:03:05.520 --> 0:03:08.000 we will have to bear. If we don't bear this cost, 0:03:08.120 --> 0:03:09.880 we're not going to have an economy of the future. 0:03:10.160 --> 0:03:11.919 We're not going to have a society of the future. 0:03:12.200 --> 0:03:15.240 We're gonna end up exporting primary products in China and 0:03:15.320 --> 0:03:19.160 buying back manufactured goods. And by the way, some people 0:03:19.200 --> 0:03:22.080 say that that's a badge of colonialism. So I don't 0:03:22.080 --> 0:03:25.760 want to be a colony of China, Gordon. Chang is 0:03:25.800 --> 0:03:29.959 on the line, Gordon. The Chinese economy has has relied 0:03:30.080 --> 0:03:36.120 substantially on stealing technology, very strong arm tactics, tariffs, that 0:03:36.240 --> 0:03:38.480 sort of thing for a long time. How far do 0:03:38.520 --> 0:03:42.720 you think that Trump administration can push them? Um? How 0:03:42.760 --> 0:03:45.800 how far can she go without causing such a shock 0:03:45.880 --> 0:03:49.960 to his entire system that, you know, the Communist Party collapses. 0:03:51.480 --> 0:03:54.080 I think China is in a very difficult position. Um. 0:03:54.080 --> 0:03:57.160 We've got to remember that last year, China's merchandise trade 0:03:57.200 --> 0:04:00.480 surplus with the US accounted for our hundred and nine 0:04:00.600 --> 0:04:04.840 point six percent of its overall merchandise surplus. That shows 0:04:04.960 --> 0:04:09.080 amazing dependence on us. Also, we've got the bigger economy, 0:04:09.360 --> 0:04:12.760 We've got economy that in reality is growing faster, and 0:04:12.840 --> 0:04:15.440 we're just not dependent on selling things to China, as 0:04:15.440 --> 0:04:19.160 the trade statistics show. Um. Siege and Pain doesn't face 0:04:19.240 --> 0:04:23.599 elections every um four years, but he in effect pass 0:04:23.640 --> 0:04:26.320 on election every day because he's held responsible for this 0:04:26.400 --> 0:04:30.120 trade war. He's held responsible for who lost America. And 0:04:30.279 --> 0:04:32.760 the reason why I think he withdrew the commitments that 0:04:32.839 --> 0:04:35.719 he had previously made to the United States for trade 0:04:36.200 --> 0:04:39.800 was essentially because he realized that he does not have 0:04:39.839 --> 0:04:42.680 the power to exert his will on other people in 0:04:42.720 --> 0:04:45.400 the Chinese political system. I think China is in real 0:04:45.400 --> 0:04:48.760 trouble right now, especially because you know, trade surplus countries 0:04:48.800 --> 0:04:51.760 just generally don't win trade wars. China is a surplus 0:04:51.800 --> 0:04:55.400 country where the deficit country we hold almost all the 0:04:55.480 --> 0:05:00.240 high cards. Interesting. Yeah, so back to my question, you know, 0:05:01.160 --> 0:05:06.040 will will they put up with being made to fundamentally 0:05:06.200 --> 0:05:09.520 change the way they deal with foreign investment and foreign 0:05:09.560 --> 0:05:12.480 trade or do we just get, you know, an incremental 0:05:12.560 --> 0:05:16.080 victory and say, well it's better. Well, I think that 0:05:16.560 --> 0:05:20.160 right now, Sieging paying is pursuing this nationalist narrative going 0:05:20.200 --> 0:05:23.480 back to the Opium War, you know, basically nineteenth century 0:05:23.560 --> 0:05:26.479 humiliation of China, and that makes us it very hard 0:05:26.520 --> 0:05:29.640 for him to adjust. UM. So I don't know if 0:05:29.640 --> 0:05:31.840 he can actually come to a trade deal. I think 0:05:31.880 --> 0:05:34.880 we're going to see a long term struggle with China UM, 0:05:34.960 --> 0:05:38.359 which will be obvious with increased tariffs and were Eventually 0:05:38.400 --> 0:05:41.360 we're going to see the two economies disengaged from each other. 0:05:41.760 --> 0:05:44.320 And I think actually that's quite a good thing for us, 0:05:44.880 --> 0:05:48.919 because long term UM disengagement is the only policy that 0:05:48.960 --> 0:05:51.880 has not failed. So UM China is going to be 0:05:52.160 --> 0:05:53.960 is going to go through. You know, you very well 0:05:54.000 --> 0:05:57.920 may not survive. The Communist Party may not survive this UM, 0:05:57.960 --> 0:05:59.640 but you know, we don't have a choice. We've got 0:05:59.640 --> 0:06:03.920 to defend ourselves, whatever the consequences are for Beijing. Gordon 0:06:04.040 --> 0:06:07.000 g Chang is the author of Losing South Korea, booklet 0:06:07.120 --> 0:06:10.320 released by Encounter Books in March of this year. Author 0:06:10.360 --> 0:06:13.200 and columnist at Gordon g Chang and at The Daily 0:06:13.240 --> 0:06:16.839 Beast Gordon, it's always enlightening. Thanks very much. Oh, thank 0:06:16.839 --> 0:06:18.600 you so much. I really appreciate being on your air. 0:06:18.920 --> 0:06:23.159 Good to talk to you. Thanks. Oh yeah, yeah, he's 0:06:23.200 --> 0:06:25.720 he's a nice saw mom does mean he likes being 0:06:25.760 --> 0:06:27.080 on our show. There's a lot of nice people out 0:06:27.080 --> 0:06:28.800 there that don't want to be on our show, granted 0:06:28.800 --> 0:06:32.520 most of them. So you got you got, Gordon. They're 0:06:32.680 --> 0:06:36.000 saying that, indeed, if we take it to the wall 0:06:36.040 --> 0:06:40.160 and hold our ground, this could be crippling for g 0:06:40.640 --> 0:06:45.040 and the Chinese Party. Did everybody follow that whole trade surplus, 0:06:45.080 --> 0:06:50.760 trade deficit, thing they need to sell to the United States. 0:06:51.520 --> 0:06:55.719 We're their biggest, you know, customer. We stopped showing up 0:06:55.760 --> 0:06:58.200 to their soda shops. Soda shop, what is this nineteen 0:06:58.279 --> 0:07:01.039 fifty Uh? What do you color? Where you get the 0:07:01.320 --> 0:07:10.480 like the jamba juice, that's a smoothie. We stopped showing 0:07:10.600 --> 0:07:13.560 up and valuing the vape pens because we buy a 0:07:13.680 --> 0:07:15.320 hell of a lot of ape pens. They go out 0:07:15.320 --> 0:07:20.120 of business. On the other hand, we run the smoothie shop. 0:07:20.280 --> 0:07:24.280 They only stopped by once a month. That's fine, they 0:07:24.280 --> 0:07:26.880 stopped coming. We'll be disappointed. We'll lose a little business. 0:07:26.880 --> 0:07:30.760 But so that's the relationship. But I tell it, he 0:07:30.880 --> 0:07:36.560 was very bold about how weak they are. I mostly 0:07:36.600 --> 0:07:39.280 agree with them, but we'll have to see. I'm still 0:07:39.360 --> 0:07:42.800 quite optimistic that we reach a good deal. But man, 0:07:42.920 --> 0:07:51.200 asking a totalitarian communist regime to stop commying on foreign 0:07:51.280 --> 0:07:55.200 companies and investors, that's that's a big gask. We shall 0:07:55.240 --> 0:08:00.080 see when you're ready to ride Metro, we want you 0:08:00.120 --> 0:08:02.560 to know we're ready for you. Here are just a 0:08:02.600 --> 0:08:04.400 few of the people at Metro to tell you how 0:08:04.440 --> 0:08:07.320 we're doing our part to keep writers safe. Were cleaning 0:08:07.480 --> 0:08:11.000 like never before. Half to the great clean you've found 0:08:11.080 --> 0:08:13.480 hand sound of sounds of statis all over the Metro. 0:08:13.960 --> 0:08:17.320 No mask, no Metro need one. We have a few 0:08:17.360 --> 0:08:20.120 extras at Metro. We're doing our part to keep the 0:08:20.200 --> 0:08:22.960 DC area moving. Find out more at well mata dot 0:08:22.960 --> 0:08:24.440 com slash doing our part.