WEBVTT - China Takes on the World – and the US 0:00:01.800 --> 0:00:05.200 Welcome to Crash Course, a podcast about business, political, and 0:00:05.240 --> 0:00:08.680 social disruption and what we can learn from it. I'm 0:00:08.680 --> 0:00:13.760 Tim O'Brien. Today's Crash Course China takes on the world 0:00:13.920 --> 0:00:18.160 and the US. Consider the numbers. China is home to 0:00:18.200 --> 0:00:21.159 one point four billion people, about eighteen percent of the 0:00:21.160 --> 0:00:24.880 planet's total population. Twenty two point three million people live 0:00:24.920 --> 0:00:28.440 in Shanghai and eleven point seven million in Beijing alone. 0:00:29.080 --> 0:00:31.960 China has the world's second largest economy and has been 0:00:32.000 --> 0:00:36.560 on track to eventually overtake the US, although China's recent 0:00:36.600 --> 0:00:42.159 economic problems may delay that trajectory. Its geographic footprint is vast, 0:00:42.479 --> 0:00:46.080 covering more than three point six million square miles. China 0:00:46.120 --> 0:00:49.440 is home to a thriving technology sector that birth such 0:00:49.479 --> 0:00:52.360 well known giants as ten Cent and Ali Baba, and 0:00:52.440 --> 0:00:56.520 China's corporate powerhouses collectively spent about two hundred and twenty 0:00:56.600 --> 0:00:59.959 eight billion dollars on research and development in twenty two 0:01:00.000 --> 0:01:03.800 twenty two. Over the past forty years, China has lifted 0:01:03.880 --> 0:01:07.920 eight hundred million people out of poverty, an epic achievement 0:01:08.040 --> 0:01:11.760 that some analysts consider the biggest reduction in inequality in 0:01:11.800 --> 0:01:16.240 the modern era. China has also built a formidable military 0:01:16.280 --> 0:01:20.840 capacity featuring a world class navy, air force, nuclear missiles, 0:01:20.880 --> 0:01:25.000 and cyber warfare proficiencies. It regards the US as a 0:01:25.120 --> 0:01:29.759 robust but flabby economic and military competitor, and America as 0:01:29.800 --> 0:01:34.000 beset by social chaos and individualism so extreme that it 0:01:34.120 --> 0:01:38.760 undermines civil society. The South China Sea and Taiwan are flashpoints. 0:01:39.360 --> 0:01:43.160 But China's economic growth may have plateaued and its politics 0:01:43.160 --> 0:01:47.040 have been so reshaped by President Xijinping that a cult 0:01:47.040 --> 0:01:51.360 of personality and raw authoritarianism has recast the country's image 0:01:51.360 --> 0:01:55.840 abroad and its direction at home. Joining me today here 0:01:55.880 --> 0:01:58.880 in Asia to discuss China's path present in future are 0:01:58.880 --> 0:02:03.680 two Bloomberg opinion columnists and wizards, Karishma Vaswani, who is 0:02:03.720 --> 0:02:07.560 a savvy political analyst, and Shulely Wren, who covers markets 0:02:07.600 --> 0:02:12.760 in China's economy. Welcome to crash course, ladies. Shulely, you 0:02:12.800 --> 0:02:15.320 grew up in Shanghai. So as someone who's had a 0:02:15.400 --> 0:02:18.600 foot literally on the ground in China and elsewhere over 0:02:18.639 --> 0:02:21.880 the years, how do you think about China when you 0:02:21.919 --> 0:02:24.600 look at its whole trajectory during your own lifetime? 0:02:25.400 --> 0:02:27.680 So to give you some background, I was born and 0:02:27.720 --> 0:02:30.040 grew up in Shanghai, and then I left for the 0:02:30.120 --> 0:02:33.320 United States for university in nineteen ninety six. By the 0:02:33.440 --> 0:02:37.320 time I was leaving for United States, Shanghai was already 0:02:37.320 --> 0:02:41.360 morphing into something I couldn't recognize, basically, like new subways 0:02:41.400 --> 0:02:44.440 and the new hiroads were coming up every year to 0:02:44.480 --> 0:02:47.440 this day. I was just in Shanghai this month, and 0:02:47.680 --> 0:02:50.320 what I saw was that, you know, if you are 0:02:50.400 --> 0:02:53.480 a taxpayer, you will see changes in the city pretty 0:02:53.520 --> 0:02:57.600 much every year. They're building new pedestrian walkways, and if 0:02:57.639 --> 0:03:01.720 you go complain about the government civil services, you will 0:03:01.760 --> 0:03:06.840 get responses immediately. Big cities in China have transformed themselves, 0:03:06.919 --> 0:03:09.920 and the China model is basically, I build it and 0:03:09.960 --> 0:03:12.400 the economy will come for you. 0:03:12.440 --> 0:03:16.000 Like what symbolizes that change most visibly? Is it skyscrapers? 0:03:16.040 --> 0:03:18.520 Is it the infrastructure? Like what are the most tangible 0:03:18.600 --> 0:03:22.520 reminders that this incredible change that occurred during your own lifetime? 0:03:23.680 --> 0:03:27.960 I think it's coming hours. The subway is very very efficient. 0:03:28.280 --> 0:03:30.680 If we talk about going from the city center to 0:03:30.760 --> 0:03:34.600 airport express you can take this very fast speed real 0:03:34.720 --> 0:03:37.560 at the three hundred kilometers an hour, and you can 0:03:37.640 --> 0:03:40.440 get to the airport in about five six minutes. And 0:03:40.520 --> 0:03:42.960 that high speed real was actually built when I was 0:03:43.000 --> 0:03:45.760 still in the US almost twenty years ago, and I 0:03:45.840 --> 0:03:51.840 find that efficiency is very transformative and glaring to visitors' eyes. 0:03:52.720 --> 0:03:56.880 Karishma, you were born in Singapore, raised in Indonesia, You've 0:03:56.920 --> 0:03:59.880 had a vast global experience apart from that, just like truly, 0:04:01.000 --> 0:04:04.040 when you look at China, what do you think about 0:04:04.080 --> 0:04:07.920 the last several decades of profound growth and change there? 0:04:08.160 --> 0:04:10.640 Yeah, you know, just picking up tim on what Schuly 0:04:11.040 --> 0:04:14.080 was saying. I remember when I was growing up that 0:04:14.320 --> 0:04:17.320 India and China were almost around the same level, right 0:04:17.400 --> 0:04:21.640 like forty years ago in terms of how unavailable resources 0:04:21.680 --> 0:04:25.320 were for people, basic sort of poverty levels, all of that. 0:04:25.440 --> 0:04:27.960 And it was as a journalist in India when I 0:04:28.040 --> 0:04:31.359 first went to visit Beijing, and there is always this 0:04:31.440 --> 0:04:35.000 comparison between China and India, and it's very envious of 0:04:35.040 --> 0:04:37.800 the achievements that China's been able to make. And I 0:04:37.839 --> 0:04:41.440 think nothing was more glaringly obvious in the strides that 0:04:41.520 --> 0:04:44.000 China had made for me at least you talked about 0:04:44.040 --> 0:04:47.240 the commuters and the subway system truly, but for me. 0:04:47.400 --> 0:04:51.520 It was the highways, because it was these gigantic highways 0:04:51.520 --> 0:04:56.040 that stretched out into the distance, huge monolithic structures that 0:04:56.200 --> 0:04:59.240 really showed the size and scale of the country and 0:04:59.279 --> 0:05:01.160 what it was able to to achieve and to your 0:05:01.200 --> 0:05:03.680 point about build it and they will come, it was 0:05:03.720 --> 0:05:07.320 exactly that. China's now seen around the world as a 0:05:07.360 --> 0:05:10.279 country that has made remarkable strides, and I think it's 0:05:10.640 --> 0:05:13.919 really important to remember the fact that when they have 0:05:14.080 --> 0:05:17.400 had a plan, they have managed to achieve that plan. 0:05:17.720 --> 0:05:20.200 And that's something that a lot of countries in the 0:05:20.200 --> 0:05:23.240 region one look up to because they are trying to 0:05:23.320 --> 0:05:27.000 find an alternative model of economic growth but also a 0:05:27.040 --> 0:05:30.120 political system. There's been a lot of lecturing from the 0:05:30.120 --> 0:05:34.440 West to countries out in Asia about how ideologies should be. 0:05:34.560 --> 0:05:38.160 That democracy is the right way forward. It's not always 0:05:38.160 --> 0:05:40.440 seen in the most palatable way for a lot of 0:05:40.520 --> 0:05:42.839 leaders out in this part of the world. But two, 0:05:42.960 --> 0:05:46.160 because it's actually been an achievement, They've done it. They 0:05:46.200 --> 0:05:48.280 said they were going to do it, and they've done it. 0:05:48.320 --> 0:05:51.760 And I think that evidence has helped to solidify the 0:05:51.839 --> 0:05:55.200 reputation of China as an economic genius in many ways, 0:05:55.720 --> 0:05:57.599 and that countries in the region have looked up to, 0:05:58.560 --> 0:05:58.919 and what do. 0:05:58.960 --> 0:06:01.520 You think China it's elf wants to be if China 0:06:01.520 --> 0:06:02.919 was a person. This is such a bad way to 0:06:02.960 --> 0:06:05.000 frame a question, but it's actually useful. I think in 0:06:05.040 --> 0:06:08.800 this case, who does China want to be accepted? 0:06:09.360 --> 0:06:11.560 Is the sense that I get, you know, like for 0:06:11.600 --> 0:06:15.520 the longest time, my impression has been that China consistently 0:06:15.560 --> 0:06:17.200 and you see this in some of the rhetoric from 0:06:17.200 --> 0:06:19.919 the Foreign ministry as well, it has a model that 0:06:19.960 --> 0:06:23.039 it wants to show the world is possible, that it 0:06:23.080 --> 0:06:27.880 is achievable, and that alternative way of being and of 0:06:27.920 --> 0:06:31.000 doing politics and of growing your economy is something that 0:06:31.000 --> 0:06:34.320 should be considered as on par with the United States, 0:06:34.839 --> 0:06:37.880 if not in some ways superior. And I think what's 0:06:37.880 --> 0:06:40.359 happened in the last couple of years, particularly under the 0:06:40.360 --> 0:06:43.480 administration of Chijin Ping, because that's really where it all changed, right, 0:06:43.600 --> 0:06:45.560 Like I mean, up until that point, there was a 0:06:45.600 --> 0:06:48.200 sense that China was growing very well, there was engagement, 0:06:48.520 --> 0:06:50.719 there were concerns about some of the actions out in 0:06:50.760 --> 0:06:52.880 places like the South China Sea and Taiwan, but not 0:06:52.920 --> 0:06:55.400 to the extent that you have now. And I think 0:06:55.520 --> 0:06:58.839 under Xi Jinping. It's become a lot more difficult for 0:06:59.040 --> 0:07:03.719 the outside world to understand. What are the intentions of 0:07:03.800 --> 0:07:07.039 this new China? What are the ambitions? Is it a 0:07:07.120 --> 0:07:12.360 sort of expansive and territorial empire building policy or is 0:07:12.400 --> 0:07:15.920 it a country that is trying to make itself known 0:07:16.120 --> 0:07:19.200 and seen on the global stage. And right now a 0:07:19.200 --> 0:07:21.040 lot of people that I talk to still haven't figured 0:07:21.040 --> 0:07:23.040 out which of the two it is. 0:07:23.920 --> 0:07:27.480 So Shuley Karishma said that China just wants to be accepted. 0:07:28.040 --> 0:07:30.600 And I'm far less sophisticated than both of you on 0:07:30.600 --> 0:07:33.240 this topic. That would not have been my first goat 0:07:33.240 --> 0:07:36.160 to description of China. I feel like as an American 0:07:36.360 --> 0:07:38.720 watching this, but as someone who's trying to be objective 0:07:38.720 --> 0:07:41.000 beyond just being an American, I also see China as 0:07:41.000 --> 0:07:45.200 a country that wants to dominate certain aspects of its 0:07:45.240 --> 0:07:50.040 relationships with commercially and economically and diplomatically with others. You 0:07:50.040 --> 0:07:52.720 don't have to agree with that, but I think Karishma's 0:07:53.280 --> 0:07:56.000 introduced to provocative talking point. I wonder what you thought 0:07:56.040 --> 0:07:56.280 of it. 0:07:57.080 --> 0:07:59.840 I absolutely agree with the Karishma on that. Like going 0:08:00.120 --> 0:08:03.720 back to your question about China's identity, Okay, let me 0:08:03.960 --> 0:08:07.000 step back and say, going back to presenting Pin the politician, 0:08:07.080 --> 0:08:11.080 the political leader's sense of identity, he sees China as 0:08:11.120 --> 0:08:14.720 a producer first and then consumer. It's actually a very 0:08:14.800 --> 0:08:18.640 nineteen sixties mentality and ideology that he grew up with, 0:08:18.960 --> 0:08:22.720 whereas us it's a consumer based society. The philosophy of 0:08:22.800 --> 0:08:25.840 governors is very different. Like China basically say, let's do 0:08:25.960 --> 0:08:29.960 industrial ambition, industrial policy, and then as we get rich, 0:08:30.240 --> 0:08:33.440 there will be money for the consumers and the workers, 0:08:33.640 --> 0:08:38.280 whereas US basically says, perhaps that's my wrong impression that 0:08:38.400 --> 0:08:40.840 a government's job is more or less to do no 0:08:41.000 --> 0:08:44.760 harm and to let people live, and the consumer society 0:08:44.800 --> 0:08:48.720 will flourish and will generate demand for new products, etc. 0:08:49.280 --> 0:08:52.280 So it is an identity issue, and the present sheging 0:08:52.320 --> 0:08:56.200 Pin basically thinks the world have two ways of economic growth, 0:08:56.400 --> 0:08:59.000 when on the producer side one on the consumer side. 0:09:00.080 --> 0:09:03.800 You would say that that entire posture on China's part 0:09:04.360 --> 0:09:05.760 is about wanting to be accepted. 0:09:06.559 --> 0:09:09.360 Yes, I mean, if you look at Belt and Row initiative, 0:09:09.400 --> 0:09:11.559 and he just made a speech in Beijing right with 0:09:11.760 --> 0:09:14.520 President putting on his site, he basically said that we 0:09:15.000 --> 0:09:18.520 China are trying to improve the infrastructure, and that's the 0:09:18.559 --> 0:09:21.320 only economic growth model that he knows of, and he 0:09:21.440 --> 0:09:24.440 feels that China is doing good to the third world countries. 0:09:25.040 --> 0:09:28.800 So, Karushimaban, is there a central thing that animates China? 0:09:29.200 --> 0:09:31.400 Staying on the conversation we just had, like, what is 0:09:31.440 --> 0:09:35.439 propelling China itself forward in terms of its own goals? 0:09:36.200 --> 0:09:39.040 Perhaps it's worth looking at this tim from the perspective 0:09:39.080 --> 0:09:40.840 if I was to ask you that question about the 0:09:40.960 --> 0:09:44.840 United States, right, what is propelling the United States forward 0:09:44.920 --> 0:09:47.640 with its own goals? A desire to show that this 0:09:47.800 --> 0:09:51.080 is a country that is a global leader, a superpower, 0:09:51.160 --> 0:09:55.000 a military power. And China feels the same way. And 0:09:55.080 --> 0:09:57.960 I think that sometimes you know, there is an arrogance 0:09:58.040 --> 0:10:01.520 in the West about the the hierarchy. Right, the US 0:10:01.600 --> 0:10:03.840 is at the top of the tree, and then everybody 0:10:03.840 --> 0:10:07.200 else is on the democratic column and on the democratic camp. 0:10:07.240 --> 0:10:09.280 And so you are our friends, and you belong in 0:10:09.320 --> 0:10:13.160 the in crowd and in the cool crowd and everybody else. Sorry, 0:10:13.640 --> 0:10:16.320 don't want you at the party, right. But for China, 0:10:16.400 --> 0:10:20.199 what it's been able to do is actually achieve a 0:10:20.400 --> 0:10:23.320 remarkable as I'm repeating myself here. But you know, I 0:10:23.360 --> 0:10:27.000 don't think we can make that point enough that it's 0:10:27.080 --> 0:10:30.040 managed to bring, as you said in your introduction, eight 0:10:30.120 --> 0:10:33.080 hundred million people out of poverty and bring them to 0:10:33.120 --> 0:10:36.720 a level where they're creating world class companies, the sorts 0:10:36.760 --> 0:10:39.640 of companies that truly writes about every day, you know, 0:10:39.720 --> 0:10:42.319 with innovation at a level. The first time I went 0:10:42.360 --> 0:10:44.800 to China, it was the highways that I remarked on 0:10:44.840 --> 0:10:47.559 the second time, when I went to Shinjin to interview 0:10:47.800 --> 0:10:50.720 the boss of Huawei, I was amazed by the fact 0:10:50.760 --> 0:10:54.599 that everything was you know, facial identification in the subways. 0:10:54.640 --> 0:10:57.840 You know, the level of technology is really something to 0:10:57.920 --> 0:10:59.960 remark on. But to go back to that point, right, 0:11:00.480 --> 0:11:04.240 I think it is worth recognizing that China is trying 0:11:04.360 --> 0:11:09.559 to showcase its achievements. It wants to be accepted, and 0:11:09.640 --> 0:11:12.200 when it comes up against the US, that is where 0:11:12.240 --> 0:11:15.920 the conflict happens. That is where the clash happens. Because 0:11:16.240 --> 0:11:18.840 I think it's not just the Chinese side that is 0:11:18.880 --> 0:11:19.800 responsible for that. 0:11:20.160 --> 0:11:22.199 The US has its own set of issues for sure, 0:11:22.600 --> 0:11:25.360 especially in the kind of shambalic politically era we're in 0:11:25.440 --> 0:11:29.120 right now in the United States. Truly how does China 0:11:29.240 --> 0:11:32.880 think about its own recent history? Obviously, with a country 0:11:32.880 --> 0:11:35.320 that has had such a rich and storied past, you 0:11:35.320 --> 0:11:37.400 could say recent history is the last three hundred years, 0:11:37.480 --> 0:11:40.040 and that's still probably not recent. So I'm sort of 0:11:40.080 --> 0:11:42.560 thinking of recent like I was going to say post 0:11:42.600 --> 0:11:46.400 World War two, but I actually think almost postcolonial when 0:11:46.480 --> 0:11:51.319 she looks at nineteenth century China and twentieth century China, 0:11:51.440 --> 0:11:54.760 and now, how does he and the people around him 0:11:55.320 --> 0:11:57.160 think about the arc of that history. 0:11:58.520 --> 0:12:01.040 I will say that there a little bit passive aggressive, 0:12:02.000 --> 0:12:04.360 aggressive in the sense that they feel that they were 0:12:04.480 --> 0:12:08.439 round in the nineteenth century and that China was almost colonialized, 0:12:08.480 --> 0:12:11.160 and then we have World War Two, the ninteen massacre 0:12:11.240 --> 0:12:14.640 by the Japanese Army, etc. Passive in the sense that 0:12:14.720 --> 0:12:17.280 they just feel that China is a huge empire. It 0:12:17.320 --> 0:12:20.439 has lasted longer than the Ottoman Empire, longer than the 0:12:20.520 --> 0:12:24.200 Roman Empire, and there is a cultural superiority that the 0:12:24.280 --> 0:12:27.760 Chinese leadership feels that they can leverage on. For instance, 0:12:28.000 --> 0:12:30.800 if we talk about the global supply chain, the Chinese 0:12:30.880 --> 0:12:33.160 workers are stellar. They are the ones who are willing 0:12:33.200 --> 0:12:36.080 to work nine ninety six. You know from nine am 0:12:36.200 --> 0:12:38.520 to nine pm for six days a week. They feel 0:12:38.559 --> 0:12:42.000 that there is a very very strong cultural superiority. Last year, 0:12:42.080 --> 0:12:44.360 when I was on the reporting trip in Viennam, I 0:12:44.400 --> 0:12:48.000 spoke to quite a few Chinese entrepreneurs who opened factories 0:12:48.040 --> 0:12:51.480 in Vietnam, and it was very politically incorrect. They said 0:12:51.679 --> 0:12:55.360 they prefer to open factories in northern Vietnam because it's 0:12:55.559 --> 0:12:59.800 culturally closer to Chinese Confucian spot and the people there 0:12:59.800 --> 0:13:03.760 were harder working in the southern Saigong area. So there 0:13:03.840 --> 0:13:07.240 is that sense. But sometimes they also get very angry 0:13:07.559 --> 0:13:10.840 if they feel that they are being slighted by global 0:13:10.920 --> 0:13:13.760 powers such as the United States. They will think back 0:13:13.880 --> 0:13:18.079 on the eighteen hundreds, how China was so humiliated by 0:13:18.120 --> 0:13:21.160 the European and later on by the Japanese powers. So 0:13:21.200 --> 0:13:24.079 it's kind of that conflict that I see. 0:13:24.240 --> 0:13:26.400 Just picking up on what Shirley said, because I think 0:13:26.440 --> 0:13:28.240 it can bring us down, you know, the sort of 0:13:28.360 --> 0:13:31.160 understanding of why then China, if it's just trying to 0:13:31.200 --> 0:13:34.360 be accepted or recognized for its achievements, get such a 0:13:34.960 --> 0:13:37.840 negative reaction in the outside world, right, Why does it 0:13:37.880 --> 0:13:40.400 have this bad press so to speak? That example that 0:13:40.440 --> 0:13:42.880 you brought up of the entrepreneurs that you met in Vietnam, 0:13:42.920 --> 0:13:45.800 and you know the Belton Road projects where Chinese companies 0:13:45.840 --> 0:13:49.240 go overseas, but they want to bring Chinese labor with them, 0:13:49.280 --> 0:13:52.199 they want to bring that Chinese expertise. And then these 0:13:52.240 --> 0:13:56.160 projects that end up becoming vessels in a way for 0:13:56.440 --> 0:13:59.960 an export of Chinese workers to these countries is then 0:14:00.120 --> 0:14:04.440 viewed is not something that's beneficial to that country. Rather, 0:14:04.800 --> 0:14:08.199 it's all going back to the empire. And I'm putting 0:14:08.200 --> 0:14:11.000 the word empire in quotation marks, and I think that's 0:14:11.000 --> 0:14:14.239 what China struggles with, right It is a rising superpower. 0:14:14.559 --> 0:14:17.600 There's no way we can deny that it's here to stay. 0:14:17.720 --> 0:14:20.080 It's not going anywhere. And I think learning how to 0:14:20.160 --> 0:14:24.680 manage China, learning how to navigate it is essential for 0:14:24.800 --> 0:14:28.560 a country like the United States, because Biden has done 0:14:28.760 --> 0:14:32.320 a remarkable job of this deterrence and integrated deterrence, getting 0:14:32.360 --> 0:14:34.280 all of the partners in the region to sort of 0:14:34.920 --> 0:14:39.440 work together on this, recognizing China is this existential sort 0:14:39.440 --> 0:14:41.560 of conflict that they've got to come up with. But 0:14:41.720 --> 0:14:45.480 nobody wants a conflict between the US and China, right, 0:14:45.640 --> 0:14:48.000 Like a lot of the countries in this part of 0:14:48.000 --> 0:14:50.200 the world and wondering why can't you just sort it 0:14:50.240 --> 0:14:51.840 out and get along, right. 0:14:52.360 --> 0:14:54.520 I just want to add one more thing, just like 0:14:54.520 --> 0:14:56.960 a world Karishma said, we do need to think about 0:14:57.040 --> 0:14:59.760 what the Chinese leaders are thinking. They are a little 0:14:59.760 --> 0:15:02.800 bit like people were, like to say, an overconfident in China. 0:15:03.000 --> 0:15:05.640 But I think the outside were also should think about 0:15:05.720 --> 0:15:11.200 China being historically insecure. So when is these aggressive gestures 0:15:11.240 --> 0:15:15.520 from the US, it will overreact. So I think it's 0:15:15.640 --> 0:15:18.760 very important to tone it down on the western side, 0:15:18.840 --> 0:15:19.520 on both sides. 0:15:19.560 --> 0:15:22.000 Actually, we'll probably get into this a little bit more 0:15:22.040 --> 0:15:24.160 later in the show, but Hong Kong to me, is 0:15:24.200 --> 0:15:29.000 such an emblematic city state for this very discussion because 0:15:29.920 --> 0:15:33.560 England turned it into a vassal property. They used it 0:15:33.600 --> 0:15:38.120 to introduce opium into mainland China. They used it controlled 0:15:38.240 --> 0:15:41.520 China so they could dominate and try to colonize China. 0:15:41.960 --> 0:15:44.560 And China has come out of that era and people 0:15:44.640 --> 0:15:48.200 now criticize China for the way it's pulling Hong Kong 0:15:48.680 --> 0:15:53.040 back into its own orbit. But I also am sympathetic 0:15:53.240 --> 0:15:55.840 to the idea that Chinese have that it was never 0:15:55.880 --> 0:15:59.200 out of our orbit, other people came in and abused 0:15:59.240 --> 0:16:02.320 it essentially at different points in our history. And I 0:16:02.360 --> 0:16:04.640 still think you can be critical of the way that 0:16:04.760 --> 0:16:08.000 China is trying to absorb it now while also respecting 0:16:08.040 --> 0:16:11.280 I think truly what you just mentioned, that this insecurity 0:16:11.880 --> 0:16:14.280 China has that's born out of the way the history 0:16:14.320 --> 0:16:16.320 has played out. You don't have to agree with me 0:16:16.320 --> 0:16:20.160 about that either, but Hong Kong fascinates me in that regard. Sure. 0:16:20.480 --> 0:16:22.840 One thing that's interesting about Hong Kong is I live 0:16:22.880 --> 0:16:25.200 in Hong Kong, and you know the twenty nineteen protests. 0:16:25.200 --> 0:16:27.240 I spoke to Hong Kong local people, right, but they're 0:16:27.280 --> 0:16:31.120 ultimately Chinese. Got migrated from the north, and I notice 0:16:31.200 --> 0:16:35.160 a very strong generational divide. Like say, I speak to 0:16:35.320 --> 0:16:37.760 like people who are older, like in their sixties or whatever, 0:16:38.040 --> 0:16:40.880 like my juror mister Ma. He told me, he said, 0:16:41.040 --> 0:16:44.720 before China has Bruce Lee, now we have Chi Jin Pin. 0:16:45.480 --> 0:16:48.560 He is actually very patriotic. A lot of old Hong 0:16:48.640 --> 0:16:51.760 Kong Chinese people are very patriotic, but if you move 0:16:51.840 --> 0:16:55.160 down to like people in their twenties or even thirties, 0:16:55.920 --> 0:16:59.640 they prefer British rule, believe it or not. And I 0:16:59.680 --> 0:17:03.720 think ultimately it's about governors. They see China as being 0:17:03.760 --> 0:17:07.400 too intrusive. The Chinese way of government is being too intrusive, 0:17:07.440 --> 0:17:10.040 whereas the British kind of sort of just left them 0:17:10.040 --> 0:17:10.920 alone and. 0:17:10.920 --> 0:17:13.399 There was free speech, there was a free press, it 0:17:13.440 --> 0:17:16.919 was a very creative community. It was authentically international, and 0:17:16.960 --> 0:17:19.679 there's a real danger now that China is sort of 0:17:19.680 --> 0:17:22.320 squeezing that out of that kind of Hong Kong. 0:17:23.080 --> 0:17:25.880 Yes, absolutely, But on the other side, Hong Kong's Chief 0:17:25.920 --> 0:17:29.720 executive Youngly just had his policy address earlier this week, right, 0:17:29.920 --> 0:17:32.240 and you can see the Hong Kong governance is changing. 0:17:32.320 --> 0:17:34.480 They're trying to give you more cash handouts. They're trying 0:17:34.520 --> 0:17:39.040 to build infrastructure. They're trying to incentivize and stimulate you 0:17:39.119 --> 0:17:43.120 through money and the buildings and the new artificial islands. 0:17:43.359 --> 0:17:45.720 You can see the way of a Hong Kong governess 0:17:45.840 --> 0:17:48.800 is heading towards the Chinese way. And I have to say, 0:17:48.920 --> 0:17:52.080 like I personally think of Hong Kong, the infrastructure is 0:17:52.080 --> 0:17:55.400 getting dilapidated. If you go to the Central Business District 0:17:55.480 --> 0:17:58.159 this summer has been terrible. We can smell switch, you know. 0:17:58.480 --> 0:18:01.440 But the Hong Kong government much left you alone, and 0:18:01.520 --> 0:18:04.399 I think they are shifting to the mainland China model. 0:18:05.000 --> 0:18:06.919 Couragem. I can see that you have some thoughts on 0:18:06.960 --> 0:18:07.879 that so way in here. 0:18:08.240 --> 0:18:11.720 Yeah, I think this idea or the framing of you 0:18:11.760 --> 0:18:16.480 can accept and sort of remark positively on aspects of 0:18:16.520 --> 0:18:19.119 how China has done things, but also be clear eyed 0:18:19.160 --> 0:18:22.280 and critical of the way, for example, it's operated in 0:18:22.320 --> 0:18:26.040 Hong Kong is crucial for our understanding of China. From 0:18:26.080 --> 0:18:29.159 the Chinese side, it's very clear. We've discussed that why 0:18:29.200 --> 0:18:31.360 they feel about Hong Kong the way that they do. 0:18:31.720 --> 0:18:34.000 But from young Hong konger's that I spoke to, just 0:18:34.200 --> 0:18:36.720 as you mentioned, surely on some of those reporting trips 0:18:36.720 --> 0:18:39.639 I made there, they do not feel Chinese. They do 0:18:39.680 --> 0:18:43.400 not feel mainland Chinese, even if they are ethnically Chinese. 0:18:43.400 --> 0:18:46.320 And I think the fact that a political system in China, 0:18:46.400 --> 0:18:48.399 this is going to be my sense, is one of 0:18:48.440 --> 0:18:52.240 the biggest issues going forward for young people who've grown 0:18:52.320 --> 0:18:56.000 up in that system but no longer feel that they 0:18:56.640 --> 0:19:00.640 have opportunities the way they saw for their parents. They 0:19:00.680 --> 0:19:03.399 don't feel that they have the ability to say the 0:19:03.480 --> 0:19:05.840 things that you know, we talk about a sort of 0:19:05.920 --> 0:19:09.080 closed system in China, but it's become even more closed 0:19:09.200 --> 0:19:12.399 now to the extent where you know, somebody says something 0:19:12.440 --> 0:19:16.359 on Wabo and within minutes it's wiped away, right, And 0:19:16.440 --> 0:19:18.760 I think it's really important for us to be clear 0:19:18.880 --> 0:19:21.240 eyed about what is happening there and be able to 0:19:21.320 --> 0:19:23.320 criticize but also to commend. 0:19:24.160 --> 0:19:26.880 I would suspect, And it seems evident in the way 0:19:26.920 --> 0:19:30.320 this has progressed that Chinese government when it sees young 0:19:30.359 --> 0:19:33.400 Hong Kongers who are saying I like the Hong Kong 0:19:33.480 --> 0:19:36.280 my parents had, and I want a Hong Kong that's 0:19:36.320 --> 0:19:40.320 not specifically on the Chinese model, that the Chinese say, well, 0:19:40.359 --> 0:19:43.320 then go live somewhere else, because this is the model 0:19:43.440 --> 0:19:46.040 we're going to have. Whether or not you feel romantic 0:19:46.119 --> 0:19:49.919 about the past, am I you know, misinterpreting them to me? 0:19:50.000 --> 0:19:52.679 It just seems patently obvious that that's where we're headed. 0:19:53.160 --> 0:19:55.760 Absolutely the Chinese government, so far head and stop the 0:19:55.760 --> 0:19:58.240 Hong Kongers from leaving. If you don't like this model, 0:19:58.359 --> 0:19:59.640 just please go ahead and leave. 0:20:00.320 --> 0:20:02.679 And I think that's the danger, right because when you 0:20:02.760 --> 0:20:05.679 look at the way that the mainland has operated in 0:20:05.720 --> 0:20:09.040 Hong Kong, it is increasingly clear that that is the 0:20:09.119 --> 0:20:11.320 root that is going to consistently be the way that 0:20:11.359 --> 0:20:14.520 they approach politics there. There hasn't been a lessening of 0:20:14.520 --> 0:20:17.480 Beijing's influence in Hong Kong. To the contrary, you see 0:20:17.520 --> 0:20:19.359 it in every aspect of public life. 0:20:19.680 --> 0:20:22.240 Precisely because some of the things I cited in the introduction, 0:20:22.359 --> 0:20:26.639 this incredible economic success that mainland China has had, and 0:20:26.720 --> 0:20:30.800 its muscularity around its military presence and the way it's 0:20:30.840 --> 0:20:34.159 asserting itself in the world. They can point to a 0:20:34.200 --> 0:20:37.320 successful track record as reason for why they want to 0:20:37.359 --> 0:20:40.200 continue to roll the way they have. Though, and we'll 0:20:40.200 --> 0:20:42.119 get into this later in the show, there's starting to 0:20:42.119 --> 0:20:44.399 be a little bit of cracks in the model. On 0:20:44.440 --> 0:20:45.960 that note, I'm going to take a quick break to 0:20:46.000 --> 0:20:48.119 hear from one of our sponsors, and then we'll come 0:20:48.200 --> 0:20:57.359 right back. We're back with karisim of Uswani and Shuley Wren. 0:20:57.359 --> 0:21:01.359 They're both Bloomberg opinion columnists, and we're talking about China. 0:21:01.480 --> 0:21:05.639 So surely, what is the secret sauce in China's economic rives? 0:21:05.680 --> 0:21:08.680 If you were to identify the things that are very 0:21:08.720 --> 0:21:14.240 specifically Chinese that were key to its growth, that differentiated 0:21:14.240 --> 0:21:18.119 it from the growth paths that other countries, including the US, 0:21:18.160 --> 0:21:20.280 has taken. What would those be. 0:21:21.920 --> 0:21:25.800 I would now say it's the Chinese people. I think 0:21:25.840 --> 0:21:30.200 that the Chinese Communist Party can be very very efficient, 0:21:30.520 --> 0:21:33.080 at least in the era when the economic growth was 0:21:33.160 --> 0:21:36.120 very fast. If there was a directive from the top, 0:21:36.760 --> 0:21:39.720 it will get executed very quickly. I remember, I mean 0:21:39.760 --> 0:21:43.360 I saw Chump high transform right, like a highway will 0:21:43.400 --> 0:21:46.120 be built within just a year. There will be all 0:21:46.119 --> 0:21:48.440 sorts of lend issues that people don't want to move. 0:21:48.560 --> 0:21:50.680 What the government would just say, Okay, if you don't 0:21:50.720 --> 0:21:53.800 want to move, I'm just going to cut off water, electricity, 0:21:54.040 --> 0:21:56.560 gas and as important you will want to move right, 0:21:56.680 --> 0:21:59.720 So everything gets built very quickly, whereas places that I've 0:21:59.760 --> 0:22:03.520