WEBVTT - Stanford's Elizabeth Economy Talks Trump/Xi Meeting

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>She is definitive out of Michigan with their view of China.

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<v Speaker 2>We look back to the giants of Jonathan Spence Oravile Shell,

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<v Speaker 2>and so wonderfully all of that has been taken by

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<v Speaker 2>Elizabeth Economy holding court at the Hoover Institution, Hargrove, Senior Fellow,

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<v Speaker 2>this of course at Stanford University. I'm really taken back,

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<v Speaker 2>Elizabeth by the cursory review of President Ji and his

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<v Speaker 2>moment in China. You wrote of a third revolution, Ji

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<v Speaker 2>Jimping and the new Chinese state. How's he doing?

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<v Speaker 1>Okay, So we're starting off with the big, big question. Look,

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<v Speaker 1>I think she Jinping is doing very well given to

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<v Speaker 1>Jenping's ambitions. I think if you look at what he

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<v Speaker 1>started off to do you know when he came into

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<v Speaker 1>power back at the end of twenty twelve, well, and

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<v Speaker 1>you fast forward to today, you know he has consolidated

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<v Speaker 1>power in his own hands. He's increased the role of

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<v Speaker 1>the party. He certainly has set out major Chinese ambitions

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<v Speaker 1>on the global stage and has made progress on achieving them.

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<v Speaker 1>He wanted China to be a leading technology and economic

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<v Speaker 1>power on the global stage. And he's achieved that as well.

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<v Speaker 1>So I think when he looks back again, according to

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<v Speaker 1>his own metrics, he's done extremely well.

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<v Speaker 2>I've studied the geography of Taiwan. How does a pro

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<v Speaker 2>like you respond to his stridency over Taiwan being the

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<v Speaker 2>major issue? How does that is it ninety miles? I

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<v Speaker 2>don't know. It's like from here, it's like from here

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<v Speaker 2>to downtown Elizabeth economy. How do you respond to the

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<v Speaker 2>Chinese discussion of Taiwan?

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<v Speaker 1>So I'm actually quite relieved by the fact that, yes,

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<v Speaker 1>Tgenping has raised this as sort of the central issue

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<v Speaker 1>for Beijing, which we already new. But the response from

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<v Speaker 1>the United States has been very muted, and so all

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<v Speaker 1>we've seen thus far coming out of the summit is

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<v Speaker 1>a statement by the Chinese side. There's been no acknowledgment

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<v Speaker 1>by the US side that we take this on board

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<v Speaker 1>and somehow are going to change our position or our

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<v Speaker 1>approach to Taiwan. And I think that's something that many

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<v Speaker 1>people in the national security space, many in Congress, even

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<v Speaker 1>probably members of the president's own cabinet, we're concerned about.

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<v Speaker 1>So I think it's fine that she did. Pink raises

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<v Speaker 1>this as the number one issue for China. What's critical

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<v Speaker 1>is how we then address it. Elizabeth.

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<v Speaker 3>Typically when a US president goes to China in particular,

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<v Speaker 3>the expectations are fairly high that there's going to be

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<v Speaker 3>some material agreements, some material discussions. Do we have any

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<v Speaker 3>of those expectations for this summit.

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<v Speaker 2>We haven't heard much so far.

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<v Speaker 1>I mean, I'm actually pretty pleased by what's come out

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<v Speaker 1>thus far. I think we went in with sort of

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<v Speaker 1>three big buckets of issues. You know, First, we wanted

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<v Speaker 1>some mechanisms first, stabilizing the relationship, and I think here

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<v Speaker 1>the two countries were aligned, and there's the talk about

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<v Speaker 1>the Board of Trade and the Board of Investment. I

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<v Speaker 1>think Board of Trade is further along than the Board

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<v Speaker 1>of Investment. But basically this is going to be an

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<v Speaker 1>area where the two sides will come together and try

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<v Speaker 1>to make progress in non sensitive areas of trade. So fine,

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<v Speaker 1>check that box. Second, I think you know, the president

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<v Speaker 1>wanted big, short term purpose purchases. And I think you know,

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<v Speaker 1>we've seen there's going to be soybeans, there's going to

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<v Speaker 1>be planes, there's going to be beef, maybe energy. He'll

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<v Speaker 1>get these big purchases. And then finally, and I think

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<v Speaker 1>this is the most important area. The bigger strategic areas

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<v Speaker 1>so Iran, Ai and again on the Taiwan front. No

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<v Speaker 1>acknowledgment on our side that we're prepared to change our position,

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<v Speaker 1>But we did get the Chinese to acknowledge on Iran

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<v Speaker 1>that they want the Straight or wormos open. They don't

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<v Speaker 1>think Iran should profit once the strait is open, and

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<v Speaker 1>they don't think Iran should have a nuclear weapon. Have

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<v Speaker 1>to see whether or not we can make China actually

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<v Speaker 1>translate that agreement into action to pressure pressure Iran. But

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<v Speaker 1>I think it's a very positive, very positive turn of events.

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<v Speaker 2>We welcome all of you across America, around the world.

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<v Speaker 2>It is Bloomberg Surveillance on YouTube. Subscribe to Bloomberg Podcast

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<v Speaker 2>air a Marie Horden coming up from Beijing. But we're

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<v Speaker 2>thrilled to bring you Elizabeth Economy of Stanford University and

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<v Speaker 2>their Hoover Institution. Her book years ago, The River Runs Black,

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<v Speaker 2>was a definitive graduate school study that was hugely successful

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<v Speaker 2>on the environmental impact of China. Liz, in your wonderful

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<v Speaker 2>effort of a few years ago, the World according to China,

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<v Speaker 2>you close with a China reset. How does China reset

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<v Speaker 2>after President Trump.

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<v Speaker 1>So I think the thing to bear in mind with

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<v Speaker 1>this summit and the sort of meeting between Presidency and

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<v Speaker 1>Asident Trump is that I think Secretary of State Mubio

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<v Speaker 1>really defined the relationship pretty well when he said, look,

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<v Speaker 1>we're going to look for areas of cooperation, but we

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<v Speaker 1>each have our own areas of interests. They're going to conflict,

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<v Speaker 1>They're going to continue to conflict, and we want to

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<v Speaker 1>manage the relationship. And so I think that the goal

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<v Speaker 1>here is largely the same as it's been, you know,

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<v Speaker 1>for two decades or more, which is sort of a

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<v Speaker 1>managed competition, managed strategic competition. The only question is whether

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<v Speaker 1>or not the conflicts are sort of greater occupies a

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<v Speaker 1>greater amount of space than the areas of cooperation. You know,

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<v Speaker 1>we're going to continue to have a lot of frictions,

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<v Speaker 1>and President She is going to continue to do just

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<v Speaker 1>what President She wants to advance Chinese interests how he

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<v Speaker 1>defines Chinese national interests, irrespective of whatever the United States

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<v Speaker 1>says or does during this summit.

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<v Speaker 3>Elizabeth, I think for many of our viewers, many of

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<v Speaker 3>our listeners, President She is the only leader that they've

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<v Speaker 3>ever known in China. Give us just a sense of

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<v Speaker 3>what his position is today. How do you think about

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<v Speaker 3>that position three, five, ten years from now?

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<v Speaker 1>So, I mean, what makes presidency different from a number

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<v Speaker 1>of leaders who have come before him in China is

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<v Speaker 1>just the degree of power that he's managed to consolidate

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<v Speaker 1>into his own hands and the extent to which he's

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<v Speaker 1>managed to translate the vision for China both at home

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<v Speaker 1>and on the global stage that you know, he articulated

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<v Speaker 1>fourteen years ago. I think critically he's coming upon you know,

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<v Speaker 1>what will be probably his fourth five year term as

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<v Speaker 1>General Secretary of the Communist Party, likely president of the country,

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<v Speaker 1>and so you know, this is he's you know, people

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<v Speaker 1>will say he's president for life. I think he will

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<v Speaker 1>step back probably and won't have a fifth five year term,

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<v Speaker 1>but will remain as sort of chairman of the party

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<v Speaker 1>so he can continue to exert control. But really, the

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<v Speaker 1>degree to which he's consolidated power I think was you know,

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<v Speaker 1>unexpected did by people either outside China or frankly inside China.

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<v Speaker 2>I look, Liza, where we are, and I go back

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<v Speaker 2>to our misjudgment of our intelligence of the Soviet Union

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<v Speaker 2>years ago. Do we have intelligence on China, or are

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<v Speaker 2>we as blind looking at Beijing, Shanghai and the rest.

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<v Speaker 2>There's submarine threat, et cetera. Are we as blind as

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<v Speaker 2>we were with Gorbashev?

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<v Speaker 1>I mean, I think are we as blind? I think

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<v Speaker 1>the challenge now is Hijinping has made China more opaque

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<v Speaker 1>rather than less of pique as his tenure has progressed.

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<v Speaker 1>So it takes more effort to sort of get inside

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<v Speaker 1>China to understand what's happening. It's also more difficult because

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<v Speaker 1>we don't have as many journalists on the ground. It's

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<v Speaker 1>much harder for scholars and students to go to China

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<v Speaker 1>to spend time to do research. So our intelligence in

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<v Speaker 1>that respect is more challenging than it was, you know,

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<v Speaker 1>a decade and a half ago. At the same time,

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<v Speaker 1>I think we do see evidence if you look closely enough,

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<v Speaker 1>we do see evidence of fractures within Chinese society. We

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<v Speaker 1>see the evidence of it in the fact that the

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<v Speaker 1>Chinese consumer is not buying. You know that there's a

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<v Speaker 1>sort of the lie flat movement, the youth saying we

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<v Speaker 1>don't want to work, the high rates of youth unemployment,

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<v Speaker 1>concerns over what AI is going to do to labor

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<v Speaker 1>in China, just as there are concerns in the United States.

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<v Speaker 1>So you have to spend more time and more energy

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<v Speaker 1>looking and maybe have a little more expertise to get

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<v Speaker 1>at what's going on inside China outside of the incredible

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<v Speaker 1>skyrocking exports and the technology accomplishments and everything that we're

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<v Speaker 1>kind of sort of fed on a daily basis from

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<v Speaker 1>the Chinese media and frankly from our own media. But

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<v Speaker 1>it's there if you look look for it. You know,

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<v Speaker 1>we can get at the impass, but it's tough.

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<v Speaker 2>Liz, thank you so much. Elizabeth Economy with the Hoover

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<v Speaker 2>Institution