WEBVTT - Tensions Heightened Between the U.S. and China

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<v Speaker 1>You're listening to Bloomberg Business Week with Carol Messer and

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<v Speaker 1>Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio, a story

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<v Speaker 1>of the Bloomberg Today as well about US Treasury Secretary

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<v Speaker 1>Janet Yellen expressing doubts about last year's trade deal with China,

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<v Speaker 1>the first clear statement from the body administration detailing it's

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<v Speaker 1>thinking about the future of the agreement between the world's

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<v Speaker 1>two largest economies. That was something we talked about with

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<v Speaker 1>Andy Brown and Bloomberg New Economy earlier. That's on his

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<v Speaker 1>radar as well. The relationship between the two continues to

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<v Speaker 1>be complicated yet inextricably linked. Someone with a keen perspective

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<v Speaker 1>on all of us and back with us, as Chris Fenton,

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<v Speaker 1>trustee of the US Asia Institute, author of Feeding the Dragon,

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<v Speaker 1>Inside the Trillion Dollar Dilemma facing Hollywood, the NBA and

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<v Speaker 1>American Business epook out last year. He joins us on

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<v Speaker 1>the phone in New York City. Hey, Chris, good to

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<v Speaker 1>have you back with us. How are you, Carol? Always

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<v Speaker 1>a pleasure and always a lot to talk about when

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<v Speaker 1>it comes to China. Yeah, Woa is right. We talked

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<v Speaker 1>about a bunch of our Andy Brown and Bloomberg New Economy,

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<v Speaker 1>who you know lived in Asia. China specifically understands that market.

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<v Speaker 1>You do as well. First of all, Uh, Janet Yellen

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<v Speaker 1>coming out making some comments. We also had regulators specifically

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<v Speaker 1>here in the US and elsewhere, pointing to China when

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<v Speaker 1>it comes UH, specifically to that Microsoft exchange hack that

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<v Speaker 1>happened UH and saying that they were actors affiliated with

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<v Speaker 1>the Chinese government, accusing the Chinese government of a broad

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<v Speaker 1>array of quote malicious cyber activities. How would you assess

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<v Speaker 1>the U S. China relationship here we are on Monday,

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<v Speaker 1>July one. It's a relationship that's been fraught with strain before.

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<v Speaker 1>How does it look to you right now? Well, it's amazing.

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<v Speaker 1>I mean I remember being on with you and Jason

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<v Speaker 1>back in October two thousand nineteen, and that same question

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<v Speaker 1>was asked right after the Daryl Morey tweet um that

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<v Speaker 1>that shocks sort of the NBA and China relationship. And

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<v Speaker 1>and we're in the middle of the Hong Kong protests

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<v Speaker 1>at that time, and you cut it today almost two

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<v Speaker 1>years later, and I would say this relationship has only

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<v Speaker 1>gotten more amplified as far as its tense relations, and

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<v Speaker 1>it seems the only begetting worse. I mean, there are

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<v Speaker 1>there are signs of some green shoots out there, but

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<v Speaker 1>there are very few and far between. For the most part,

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<v Speaker 1>we're seeing things getting even more and more and more

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<v Speaker 1>tense and more difficult. Well, you mentioned Darryl Moury. I

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<v Speaker 1>mean the NBA front office grew right back in nineteen

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<v Speaker 1>and basically he came out and expressed support for Hong

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<v Speaker 1>Kong's pro democracy protests. And then you had Lebron James

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<v Speaker 1>come out and remind us what he did. Yeah, it's

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<v Speaker 1>and it's unbelievable. And we talked about it back then

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<v Speaker 1>two years ago, and here we are today. We have

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<v Speaker 1>Space Jam two that came out in United States theaters

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<v Speaker 1>and in markets around the world, yet China has not

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<v Speaker 1>allowed it access to that market. And quite frankly, that

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<v Speaker 1>movie was made for the Chinese market. Both the NBA,

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<v Speaker 1>Lebron James and Hollywood really set its sight on that market,

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<v Speaker 1>being the largest in the world. And to date we

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<v Speaker 1>do not have a release date for it. Right, and

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<v Speaker 1>this is Lebron Lebron James. He's been involved in this

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<v Speaker 1>movie big time, obviously staring in it, but also in

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<v Speaker 1>terms of the production of it. Yeah, no, and exactly.

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<v Speaker 1>And he was one of the biggest critics towards the

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<v Speaker 1>free speech rights of Darryl Morey, and there was a

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<v Speaker 1>lot of reasons for him to do that because he

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<v Speaker 1>had a lot of skin in the game when it

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<v Speaker 1>comes to the China market. It's very difficult for people

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<v Speaker 1>that don't to say, hey, why are you speaking up

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<v Speaker 1>against what Darryl Morey was doing. But the fact is

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<v Speaker 1>he's making fifty million dollars a year roughly in that

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<v Speaker 1>in that market from those consumers, and he needs to

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<v Speaker 1>tread carefully. But the fact is he has been treading

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<v Speaker 1>carefully for the last two years, and we're seeing sort

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<v Speaker 1>of the lack of reward for that cow towing happening

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<v Speaker 1>today with his movie not in theaters. It's always been

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<v Speaker 1>delicate for any of us who have been following UH.

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<v Speaker 1>Increasingly US companies, global nationals, global multinationals overall, but US companies,

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<v Speaker 1>you know, cozy up to China specifically over the last

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<v Speaker 1>couple of decades because they wanted a piece of that

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<v Speaker 1>one billion plus consumer market UH and doing whatever they

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<v Speaker 1>needed to kind of get themselves on the ground. Do

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<v Speaker 1>you think that change is dramatically going forward because of

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<v Speaker 1>the heightened tentions. We've been in a heightened tention situation

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<v Speaker 1>before between US and China. Look, I've been very vocal

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<v Speaker 1>about it because I am hopeful. I have two kids

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<v Speaker 1>that are fourteen years old and I want them growing

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<v Speaker 1>up in a more balanced global community. So I'm talking

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<v Speaker 1>about it. But I also want to be constructive. I

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<v Speaker 1>I refuse to speak out against C suite executives telling

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<v Speaker 1>them that they're doing the wrong things. It involves all

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<v Speaker 1>of us. I mean, you have investors and shareholders that

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<v Speaker 1>are putting massive pressure on these C suites to essentially

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<v Speaker 1>cows out at the Chinese Communist Party and do exactly

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<v Speaker 1>as they say. And on top of it, you can't

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<v Speaker 1>just have one celebrity or one athlete like Lebron James

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<v Speaker 1>take a stand. There'll just be a lone wolf for

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<v Speaker 1>a sacrificial lamb and replaced by somebody else. So this

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<v Speaker 1>is a united we stand situation. We need to create

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<v Speaker 1>the leverage as a nation, as an a Western alliance

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<v Speaker 1>to push back against the Chinese Countunist Party and we can,

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<v Speaker 1>and we've seen it before. They do retreat if you

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<v Speaker 1>apply the right kind of pressure. But right now we

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<v Speaker 1>have not done that. It's all been lone wolf approaches

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<v Speaker 1>and that's just not going to get us anywhere. So

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<v Speaker 1>be real. You were president of DMG Entertainment, Motion Picture Group,

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<v Speaker 1>General Matter, General manager, excuse me, DMG North America. So

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<v Speaker 1>listen you you were working in China specifically when it

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<v Speaker 1>came to you know, movies and all of that, you know,

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<v Speaker 1>creative content and businesses. So I do wonder, is there

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<v Speaker 1>do you expect it to change dramatically? Look, what I

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<v Speaker 1>expect to change is more and more people like myself

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<v Speaker 1>who were cogs in the wheel that believed in the

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<v Speaker 1>mission of globalism being the best interests of the American um,

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<v Speaker 1>the average American citizen, and our Western allies. But the

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<v Speaker 1>fact is we've done it too far. We've done it

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<v Speaker 1>in a way that is detrimental to the long term

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<v Speaker 1>health of the Western Alliance and we need to wake

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<v Speaker 1>up to that. And there's lots of us that are

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<v Speaker 1>and it's time that we start to put pressure on leadership,

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<v Speaker 1>on businesses and get consumers excited about the fact that hey,

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<v Speaker 1>you know what, these companies, if they take an activist

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<v Speaker 1>position against some of the things that are wrong in

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<v Speaker 1>that market, they'll be rewarded with the pocketbooks of people

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<v Speaker 1>in countries around the world that will generate more revenues

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<v Speaker 1>for those products and services. We just need to have

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<v Speaker 1>the guts and we need to start uniting together because

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<v Speaker 1>just one shot, one single entities trying to approach this

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<v Speaker 1>is just never going to get us anywhere. But the

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<v Speaker 1>bottom line is, I am hopeful. You're hopeful, Okay, But

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<v Speaker 1>I mean, I guess I want to say, what's the likelihood?

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<v Speaker 1>Just got about thirty seconds left here. I mean, hope

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<v Speaker 1>is a great thing, and I'm an optimist and I'm

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<v Speaker 1>with you, but I do wonder what's the likelihood. The

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<v Speaker 1>likelihood is getting better because I'm seeing a bipartisan move

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<v Speaker 1>towards it. We are seeing both left and right unify

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<v Speaker 1>in Congress to push forward bills that might do it.

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<v Speaker 1>So I am feeling like we do have a likelihood,

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<v Speaker 1>but it's going to take a lot of work. Yeah,

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<v Speaker 1>that's a good point. Hey, listen, good to check in

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<v Speaker 1>with you, b well. Chris Fenton, trustee of the USA

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<v Speaker 1>Asia Institute, on the phone in New York City,