1 00:00:06,409 --> 00:00:10,039 Speaker 1: Hello, welcome to Copy Time, a podcast series on Markets 2 00:00:10,050 --> 00:00:13,148 Speaker 1: and Economies from DVS Group Research. I'm Tamir Beg, chief economist, 3 00:00:13,159 --> 00:00:15,750 Speaker 1: welcoming you to our 136th episode. 4 00:00:16,709 --> 00:00:19,599 Speaker 1: In the last episode of this podcast, we discussed techno 5 00:00:19,739 --> 00:00:23,610 Speaker 1: nationalism with Alex Capri. And today we will talk about 6 00:00:23,620 --> 00:00:28,209 Speaker 1: Taiwan where tech and nationalism and security all get blended together. 7 00:00:28,670 --> 00:00:31,489 Speaker 1: We will have a keen Taiwan watcher to do that. 8 00:00:31,729 --> 00:00:34,360 Speaker 1: Drew Thompson is a senior fellow at the S Rajaratnam 9 00:00:34,790 --> 00:00:38,939 Speaker 1: School of International Studies at Nanyang Technological University. He's also 10 00:00:38,950 --> 00:00:42,250 Speaker 1: a part time senior research scientist at the CN A corporation. 11 00:00:42,590 --> 00:00:44,889 Speaker 1: He's been with the Lee Kuan Yew School of Public 12 00:00:44,900 --> 00:00:47,168 Speaker 1: Policy at the National University of Singapore in the past 13 00:00:47,180 --> 00:00:50,150 Speaker 1: and from 2011 to 2018, he was the director for 14 00:00:50,159 --> 00:00:52,490 Speaker 1: China Taiwan and Mongolia in the office of the Secretary 15 00:00:52,500 --> 00:00:55,450 Speaker 1: of Defense in the United States where he was responsible 16 00:00:55,459 --> 00:00:59,360 Speaker 1: for supporting the secretary and managing military to military relations. 17 00:00:59,470 --> 00:01:02,709 Speaker 1: Drew Thompson, a warm welcome to Kobe time. Thank you 18 00:01:02,720 --> 00:01:05,449 Speaker 1: for having me. It's great to have you drew. I 19 00:01:05,459 --> 00:01:07,650 Speaker 1: want to talk about Taiwan today with you and let's 20 00:01:07,660 --> 00:01:09,809 Speaker 1: begin with Taiwan's President Lai Chen de 21 00:01:10,489 --> 00:01:12,800 Speaker 1: known also as William Lai. But I think you just 22 00:01:12,809 --> 00:01:14,610 Speaker 1: told me earlier that he doesn't go with you by 23 00:01:14,620 --> 00:01:16,809 Speaker 1: William anymore. So I will refer to him as President 24 00:01:16,819 --> 00:01:19,379 Speaker 1: Lai if I may. Uh President Lai has been in 25 00:01:19,389 --> 00:01:22,179 Speaker 1: power for about four months. In a recent article, I 26 00:01:22,190 --> 00:01:24,559 Speaker 1: think you talked about his 100 days where he said 27 00:01:24,569 --> 00:01:28,330 Speaker 1: that the view and degree of satisfaction with Lai's 100 28 00:01:28,339 --> 00:01:32,919 Speaker 1: days so far differ considerably in Taipei, Beijing and Washington 29 00:01:33,339 --> 00:01:36,559 Speaker 1: walk us through those multiple city of assessments. 30 00:01:37,339 --> 00:01:40,319 Speaker 2: Sure. So actually I was asked by the, by the 31 00:01:40,330 --> 00:01:44,169 Speaker 2: publisher to submit an article because they'd read a piece 32 00:01:44,180 --> 00:01:47,900 Speaker 2: in a Chinese outlet that basically said how bad lies 33 00:01:47,910 --> 00:01:51,120 Speaker 2: 1st 100 days were. And, and the editor thought there's 34 00:01:51,129 --> 00:01:54,930 Speaker 2: really more to it than, than Beijing's perspective. So, so 35 00:01:54,940 --> 00:01:57,000 Speaker 2: I really think it does come down to sort of 36 00:01:57,010 --> 00:02:01,089 Speaker 2: president line and is domestic uh contacts as well as 37 00:02:01,099 --> 00:02:03,000 Speaker 2: Beijing and Washington, of course. So, 38 00:02:03,250 --> 00:02:06,589 Speaker 2: so maybe starting with, with President Lai, um I mean, 39 00:02:06,599 --> 00:02:09,630 Speaker 2: I think he's managed his transition pretty well. I mean, 40 00:02:09,639 --> 00:02:11,800 Speaker 2: he hit the ground running, which is the advantage of 41 00:02:11,809 --> 00:02:15,309 Speaker 2: being the former vice president. Um He certainly got an 42 00:02:15,320 --> 00:02:18,369 Speaker 2: advantage in that the Taiwan economy is doing quite well. 43 00:02:18,399 --> 00:02:20,720 Speaker 2: I mean, it's in good shape, it's, you know, growth, 44 00:02:20,729 --> 00:02:23,668 Speaker 2: GDP growth is like 3% or so they predict it 45 00:02:23,679 --> 00:02:26,710 Speaker 2: to maybe go up a little, inflation is under 2% 46 00:02:26,720 --> 00:02:29,990 Speaker 2: and unemployment's at 3%. So you've got pretty much full employment. 47 00:02:30,389 --> 00:02:33,138 Speaker 2: Uh And then in, in the sentiment index, you, you've 48 00:02:33,149 --> 00:02:35,889 Speaker 2: got the Taiwan stock market being one of the best 49 00:02:35,899 --> 00:02:38,940 Speaker 2: performing in Asia and it's up over 30% in the 50 00:02:38,949 --> 00:02:42,100 Speaker 2: first half of, of the year. So, so, so things 51 00:02:42,110 --> 00:02:46,869 Speaker 2: are kind of going his way domestically. Um He has 52 00:02:46,880 --> 00:02:50,559 Speaker 2: uh uh a parliament, the legislative yuan that's controlled by 53 00:02:50,570 --> 00:02:54,449 Speaker 2: the opposition party, Guomindang, uh uh the KMT 54 00:02:54,869 --> 00:02:57,960 Speaker 2: and, and they, since they control the legislature that that's 55 00:02:57,970 --> 00:03:01,429 Speaker 2: a potential political challenge for him, um They've thrown a 56 00:03:01,440 --> 00:03:03,660 Speaker 2: couple of shots across his bow and I think he's 57 00:03:03,669 --> 00:03:07,410 Speaker 2: dealt with them pretty effectively so far, but that's going 58 00:03:07,419 --> 00:03:09,820 Speaker 2: to be an ongoing challenge for him, 59 00:03:09,925 --> 00:03:11,725 Speaker 2: but he so far managed it well. I mean, he's, 60 00:03:11,735 --> 00:03:14,505 Speaker 2: he's like any president, you know, certainly very astute about 61 00:03:14,514 --> 00:03:17,744 Speaker 2: his own domestic politics. He's had a long run in 62 00:03:17,755 --> 00:03:21,074 Speaker 2: politics as a, as a former mayor. So, so he 63 00:03:21,085 --> 00:03:24,904 Speaker 2: knows the political field and plays it well. Um He 64 00:03:25,360 --> 00:03:27,579 Speaker 2: has, I think, done something rather unique in that. He's 65 00:03:27,589 --> 00:03:32,149 Speaker 2: really set an agenda that he's been able to push. And, 66 00:03:32,160 --> 00:03:33,699 Speaker 2: and one of the ways he's done that is he's 67 00:03:33,710 --> 00:03:37,949 Speaker 2: formed three presidential level committees similar to what the US 68 00:03:37,960 --> 00:03:41,320 Speaker 2: would have and what we call the interagency, sort of multipart, 69 00:03:41,880 --> 00:03:48,070 Speaker 2: multi multi government agency meetings that he chairs and one 70 00:03:48,080 --> 00:03:51,169 Speaker 2: of them is on climate change, another on health care. 71 00:03:51,250 --> 00:03:54,570 Speaker 2: And the last one is on whole of society resilience. 72 00:03:55,000 --> 00:03:57,300 Speaker 2: Uh, and, and I think the, the whole of society 73 00:03:57,309 --> 00:04:00,160 Speaker 2: resilience campaign is, is, is pretty new and I think 74 00:04:00,169 --> 00:04:05,460 Speaker 2: that makes it, um, uh, pretty potentially impactful and, and 75 00:04:05,470 --> 00:04:09,179 Speaker 2: I think it's worth watching. Um, it, it's, it's intended 76 00:04:09,190 --> 00:04:11,460 Speaker 2: as they said to coordinate government efforts as well as 77 00:04:11,470 --> 00:04:16,589 Speaker 2: mobilize society and it's not just homeland defense against blockades 78 00:04:16,600 --> 00:04:20,450 Speaker 2: or invasions or the threat of natural disasters which they face. 79 00:04:20,459 --> 00:04:22,779 Speaker 2: There's a typhoon currently hitting Taiwan. 80 00:04:23,178 --> 00:04:26,880 Speaker 2: Um But it, it's, it's really about mobilizing civilians to 81 00:04:26,890 --> 00:04:31,329 Speaker 2: be prepared and get basic training for uh like medical 82 00:04:31,339 --> 00:04:35,579 Speaker 2: and emergency responder training. Um And that's an area where 83 00:04:35,589 --> 00:04:38,350 Speaker 2: NGO S in the private sector can, can step in. 84 00:04:38,619 --> 00:04:44,500 Speaker 2: It's also about strengthening critical infrastructure, including the power financial system, 85 00:04:44,690 --> 00:04:50,019 Speaker 2: wartime communications and also reducing their vulnerability to disruptions in 86 00:04:50,029 --> 00:04:53,518 Speaker 2: undersea cables. So, and the last thing I think they're 87 00:04:53,529 --> 00:04:58,260 Speaker 2: really focusing on is stockpiling energy, food and emergency medical 88 00:04:58,269 --> 00:05:00,799 Speaker 2: supplies so that they can withstand either 89 00:05:00,912 --> 00:05:05,282 Speaker 2: prolonged natural disaster or, or a blockade, for example. So, 90 00:05:05,291 --> 00:05:07,532 Speaker 2: so I think, you know, this is a pretty new 91 00:05:07,541 --> 00:05:11,803 Speaker 2: and innovative um and, and potentially game changing approach to 92 00:05:11,812 --> 00:05:14,811 Speaker 2: resilience in Taiwan. Um But I think it also is 93 00:05:14,822 --> 00:05:17,713 Speaker 2: really important because of the signaling aspect. So rather than 94 00:05:17,722 --> 00:05:21,082 Speaker 2: focusing on like how much natural gas uh Taiwan could 95 00:05:21,092 --> 00:05:22,773 Speaker 2: stockpile and who's going to pay for it. 96 00:05:23,205 --> 00:05:27,055 Speaker 2: I think it's going to change the population's mindset and 97 00:05:27,065 --> 00:05:30,075 Speaker 2: probably raise their morale and maybe strengthen the will to resist, 98 00:05:30,085 --> 00:05:32,304 Speaker 2: which is a, which is a big issue. And so 99 00:05:32,315 --> 00:05:36,145 Speaker 2: it's going to give him political support to stand up 100 00:05:36,156 --> 00:05:40,985 Speaker 2: to bullying and protect Taiwan's autonomy in the face of aggression. 101 00:05:40,996 --> 00:05:43,996 Speaker 2: So basically, he's empowering the Taiwan people to take their 102 00:05:44,005 --> 00:05:45,385 Speaker 2: future into their own hands. 103 00:05:45,859 --> 00:05:49,868 Speaker 2: Um That obviously doesn't make Beijing happy. Once 104 00:05:51,380 --> 00:05:53,178 Speaker 1: Drew before we go to Beijing, I just want to 105 00:05:53,190 --> 00:05:56,440 Speaker 1: stay with for one second. Sorry about interrupting. Um So 106 00:05:56,450 --> 00:06:00,519 Speaker 1: how popular is he uh with these uh pivots that 107 00:06:00,529 --> 00:06:01,320 Speaker 1: you just talked about? 108 00:06:02,170 --> 00:06:05,149 Speaker 2: So, I mean, these are fairly new developments. The, the 109 00:06:05,160 --> 00:06:08,980 Speaker 2: first committee meeting he held was last week. Um So, 110 00:06:09,130 --> 00:06:11,660 Speaker 2: so I don't think there's a reflection yet in the 111 00:06:11,670 --> 00:06:15,720 Speaker 2: public polling, he's doing pretty well in public polls. Um 112 00:06:15,839 --> 00:06:18,630 Speaker 2: I mean, as, as good as they are. Um he's, 113 00:06:18,640 --> 00:06:21,510 Speaker 2: he's at around the 50% mark, which is quite good. 114 00:06:21,799 --> 00:06:24,980 Speaker 2: Um in a way the risk is that his, um 115 00:06:25,070 --> 00:06:27,130 Speaker 2: you know, his popularity is going to decrease because there's 116 00:06:27,140 --> 00:06:28,579 Speaker 2: really nowhere else to go. 117 00:06:28,890 --> 00:06:32,630 Speaker 2: Um So, so I think he's got, he's got strong support. 118 00:06:32,890 --> 00:06:36,959 Speaker 2: Uh It's interesting to note that um commentators in Beijing, 119 00:06:36,970 --> 00:06:39,738 Speaker 2: you know, keep pointing out that he only, he only 120 00:06:39,750 --> 00:06:43,109 Speaker 2: got 40% of the vote um in the last election. 121 00:06:43,329 --> 00:06:46,600 Speaker 2: And that's an indication that he's not supported by the, the, 122 00:06:46,670 --> 00:06:49,558 Speaker 2: the public. But, you know, they, they don't often mention 123 00:06:49,570 --> 00:06:52,529 Speaker 2: that it was a three way race. Um And that 124 00:06:52,540 --> 00:06:54,369 Speaker 2: uh and that the vote was split so he didn't 125 00:06:54,380 --> 00:06:58,849 Speaker 2: get an absolute majority. Um but he definitely one handedly 126 00:06:58,859 --> 00:07:01,109 Speaker 2: um uh against the other two candidates. 127 00:07:03,459 --> 00:07:03,880 Speaker 2: Great. 128 00:07:05,029 --> 00:07:07,609 Speaker 2: So Beijing, yes. Um 129 00:07:08,589 --> 00:07:11,518 Speaker 2: Beijing is, is in a way, sort of 130 00:07:12,380 --> 00:07:16,040 Speaker 2: their approach to Taiwan since he's been elected is essentially unchanged. 131 00:07:16,420 --> 00:07:20,850 Speaker 2: Um It, it's very static. Um I mean, Lai is, is, 132 00:07:20,859 --> 00:07:23,720 Speaker 2: I mean, his, his existence is a provocation to Beijing. 133 00:07:24,109 --> 00:07:27,880 Speaker 2: Um when a couple of years ago around 2017, he 134 00:07:27,890 --> 00:07:30,959 Speaker 2: said sort of off the cuff that he called himself 135 00:07:30,970 --> 00:07:34,040 Speaker 2: a pragmatic worker for Taiwan independence. 136 00:07:34,510 --> 00:07:37,339 Speaker 2: And, and I think that that really stuck in Beijing's 137 00:07:37,350 --> 00:07:41,049 Speaker 2: mind and, and as a result, even when Li Jing 138 00:07:41,140 --> 00:07:44,420 Speaker 2: De is trying to be accommodating or trying to be 139 00:07:44,579 --> 00:07:49,619 Speaker 2: uh self restrained, um Chinese commentators will often say, well, 140 00:07:49,630 --> 00:07:52,450 Speaker 2: you know, he's just hiding his true nature. Um or 141 00:07:52,459 --> 00:07:55,500 Speaker 2: you know, he's, he's a die hard, independent separatist and 142 00:07:55,510 --> 00:07:58,170 Speaker 2: he's irredeemable. Um so, 143 00:07:58,640 --> 00:08:02,720 Speaker 2: so so basically he has to face a pretty tense 144 00:08:02,730 --> 00:08:06,660 Speaker 2: and difficult cross strait relationship from, from the day he 145 00:08:06,670 --> 00:08:11,299 Speaker 2: was elected. And, and there's really very little prospect for 146 00:08:11,359 --> 00:08:15,809 Speaker 2: uh cross strait engagement because China positions it as uh 147 00:08:15,820 --> 00:08:20,660 Speaker 2: a precondition that, that he accepts the one China principle. 148 00:08:20,769 --> 00:08:24,350 Speaker 2: Um and, and that pretty much rules out dialogue between 149 00:08:24,359 --> 00:08:27,489 Speaker 2: them because it's not acceptable to, to, to his electorate. 150 00:08:27,760 --> 00:08:28,339 Speaker 2: So 151 00:08:29,040 --> 00:08:31,720 Speaker 2: the other thing is that Beijing really doesn't have any 152 00:08:31,730 --> 00:08:35,270 Speaker 2: assurances to offer Taiwan very few incentives and, and those 153 00:08:35,280 --> 00:08:38,780 Speaker 2: incentives that they do offer are not terribly attractive. Um 154 00:08:38,789 --> 00:08:42,330 Speaker 2: So China has tried to offer economic integration as a 155 00:08:42,340 --> 00:08:46,098 Speaker 2: potential carrot to, to get uh Taiwan closer to the mainland, 156 00:08:46,359 --> 00:08:49,819 Speaker 2: but it becomes less effective when China's economy is not 157 00:08:49,830 --> 00:08:53,650 Speaker 2: doing as well. Taiwan companies are are struggling to be, 158 00:08:53,950 --> 00:08:56,549 Speaker 2: to be profitable and succeed in the market or enter 159 00:08:56,559 --> 00:08:59,689 Speaker 2: the market. Um But more importantly, you know, China has 160 00:08:59,700 --> 00:09:04,848 Speaker 2: used trade as a political coercion tool. Uh more than once, 161 00:09:04,859 --> 00:09:10,270 Speaker 2: including against Taiwan, they've cut off tourists since 2016, 2020. 162 00:09:10,280 --> 00:09:12,039 Speaker 2: There was a pretty dramatic 163 00:09:12,085 --> 00:09:16,655 Speaker 2: incident in 2021 where um you know, China has embargoed 164 00:09:16,664 --> 00:09:21,603 Speaker 2: pineapples from Taiwan. So so suddenly, you know, Taiwan pineapple 165 00:09:21,614 --> 00:09:24,955 Speaker 2: farmers have lost their major market and uh it became 166 00:09:24,965 --> 00:09:29,145 Speaker 2: a rallying cry for uh divestiture from China and, and for, 167 00:09:29,155 --> 00:09:32,924 Speaker 2: for de risks. Um and that's been driving uh Taiwan 168 00:09:32,934 --> 00:09:37,025 Speaker 2: businesses away from the mainland and into places like Southeast Asia. 169 00:09:37,349 --> 00:09:41,969 Speaker 2: So, so that kind of leaves Beijing's main policy tool. 170 00:09:42,179 --> 00:09:44,969 Speaker 2: Um and, and, and sort of go to response to 171 00:09:44,979 --> 00:09:49,500 Speaker 2: deal with policy differences. It's military coercion and, and it's 172 00:09:49,510 --> 00:09:52,809 Speaker 2: just not working on the people of Taiwan. It may 173 00:09:53,030 --> 00:09:56,858 Speaker 2: serve the interests of, you know, leadership in Beijing in 174 00:09:56,869 --> 00:09:59,760 Speaker 2: terms of demonstrating to their people that, that they are, 175 00:09:59,820 --> 00:10:03,949 Speaker 2: you know, resolved to, to oppose Taiwan independence and anything 176 00:10:03,960 --> 00:10:04,239 Speaker 2: that 177 00:10:04,340 --> 00:10:07,960 Speaker 2: goes against Beijing's interest. But the military tool is not 178 00:10:07,969 --> 00:10:11,968 Speaker 2: convincing the people of Taiwan that they should form a 179 00:10:12,010 --> 00:10:15,880 Speaker 2: uh uh uh some sort of confederation with China. In fact, 180 00:10:15,890 --> 00:10:19,940 Speaker 2: it's driving people to be more 181 00:10:20,280 --> 00:10:24,400 Speaker 2: uh supportive of a higher degree of autonomy and resilience 182 00:10:24,409 --> 00:10:28,099 Speaker 2: against the mainland, which is, you know, continually running uh 183 00:10:28,109 --> 00:10:32,859 Speaker 2: uh military missions around Taiwan across the center line in, 184 00:10:32,909 --> 00:10:35,979 Speaker 2: in increasingly complex military maneuvers. 185 00:10:37,109 --> 00:10:43,109 Speaker 1: Uh drew one question on Beijing, it it's uh engagement 186 00:10:43,119 --> 00:10:47,909 Speaker 1: or you know, efforts to coerce or um you know, 187 00:10:47,919 --> 00:10:51,500 Speaker 1: show them with some carrots either way. Uh your your 188 00:10:51,510 --> 00:10:53,880 Speaker 1: point that you know, it's not really has had any 189 00:10:53,890 --> 00:10:54,710 Speaker 1: impact on 190 00:10:55,109 --> 00:10:58,599 Speaker 1: improving the relationship or changing the mind of the Taiwanese 191 00:10:58,609 --> 00:11:02,849 Speaker 1: political leadership. I think that's well taken. But it is 192 00:11:02,859 --> 00:11:05,549 Speaker 1: still the fact that despite all the talk of Deris 193 00:11:05,780 --> 00:11:08,780 Speaker 1: Taiwan remains a very large investor in China and you 194 00:11:08,789 --> 00:11:12,729 Speaker 1: do have many Taiwanese professionals gainfully employed in China. 195 00:11:13,530 --> 00:11:17,909 Speaker 2: There's been a dramatic exodus of Taiwanese expats from the 196 00:11:17,919 --> 00:11:23,069 Speaker 2: mainland back to Taiwan and increasingly to other places. Um 197 00:11:24,090 --> 00:11:29,070 Speaker 2: not, not considering the total stock of foreign direct investment. 198 00:11:29,080 --> 00:11:32,000 Speaker 2: But if you look at at new foreign direct investment, 199 00:11:32,239 --> 00:11:36,280 Speaker 2: I think the last year uh two years, the amount 200 00:11:36,289 --> 00:11:40,069 Speaker 2: of Taiwan foreign direct investment going to Southeast Asia and 201 00:11:40,080 --> 00:11:45,549 Speaker 2: South Asia, primarily India um is exceeding what goes to China. 202 00:11:45,969 --> 00:11:48,299 Speaker 2: Um And I think if you add it up with 203 00:11:48,309 --> 00:11:52,150 Speaker 2: what's going to the United States, um there are clear 204 00:11:52,159 --> 00:11:55,728 Speaker 2: indications that there is de risking going on uh in 205 00:11:55,739 --> 00:11:57,789 Speaker 2: the cross strait economic relationship. 206 00:11:58,109 --> 00:12:01,530 Speaker 2: Uh It's also borne out in, in the identity issue. 207 00:12:01,539 --> 00:12:04,559 Speaker 2: We can, we can talk about that some more but, 208 00:12:04,570 --> 00:12:09,210 Speaker 2: but essentially the Taiwanese people increasingly self identify as Taiwanese, 209 00:12:09,219 --> 00:12:13,199 Speaker 2: not as Chinese and they may speak Chinese language. Um 210 00:12:13,210 --> 00:12:16,289 Speaker 2: you know, they, they have a shared history but, but 211 00:12:16,530 --> 00:12:18,719 Speaker 2: that's changing in Taiwan as well. 212 00:12:20,280 --> 00:12:23,960 Speaker 1: Hm. Good point. Uh All right, we'll, we'll come back 213 00:12:23,969 --> 00:12:27,859 Speaker 1: to Beijing a little later but walk us through Washington's 214 00:12:27,869 --> 00:12:29,119 Speaker 1: assessment of like, 215 00:12:29,929 --> 00:12:34,880 Speaker 2: sure. So I mean, Washington is always going nervous about 216 00:12:34,890 --> 00:12:39,150 Speaker 2: cross strait relations when they're tense. Um they uh are 217 00:12:39,159 --> 00:12:42,630 Speaker 2: going to be concerned about the risk of miscalculation. Um 218 00:12:42,640 --> 00:12:49,539 Speaker 2: whether that's uh China miscalculating uh Taiwan miscalculating uh or 219 00:12:49,549 --> 00:12:54,169 Speaker 2: even even Washington itself. So, so I think Washington is, is, 220 00:12:54,190 --> 00:12:58,710 Speaker 2: is going to be concerned about lie, possibly antagonizing Beijing 221 00:12:59,109 --> 00:13:03,650 Speaker 2: um because he'll be pursuing a balance between protecting Taiwan's 222 00:13:03,659 --> 00:13:08,010 Speaker 2: autonomy and their dignity and at the same time showing 223 00:13:08,020 --> 00:13:09,679 Speaker 2: some restraint so that he's not 224 00:13:10,210 --> 00:13:13,789 Speaker 2: overtly antagonizing Beijing. And I think that's an important posture 225 00:13:13,799 --> 00:13:16,689 Speaker 2: that he has to continually manage and calibrate. And I 226 00:13:16,700 --> 00:13:20,150 Speaker 2: think that's the context by which Washington views most of 227 00:13:20,159 --> 00:13:24,489 Speaker 2: Taipei's actions. I mean, obviously there's strong support in Washington 228 00:13:24,500 --> 00:13:30,619 Speaker 2: for human rights self determination, particularly with AAA liberal government 229 00:13:30,630 --> 00:13:31,419 Speaker 2: in Washington. 230 00:13:31,739 --> 00:13:34,789 Speaker 2: Um But, but there are limits to that. It can't 231 00:13:34,799 --> 00:13:38,069 Speaker 2: come at the expense of of, of us interests and 232 00:13:38,080 --> 00:13:41,859 Speaker 2: us interests are stable cross strait relations. So we'll certainly 233 00:13:41,869 --> 00:13:48,280 Speaker 2: see Washington continuing to monitor Lai's behaviors, his speeches in 234 00:13:48,289 --> 00:13:51,119 Speaker 2: a couple of days on October 10th, he'll, he'll 235 00:13:51,284 --> 00:13:54,234 Speaker 2: a National Day speech. And I think there will be 236 00:13:54,244 --> 00:13:58,455 Speaker 2: plenty of, of think tankers in, in Washington and Beijing 237 00:13:58,465 --> 00:14:02,085 Speaker 2: analyzing word by word what he says and scrutinizing it 238 00:14:02,094 --> 00:14:06,195 Speaker 2: for evidence about whether he's diverging from the status quo. 239 00:14:06,484 --> 00:14:08,585 Speaker 2: But I mean, I think, I think Lii Jing de 240 00:14:08,604 --> 00:14:13,034 Speaker 2: will thread that needle well, um Tsai Wen certainly did 241 00:14:13,044 --> 00:14:15,354 Speaker 2: it for, for eight years. And I think at the 242 00:14:15,364 --> 00:14:17,215 Speaker 2: end of the day, you know, Washington is going to 243 00:14:17,224 --> 00:14:20,034 Speaker 2: be satisfied that um 244 00:14:20,349 --> 00:14:24,380 Speaker 2: uh that, that Li Jing De is considering us interests 245 00:14:24,390 --> 00:14:27,869 Speaker 2: as he postures himself and communicates with his own, his 246 00:14:27,880 --> 00:14:30,690 Speaker 2: own people. Uh Beijing is not going to be happy. 247 00:14:30,809 --> 00:14:33,330 Speaker 2: Um You know, and at the end of the day though, 248 00:14:33,340 --> 00:14:36,830 Speaker 2: for Lai Jing De, it's really Washington's continued support, that's 249 00:14:36,840 --> 00:14:39,989 Speaker 2: what really matters the most. And I think importantly, and 250 00:14:40,000 --> 00:14:42,380 Speaker 2: I mentioned this in the, in, in the, the, the 251 00:14:42,390 --> 00:14:45,119 Speaker 2: essay uh Lai Qing has done a pretty good job 252 00:14:45,130 --> 00:14:49,169 Speaker 2: building a rapport and a relationship with Washington and the 253 00:14:49,179 --> 00:14:50,070 Speaker 2: US government. 254 00:14:50,380 --> 00:14:56,559 Speaker 2: Um It started before um before the uh inauguration in May. 255 00:14:56,570 --> 00:15:00,039 Speaker 2: I remember the, it's a very long interregnum in, in, 256 00:15:00,049 --> 00:15:04,559 Speaker 2: in Taiwan between the election in January and inauguration in 257 00:15:04,570 --> 00:15:10,119 Speaker 2: May and the um Biden administration had pretty strong connections 258 00:15:10,130 --> 00:15:13,090 Speaker 2: even before the election with, with all of the political 259 00:15:13,099 --> 00:15:14,799 Speaker 2: parties that were running and that really 260 00:15:14,895 --> 00:15:18,914 Speaker 2: helps build trust and, and a sense of confidence that 261 00:15:19,265 --> 00:15:23,054 Speaker 2: the US interests will be protected that, that Taiwan candidates 262 00:15:23,065 --> 00:15:25,075 Speaker 2: are not going to be reckless. And I think he's 263 00:15:25,085 --> 00:15:29,155 Speaker 2: done a good job developing that trust, but that said 264 00:15:29,174 --> 00:15:32,044 Speaker 2: he never gets a free pass. Uh, he won't get 265 00:15:32,054 --> 00:15:35,455 Speaker 2: a free pass from Washington. So I think Washington DC 266 00:15:35,465 --> 00:15:37,515 Speaker 2: and its perceptions are a risk that he'll have to 267 00:15:37,525 --> 00:15:39,315 Speaker 2: continually manage. Looking ahead, 268 00:15:40,070 --> 00:15:44,289 Speaker 1: the perception from Washington DC is a function of who's 269 00:15:44,299 --> 00:15:50,609 Speaker 1: the president or there's a little more structural beyond political cycle. 270 00:15:50,619 --> 00:15:52,359 Speaker 1: Uh Sort of stands on Taiwan, 271 00:15:54,859 --> 00:15:55,599 Speaker 2: I think, 272 00:15:56,119 --> 00:15:59,799 Speaker 2: I mean, at its best, Washington's foreign policy is based 273 00:15:59,809 --> 00:16:02,179 Speaker 2: on national interests. Uh it tends to be in the 274 00:16:02,190 --> 00:16:05,119 Speaker 2: context of allies and partners, you know, coming as the, 275 00:16:05,130 --> 00:16:09,960 Speaker 2: the primary interest uh as well as access and influence and, and, 276 00:16:09,969 --> 00:16:13,090 Speaker 2: and that's really irregardless of the party in power, both 277 00:16:13,099 --> 00:16:14,479 Speaker 2: in Washington or in Taipei. 278 00:16:14,950 --> 00:16:18,419 Speaker 2: Um It's, uh you know, these are, these are, you know, 279 00:16:18,429 --> 00:16:22,520 Speaker 2: two governments that have long experience dealing with one another, 280 00:16:22,530 --> 00:16:27,010 Speaker 2: you know, very, very experienced bureaucracies and, and professional career, 281 00:16:27,020 --> 00:16:31,619 Speaker 2: civil servants that manage the relationship in multiple administrations as 282 00:16:31,630 --> 00:16:35,130 Speaker 2: the political leaders shift, the managers of the relationship do not. 283 00:16:35,619 --> 00:16:38,919 Speaker 2: Um And, and, and I think it's uh there may 284 00:16:38,929 --> 00:16:43,630 Speaker 2: be an element of risk, but it's basically a manageable one, 285 00:16:43,739 --> 00:16:48,760 Speaker 2: the um uh kmt present presidency. Certainly we saw this 286 00:16:48,770 --> 00:16:52,690 Speaker 2: under Mao had a very different cross straight characteristic than 287 00:16:52,700 --> 00:16:56,270 Speaker 2: the twn administration. But the US can, can deal with 288 00:16:56,280 --> 00:17:00,440 Speaker 2: that just as a Taiwan administration can deal with uh 289 00:17:00,450 --> 00:17:03,119 Speaker 2: shifts in, in Washington politics as well. 290 00:17:03,510 --> 00:17:05,469 Speaker 1: All right. Well, we'll talk about that some more later. 291 00:17:05,479 --> 00:17:08,329 Speaker 1: I'm curious about that issue. Uh but just staying with 292 00:17:08,339 --> 00:17:12,500 Speaker 1: uh President Lai's uh uh you know, performance so far. So, ok, 293 00:17:12,670 --> 00:17:15,140 Speaker 1: 100 days, you think that, you know, he has done 294 00:17:15,150 --> 00:17:20,010 Speaker 1: pretty well from Taiwan's perspective. He has not surprised Washington 295 00:17:20,020 --> 00:17:22,239 Speaker 1: and Beijing, of course, is not going to be happy. 296 00:17:22,359 --> 00:17:25,969 Speaker 1: Uh What about the next 3.5 years? What lies ahead? 297 00:17:29,439 --> 00:17:34,129 Speaker 2: Yeah, as Yogi Berra said, right, making predictions is difficult, 298 00:17:34,140 --> 00:17:35,459 Speaker 2: especially about the future. 299 00:17:35,709 --> 00:17:36,140 Speaker 2: Um 300 00:17:36,829 --> 00:17:39,790 Speaker 2: But that said, you know, we, we can monitor trends and, 301 00:17:39,800 --> 00:17:42,859 Speaker 2: and I don't see big paradigm shifts from what we've 302 00:17:42,869 --> 00:17:46,659 Speaker 2: already seen. Um I mean, he's gonna have to manage 303 00:17:47,079 --> 00:17:51,209 Speaker 2: a host of known risks. Um uh some of them 304 00:17:51,219 --> 00:17:54,709 Speaker 2: including demographic risk of a, of an aging shrinking society 305 00:17:54,719 --> 00:17:57,149 Speaker 2: and the impact that has on, on the economy and 306 00:17:57,160 --> 00:17:58,660 Speaker 2: society and security. 307 00:17:58,949 --> 00:18:02,550 Speaker 2: Uh He's got, you know, domestic political and economic risks. 308 00:18:02,560 --> 00:18:05,750 Speaker 2: As I said, managing an opposition party that's quite empowered 309 00:18:05,760 --> 00:18:08,680 Speaker 2: and runs the legislature. Uh He's got to manage cross 310 00:18:08,689 --> 00:18:11,739 Speaker 2: strait risks. He's got to manage Washington. Uh And at 311 00:18:11,750 --> 00:18:15,089 Speaker 2: the same time, he's also looking to strengthen relations with 312 00:18:15,099 --> 00:18:18,188 Speaker 2: Japan and with Europe and those have been trending upwards 313 00:18:18,199 --> 00:18:21,310 Speaker 2: as well. So that's added to his, his workload. 314 00:18:21,670 --> 00:18:24,629 Speaker 2: Um as I mentioned before, his polls are quite high. 315 00:18:24,640 --> 00:18:27,949 Speaker 2: So it's pretty certain his popularity will fall. Um that 316 00:18:27,959 --> 00:18:30,649 Speaker 2: may not be a horrendous thing. Um uh If it 317 00:18:30,660 --> 00:18:32,489 Speaker 2: gives him guidance in terms of, you know, what the 318 00:18:32,500 --> 00:18:35,219 Speaker 2: people of Taiwan wants and how to deliver it. Um 319 00:18:35,229 --> 00:18:40,359 Speaker 2: But I think those are all pretty, pretty well known knowns. 320 00:18:40,369 --> 00:18:40,849 Speaker 2: Um 321 00:18:41,599 --> 00:18:44,899 Speaker 2: There is a risk of, I think some exogenous shocks, 322 00:18:44,910 --> 00:18:48,849 Speaker 2: unexpected ones. Um you know, he'll have to deal with that, 323 00:18:48,859 --> 00:18:51,859 Speaker 2: that are really kind of irrespective of cross strait relations or, 324 00:18:51,869 --> 00:18:56,459 Speaker 2: or maybe Washington. Um you've got global economic downturn risk. 325 00:18:56,469 --> 00:18:59,689 Speaker 2: Uh global rise in inflation would be pretty hard on 326 00:18:59,699 --> 00:19:02,930 Speaker 2: Taiwan because inflation is currently quite low. Uh wages have 327 00:19:02,939 --> 00:19:06,609 Speaker 2: not been increasing dramatically, standard of living is high but 328 00:19:06,619 --> 00:19:08,989 Speaker 2: but wages have not been going up. So a kick 329 00:19:09,000 --> 00:19:11,209 Speaker 2: in global inflation would, would hurt. 330 00:19:11,609 --> 00:19:15,619 Speaker 2: Um if you had additional stress in the global supply 331 00:19:15,630 --> 00:19:19,989 Speaker 2: chain system of trade, I mean, Trump is threatening 60% 332 00:19:20,359 --> 00:19:23,920 Speaker 2: tariffs on, on China if that comes to be, you know, 333 00:19:23,930 --> 00:19:26,390 Speaker 2: that will be difficult on those Taiwan companies that still 334 00:19:26,400 --> 00:19:31,880 Speaker 2: have manufacturing in China. But um that's as I said, 335 00:19:31,890 --> 00:19:36,109 Speaker 2: trending downward and trending outward. So maybe what's more threatening 336 00:19:36,119 --> 00:19:40,500 Speaker 2: would be Trump threat uh in, in, in initiating 10% 337 00:19:40,510 --> 00:19:43,640 Speaker 2: tariffs across the board on every country uh which would 338 00:19:43,650 --> 00:19:47,339 Speaker 2: hurt Taiwanese operating in the mainland Taiwan and Southeast Asia. 339 00:19:47,579 --> 00:19:51,099 Speaker 2: So uh for trade dependent countries like Taiwan, like Singapore, 340 00:19:51,109 --> 00:19:53,800 Speaker 2: this could be a a major risk that that is 341 00:19:53,810 --> 00:19:57,550 Speaker 2: difficult to prepare for. Um it's important to know that 342 00:19:59,020 --> 00:20:03,250 Speaker 2: Taiwan's top export destination is still China, but the US 343 00:20:03,260 --> 00:20:07,160 Speaker 2: is catching up and it's probably going to exceed total 344 00:20:07,170 --> 00:20:10,199 Speaker 2: exports in the near future. And again, I think that's 345 00:20:10,209 --> 00:20:15,280 Speaker 2: a growing trend as manufacturing hubs shift out of China 346 00:20:15,290 --> 00:20:20,140 Speaker 2: into Southeast Asia. Chinese factories are increasingly focused on supplying 347 00:20:20,150 --> 00:20:21,280 Speaker 2: the Chinese market. 348 00:20:21,599 --> 00:20:24,239 Speaker 2: Um You're going to see the importance of the US 349 00:20:24,250 --> 00:20:30,180 Speaker 2: as an export destination rise. It's already Singapore's top export destination. 350 00:20:30,430 --> 00:20:32,680 Speaker 2: Um and it's going to, I think very shortly be 351 00:20:32,689 --> 00:20:36,160 Speaker 2: one for Taiwan as well. So, so I think having 352 00:20:36,170 --> 00:20:39,379 Speaker 2: the US close itself off to imports would certainly hurt, 353 00:20:39,390 --> 00:20:43,390 Speaker 2: hurt Taiwan. Um I I think there's another major risk that, 354 00:20:43,400 --> 00:20:45,829 Speaker 2: you know, everybody has to contend with is, is you 355 00:20:45,839 --> 00:20:47,260 Speaker 2: know what emanates from Beijing. 356 00:20:47,579 --> 00:20:51,579 Speaker 2: Um I mean, we saw, you know, Beijing last week 357 00:20:51,589 --> 00:20:55,800 Speaker 2: uh implement uh stimulus, but that wasn't expected. Uh I 358 00:20:55,810 --> 00:20:59,639 Speaker 2: think that that maybe took longer than most people hoped for. 359 00:20:59,719 --> 00:21:04,670 Speaker 2: Um We saw China very unexpectedly shift away from its 360 00:21:04,680 --> 00:21:08,410 Speaker 2: uh zero COVID stance and, and and just open everything 361 00:21:08,420 --> 00:21:11,069 Speaker 2: up and, and return to normal uh which certainly had 362 00:21:11,079 --> 00:21:13,719 Speaker 2: costs on, on, on the Chinese people as well as 363 00:21:13,729 --> 00:21:15,869 Speaker 2: the society. So there's an unpredictability 364 00:21:16,140 --> 00:21:19,560 Speaker 2: emanating from Beijing that I think um Lai Jing de 365 00:21:19,569 --> 00:21:21,550 Speaker 2: and everyone else is going to have to deal with. 366 00:21:21,859 --> 00:21:24,859 Speaker 2: Um and, and maybe ultimately the mother of all political 367 00:21:24,869 --> 00:21:28,000 Speaker 2: risks is, you know, what happens if Xi Jinping suddenly 368 00:21:28,010 --> 00:21:32,719 Speaker 2: departs the scene. I mean, there's no anointed successor, there's 369 00:21:32,729 --> 00:21:37,500 Speaker 2: no agreed to norms for succession. So I mean, if 370 00:21:37,520 --> 00:21:39,959 Speaker 2: Xi Jinping suddenly uh you know, 371 00:21:40,599 --> 00:21:43,819 Speaker 2: gets called for a meeting with Marx, Um you know, 372 00:21:43,829 --> 00:21:47,409 Speaker 2: Beijing's palace politics could get very sporty and, and we're 373 00:21:47,420 --> 00:21:48,920 Speaker 2: all going to have to deal with that, but Lai 374 00:21:49,060 --> 00:21:50,420 Speaker 2: Jing in particular, 375 00:21:51,489 --> 00:21:56,010 Speaker 1: yes, uh no, no shortage of unpredictability these days. I 376 00:21:56,020 --> 00:21:59,810 Speaker 1: want to stay with this uh US, Taiwan trade and 377 00:21:59,819 --> 00:22:03,189 Speaker 1: investment relationship a little more as you know, uh Drew 378 00:22:03,199 --> 00:22:08,280 Speaker 1: TS MC is a singular point of vulnerability as well 379 00:22:08,290 --> 00:22:10,649 Speaker 1: as opportunity for Taiwan because, you know, no other company 380 00:22:10,660 --> 00:22:13,419 Speaker 1: makes what TS MC makes with the quantity and precision 381 00:22:13,709 --> 00:22:16,890 Speaker 1: and the US administration is very keen on reducing the 382 00:22:16,900 --> 00:22:19,310 Speaker 1: risk of all of those things being made in Taiwan. 383 00:22:19,500 --> 00:22:21,670 Speaker 1: So we've seen under the Ira, you know, lots of 384 00:22:21,680 --> 00:22:25,000 Speaker 1: incentives being given to Taiwanese manufacturers to build in the US. 385 00:22:25,339 --> 00:22:27,589 Speaker 1: So when we talk about the next 3.5 years of 386 00:22:27,599 --> 00:22:31,760 Speaker 1: vice presidency, would he be a cheerleader of Taiwanese companies 387 00:22:31,770 --> 00:22:35,760 Speaker 1: building in Texas or Arizona? Or would he try to 388 00:22:35,770 --> 00:22:39,500 Speaker 1: tread the balance because he does want that core excellence 389 00:22:39,510 --> 00:22:42,810 Speaker 1: to stay in Taiwan? Because that is Taiwan's branding and 390 00:22:42,819 --> 00:22:44,119 Speaker 1: source of power. 391 00:22:45,060 --> 00:22:48,050 Speaker 2: Yeah. Yeah, I mean, between the Ira and the Chips Act, 392 00:22:48,060 --> 00:22:51,099 Speaker 2: the US is suddenly very attractive for, for this type 393 00:22:51,109 --> 00:22:54,579 Speaker 2: of manufacturing. I think it's also important. It's not just 394 00:22:55,060 --> 00:22:58,000 Speaker 2: TS MC, right? I mean, TS MC is, is very 395 00:22:58,010 --> 00:23:00,829 Speaker 2: much a product of its own supply chains. There's a, 396 00:23:00,979 --> 00:23:05,900 Speaker 2: there's a tremendous ecosystem of companies that support TS MC 397 00:23:05,910 --> 00:23:09,160 Speaker 2: and its processes. So, so it's not just TS MC 398 00:23:09,170 --> 00:23:11,889 Speaker 2: setting up a factory, it's the whole supply chain to 399 00:23:11,900 --> 00:23:12,199 Speaker 2: that 400 00:23:12,819 --> 00:23:17,379 Speaker 2: fabrication plant moving with it. And many of those are Taiwanese. So, 401 00:23:17,390 --> 00:23:21,629 Speaker 2: so it, it's potentially AAA pretty massive footprint that that 402 00:23:21,640 --> 00:23:26,919 Speaker 2: will ultimately emerge. Um I don't think La Jinta is 403 00:23:27,489 --> 00:23:32,680 Speaker 2: terribly concerned because Ts MC is committed to keeping the 404 00:23:32,689 --> 00:23:36,199 Speaker 2: most cutting edge of the cutting edge in Taiwan. That's 405 00:23:36,209 --> 00:23:38,079 Speaker 2: where they perform at their highest 406 00:23:38,579 --> 00:23:41,869 Speaker 2: uh their highest efficiency levels. It's where the top top 407 00:23:41,880 --> 00:23:47,520 Speaker 2: engineers are. They definitely see um uh Arizona as an 408 00:23:47,530 --> 00:23:51,319 Speaker 2: important component of their global manufacturing just as they also 409 00:23:51,329 --> 00:23:54,630 Speaker 2: manufacture in China too. So, so I think there's going 410 00:23:54,640 --> 00:23:58,319 Speaker 2: to be diversified footprints. But 411 00:23:58,920 --> 00:24:02,369 Speaker 2: II, I don't think Lai is concerned about the semiconductor 412 00:24:02,380 --> 00:24:08,079 Speaker 2: industry hollowing out from Taiwan itself, partly because that infrastructure 413 00:24:08,089 --> 00:24:10,849 Speaker 2: to support it, not only in the subs suppliers but 414 00:24:10,859 --> 00:24:14,300 Speaker 2: also in the human capital uh uh sector and, and, 415 00:24:14,310 --> 00:24:18,020 Speaker 2: and really the, you know, the, the incredible work ethic 416 00:24:18,030 --> 00:24:22,380 Speaker 2: of Taiwan engineers um who are highly incentivized to work 417 00:24:22,390 --> 00:24:26,020 Speaker 2: incredibly hard. Um In Taiwan plus, you know, pretty good 418 00:24:26,030 --> 00:24:28,180 Speaker 2: standard of living, fairly low cost standard 419 00:24:28,280 --> 00:24:32,369 Speaker 2: of living um makes it pretty competitive. So I don't 420 00:24:32,380 --> 00:24:35,300 Speaker 2: think they're worried about losing that. Um I think there's 421 00:24:35,310 --> 00:24:41,760 Speaker 2: enough semiconductor demand from the highest levels to lower levels that, 422 00:24:42,030 --> 00:24:43,479 Speaker 2: that the TS MC 423 00:24:44,400 --> 00:24:48,079 Speaker 2: position in, in, in Taiwan itself is pretty secure so 424 00:24:48,089 --> 00:24:51,060 Speaker 2: they can afford to diversify. And I think that's Taiwan's 425 00:24:51,069 --> 00:24:52,899 Speaker 2: benefit as well at the end of the day. 426 00:24:53,979 --> 00:24:57,459 Speaker 1: Ok. So speaking of diversification, you, you've touched upon this 427 00:24:57,469 --> 00:24:59,770 Speaker 1: briefly earlier, let's go a little deeper on this, which 428 00:24:59,780 --> 00:25:03,310 Speaker 1: is Taiwan vis A vis Southeast Asia. Uh There's a 429 00:25:03,319 --> 00:25:06,280 Speaker 1: lot of trade and commerce between this region and Taiwan 430 00:25:06,310 --> 00:25:09,290 Speaker 1: and in the context of the risks of supply chains, 431 00:25:09,729 --> 00:25:13,459 Speaker 1: I think there'll be far more going forward. Um What 432 00:25:13,469 --> 00:25:17,609 Speaker 1: do you hear from the president and his administration as 433 00:25:17,619 --> 00:25:20,000 Speaker 1: far as their Southeast Asia strategy is concerned? 434 00:25:21,329 --> 00:25:21,899 Speaker 2: Um 435 00:25:22,839 --> 00:25:27,589 Speaker 2: So the Taiwan Southeast Asian relationship is, is really quite, 436 00:25:27,599 --> 00:25:31,209 Speaker 2: quite interesting. Um I won't get into the history but 437 00:25:31,219 --> 00:25:34,260 Speaker 2: I mean, I've been watching and traveling to Taiwan for, 438 00:25:34,270 --> 00:25:37,050 Speaker 2: for more than 20 years and 439 00:25:37,699 --> 00:25:40,439 Speaker 2: it's intriguing for me to watch the change particularly in 440 00:25:40,449 --> 00:25:44,040 Speaker 2: the last say 10 years, how Southeast Asia is becoming 441 00:25:44,050 --> 00:25:47,280 Speaker 2: much more relevant in and to Taiwan. So, I mean, 442 00:25:47,290 --> 00:25:50,438 Speaker 2: I think the two, the two Taiwan and, and, and 443 00:25:50,449 --> 00:25:54,399 Speaker 2: the Southeast Asian region, they're really becoming very increasingly intertwined. 444 00:25:54,880 --> 00:25:57,550 Speaker 2: Um and maybe I'd describe that as is too 445 00:25:58,390 --> 00:26:01,020 Speaker 2: two trends, right? So call it an inward trend and 446 00:26:01,030 --> 00:26:05,189 Speaker 2: an outward trend. Um So, you know, first of all, 447 00:26:05,199 --> 00:26:07,988 Speaker 2: I remember Taiwan is not small, it's, it's very tempting 448 00:26:08,000 --> 00:26:09,619 Speaker 2: to sit back and say, wow, you know, China is 449 00:26:09,630 --> 00:26:12,130 Speaker 2: so big and Taiwan is so small but, but Taiwan is, 450 00:26:12,140 --> 00:26:15,760 Speaker 2: is neither small nor nor significant. I mean, if you 451 00:26:15,770 --> 00:26:20,448 Speaker 2: group it economically with Southeast Asia, Taiwan would be the 452 00:26:20,459 --> 00:26:23,409 Speaker 2: second largest economy after Indonesia and it would be the 453 00:26:23,420 --> 00:26:28,149 Speaker 2: second wealthiest per capita after Singapore. Um So, so 454 00:26:28,709 --> 00:26:35,389 Speaker 2: as the relationship changes, Taiwan becomes increasingly important uh in 455 00:26:35,400 --> 00:26:39,010 Speaker 2: a way to Southeast Asia. So on that, that outbound side, 456 00:26:39,300 --> 00:26:43,129 Speaker 2: um yeah, we're now seeing Taiwan companies increasingly investing in 457 00:26:43,140 --> 00:26:46,089 Speaker 2: Southeast Asia and South Asia more than they do in China. 458 00:26:46,099 --> 00:26:48,489 Speaker 2: I think that's, that's an inevitable trend here. 459 00:26:48,839 --> 00:26:52,060 Speaker 2: Um We talked about Taiwan companies being sort of central 460 00:26:52,069 --> 00:26:55,079 Speaker 2: to these global supply chains. It's not just semiconductors, it's 461 00:26:55,089 --> 00:26:59,489 Speaker 2: IC T across the board oe impart suppliers. Um uh 462 00:26:59,510 --> 00:27:03,170 Speaker 2: So that electronic sector is really pretty critical and, and 463 00:27:03,180 --> 00:27:06,260 Speaker 2: we saw that during COVID, when everybody began working from 464 00:27:06,270 --> 00:27:10,020 Speaker 2: home and they were buying um uh they were buying new, 465 00:27:10,030 --> 00:27:11,339 Speaker 2: you know, new cameras 466 00:27:11,415 --> 00:27:15,514 Speaker 2: and new monitors and new computers. And Taiwan's exports soared 467 00:27:15,525 --> 00:27:18,755 Speaker 2: during COVID to supply that. So, so I think as 468 00:27:18,765 --> 00:27:23,025 Speaker 2: manufacturers from around the world, including Taiwan shift their production 469 00:27:23,035 --> 00:27:26,675 Speaker 2: to Southeast Asia, you'll see a supply chain from Taiwan 470 00:27:26,685 --> 00:27:30,405 Speaker 2: following those clients. And that's primarily landing in Singapore, Vietnam, 471 00:27:30,415 --> 00:27:32,145 Speaker 2: Indonesia and Thailand. For the most part, I think some 472 00:27:32,155 --> 00:27:33,875 Speaker 2: in Malaysia but, but less, 473 00:27:34,810 --> 00:27:38,040 Speaker 2: but on the inbound side, we'll call it the inbound side. 474 00:27:38,569 --> 00:27:41,989 Speaker 2: You've got more Southeast Asians becoming part of the fabric 475 00:27:42,000 --> 00:27:46,979 Speaker 2: of Taiwanese society. So Taiwan's society is shrinking. Their population 476 00:27:46,989 --> 00:27:50,020 Speaker 2: is shrinking. The fertility rate is like 1.25 which is 477 00:27:50,030 --> 00:27:52,540 Speaker 2: one of the lowest in the world. So basically for 478 00:27:52,550 --> 00:27:56,750 Speaker 2: every couple, you have one and a quarter Children being born, 479 00:27:57,050 --> 00:27:59,900 Speaker 2: uh the sustainment rate for a population is 2.2. 480 00:28:00,290 --> 00:28:02,819 Speaker 2: So, so Taiwan is, is basically running out of people 481 00:28:02,829 --> 00:28:05,589 Speaker 2: and they have been for a fairly long time and 482 00:28:05,599 --> 00:28:09,000 Speaker 2: Southeast Asians are stepping in to fill the gaps in 483 00:28:09,010 --> 00:28:11,550 Speaker 2: the workforce and they're playing a really important role in 484 00:28:11,560 --> 00:28:15,010 Speaker 2: Taiwan's economy. But that also means in their society. So 485 00:28:15,020 --> 00:28:19,219 Speaker 2: the official statistic is that there are about 760,000 Southeast 486 00:28:19,229 --> 00:28:22,260 Speaker 2: Asians living in Taiwan. Uh But there's actually probably a 487 00:28:22,270 --> 00:28:25,560 Speaker 2: sizable number that are not counted. Uh So it's probably 488 00:28:25,569 --> 00:28:27,109 Speaker 2: closer to a million 489 00:28:27,380 --> 00:28:30,129 Speaker 2: and this is in a population of 23 million. So 490 00:28:30,140 --> 00:28:33,938 Speaker 2: it's a pretty big, pretty big chunk. Um And, and 491 00:28:33,949 --> 00:28:37,448 Speaker 2: they primarily come from Indonesia, Vietnam and the Philippines. Um and, 492 00:28:37,459 --> 00:28:39,660 Speaker 2: and as I said, it's a big number of people. 493 00:28:39,739 --> 00:28:43,599 Speaker 2: So when you walk around in, you know, downtown Taipei or, 494 00:28:43,609 --> 00:28:46,560 Speaker 2: or a major city, particularly in the affluent areas, you 495 00:28:46,569 --> 00:28:50,510 Speaker 2: see shops catering to Southeast Asians, they're selling, you know, 496 00:28:50,520 --> 00:28:50,709 Speaker 2: some 497 00:28:50,829 --> 00:28:54,869 Speaker 2: ball and Southeast Asian products and services and shipping, you know, 498 00:28:54,880 --> 00:28:57,969 Speaker 2: shipping boxes back to Southeast Asian States. And there's a 499 00:28:57,979 --> 00:29:01,199 Speaker 2: prominent chain called Coco Indo uh that you can find 500 00:29:01,209 --> 00:29:05,130 Speaker 2: in sort of uh back alley. Um um you know, 501 00:29:05,140 --> 00:29:10,729 Speaker 2: neighborhoods and, and, and, and where the domestic helpers and the, 502 00:29:10,739 --> 00:29:14,130 Speaker 2: you know, service workers can, can go and, you know, 503 00:29:14,989 --> 00:29:17,290 Speaker 2: buy their comfort food and ship their boxes home and 504 00:29:17,300 --> 00:29:22,270 Speaker 2: transfer money. And um and you see Indonesian caregivers escorting 505 00:29:22,579 --> 00:29:25,650 Speaker 2: the seniors in the markets, doing, doing their shopping on 506 00:29:25,660 --> 00:29:28,140 Speaker 2: the weekends and, and in the mornings it's, it's an 507 00:29:28,150 --> 00:29:29,770 Speaker 2: increasingly common sight. 508 00:29:30,060 --> 00:29:33,660 Speaker 2: Um So, so you basically got a lot of Southeast 509 00:29:33,670 --> 00:29:36,540 Speaker 2: Asians living in the homes of Taiwanese. So you've got 510 00:29:36,550 --> 00:29:40,349 Speaker 2: some cross cultural uh exchanges going there in the major cities. 511 00:29:40,359 --> 00:29:43,479 Speaker 2: But you're also seeing that in the industrial centers um 512 00:29:43,489 --> 00:29:47,069 Speaker 2: particularly from Indonesia, Vietnam, you've got a lot of factory workers, 513 00:29:47,079 --> 00:29:50,829 Speaker 2: a lot of skilled laborers who are working in these factories, 514 00:29:50,839 --> 00:29:53,040 Speaker 2: particularly down south. So you can just 515 00:29:53,390 --> 00:29:55,410 Speaker 2: go to a shopping center and see a lot of 516 00:29:55,420 --> 00:29:59,310 Speaker 2: signage in, in, in different Southeast Asian languages where they're 517 00:29:59,319 --> 00:30:03,609 Speaker 2: providing services and information. You're also seeing this in the government, 518 00:30:03,619 --> 00:30:07,689 Speaker 2: public facing departments are, are, are communicating in up to 519 00:30:07,699 --> 00:30:12,119 Speaker 2: seven languages. Now, um I was almost surprised that Taiwan 520 00:30:12,130 --> 00:30:16,050 Speaker 2: government's news agency started issuing, uh they started a a 521 00:30:16,060 --> 00:30:18,839 Speaker 2: Bahasa language service uh in, in July. 522 00:30:19,199 --> 00:30:23,739 Speaker 2: So, so it's really changing Taiwan. Um And so even 523 00:30:23,750 --> 00:30:29,020 Speaker 2: though countries don't recognize Taiwan for the most part, diplomatically, 524 00:30:29,030 --> 00:30:33,780 Speaker 2: this labor trend is internationalizing Taiwan in a way. And 525 00:30:33,790 --> 00:30:37,410 Speaker 2: I think there's maybe two big implications for this. Um 526 00:30:37,770 --> 00:30:40,199 Speaker 2: I mean, obviously there's a social impact, 5% of the 527 00:30:40,209 --> 00:30:43,949 Speaker 2: population give or take is, is from Southeast Asia. Um 528 00:30:43,959 --> 00:30:47,849 Speaker 2: and that's going to change Taiwan's identity, right? And, and 529 00:30:47,859 --> 00:30:51,410 Speaker 2: it's Taiwan is increasingly dependent on diversity and that's going 530 00:30:51,420 --> 00:30:54,988 Speaker 2: to make Taiwan even more distinct from China. Then you've 531 00:30:55,000 --> 00:31:00,790 Speaker 2: got political and security implications. Um Taiwan's security interests align 532 00:31:00,800 --> 00:31:04,109 Speaker 2: more closely with Southeast Asia than they ever have before. 533 00:31:04,390 --> 00:31:04,890 Speaker 2: Um 534 00:31:05,209 --> 00:31:08,869 Speaker 2: I was, you know, doing some research on um you know, 535 00:31:08,959 --> 00:31:13,829 Speaker 2: countries opposed, you know, basically which countries had opposed China's 536 00:31:13,839 --> 00:31:17,930 Speaker 2: aggression in the South China Sea. So I Googled, you know, Vietnam, 537 00:31:17,939 --> 00:31:22,189 Speaker 2: Indonesia pick a couple of countries and, and, and Google, 538 00:31:22,199 --> 00:31:26,630 Speaker 2: you know, Indonesia condemns China's coast guard ramming a Philippine vessel. 539 00:31:26,900 --> 00:31:30,040 Speaker 2: Um you know, no public statements from any of the 540 00:31:30,050 --> 00:31:32,810 Speaker 2: Southeast Asian States, but the number one hit on Google 541 00:31:32,819 --> 00:31:37,900 Speaker 2: is Taiwan Ministry of Foreign Affairs decries uh China ramming 542 00:31:37,910 --> 00:31:41,260 Speaker 2: Philippine vessel. So, so you have, you know, Taiwan is 543 00:31:41,270 --> 00:31:42,290 Speaker 2: a very vocal 544 00:31:42,505 --> 00:31:46,165 Speaker 2: quarter of, of, of these sorts of, you know, peaceful 545 00:31:46,175 --> 00:31:50,385 Speaker 2: resolution of conflict, international norms and, and that, that, that 546 00:31:50,395 --> 00:31:53,614 Speaker 2: means there's a security alignment of interest. So, you know, 547 00:31:53,625 --> 00:31:57,954 Speaker 2: even though the potential for cross strait conflict is low. Um, 548 00:31:58,359 --> 00:32:01,810 Speaker 2: uh, you know, it's not imminent, it's not inevitable. But, 549 00:32:01,819 --> 00:32:03,979 Speaker 2: you know, you've got a million Southeast Asians living on 550 00:32:03,989 --> 00:32:08,510 Speaker 2: Taiwan who'd be pretty adversely impacted if a conflict occurs. Um, 551 00:32:08,520 --> 00:32:11,699 Speaker 2: and there's, of course, economic consequences too. Right. It's not 552 00:32:11,709 --> 00:32:14,459 Speaker 2: just the remittances but the impact on global trade. And 553 00:32:14,469 --> 00:32:17,420 Speaker 2: I think the polls in Southeast Asia are starting to 554 00:32:17,430 --> 00:32:20,939 Speaker 2: show Southeast Asian elites increasingly opposed 555 00:32:21,204 --> 00:32:24,515 Speaker 2: China using force against Taiwan. Doesn't mean they're willing to 556 00:32:24,525 --> 00:32:27,744 Speaker 2: stand up to Taiwan or denounce them publicly, but they 557 00:32:27,755 --> 00:32:31,045 Speaker 2: definitely have an interest in not having a conflict occur. 558 00:32:31,055 --> 00:32:34,305 Speaker 2: So the question will be what Southeast Asia prepared to 559 00:32:34,314 --> 00:32:37,844 Speaker 2: do to, to deter China from using force. And at 560 00:32:37,854 --> 00:32:40,665 Speaker 2: this point, there's not much, but I think as that 561 00:32:40,675 --> 00:32:43,535 Speaker 2: trend continues, we may see some change. 562 00:32:44,280 --> 00:32:48,310 Speaker 1: So the trend is certainly fascinating and um I actually 563 00:32:48,319 --> 00:32:51,969 Speaker 1: want you to look a little further east from Southeast 564 00:32:51,979 --> 00:32:56,810 Speaker 1: Asia or rather sorry, look West India. Uh I've seen 565 00:32:56,819 --> 00:33:01,520 Speaker 1: recent stories that, you know, Indian Navy have Cooper with 566 00:33:01,530 --> 00:33:06,170 Speaker 1: the Vietnamese Navy or Indian companies are, you know, exploring 567 00:33:06,180 --> 00:33:09,619 Speaker 1: Southeast Asia as part of the supply chain that they 568 00:33:09,630 --> 00:33:12,170 Speaker 1: could take advantage in their pursuit for manufacturing excellence. 569 00:33:12,469 --> 00:33:17,640 Speaker 1: Um Do you see Taiwan India relationship, you know, feature 570 00:33:17,650 --> 00:33:20,349 Speaker 1: in a prominent manner when you read like Taiwanese media, 571 00:33:20,359 --> 00:33:20,969 Speaker 1: for example, 572 00:33:22,479 --> 00:33:22,959 Speaker 2: and there's, 573 00:33:24,449 --> 00:33:26,790 Speaker 2: I mean, hardly, I I would hardly consider myself an 574 00:33:26,800 --> 00:33:29,869 Speaker 2: expert on, you know, the Taiwan India relationship. But, but 575 00:33:29,880 --> 00:33:34,670 Speaker 2: my sense is that it's growing, um there are now 576 00:33:35,060 --> 00:33:40,859 Speaker 2: a number of prominent Indian scholars who are resident in 577 00:33:40,869 --> 00:33:44,589 Speaker 2: Taiwan in academia doing national security research. 578 00:33:45,180 --> 00:33:50,719 Speaker 2: Um The Taiwan government just signed an agreement with India 579 00:33:50,729 --> 00:33:55,300 Speaker 2: to facilitate migrant workers coming to India. I mentioned that, 580 00:33:55,310 --> 00:33:59,800 Speaker 2: you know, you've got potentially a million Southeast Asians. Um 581 00:33:59,810 --> 00:34:03,189 Speaker 2: Taiwan is looking to bring in South Asians as well. 582 00:34:03,339 --> 00:34:07,670 Speaker 2: So I think maybe those are two examples. Um the 583 00:34:07,900 --> 00:34:12,120 Speaker 2: uh you know Indian representative office in Taiwan is, is 584 00:34:12,129 --> 00:34:15,459 Speaker 2: active and you know, meets with officials and and does 585 00:34:15,469 --> 00:34:22,419 Speaker 2: representation and provides facilitation for businesses to, to invest in Taiwan. 586 00:34:22,429 --> 00:34:25,959 Speaker 2: We've certainly seen um uh you know, one of the 587 00:34:25,969 --> 00:34:30,959 Speaker 2: the biggest Taiwan companies hung high precision Foxconn which assembles 588 00:34:30,969 --> 00:34:34,320 Speaker 2: iphones and other apple products, setting up factories 589 00:34:34,610 --> 00:34:37,600 Speaker 2: in, in India. So, so I think the potential for 590 00:34:37,610 --> 00:34:41,790 Speaker 2: that relationship to grow is, is definitely there. Uh but 591 00:34:41,800 --> 00:34:44,520 Speaker 2: it's been starting from what I think is a fairly 592 00:34:44,530 --> 00:34:48,029 Speaker 2: low base. But again, I think Taiwan's interest is on 593 00:34:48,040 --> 00:34:53,870 Speaker 2: is in internationalizing. So if Taiwan businesses um are looking 594 00:34:53,879 --> 00:34:57,080 Speaker 2: for opportunities to invest in India, I'm sure India will 595 00:34:57,090 --> 00:34:58,590 Speaker 2: welcome them. And likewise, 596 00:34:59,179 --> 00:35:01,419 Speaker 2: uh you know, if, if, if you know the big 597 00:35:01,429 --> 00:35:05,239 Speaker 2: Indian companies, the Tatas of the world want to engage 598 00:35:05,250 --> 00:35:10,199 Speaker 2: in Taiwan, the Taiwan Economic Ministries will certainly help them 599 00:35:10,209 --> 00:35:14,610 Speaker 2: find a suitable partner, suitable locations and facilitate their inbound 600 00:35:14,620 --> 00:35:17,560 Speaker 2: investments as well. So I think that's, it's a, it's 601 00:35:18,070 --> 00:35:20,560 Speaker 2: a relationship primed to expand for sure. 602 00:35:21,629 --> 00:35:24,239 Speaker 1: Ok. Since I'm dragging you around the region, uh, Drew, 603 00:35:24,250 --> 00:35:25,709 Speaker 1: I might as well teach you up north a little 604 00:35:25,719 --> 00:35:29,010 Speaker 1: bit now. Quick comments. Uh, Taiwan, Japan, Taiwan Korea. 605 00:35:31,620 --> 00:35:34,239 Speaker 2: Good one. Taiwan Korea, 606 00:35:36,540 --> 00:35:42,000 Speaker 2: smaller, less potential but certainly plenty of overlap. I mean, in, 607 00:35:42,010 --> 00:35:43,439 Speaker 2: in some ways, I think 608 00:35:44,300 --> 00:35:45,679 Speaker 2: painting a broad brush. 609 00:35:46,449 --> 00:35:50,750 Speaker 2: Taiwan companies in many ways, compete with, um, South Korean 610 00:35:50,760 --> 00:35:54,949 Speaker 2: ones in, in places like Southeast Asia. Um certainly the, 611 00:35:54,959 --> 00:35:55,580 Speaker 2: the 612 00:35:56,419 --> 00:36:00,600 Speaker 2: the South South Korean companies like Samsung are quite prominent. 613 00:36:00,850 --> 00:36:02,810 Speaker 2: Uh And at the same time, I'm sure they have 614 00:36:02,820 --> 00:36:07,229 Speaker 2: plenty of Taiwanese suppliers who contribute to their assembly work in, 615 00:36:07,239 --> 00:36:10,080 Speaker 2: in Vietnam and elsewhere. So I think it's both symbiotic 616 00:36:10,370 --> 00:36:15,860 Speaker 2: but certainly politically. Um South Korea hasn't had much interest 617 00:36:15,870 --> 00:36:18,520 Speaker 2: in Taiwan or the cross strait relationship. 618 00:36:18,850 --> 00:36:22,610 Speaker 2: Um South Korea has been very focused on its security 619 00:36:22,620 --> 00:36:25,549 Speaker 2: issues with the North Koreans and China's support for North 620 00:36:25,560 --> 00:36:30,149 Speaker 2: Korea as well as the survival of South Korean businesses 621 00:36:30,159 --> 00:36:33,159 Speaker 2: in China. So, so I think that's been primarily the 622 00:36:33,169 --> 00:36:37,750 Speaker 2: focus and there hasn't been, for instance, you know, not 623 00:36:37,760 --> 00:36:42,370 Speaker 2: expecting to hear news that, that South Korean arms manufacturers 624 00:36:42,379 --> 00:36:46,300 Speaker 2: are preparing to provide platforms or munitions to Taiwan. 625 00:36:46,580 --> 00:36:51,870 Speaker 2: Um uh you rarely hear South Korean politicians talk about Taiwan, 626 00:36:52,000 --> 00:36:56,110 Speaker 2: but Japan is a completely different matter. Um When Tsai 627 00:36:56,330 --> 00:37:00,219 Speaker 2: Wen was elected in 2016 and Prime Minister Abe was 628 00:37:00,229 --> 00:37:04,199 Speaker 2: in office, you had really a confluence of interest um 629 00:37:04,219 --> 00:37:06,000 Speaker 2: where uh 630 00:37:06,659 --> 00:37:09,810 Speaker 2: Prime Minister Abe had a very close relationship with Taiwan, 631 00:37:09,820 --> 00:37:13,109 Speaker 2: had an affinity for them. And likewise, the, the, the 632 00:37:13,120 --> 00:37:16,429 Speaker 2: President Thai and her party, the DPP and, and President 633 00:37:16,439 --> 00:37:20,040 Speaker 2: Lai's party have, have, have an affinity for Japan. I 634 00:37:20,050 --> 00:37:22,919 Speaker 2: think there's been an awakening in Japan about the security 635 00:37:22,929 --> 00:37:27,790 Speaker 2: risks that China presents to the Japanese homeland. Um And 636 00:37:27,800 --> 00:37:31,040 Speaker 2: Taiwan is a very important part of that. Uh Japanese 637 00:37:31,050 --> 00:37:34,399 Speaker 2: politicians will sometimes say that if you stand on the 638 00:37:34,409 --> 00:37:36,030 Speaker 2: southernmost parts of, 639 00:37:36,370 --> 00:37:40,560 Speaker 2: of Japan, you can see Taiwan from Yonaguni Island. Um 640 00:37:40,570 --> 00:37:44,520 Speaker 2: So Japan is concerned about the security of the Southwest 641 00:37:44,530 --> 00:37:48,590 Speaker 2: Islands and, and therefore, um there's been a lot of 642 00:37:48,600 --> 00:37:54,529 Speaker 2: investment in building uh military infrastructure around the, the, 643 00:37:55,419 --> 00:37:59,469 Speaker 2: the Ryuu chain and, and as a result, um you know, 644 00:37:59,479 --> 00:38:03,879 Speaker 2: from Okinawa down to, to, to Yonaguni, you've, you've got 645 00:38:04,040 --> 00:38:09,760 Speaker 2: uh an increasingly aware and prepared and postured uh Japan 646 00:38:09,770 --> 00:38:13,459 Speaker 2: self defense force. Um I mentioned, you know, socially, I 647 00:38:13,469 --> 00:38:16,000 Speaker 2: think there's a lot, you know, Japanese culture is very 648 00:38:16,010 --> 00:38:21,340 Speaker 2: popular in, in, in, in Taiwan. Um People can forget, 649 00:38:21,350 --> 00:38:21,879 Speaker 2: you know, that, 650 00:38:22,590 --> 00:38:25,310 Speaker 2: that Taiwan is not the home of, of Hello, Kitty, 651 00:38:25,320 --> 00:38:27,949 Speaker 2: not the birthplace of, hello Kitty, but you wouldn't know it. 652 00:38:28,290 --> 00:38:32,030 Speaker 2: Um uh So, so I think Japanese culture very, very 653 00:38:32,040 --> 00:38:36,509 Speaker 2: popular in Taiwan. Um the economy, the economic relationship also 654 00:38:36,520 --> 00:38:41,729 Speaker 2: quite close. Uh and the security relationship is is increasing. 655 00:38:41,739 --> 00:38:46,860 Speaker 2: Um They don't have diplomatic recognition. But uh the Japanese 656 00:38:46,870 --> 00:38:50,620 Speaker 2: uh defense Ministry has posted a serving official for the 657 00:38:50,629 --> 00:38:52,209 Speaker 2: first time to Taiwan, 658 00:38:52,530 --> 00:38:56,060 Speaker 2: um not retired officials and retired officers as they had 659 00:38:56,070 --> 00:38:59,000 Speaker 2: in the past. So that's a very small upgrade. Uh 660 00:38:59,159 --> 00:39:03,610 Speaker 2: But it's important for the Japanese Defense Ministry to understand 661 00:39:04,040 --> 00:39:08,550 Speaker 2: um what's going on in Taiwan and Taiwan's military and, 662 00:39:08,560 --> 00:39:11,870 Speaker 2: and have an open channel that, that they, they can 663 00:39:11,879 --> 00:39:12,629 Speaker 2: count on. 664 00:39:12,899 --> 00:39:17,040 Speaker 2: So, uh I think Japan has a very heightened concern 665 00:39:17,050 --> 00:39:21,360 Speaker 2: about the military threat from China and the prospect for 666 00:39:21,370 --> 00:39:25,360 Speaker 2: a cross strait conflict and, and that's, that's becoming apparent in, 667 00:39:25,370 --> 00:39:27,120 Speaker 2: in Japan's posture towards Taiwan. 668 00:39:28,030 --> 00:39:32,209 Speaker 1: Ok. Drew, you're nudging me into the next segue uh very, 669 00:39:32,219 --> 00:39:38,250 Speaker 1: very seamlessly. Um In a recent article you wrote, I quote, 670 00:39:38,260 --> 00:39:43,189 Speaker 1: China's steadily increasing coercive measures against Taiwan, but they remain 671 00:39:43,199 --> 00:39:46,029 Speaker 1: to date below the threshold of military conflict 672 00:39:46,669 --> 00:39:50,939 Speaker 1: essentially. When does coercion end and conflict begin? Question mark, 673 00:39:50,949 --> 00:39:53,169 Speaker 1: end quote. All right, let's be clear, you're not making 674 00:39:53,179 --> 00:39:55,820 Speaker 1: a prediction for a war here, but your objective is 675 00:39:55,830 --> 00:40:00,089 Speaker 1: to deepen the understanding of the risks of conflict. So 676 00:40:00,100 --> 00:40:03,859 Speaker 1: with that context, please walk us through the threshold scenario. 677 00:40:03,870 --> 00:40:04,109 Speaker 1: Dr 678 00:40:05,530 --> 00:40:09,239 Speaker 2: So yeah, I appreciate the caveat. I mean, when, when 679 00:40:09,250 --> 00:40:13,649 Speaker 2: one is engaged in defense planning, um it can be 680 00:40:13,659 --> 00:40:16,909 Speaker 2: a somewhat dark, dark place. Um You know, you, you're 681 00:40:16,919 --> 00:40:21,479 Speaker 2: thinking about the worst possible outcomes, you know, the failure 682 00:40:21,489 --> 00:40:25,739 Speaker 2: of diplomacy and, and the prosecution of a war. Uh 683 00:40:25,750 --> 00:40:30,260 Speaker 2: and and that's, that's, that's hard. Um So, so just 684 00:40:30,270 --> 00:40:33,189 Speaker 2: because you're planning for it doesn't mean you want it. 685 00:40:33,620 --> 00:40:35,939 Speaker 2: Um it, it, what it really means is you want 686 00:40:35,949 --> 00:40:37,859 Speaker 2: to avoid it, you want to prevent it, you want 687 00:40:37,870 --> 00:40:41,439 Speaker 2: to deter it. So, one of the things I've been 688 00:40:41,449 --> 00:40:45,899 Speaker 2: thinking about for a very long time is and particularly as, 689 00:40:46,090 --> 00:40:52,080 Speaker 2: as I mentioned, China's military coercion against Taiwan has increased 690 00:40:52,090 --> 00:40:57,479 Speaker 2: very steadily, especially since August 2022. And Speaker Pelosi visited 691 00:40:57,659 --> 00:41:01,239 Speaker 2: um that coercion has become normalized. 692 00:41:01,560 --> 00:41:06,459 Speaker 2: Um you know, Chinese navy regularly sails ships around Taiwan, 693 00:41:06,469 --> 00:41:12,429 Speaker 2: including aircraft carriers, they fly surveillance planes, bombers regularly, all 694 00:41:12,439 --> 00:41:15,259 Speaker 2: around Taiwan. Fighter planes cross the center line on an 695 00:41:15,270 --> 00:41:19,620 Speaker 2: almost daily basis. Um You know, it it looks quite 696 00:41:20,860 --> 00:41:23,600 Speaker 2: touchy. Um And, and I think 697 00:41:24,739 --> 00:41:30,469 Speaker 2: as we become normalized to that regular steady military coercion, 698 00:41:30,780 --> 00:41:34,060 Speaker 2: you also recognize there's a lot of other coercion going 699 00:41:34,070 --> 00:41:41,179 Speaker 2: on diplomatic, economic informational. Sometimes the Taiwanese call that cognitive warfare. 700 00:41:41,219 --> 00:41:45,649 Speaker 2: It's all designed to impose political pressure on Taiwan oftentimes 701 00:41:45,659 --> 00:41:49,069 Speaker 2: it's called gray zone below the threshold of conflict, any 702 00:41:49,080 --> 00:41:51,000 Speaker 2: of these activities. So 703 00:41:51,620 --> 00:41:56,020 Speaker 2: the question for me is as it increases, is there 704 00:41:56,030 --> 00:41:59,000 Speaker 2: a tipping point at what point does it become war? And, 705 00:41:59,010 --> 00:42:03,459 Speaker 2: and it's pretty, pretty critical moment to consider because if 706 00:42:03,469 --> 00:42:07,629 Speaker 2: you've got tensions rising and, and a conflict is becoming 707 00:42:07,889 --> 00:42:10,439 Speaker 2: increasingly apparent 708 00:42:10,889 --> 00:42:13,080 Speaker 2: at what point do you cross that threshold? And I 709 00:42:13,090 --> 00:42:16,070 Speaker 2: think it's important for businesses as well as governments and 710 00:42:16,080 --> 00:42:19,570 Speaker 2: militaries to, to sort of recognize this because that normalization 711 00:42:19,580 --> 00:42:23,218 Speaker 2: of military coercion makes people complacent. Um And you may not, 712 00:42:23,709 --> 00:42:27,209 Speaker 2: you may not be aware of the indications of the 713 00:42:27,219 --> 00:42:30,739 Speaker 2: change in, in the phase. And, and I think that 714 00:42:31,510 --> 00:42:35,010 Speaker 2: also has really important implications for how the US responds. 715 00:42:35,310 --> 00:42:39,770 Speaker 2: So there's a very natural tension within the US government 716 00:42:39,780 --> 00:42:43,239 Speaker 2: between the civilians. Um you know, the diplomats, the White 717 00:42:43,250 --> 00:42:47,540 Speaker 2: House who really want to use diplomatic means to avoid conflict. 718 00:42:47,790 --> 00:42:51,629 Speaker 2: Um and that bumps up against military officials who also 719 00:42:51,639 --> 00:42:54,049 Speaker 2: want to avoid a conflict for sure, but they need 720 00:42:54,060 --> 00:42:57,010 Speaker 2: to move forces to prepare for the start of the war. 721 00:42:57,270 --> 00:43:00,169 Speaker 2: Um They need to move forces from the US mainland, 722 00:43:00,179 --> 00:43:03,590 Speaker 2: from Guam, from Hawaii towards the conflict and they need 723 00:43:03,600 --> 00:43:07,439 Speaker 2: to posture themselves to be able to take advantage of 724 00:43:07,449 --> 00:43:10,310 Speaker 2: the opening phases from a position of strength, right? The 725 00:43:10,320 --> 00:43:14,899 Speaker 2: first movers advantage, uh some military officers might might advocate 726 00:43:14,909 --> 00:43:17,330 Speaker 2: for a show of force as a means to deter China. 727 00:43:18,110 --> 00:43:22,649 Speaker 2: But the diplomats that are looking for negotiated solutions don't 728 00:43:22,659 --> 00:43:26,959 Speaker 2: want to do anything to provoke Beijing because they're looking 729 00:43:26,969 --> 00:43:31,370 Speaker 2: for an off ramp from the road to war and 730 00:43:31,379 --> 00:43:35,419 Speaker 2: that's going to be a natural tension because diplomats, the 731 00:43:35,429 --> 00:43:38,810 Speaker 2: White House are not necessarily going to want the military 732 00:43:38,820 --> 00:43:44,129 Speaker 2: to move forces very visibly closer to a potential conflict 733 00:43:44,139 --> 00:43:47,610 Speaker 2: because it might hurt their chances for a negotiated peaceful solution. 734 00:43:48,129 --> 00:43:50,659 Speaker 2: And you, you run a risk and I think we 735 00:43:50,669 --> 00:43:54,279 Speaker 2: saw that a little bit in Ukraine. Um uh We, 736 00:43:54,290 --> 00:43:57,850 Speaker 2: we've seen it in past historic cases where negotiations tend 737 00:43:57,860 --> 00:44:02,370 Speaker 2: to supplant military preparations. So, um so I think that, 738 00:44:02,379 --> 00:44:02,839 Speaker 2: that 739 00:44:03,330 --> 00:44:05,469 Speaker 2: that's a pretty key tipping point that we have to 740 00:44:05,479 --> 00:44:08,879 Speaker 2: understand so that we're not behind the curve and that, 741 00:44:09,250 --> 00:44:13,060 Speaker 2: and that we're not showing restraint when the other side 742 00:44:13,070 --> 00:44:15,549 Speaker 2: is preparing for a conflict and ready to move or 743 00:44:15,560 --> 00:44:20,290 Speaker 2: potentially even using diplomatic negotiations as a ruse as a 744 00:44:20,300 --> 00:44:23,750 Speaker 2: means to, to obscure and, and prevent, 745 00:44:24,439 --> 00:44:27,959 Speaker 2: prevent the adversary from, from using their military to their 746 00:44:27,969 --> 00:44:28,819 Speaker 2: own advantage. 747 00:44:29,199 --> 00:44:36,149 Speaker 1: Your view on the US Taiwan policy under Trump versus Harris, 748 00:44:36,159 --> 00:44:38,919 Speaker 1: you've already talked about this a bit, but just specifically 749 00:44:38,929 --> 00:44:40,949 Speaker 1: under Trump or under Harris, how do you see us 750 00:44:40,959 --> 00:44:41,239 Speaker 1: Taiwan 751 00:44:41,250 --> 00:44:42,060 Speaker 1: policy evolve? 752 00:44:44,229 --> 00:44:46,449 Speaker 2: Yeah, as, as I mentioned, I'm also reluctant to make 753 00:44:46,459 --> 00:44:48,929 Speaker 2: predictions about the future. Um 754 00:44:49,790 --> 00:44:52,149 Speaker 2: I, I think there's very little to go on. I mean, 755 00:44:52,159 --> 00:44:52,659 Speaker 1: they haven't said 756 00:44:52,669 --> 00:44:53,609 Speaker 1: much, yeah, 757 00:44:53,620 --> 00:44:57,709 Speaker 2: us elections are, and, and the rhetoric that accompanies them 758 00:44:57,719 --> 00:45:02,770 Speaker 2: are primarily domestic. Um That's what the, the voters care about. 759 00:45:02,989 --> 00:45:06,239 Speaker 2: Um So we really can just speculate on what either 760 00:45:06,250 --> 00:45:08,370 Speaker 2: administration will do. Um 761 00:45:09,110 --> 00:45:13,370 Speaker 2: So I, I think let's make the assumption that Washington's 762 00:45:13,379 --> 00:45:16,070 Speaker 2: China Taiwan Asia policy is part of sort of an 763 00:45:16,080 --> 00:45:21,299 Speaker 2: overarching approach uh to Asia. Um The relationship with treaty 764 00:45:21,310 --> 00:45:22,689 Speaker 2: allies will take precedent. 765 00:45:23,270 --> 00:45:27,280 Speaker 2: Um And, and strengthening partnerships is kind of an instinct 766 00:45:27,290 --> 00:45:30,699 Speaker 2: or perpetual foreign policy goal for, for Washington, that's kind 767 00:45:30,709 --> 00:45:34,169 Speaker 2: of left to its own devices the way Washington would go. 768 00:45:34,179 --> 00:45:38,158 Speaker 2: So I think those are us constants and you can say, well, 769 00:45:38,169 --> 00:45:41,169 Speaker 2: Trump is hard on allies or not Trump. Trump is 770 00:45:41,179 --> 00:45:45,159 Speaker 2: very crude uh when he's talking about allies. But what if, 771 00:45:45,469 --> 00:45:46,959 Speaker 2: if you're gonna be 772 00:45:48,159 --> 00:45:53,250 Speaker 2: kind uh what he's essentially pushing for is, is reciprocity and, 773 00:45:53,260 --> 00:45:57,000 Speaker 2: and what's sometimes referred to as burden sharing, basically trying 774 00:45:57,010 --> 00:46:01,580 Speaker 2: to establish the, the value to the United States of 775 00:46:01,590 --> 00:46:05,388 Speaker 2: a bilateral relationship in, in a security treaty. Um And 776 00:46:05,399 --> 00:46:08,299 Speaker 2: I think that's, that's healthy. Uh I think the way 777 00:46:08,310 --> 00:46:11,280 Speaker 2: Trump maybe approaches it isn't necessarily healthy but, but let's 778 00:46:11,290 --> 00:46:14,219 Speaker 2: get back to the constant, you've got the alliances, you've 779 00:46:14,229 --> 00:46:17,300 Speaker 2: got us interests in access, influence markets. 780 00:46:17,669 --> 00:46:22,080 Speaker 2: Um The desire to strengthen partnerships. Um You've got the 781 00:46:22,090 --> 00:46:25,120 Speaker 2: other major constant in Xi Jinping. Um he's going to 782 00:46:25,129 --> 00:46:28,290 Speaker 2: affect either administration equally. So you have to take that 783 00:46:28,300 --> 00:46:31,649 Speaker 2: into account. Um I think Xi Jinping's foreign policy and 784 00:46:31,659 --> 00:46:36,270 Speaker 2: national security objectives are, are not always aligned with us interests. 785 00:46:36,550 --> 00:46:39,729 Speaker 2: Um Xi Jinping can be very um 786 00:46:40,560 --> 00:46:44,709 Speaker 2: uncompromising in his approaches. I mean, he set a goal for, for, 787 00:46:44,719 --> 00:46:47,729 Speaker 2: for China, whether it's the China Dream or, or, or, 788 00:46:48,260 --> 00:46:52,299 Speaker 2: or his economic policies that, that don't take into account 789 00:46:52,310 --> 00:46:53,860 Speaker 2: us interests necessarily. 790 00:46:54,120 --> 00:46:57,029 Speaker 2: So, so I don't think there's a lot of room for, 791 00:46:57,050 --> 00:47:01,020 Speaker 2: for negotiation or somehow fundamentally changing the paradigm. The us 792 00:47:01,030 --> 00:47:04,459 Speaker 2: isn't just going to surrender and neither is China. So, 793 00:47:04,590 --> 00:47:07,729 Speaker 2: so I mentioned that Xi Jinping can also be unpredictable. 794 00:47:07,739 --> 00:47:10,979 Speaker 2: So throw everything out that I say. Um and we, 795 00:47:10,989 --> 00:47:14,830 Speaker 2: we don't have visibility into the policy making process, but 796 00:47:14,840 --> 00:47:17,669 Speaker 2: I think it's a fairly low probability that he's going 797 00:47:17,679 --> 00:47:17,699 Speaker 2: to 798 00:47:17,745 --> 00:47:19,714 Speaker 2: wake up one morning and say, you know, I've misread 799 00:47:19,725 --> 00:47:22,763 Speaker 2: the United States, they're not an ideological and security threat 800 00:47:22,774 --> 00:47:25,445 Speaker 2: to us, you know, let's be friends. Um I, I 801 00:47:25,455 --> 00:47:28,854 Speaker 2: don't think he's headed there. Um So, so I think 802 00:47:28,864 --> 00:47:32,114 Speaker 2: competition is, is going to be a feature for the 803 00:47:32,125 --> 00:47:35,864 Speaker 2: next administration, not only because of how Xi Jinping sees 804 00:47:35,875 --> 00:47:40,145 Speaker 2: the relationship between the Communist Party and everything outside the party, 805 00:47:40,155 --> 00:47:42,125 Speaker 2: including the West. Um 806 00:47:42,659 --> 00:47:46,339 Speaker 2: Competition is also deeply ensconced in the US political agenda. 807 00:47:46,350 --> 00:47:49,509 Speaker 2: It's a bipartisan issue and that's very evident in Congress. 808 00:47:49,520 --> 00:47:54,158 Speaker 2: So I think either political candidate falls in on that 809 00:47:54,169 --> 00:47:56,908 Speaker 2: scenario as president. Uh I mean, 810 00:47:57,629 --> 00:48:00,388 Speaker 2: uh Vice President Harris doesn't have a lot of experience 811 00:48:00,399 --> 00:48:03,689 Speaker 2: in foreign policy unlike President Biden who has very strong 812 00:48:03,699 --> 00:48:08,020 Speaker 2: interests and preferences. Um So I think she doesn't to 813 00:48:08,030 --> 00:48:12,299 Speaker 2: my knowledge yet have clearly designated foreign policy advisor with 814 00:48:12,310 --> 00:48:18,029 Speaker 2: Deep Asia experience. Um certainly not on East Asia, China Taiwan. So, 815 00:48:18,040 --> 00:48:21,070 Speaker 2: so it's questionable whether they would be in her inner 816 00:48:21,080 --> 00:48:24,270 Speaker 2: circle once they are brought in. Um uh 817 00:48:25,590 --> 00:48:27,689 Speaker 2: I, I would assume their outlook is going to likely 818 00:48:27,699 --> 00:48:31,419 Speaker 2: conform to past democratic administrations, but that doesn't necessarily tell 819 00:48:31,429 --> 00:48:36,250 Speaker 2: you anything if you compare, say President Biden to President Obama, right? 820 00:48:36,260 --> 00:48:38,359 Speaker 2: And again, that may be as much about the changes 821 00:48:38,370 --> 00:48:41,719 Speaker 2: in China as it is in Washington. So so Beijing 822 00:48:41,729 --> 00:48:45,709 Speaker 2: thought that President Obi President Biden would, would return to 823 00:48:45,719 --> 00:48:49,159 Speaker 2: a more accommodating policy like the Obama administration after four 824 00:48:49,169 --> 00:48:53,408 Speaker 2: years of Trump and and all of his assertiveness and disruption. 825 00:48:53,780 --> 00:48:56,149 Speaker 2: So, so I think Beijing was quite surprised and in 826 00:48:56,159 --> 00:49:00,560 Speaker 2: some cases, very disappointed with Biden when he retained the 827 00:49:00,570 --> 00:49:05,560 Speaker 2: tariffs that Trump initiated. Um he strengthened the alliance um 828 00:49:05,570 --> 00:49:10,199 Speaker 2: network strength, strengthen the quad, he established Aus. Uh he 829 00:49:10,209 --> 00:49:13,959 Speaker 2: restricted and expanded the restriction of high tech exports. Um 830 00:49:13,969 --> 00:49:18,419 Speaker 2: And he's also actively encouraged reshoring French shoring to, to 831 00:49:18,429 --> 00:49:22,379 Speaker 2: derisk and supply supply chains, the Chips Act, the Ira. 832 00:49:22,760 --> 00:49:23,419 Speaker 2: So 833 00:49:24,199 --> 00:49:27,339 Speaker 2: Harris may not recycle the Biden playbook, but she can 834 00:49:27,350 --> 00:49:31,520 Speaker 2: build on that already. So it's probably unrealistic for Beijing 835 00:49:31,530 --> 00:49:34,090 Speaker 2: to think that the Harris administration is somehow going to 836 00:49:34,100 --> 00:49:36,620 Speaker 2: be a different path. Uh And we will suddenly start 837 00:49:36,629 --> 00:49:39,908 Speaker 2: accommodating China, right? Saying, oh yeah, we should cooper and 838 00:49:39,919 --> 00:49:43,300 Speaker 2: not worry about competition. I don't think that's going to happen. So, 839 00:49:43,699 --> 00:49:47,459 Speaker 2: so I think Taiwan faces a slightly different risk. Um 840 00:49:47,469 --> 00:49:51,340 Speaker 2: And that's the Harris administration is, is overly deliberative 841 00:49:51,760 --> 00:49:55,699 Speaker 2: um uncertain about how China will respond um to, to 842 00:49:55,709 --> 00:49:59,859 Speaker 2: actions that support Taiwan that basically the calculus for deterring 843 00:49:59,919 --> 00:50:03,110 Speaker 2: China is different. Um And I think there's a risk 844 00:50:03,120 --> 00:50:06,310 Speaker 2: that Washington self deters. Right. And that there, there's a 845 00:50:06,320 --> 00:50:08,489 Speaker 2: fear that whatever they do to support 846 00:50:09,320 --> 00:50:14,729 Speaker 2: Taiwan might elicit a response from Beijing. That's, that's, um, uh, 847 00:50:14,739 --> 00:50:18,320 Speaker 2: particularly violent, uh, or impactful. And I, and I think 848 00:50:18,330 --> 00:50:21,360 Speaker 2: that's a risk that, that Taipei is probably aware of, 849 00:50:21,959 --> 00:50:27,270 Speaker 2: um, Trump. I mean, Trump is the essence of uncertainty. Um, he, 850 00:50:27,280 --> 00:50:30,469 Speaker 2: he fosters that intentionally, he takes a lot of risks. 851 00:50:30,479 --> 00:50:34,100 Speaker 2: He ignores a lot of conventions. Um, In some cases, 852 00:50:34,110 --> 00:50:36,799 Speaker 2: I think that can be virtuous. I mean, Trump, Trump 853 00:50:36,810 --> 00:50:40,589 Speaker 2: made an effort to normalize the relationship with North Korea. 854 00:50:40,790 --> 00:50:41,379 Speaker 2: Um 855 00:50:41,669 --> 00:50:43,989 Speaker 2: Yeah, and if you think about the Biden administration, you 856 00:50:44,000 --> 00:50:47,729 Speaker 2: think about the Obama administration, neither one took a risk to, to, 857 00:50:47,739 --> 00:50:51,169 Speaker 2: to address North Korea. Trump was all about risk. Um And, 858 00:50:51,179 --> 00:50:53,419 Speaker 2: and I think it was a genuine approach to change 859 00:50:53,429 --> 00:50:56,409 Speaker 2: the status quo and change the paradigm to offer him 860 00:50:56,419 --> 00:51:00,689 Speaker 2: a very alternative future and it ultimately failed. Um But, 861 00:51:00,699 --> 00:51:03,120 Speaker 2: but I think that that was indicative of what we 862 00:51:03,129 --> 00:51:04,889 Speaker 2: might see. Um 863 00:51:05,199 --> 00:51:08,540 Speaker 2: Now again, Kim was open to it, there was support 864 00:51:08,550 --> 00:51:11,370 Speaker 2: from South Korea. Um I'm not sure you have the 865 00:51:11,379 --> 00:51:15,610 Speaker 2: same factors at play with China. So I don't think 866 00:51:15,889 --> 00:51:19,270 Speaker 2: uh you know Xi Jinping is able to cut some 867 00:51:19,280 --> 00:51:23,379 Speaker 2: sort of grand bargain modus vivendi deal with, with Trump. 868 00:51:23,389 --> 00:51:26,500 Speaker 2: I I don't think either one are prepared for it. So, 869 00:51:26,639 --> 00:51:29,120 Speaker 2: so again, you've got the risk of uncertainty, the risk 870 00:51:29,129 --> 00:51:32,350 Speaker 2: of how Trump communicates um you also have, of course, 871 00:51:32,360 --> 00:51:34,138 Speaker 2: the risk of the, the, the, 872 00:51:34,479 --> 00:51:38,520 Speaker 2: the conflation of his personal and, and national interests. Um 873 00:51:39,209 --> 00:51:44,070 Speaker 2: um, but for Taiwan, you've got maybe a different calculation. 874 00:51:44,379 --> 00:51:47,389 Speaker 2: Um One way to think of it is, you know, the, the, 875 00:51:47,399 --> 00:51:50,979 Speaker 2: the fat tail concept, right, the curve that, that lengthens 876 00:51:50,989 --> 00:51:53,919 Speaker 2: at the ends. And, uh, and, and I, I think 877 00:51:53,929 --> 00:51:56,239 Speaker 2: the fat tail for Trump is really quite large at 878 00:51:56,250 --> 00:51:59,100 Speaker 2: both of the ends. Um So 879 00:51:59,830 --> 00:52:02,760 Speaker 2: there's huge risks with Trump, but there's also potentially very 880 00:52:02,770 --> 00:52:06,040 Speaker 2: big rewards if you can get him on your side 881 00:52:06,280 --> 00:52:09,729 Speaker 2: and give him what he wants. I mean, Trump is, 882 00:52:09,739 --> 00:52:13,560 Speaker 2: I think almost undoubtedly going to be surrounded by advisers 883 00:52:13,570 --> 00:52:17,560 Speaker 2: that are very positive towards Taiwan and quite negative towards China, 884 00:52:17,570 --> 00:52:22,000 Speaker 2: quite skeptical of China and the Communist Party. Um I mean, 885 00:52:22,010 --> 00:52:22,719 Speaker 2: we've seen 886 00:52:23,870 --> 00:52:27,699 Speaker 2: several of Trump's former advisor, you know, call for, for 887 00:52:27,709 --> 00:52:31,489 Speaker 2: recognizing Taiwan. I mean, that would be a huge coup for, for, 888 00:52:31,500 --> 00:52:33,909 Speaker 2: for Taiwan. So, so that's the positive end of the 889 00:52:33,919 --> 00:52:36,259 Speaker 2: fat tail. Of course, there is a big risk at 890 00:52:36,270 --> 00:52:38,669 Speaker 2: the other side. Um I think there's a risk that 891 00:52:38,679 --> 00:52:42,489 Speaker 2: there will be some in, in the conservative side of 892 00:52:42,500 --> 00:52:45,169 Speaker 2: the political agenda who see value in 893 00:52:45,429 --> 00:52:49,060 Speaker 2: supporting Taiwan because it's a good way to antagonize China 894 00:52:49,070 --> 00:52:52,399 Speaker 2: and that's their ultimate goal. Um And I personally don't 895 00:52:52,409 --> 00:52:55,040 Speaker 2: think that's a very good approach. It's not consistent with 896 00:52:55,050 --> 00:52:58,439 Speaker 2: us national interests. Uh But there, there are possibly some 897 00:52:58,449 --> 00:53:02,649 Speaker 2: who would. So it's, it's difficult to see how either 898 00:53:02,659 --> 00:53:06,879 Speaker 2: administration will be good from Beijing's perspective, what they want. 899 00:53:07,219 --> 00:53:10,889 Speaker 2: Um It's difficult to, to, to, 900 00:53:11,699 --> 00:53:14,320 Speaker 2: to determine, you know, whether Trump is going to be 901 00:53:14,330 --> 00:53:20,179 Speaker 2: truly disruptive or simply ineffective. Um From Tai Taiwan's perspective, 902 00:53:20,189 --> 00:53:23,299 Speaker 2: I think Taipei is, is very experienced, dealing with transitions 903 00:53:23,310 --> 00:53:26,510 Speaker 2: from one US administration to the next. They have a 904 00:53:26,520 --> 00:53:32,029 Speaker 2: playbook for keeping those channels of communication open. Um And, 905 00:53:32,040 --> 00:53:36,439 Speaker 2: and Taiwan's also particularly good at making its case for 906 00:53:36,750 --> 00:53:39,879 Speaker 2: obtaining us support and they're also good at rolling, rolling 907 00:53:39,889 --> 00:53:41,500 Speaker 2: with the punches, rolling with the brakes. 908 00:53:41,810 --> 00:53:45,989 Speaker 2: So, so Taipei faces different risks from either administration um 909 00:53:46,000 --> 00:53:48,270 Speaker 2: but they're accustomed to it and I think they are 910 00:53:48,280 --> 00:53:52,179 Speaker 2: resilient um and they're resourceful. So I'm pretty confident Taiwan 911 00:53:52,189 --> 00:53:56,310 Speaker 2: will make the best of whichever uh situation it encounters. 912 00:53:57,520 --> 00:54:00,310 Speaker 1: Super, super interesting. OK. So drew the things that you 913 00:54:00,320 --> 00:54:03,520 Speaker 1: just talked about are in the context of the near term, 914 00:54:03,600 --> 00:54:07,600 Speaker 1: a year, two years out. Uh Would you sort of 915 00:54:07,610 --> 00:54:12,359 Speaker 1: change your assessment or prediction if you will as much 916 00:54:12,370 --> 00:54:14,229 Speaker 1: as you hate that word? Uh If I were to 917 00:54:14,239 --> 00:54:16,659 Speaker 1: ask you to look into the region a decade from now, 918 00:54:18,989 --> 00:54:24,770 Speaker 2: a decade from now? So where are we in 2034 35? 919 00:54:25,719 --> 00:54:29,060 Speaker 2: Um So Xi Jinping will be Biden's age 920 00:54:30,290 --> 00:54:33,510 Speaker 2: today. Um Is he still in power or not? I 921 00:54:33,520 --> 00:54:36,850 Speaker 2: think that's an important question to ask. What does his 922 00:54:36,860 --> 00:54:40,299 Speaker 2: successor look like and how did that succession take place? 923 00:54:41,040 --> 00:54:44,580 Speaker 2: Um So I think that's an important trend to map if, 924 00:54:44,590 --> 00:54:45,610 Speaker 2: if we see 925 00:54:46,489 --> 00:54:53,469 Speaker 2: Taiwan, uh if we see China as, as inevitably consistently revenge, 926 00:54:54,840 --> 00:54:55,699 Speaker 2: angry 927 00:54:56,419 --> 00:55:02,639 Speaker 2: insecure, censoring all information within its borders, um 928 00:55:03,590 --> 00:55:08,810 Speaker 2: unable to let go of century of humiliation and, and 929 00:55:09,340 --> 00:55:14,570 Speaker 2: you know, Japanese history in World War Two, if, if, 930 00:55:14,580 --> 00:55:18,949 Speaker 2: if all of its relationships are still antagonistic um which 931 00:55:18,959 --> 00:55:23,120 Speaker 2: is part part Marxism, right? Marx was all about antagonism, right? 932 00:55:23,129 --> 00:55:26,080 Speaker 2: Relationships between the superstructure of the base, you know, 933 00:55:26,530 --> 00:55:29,229 Speaker 2: between you know, labor and capital, you know, I I 934 00:55:29,239 --> 00:55:32,229 Speaker 2: think the Chinese see the world in very adversarial terms 935 00:55:32,239 --> 00:55:35,340 Speaker 2: between the Communist Party and those outside of it. And 936 00:55:35,350 --> 00:55:39,468 Speaker 2: I think if that continues, then what we see today 937 00:55:40,189 --> 00:55:41,929 Speaker 2: continues and perhaps 938 00:55:42,620 --> 00:55:49,509 Speaker 2: the risks increase, commensurate with China's economic success, its expansion 939 00:55:49,520 --> 00:55:54,439 Speaker 2: of military power, um possibility that its soft power becomes 940 00:55:54,449 --> 00:55:57,459 Speaker 2: more attractive though, I think that may be antithetical to, 941 00:55:57,469 --> 00:56:00,760 Speaker 2: to increasing Marxism in, in Beijing. 942 00:56:01,590 --> 00:56:03,169 Speaker 2: Um Taiwan 943 00:56:04,139 --> 00:56:08,290 Speaker 2: demographics work against it. It needs to figure out you know, 944 00:56:08,300 --> 00:56:09,600 Speaker 2: how is it going to 945 00:56:10,760 --> 00:56:13,370 Speaker 2: protect itself, feed itself clothe itself 946 00:56:14,449 --> 00:56:17,659 Speaker 2: if, if its population is shrinking at a at a 947 00:56:17,669 --> 00:56:21,699 Speaker 2: steady rate, so either turn around your birth rates or 948 00:56:22,370 --> 00:56:25,169 Speaker 2: figure out how do you assimilate some of these Southeast 949 00:56:25,179 --> 00:56:28,729 Speaker 2: Asian migrants who are coming to, to, to live in Taiwan, 950 00:56:28,739 --> 00:56:31,489 Speaker 2: a path to citizenship. And I think that's perhaps a 951 00:56:31,500 --> 00:56:34,489 Speaker 2: little difficult for them to think about today, it's going 952 00:56:34,500 --> 00:56:36,709 Speaker 2: to be increasingly necessary 953 00:56:37,290 --> 00:56:39,310 Speaker 2: uh in 10 years. And of course, that puts it 954 00:56:39,320 --> 00:56:42,820 Speaker 2: even farther at odds as, as Taiwan would effectively be 955 00:56:42,830 --> 00:56:47,629 Speaker 2: moving closer to Southeast Asia than to, to mainland China. So, 956 00:56:47,669 --> 00:56:50,520 Speaker 2: so 10 years from now, that could be uh part 957 00:56:50,530 --> 00:56:56,250 Speaker 2: of the paradigm, uh an increasingly internationalized Southeast Asian Taiwan. 958 00:56:56,719 --> 00:56:59,820 Speaker 2: Um So the US, 959 00:57:00,800 --> 00:57:03,179 Speaker 2: the US just exists, right? I mean, it's, it's a 960 00:57:03,189 --> 00:57:07,850 Speaker 2: country that thrives on chaos in many ways. Um It, it, 961 00:57:07,860 --> 00:57:11,739 Speaker 2: you know, people who want small government, you see, you 962 00:57:11,750 --> 00:57:16,139 Speaker 2: see cycles of, of, you know, strength and weakness. Um 963 00:57:16,389 --> 00:57:18,620 Speaker 2: you know, you, you talk to folks older than me 964 00:57:18,629 --> 00:57:20,580 Speaker 2: who have been around and they think, you know, the 965 00:57:20,590 --> 00:57:22,620 Speaker 2: US is full of chaos, but it's nothing like the 966 00:57:22,629 --> 00:57:26,860 Speaker 2: 19 sixties um the civil rights movement in Vietnam. So 967 00:57:26,949 --> 00:57:30,139 Speaker 2: the US has a, has a way of rejuvenating itself, 968 00:57:30,459 --> 00:57:35,149 Speaker 2: maybe, you know, two election cycles from now, we, we 969 00:57:35,159 --> 00:57:41,530 Speaker 2: have two very capable candidates for president who can articulate 970 00:57:41,580 --> 00:57:45,110 Speaker 2: a inspiring vision to the American people to pull together 971 00:57:45,120 --> 00:57:48,439 Speaker 2: and continue to, you know, follow its values and, and, 972 00:57:48,449 --> 00:57:50,870 Speaker 2: and lead the free world it could happen 973 00:57:51,169 --> 00:57:54,489 Speaker 2: um or the cycles could deepen and strengthen. So I 974 00:57:54,520 --> 00:57:58,550 Speaker 2: think I like to think of trends as being fairly consistent. 975 00:57:58,719 --> 00:58:01,540 Speaker 2: Um It's just a question of their, their velocity 976 00:58:03,110 --> 00:58:06,060 Speaker 1: fair enough, uh very good. Uh We'll come back in 977 00:58:06,070 --> 00:58:08,570 Speaker 1: 2034 and look back at what you said. Uh Drew. 978 00:58:08,899 --> 00:58:12,590 Speaker 1: Uh Thank you so much for your time and insight. 979 00:58:12,600 --> 00:58:18,520 Speaker 1: Drew Thompson. Thanks for our listeners and viewers for their 980 00:58:18,530 --> 00:58:20,969 Speaker 1: time as well. Kobe Time was produced by Ken Dub 981 00:58:21,189 --> 00:58:25,010 Speaker 1: at Fly Studios, Violet Lee and Daisy Sherman provided additional assistance. 982 00:58:25,370 --> 00:58:27,729 Speaker 1: It is for information only and does not represent any 983 00:58:27,739 --> 00:58:32,570 Speaker 1: trade recommendations. All 136 episodes of the podcast are available 984 00:58:32,580 --> 00:58:36,590 Speaker 1: on youtube and on all major podcast platforms including Apple 985 00:58:36,600 --> 00:58:40,550 Speaker 1: and Spotify. As for our research publications, webinars and live streams, 986 00:58:40,560 --> 00:58:43,219 Speaker 1: you can find them all by Googling D BS Research Library. 987 00:58:43,320 --> 00:58:44,590 Speaker 1: Have a great day.