Trump heads to China after ‘JAW DROPPING’ remarks about Americans’ finances

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[00:00:00]He's now less popular than Biden was at his most unpopular point and that is not a good place to be if you care about the midterm elections.

[00:00:07]>> We talk a lot about Teflon Trump, but Americans financial situation saying that he doesn't care about that. I found it completely jaw-dropping.

[00:00:16]>> This White House is now so marinated, so steeped in its own juices of sycophancy and there's so little questioning of the boss. He arrives in Beijing with the embarrassment of the Strait of Hormuz still in the chokeold of Iran.

[00:00:36]>> Hello, welcome to Trump World. I'm Manish Gastana. I'm in Memphis, Tennessee.

[00:00:40]>> And I'm Matt Fry. And I'm in London. No surprises there. But we are geographically spread out today. Not that just that you're in Memphis and I'm in London, but also we're going to talk about China. China is the big issue because of course President Trump has just landed in Beijing uh for the first China US summit in almost a decade. And since these are the two most powerful nations on the planet, this meeting after a very very difficult and challenging year where they both tested each other's strengths is vitally important. And it is the most important bilateral relationship on planet earth.

[00:01:16]And so arguably this is the most important bilateral meeting we will see all year long. But before we get to Beijing and Trump and she, why are you in Memphis, Anushka?

[00:01:26]>> I'm in Memphis uh reporting on a really fascinating story all about redistricting and voting rights. Can't say that much now because hopefully we're going to be talking about it next week. But it's been a really incredible trip. While I was here, I was standing at the podium where Martin Luther King gave his final speech at one point. Um, and the history and music of this city is completely immense. But yeah, we'll hopefully be talking about that next week. But right now, we're going to be talking about China. Donald Trump has just landed, as you said. But before he took off in the US, he said something that I found flabbergasting. Have a listen.

[00:02:06]The only thing that matters when I'm talking about Iran, they can't have a nuclear weapon. I don't think about Americans financial situation and I don't think about anybody. I think about one thing. We cannot let Iran have a nuclear weapon. That's all.

[00:02:21]>> That's the only thing that motivates.

[00:02:24]>> And so the reason I found it completely jaw-dropping is we talk a lot about Teflon Trump, the man on whom nothing sticks. There are accusations about sexual harassment. He gets voted again as president. There are claims about corruption. Nobody Well, lots of people care. That's not true that nobody cares, but it doesn't seem to stop him being voted for. But Americans financial situations saying that he doesn't care about that. Saying it as he's going into a trip where presumably he'll try to fix this um because they will talk about the economic situation. And when they talk there are kind of the three T's, Tyrron, tariffs, and Taiwan. And we will come to those. But Matt, do you think that that comment could actually stick to Teflon Trump?

[00:03:11]>> I think it could. And I I'm hoping that someone is telling him that it will. And remember the last time he said something so unbelievably misguided and abrasive and arrogant frankly about affordability and ordinary Americans, you know, not really caring about rates of inflation, which is, by the way, the subject that he was, you know, elected on in large part. And that was not even during a war of choice on a country that most Americans don't really care about or can't locate on a map. JD Vance was immediately mobilized to kind of do some damage repair. And I'm wondering what's going on here, Anushka, is that this White House is now so marinated, so steeped in its own juices of sycophancy, and there's so little questioning of the boss, and all the Trump whispers who might have been whistling in the past are either distracted. I mean, someone should be saying to them right now, "No, Mr. President, sir, respectfully, this is a really bad thing to say." And the fact that he's saying more and more things that are really weird, you know, whether it's civilizational, you know, extinction for Iran or this comment now about affordability makes me think that internally in the White House, the machinery, even around a kind of very loyal team where there has to be some push back, at least some glimpse of reality is just not working for him because some reminding him that his favorability ratings as you know insushka are really miserable. If you I looked at the graph this morning. I mean in in the first Trump administration at this point uh he was also down but not nearly as badly down as he is now. And there was a little uptick you know towards the end. But he's now less popular than Biden was at his most unpopular point. He's less popular than he was at his most unpopular point. And that is not a good place to be if you care about the midterm elections. Well, I think that if is really important because I do think you'll have heard a collective groan among Republicans. Very recently, I was speaking to um a congressman who's been in the House for a long time and is expecting an absolute mauling in the midterms. But Donald Trump's name's not on the ballot in the midterms. He will argue that afterwards.

[00:05:19]And he doesn't, we think, if he sticks to the Constitution, run for president again. So, it's not his name that's going to come up. and the amount he talks um in many ways he doesn't seem to care what he says. I think they will be doing some damage control and I think a lot of people will look at that and think oh it's fake news the media somehow responsible for what he said but I have to say it was very very clear. So look that is the backdrop and it's a backdrop in which I think he expressed frustration because he is frustrated because of the situation in Iran. He's taking that with him into this meeting in Beijing. You know, the last time they met, 2017, I was just trying to remember like how much the world has changed since then. Theresa May was prime minister. Um I I was at the time political editor at the Guardian.

[00:06:04]>> We all remember those days in Ushka. We all remember >> so long ago. So how many prime ministers have we had since then and going for another one now? Um so it's a completely different world, a completely different relationship. And let's just talk about the situation.

[00:06:17]>> Well, look back at the last year. So, so the second Trump administration was really very much about Trump challenging China, you know, on even though he gets on very well with Xi Jinping and you know, he said before he left, didn't he?

[00:06:30]He said, "I'm going to get a big fat hug from President Xi." Well, I wonder about that. He doesn't really do hugging, does President Xi? But anyway, despite their personal relationship, I think Trump has viewed China as the competitor stroke foe of America forever. And when I interviewed Trump in 2013, he was going on and on and on about China. In fact, the interview at one stage fell apart when I said, "Why would you pick a fight with your banker?" At that stage, China was the biggest owner of US Treasury bills. So, effectively bankrolling America's debt. And he said, "Don't be so stupid, Matt." But I mean, we live off Chinese manufacturing whether we like it or not.

[00:07:08]>> That's because when you say we, you are stupid. You're stupid.

[00:07:13]>> You called me a bad economist. I'm stupid. Well, that's a good idea. I've been very civil to you.

[00:07:18]>> You're not a good economist. No, you haven't. You're not a good economist at all. Uh, you don't understand business and you don't understand what I'm saying with China. You think it's a joke. It's not a joke. So, I'm fired.

[00:07:28]>> You're not fired. You're not fired. You think it's a joke and it's not >> No, it's not a joke. No, I don't. Very serious problem.

[00:07:33]>> You know, he really told me off and that was a golden moment for the interview.

[00:07:36]Anyway, getting back to today or this year rather, this whole year has been about challenging China. Liberation Day was about challenging China more than it was about challenging, you know, the rest of America's trading partners or indeed the whole trading world. And remember that war then ratcheted up to where at one stage Donald Trump uh was imposing 145% tariffs on China and the Chinese responded with something that was almost as high and we thought that's it. The World Trade Order is about to collapse because these two giants are going at each other. But actually what Trump hadn't reckoned on, just as he hadn't reckoned on, you know, Iran's ability to fight back even though they are bruised and blooded, what he had not reckoned on, and he should have reckoned on if he had listened to anyone or anyone had the coonest to tell him so was that China holds a trump card. And those of course the famous rare earth metals that we all had to learn about.

[00:08:33]Um, the vast majority of which are not just mined in China, but also refined in China. And without those rare earth metals metals and we said it off before on the podcast it's worth reminding people you can't produce fighter jets you can't produce electric cars you can't make solar energy work you can't do you know medical instrumentation in hospitals there's a hell of a lot of stuff you simply can't do realized that as in Trump that they hold this trump card and suddenly that trade war was called off and they had a kind of truce which is you know which is still in place and I think one of the things he very much wants to do is is to turn that truce in a more lasting into a more lasting settlement. And by the way, the Chinese who have their own economic issues with a property bubble, you know, a potential a massive potential debt crisis always looming and of course they need to sell their stuff to the rest of the world because they are the world's factory. The Chinese also want a deal.

[00:09:27]They want predictability out of this president because Donald Trump has gone from being unpredictable to being unreliable in his second term and that is a problem for them. So I think they're going to look for a trade deal which is really important and let's not forget Anushka that you know this whole visit was supposed to take place in April and it was postponed because of the Iran war. Obviously Trump thought the whole thing would be done and dusted by now. It's not and he arrives in Beijing with the embarrassment of the strait of Hormuz still in the chokeold of Iran.

[00:09:57]>> Certainly from what you read about how the government in China is feeling about all of this. They see what's happening in Iran as pretty much a known goal for the Americans and particularly the economic impact of the Strait of Hormuz closing although clearly that economic impact is felt the world over including in Beijing and the suggestion is that they now see themselves as in a prime position to become the world's premier superpower and that Donald Trump and his premiership has weakened um America's position on all of that and I think it'll be interesting to see whether that there's a little bit less of the uh pump than there were than there was in 2017 in terms of the way that they greet um each other. I mean, Donald Trump obviously has his line on Iran. He thinks they're going to win either way, whether it's through talks or whether it's through um military might. Many many analysts the world over disagree and think America made a mistake going into um that war. But as you say, it massively hangs over this and it hangs over the rest of the discussions as well. I mean, in terms of trade, I thought it's really interesting. So, they, you know, Donald Trump has taken with him all these massive CEOs.

[00:11:08]Obviously, Elon Musk, they've clearly made friends. Also, Tim Cook, who is the outgoing CEO of Apple and you know, one of Trump's kind of like basis basic arguments when he put together his tariff package in the first place was manufacturing has all been exported to China. We need to bring it back to the US. But if you look at where Apple products are made, they have been made traditionally in China and where they have diversified to away from China is India and Vietnam, not into America. So I I don't know if that's a sort of acceptance from Donald Trump that actually the argument is much more complicated than he first put out there.

[00:11:46]I mean I I have we've had this argument before. I think you know Donald Trump has a point that America's manufacturing base was exported to China over things where I think the arguments around comparative advantage are quite complicated and there was an argument that a lot of that manufacturing could have stayed in the US but now we have a new kind of war that is taking on an economic war that's taking on and it's over AI and on that you know neither side really wants to go down serious regulation which many people are screaming for and thinks is required. I thought it was interesting to hear Bernie Sanders say that what we need is a moment like when um Reagan and Gorbachev actually got together and they talked about you know an arms deal and nuclear weapons. Do you feel that you know there's going to be progress in terms of their discussions when it comes to AI?

[00:12:38]>> The thing about this summit is that there's so much to unpack and it happens on so many different levels. Just a couple of points. So on Iran for instance, you know, it is I mean I talked to a senior defense uh intelligence guy yesterday here in London and he was absolutely adamant that the Iranians have been given Chinese satellite information in order to target American or Gulf targets in this war. We know that the Chinese are providing the Russians with electrical components that allow them to build their drones and their missiles. They may be doing the same with Iran. So Donald Trump does need to have a conversation with Xi Jinping who might be laughing, you know, behind his polite smile about the fact that America is stuck in a war that it wanted and can't complete by saying actually you're helping the other guys to win. And remember also Iran is part of China's Belt and Road project. You know, Iran is answers to China. The Iranian foreign minister Arachi was in China just last week. So there's a lot there for Trump to to talk about with Xiinping in a slightly uncomfortable way when it comes to the other sectors. And the thing that always struck me when I was living in America that where the the rivalry between China and America is so different to the rivalry between Japan and America. I mean Japan really freaked out the Americans in the 80s and early 90s before it flatlined because they were competing on cars and all these other things. But China is so much bigger than Japan. China is so much more robust militarily and building up all the time. And China is beating America at its capitalist game under a red communist flag. And that really sticks in the throat of many many Americans whether they are Democrats or whether they are Republicans. So to that point, one of the things that Trump may be discussing is, you know, tariffs um against Chinese electrical cars. Now, China used to export in the first Trump administration roughly a million electrical cars every year. Now they're exporting more than 7.5 million a year.

[00:14:50]None of those are going to America because Americans have put up 100% tariffs against Chinese electrical vehicles. Who put up those tariffs? A guy called Joe Biden. So there's, you know, it's possible that there'll be some deal to be done there, for instance. But the fact that the Chinese are outperforming America on all these issues where America always thought it was leading is a very bitter appeal for them to swallow. And the reason is that in China, Americans will say they're cheating. But in China, they don't just have freewheing capitalism as you have in America. They have capitalism and they have an industrial policy. So, if you want to start a company in China that produces, I don't know, electrical cars or, you know, mechanical dolls or whatever, you get a loan from your local government that is underwritten by the central government in Beijing. And they do the same thing with four other factories producing the same kind of dolls or cars or whatever. And then they compete against each other in an absolutely brutal world. Tom Freriedman of the New York Times who's obsessed with this subject described it as like Chinese companies go to a gym. American companies you know go and have lunch or you know and a guy that we interviewed uh last year on on on the show on channel 4 news wrote this wonderful book about you know comparing China and America and he said China is a nation of engineers. America is a nation of lawyers. Now lawyers are very useful.

[00:16:15]engineers invent new stuff and both an emphasis on both has its problems. But this is what Trump is up against. I wonder if he sees that bigger picture.

[00:16:23]He'll come away saying, "I've got this amazing deal. They're going to buy 500 Boeing Supermax jets," which apparently is on the cards. That's a huge order for for Boeing. I mean, it's the biggest order they've ever had. That will be a big deal. And there might be some some movement on tariffs. And they might, you know, the Americans might buy some, I don't know, electric vehicles. and the and the Chinese will buy more American soybeans or beef. But fundamentally, what none of this touches on Anushka is that this relationship, you know, in the broader historical context is about one superpower trying to contain its decay and another superpower dealing, you know, or perhaps even trying to contain its exuberant expansion. And you know I went I'd studied Mandrin when I was you know at school and I went to China in 1981 and Shenzhen was then a town of 10,000 people and there were no cars just bicycles and it is now a mega city of 27 million. So I've seen the transformation. It is all inspiring and I think Americans have no idea what they're up against. I think one thing that has always baffled me is why Donald Trump would allow China to continue with what it's doing in the renewables industry, which is China's not doing this for the good of the environment.

[00:17:41]You know, as the Americans point out, they burn a lot of coal. They're not they're not, you know, kind of climate evangelist.

[00:17:47]>> Can I just I'm going to disagree with you a little bit there because in Beijing, I've got friends who live in Beijing and they are obsessed with the terrible quality of the air. And so actually part of the Chinese government is okay let's use more electrical energy to make the air more breathable and because it's just reached critical levels where people were not prepared to stay there any longer. So even they who don't normally care about their population in terms of their well-being have a kind of bottom threshold because the one thing and I've said this before the Chinese are more terrified than anything else is their own people getting very very upset.

[00:18:19]>> Yeah. Although I wasn't talking about the Chinese people, I was talking about the motivation for China in becoming the world leader when it comes to renewables, which is it makes economic sense. This is a massively growing industry and for some reason America is stepping back from the brink. America which actually believed more obviously not under Donald Trump in the climate reason for doing it as well. So for all those reasons, China's pushing ahead.

[00:18:45]Let's not forget though the massive human rights abuses that take place in China. And I do sometimes find it quite eye opening when we're now watching European leaders go and sort of, you know, bow in front of the Chinese because of in many ways where America has left them. Um, and I really do hope that those difficult conversations are happening behind the scenes. I suspect they won't be happening when it comes to Donald Trump.

[00:19:08]>> Jimmy Lie, right? We all know Jimmy Lie.

[00:19:11]Jimmy Lie who's in jail, you know, a Hong Kong media tycoon. used to it came from China originally, set up a clothing business, set up this incredible media company, held the authorities, you know, to account whether they were British colonial authorities or Chinese ones after the handover. He we know he's in jail. Donald Trump said about you know Jimmy Lie India who was sitting there in the Oval Office that Jimmy lie was a troublemaker. I mean to talk about Jimmy Lie who was a a a political prisoner you know all he did that was wrong was to challenge you know authority with freedom of speech bad bad form Mr. Trump.

[00:19:47]>> And just the final thing um I wanted to um talk about ask about is Taiwan. Um the Chinese are hopeful, aren't they, that there will be some incremental shifts from America when it comes to the issue of Taiwan. And it certainly seems to the case to me that Donald Trump doesn't really want to go there when it comes to Taiwan, which suggests that perhaps he is prepared to offer the incremental I mean, we're talking incremental shifts. Do you think that's a fair reading of it?

[00:20:18]>> Probably. I just think on anything outside his immediate sphere of influence or interest, would Donald Trump go to war over a principle? And the principle that you would go to war over with Taiwan is, you know, democracy, self-determination, and so on. But since America's not recognized Taiwan, you know, since it started recognizing the People's Republic of China in the 70s, for him there's a an easy get out clause here, just as I don't think he necessarily will defend, you know, Latvia or Lithuania if they're attacked by Russia. But I think what's interesting is that you know to what extent will he use his leverage over Taiwan and the you know the Chinese are genuinely worried by the ambiguity of America's uh stance on Taiwan. Will they get involved militarily or won't they if we impose a blockade of we the Chinese invade? And what they're hoping for is a small, you know, and everyone knows about this, a small change in the wording, to go from America does not support Taiwanese independence to America opposes Taiwanese independence.

[00:21:24]And that in itself isn't militarily significant. It doesn't necessarily um mean that America will never get involved militarily on behalf of Taiwan.

[00:21:32]But what it does do is it sews doubts in the mind of Taiwanese politicians of the Taiwanese government that maybe America is not quite so keen on stepping in on their side. The really big one here um Anushka is the 11 billion defense packet which was parked by Trump before this summit. And if that is parked or scrapped after the summit then I would say the Taiwanese have every reason to be nervous. If somehow it is revived or there's ambiguous language around it, then they can breathe a sigh of relief.

[00:22:07]But whether it's Taiwan or to what extent the Chinese are helping Iran or whether it's trade or indeed maybe in a very small addendum at the at the bottom of the page, human rights, which I don't think Trump really cares about, it's all part of the package that will define the relationship between these two giants going forward. Well, to get you know the kind of perspective on what's going on between China and America, but also crucially what's going on inside China itself because that's an important motivator. I spoke earlier to Dr. Jujier. She's the senior China research fellow at the Chattam House think tank here in London.

[00:22:46]Dr. Eugia, thank you very much for coming on the program. So, let's start with a really kind of basic maybe slightly unfair question. In this important meeting between she and Trump, the first in, you know, almost a decade, who's got the bigger cards to play here?

[00:23:01]Because Trump loves to talk in terms of cards to play.

[00:23:04]>> Who has the card? I think both have really a lot card to play. Um, on the one hand, I think Tinping is very much looking into some kind of minimal stability on this bilateral relationship. Whereas on the other hand and Donald Trump want to justify that he has made a deal with China and want to bring something back on the way back to United States. So I think both end have some card but they're a high state card on stage over there.

[00:23:33]>> So if Donald Trump were to declare victory after this summit, how would that look? What could he what he could could he show to the world's media and to his own people that looks like victory? Well firstly I mean there has been a nine years absence of US president to visit Beijing and last time was actually under his first term and Biden did not make it and so that's the victory number one and he has managed the so-called great power relationship with Beijing. Secondly, I think when it come to the trade issues and judging from the all the previous discussions um that both trade negotiators uh between Beijing and Washington had, I think it's very likely that Beijing might increase the level of purchase of agriculture products from United States and Beijing is perhaps likely to increasing um purchase towards binge aircraft and so by having this two big weighty meaty items in place and these would look like a economic victory for Donald Trump who desperately needed um for his midterm election.

[00:24:38]>> So, one deal that was mentioned was the the 500 Boeing supermax jets. That's a huge order. I think the biggest order for Boeing in history. Is that a done deal, you know, or is that just something that people are hoping for?

[00:24:50]>> Well, I think that's the headline number. Um but also judging from headline number and how quickly that boring can deliver, that's one thing.

[00:24:59]And secondly, how much that Chinese really needed that's entirely different question. So I guess to to end you will come up with some kind of memorandum of understanding. So the devils are always in the details and how many actually in this in existing in terms of delivery and how many actually is only the intention that Beijing indicated willing to purchase. So the American administration since Biden has imposed 100% tariffs I believe on Chinese electrical vehicles which means that hardly any of them are sold in America but many many of them millions of them are sold in places like Europe and elsewhere. Do you expect that to be tweaked as well? I mean could those tariffs come down?

[00:25:41]>> Well I think it's unlikely. Um this is also partially to do with the legacy um in terms control um regarding the tech Chinese technology for example electric vehicles is not just a matter of the everyday use but it's also connected with the data is also connect with the cyber security so I think there's a big security question in place and hence how likely that Beijing is intent to selling the electric vehicles to United States and that perhaps Beijing would prefer go to other markets and which um might be easier for them to deal with it rather than just going through the US market.

[00:26:16]Anyway, >> I mentioned the trade because for Donald Trump, he loves to show off a trade deal. He loves to come back from a trip abroad to say they've pledged X, you know, billion dollars to invest in our country. They're going to buy 500, you know, Boeing jets. It's the greatest jet company in the world. I mean, he loves all those numerical superlatives. But of course the other thing that's going on that arguably is even more important is you know China's relationship with Iran and to what extent he can Trump can rein in the Chinese when it comes to helping Iran continue their war against America.

[00:26:51]So what you know what's going to be discussed on that level for instance I mean satellite imaging for instance of American or Gulf targets that apparently the Iranians have been able to use during this war. Well, I think to some extent that is really a wild card uh for this visit that the conversation between presidency and President Trump being here and firstly um I think Beijing would consider this is the war started from United States and hence why should Beijing help United States to finish the war that they started in the first place.

[00:27:22]>> But Beijing is helping Iran at the moment.

[00:27:25]>> Um yeah for the for the crisis in the Gulf. Yeah, for the crisis in the Gulf.

[00:27:29]And then secondly, I think also Beijing's idea is really not to get involved with the domestic affairs of other country. That has been a longheld foreign policy strand that Beijing has been doing ever since the foundation of founding of the country. Um it's also largely due to the fact that um between uh Iran and United States and Israel and the differences between the two end are too vast and then how come they will be able to find any common ground and to to mediate and hence Beijing does not want to taking the responsibility of upholding the both parties. So I think that's another hurdle in place. But having said that given the street of horm, the importance towards China's energy supply, the importance towards letting the Chinese export imports transit through and Beijing certainly would have the interest of end this war as quickly as possible.

[00:28:21]>> So what could Donald Trump who also wants the straight of Hormuz open, what could he ask from the Chinese that they might give him realistically in order for that to happen? Well, Donald Trump may perhaps asking presidency to be the messenger to Iran and telling Iran that what United States want from this um this crisis and equally Iranian may using China as a messenger to passing this message to Washington. But whether um the two side between Iran and United States be able to realistically sit down and talk with each other, I think we're bit farfetched for now. How embarrassing is it for Donald Trump to turn up in Beijing while the straight of Hormuz is under an Iranian chokeold?

[00:29:03]>> Well, suddenly that's not looking good for United States and but that's also equally not looking good for China either. Um that I think that's also as I explained to the reason earlier regarding this security guarantee and regarding the economic necessity for China to have this straight operate um in full place. But I think nevertheless, yes, it might be an embarrassing moment for Donald Trump, but I think what Beijing is trying to do at this very moment, it is really to put forward a huge digmatic show to make Donald Trump feel very comfortable and make Donald Trump feel extremely rewarded by visiting China and hence seeking for that sense of minimal stability, the very fragile stability between the world two largest economies. ing here.

[00:29:55]>> So really Xiinping will do what every other world leader has done at first with Donald Trump is to try and kill him with flattery, kill him with kindness, >> with a flattery. But also I think what um what the Chinese strategist has been ponder I think ever since uh Donald Trump came to power last year was exactly what kind of United States does China would like to work with. Does China would prefer to have United States that is largely in declining but also militarily adventurous or China would prefer the latter that United States is gradually in decline but being consistent even though serve as a China's adversary and I think perhaps China would prefer a consistent adversary than a militarily adventurous United States to me. So what China really wants is predictability both on trade and on you know on on military affairs >> which like everybody else in the world they don't like surprises and and of course arguably Trump has gone from being unpredictable to being unreliable but that's something that affects us in Europe more than people in China perhaps just on the you know on Trump's vision of the world as being carved up into hemispheres. Is that a vision of the world that uh the Chinese buy into especially since they don't like interference in their own affairs and how far are they prepared to push that with Donald Trump?

[00:31:16]>> Well, I think the sphere of influence idea is this idea of G2 framework which uh the White House referring to in the previous meeting that they held in last October. However, I think until this day, Beijing has not accepted the so-called framework of Gene 2 for now.

[00:31:33]Instead, and Beijing would much prefer the world is led by uh different countries. So, the so-called multipolar world order is something that Beijing would largely prefer a less of dividing rule in terms of spare of influence. But I think it's more towards into various countries will be able to casting their voices and that is Beijing's and of preferred international order. Um but ironically that is all also world order without any particular leader. So that is also perhaps might led into some kind of disorder as well.

[00:32:03]>> I mean do the Chinese view themselves as moving into the space that arguably is now being vacated by America sort of pax Chinese as opposed to Pax Americana that we had in the last century.

[00:32:18]>> So determined here is a pax senica um for China centered world. I don't think so. I I think there are two things what Chinese is looking the Chinese leaders particularly look into here and firstly is the foreign affairs of China would be that conducive for China's domestic economic resilience and secondly given the country shares so many different borders with 14 different countries are the neighboring countries um being friendly towards China are the neighboring countries would perhaps have security um clashes with China so I think it's less about fill the vacuum left by United States by being global leader but instead I think Beijing's interest firmly rooted and focused within Asia-Pacific region I would say so it's less about taking leadership but it's more about firstly managing his own household in good order and secondly how to manage a Asia- Pacific that is largely without the influence from United States >> it all sounds rather cautious compared to what Donald Trump has been saying I in his rhetoric is much more kind of out there and hyperbolic, isn't it? Just on in terms of, you know, influence in your own backyard. I mean, the big issue here, the, you know, the third T after tan and trade is of course Taiwan.

[00:33:38]Again, what are the Chinese hoping for in terms of concessions from Donald Trump on the issue of Taiwan?

[00:33:44]>> Well, I think the Chinese may asking all kind of concessions. for example, changing the wording that how United States expressed regarding Taiwan um and also changing perhaps the expression >> is this is this the um change line of we are we are not supporting independence to we are opposed to independence >> to opposing yeah to opposing um so I I think it's unlikely that Beijing will able to have that >> and why do you think that's unlikely that that will be a concession >> um I think this largely to do with the American political elite and particularly within Congress within legislature. that is much prefer um United States further its engagement with Taiwan and much prefer that United States would pro provide a secure continue to provide security guarantee with Taiwan and however I think Chinese may ask but whether Chinese will get it or not and that's not up to to Beijing to decide um but however I think it's largely unlikely because to changing something fundamental of US's policy towards Taiwan that is almost unthinkable Let's say Donald Trump in one of his famous, you know, off-piece moments blurts out, you know, the wording that they want to hear, blurts out the fact that he opposes Chinese independence or maybe says something different to that effect. And everyone else is thinking, is that actual a change of policy or is that just Donald Trump going freelance?

[00:35:13]How do the Chinese respond to something like that? I think the Chinese will responded very cautiously by saying continuously to say that firstly Taiwan is a domestic affairs of of PRC of of China and secondly um the Chinese and hoping that United States would abide the so-called um realmon agreement um the communicate the three communicate between Beijing and Washington that was sailed back to 1979.

[00:35:42]So Beijing's responses with quite standard framework in terms of diplomatic language and also not ruled out having any surprises whereas even though uh Donald Trump may tweeted something and Donald Trump may said something on his ch social but what you have is a very cold and official language from Beijing. Some of the people on the plane with Donald Trump, most famously Elon Musk, I think Jensen Huang, um the CEO of Nvidia, was picked up in Alaska on the way to Beijing. Tim Cook, the outgoing head of Apple, is there as well. Um Larry Frink, the head of Black Rockck, I mean, there's some very big financial and business names.

[00:36:22]Again, how do the Chinese play those names? I mean, do they throw their own big names at these big names? Do they do deals with them? What's what's what's the game plan here for Beijing?

[00:36:32]>> Well, the Chinese certainly will come up with their list of dignitaries and that would also include some uh tech companies um including Huawei and including others and also was also on the central list by United States. Um but having said that by having the the techno uh technology entrepreneur and to visit China I think one thing that what they want to what does tech entrepreneur want to achieve is really to learn how Chinese speed up this technology progressing there so that's one thing now secondly I think particularly for Nadia is looking to selling it most advanced semiconductors towards China however I think Beijing taking the national security at the heart of his latest 5 years plan. So that is to say the pursuit of technology softians become even more important and hence they will rely less far less on foreignade semiconductors. So even though yes um Donald Trump perhaps bring a cohort of those billionaire attack billionaires but whereas on the other hand of what China would like to do I think has been quite clear that China is by domestic used domestic and develop domestically >> by the way how is Elon Musk viewed in China I mean he's very controversial obviously in the United States and elsewhere and Tesla sales have been affected by his dipping into politics.

[00:37:56]How is he seen in China? Well, he's obviously um has certain cult followers on social medias in China. Um secondly, I think he's also somebody that really started China's upgrade on electric vehicles and back to 10 years ago. So he's seen as some of the the founders of electric vehicles in this sense back through Tesla. So I mean his view by the Chinese is very much mixed. I wouldn't say this a universal view about Elon Musk but nevertheless um people also felt quite perplexed about it you know this entire ideas of cutting government spending and when he ran the doge department of government um spending and where that end up to and what kind of relationship that Donald Trump and Elon Musk would have evolved so far and that is also remain as a mystery among the Chinese. Yeah, absolutely. And uh I mean it's also worth pointing out that the biggest Tesla factory in the world is in fact in Shanghai. Um so that's another reason for Elon Musk to be on that plane. Um how when what do the Chinese feel they can learn from the American economy at the moment or America in general? Well, I think there's three things that China has already learned from United States and that is to say um having the sense of economic interdependence, it is no longer a sign of strength like in the golden days of the globalization but instead it's a sign of weaknesses and hence the Chinese policy makers will be examining those vulnerabilities that China would have with the external powers in a greater detail to prevent and also to um to to stop those vulnerabilities. That's one thing. No. Secondly, I think the Chinese has learned um in in a very hard way that is you should never engage with certain conflicts that you only halfheartly understood for example unlike what the United States have done and hence only managing it own domestic affairs. So not to be a great power as United States and which like to engage almost every single conflicts in the world. Now third thing which the Chinese learn is that by doing a politics or doing businesses consistency is absolutely the key term that engage with the external parties and by not being consistent and that means it's very hard to build a trust between any of your business partners or country to countries. So hence China has learned quite very hard how not to be liked. So, so really China sees America as an example of something to avoid when it comes to geopolitics, not something to emulate.

[00:40:31]>> Well, something to avoid on the one hand, but also in terms of weaponization of your advantages and I think that's something to learn from.

[00:40:39]>> Yeah. Okay. Um, just one more AI. I mean, do the Chinese see AI where of course the, you know, Chinese companies have done incredibly well with Deep Seek, you know, producing the same thing that Chad GPT produced, but for a fraction of the cost at scale. Do they see that as the new frontier that is the new frontier of the superpower rivalry between these two giants? And who's winning?

[00:41:05]>> Well, for sure. I mean, AI is one of the one of the frontier. I wouldn't consider as the only frontier. I think there's a quantum computing there's a robotic technologies as well. Yes. Um Beijing see this absolutely as a matter of national security and in a way by playing catch up with United States that is a good signal and by playing catchup that actually offered incentive for China to progress even further. So given what happened with the technology restrictions that United States imposing back to China back to a couple of years ago and this actually become an incentive for Beijing to closing that technology edge and closing that technology gap. So um in a way it's a blessing in disguise.

[00:41:50]>> And just very briefly and finally do the Chinese think they're winning the race with America on all these levels? Are they going to be the next superpower dominating the planet? Well, certainly they don't consider they have won right now. Uh but they consider they have gone down the right path by giving the strength towards economic resilience domestically and also by convincing themselves be prepared worst yet to happen. Look around what happened in street of hormones. Look looking around energy shortage and Beijing felt somehow vindicated in terms of preparing the worst yet to come for all this geopolitical headwind and that's where we are.

[00:42:33]>> Dr. Eug of Chattamas. Thank you very much indeed.

[00:42:36]>> Thank you so much Matt.

[00:42:38]>> Well that was interesting. I mean you know China and America that's that is a story let's face it that will run and run and run. The crucial area of competition that we touched on in that interview and they will carry on talking about Anushka is of course AI where the Chinese are again showing that you can do extraordinary things at scale for a lot less money than the Americans are doing at the moment. Uh but that's it for this edition. I'm afraid I won't be here next week. Uh and you'll be back in DC and you'll have to find someone else to tell the world about Memphis.

[00:43:08]>> I will. I'm leaving Memphis to go back to DC, but hopefully we'll be able to talk a bit about what we found here.

[00:43:16]That is it from Trump World this week.

[00:43:18]See you next week.