Bob Hormats Talks Trump/Xi Summit | Bloomberg Talks

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[00:00:08]>> Okay, here's what we're going to do worldwide and across the nation. It's not going to be, "Oh, Trump, what do we do that?" The Washington Post with a nice treatment this morning thinking of Ian Bremer is maybe it was the first G2 summit where there was some form of equalization of the United States and China. What we're going to do here, which a lot of people don't know, is how did we get here? And I don't mean Kissinger sitting in the peace hotel in Shanghai or on the way to Beijing and for those all all of us fossils the shock of 72 in Nixon with us. Robert Hormatz some people talk other people do. You and Winston Lord got this going.

[00:00:49]Back then there had to be literally like Columbus looking over the horizon. Tell us about what Winston Lord with your assistance on economics ambassador. What was the Shanghai communicate like to jumpstart this new Asia US nexus?

[00:01:07]>> It's a great question and I wrote a piece about it in foreign affairs to document this. The goal at that point was to try to make the relationship more normal. um to deal with a whole series of problems that had been built up over 25 years of no communication, no trade, no investment. And of course, the key issue on the minds of both the Chinese and the Americans was Taiwan. And Joan Lie, who was the premier of China, who was their negotiator, and Henry Kissinger, who was Nixon's negotiator, and both formidable people on their own, decided they would need some compromised language. And the Shanghai declaration that still is the centerpiece of China US relations on that issue was worked out between the two of them and that opened the way to a building up of confidence and then after that we came up with a few economic issues that we can use to normalize relations to increase trade incrementally and it it built from there. But it was trust and confidence and precise planning >> that were critical to this and trust >> which of course the Trump administration is wonderful at just because of time and Paul wants to get in here with some real questions. I've got to ask you this.

[00:02:30]President Xi seems to venerate the pre-China.

[00:02:34]He wants to go back to Mao. He wants to go back to a more rigid tougher China.

[00:02:39]When you see the turmoil with their defense leaders, their generals, their admirals, when you see just the clock ticking, is there any chance President Xi can pull back and become more like the China Robert Hormance knew? Well, I think he's I I know him quite well because I've worked with him since he was uh the party secretary in Jang Province, which was in the '9s. Um he's a very methodical person and he does uh sort of venerate Mao but he also realizes Mao uh had a number of of issues that made him controversial but there are two parts of the Mao background that are extremely important to understand. Ma made one point that we've been bullied by the foreigners over the last hundred years and we're not going to be bullied again. And she is very much of the view that that must be a critical part of China's strategy to be invulnerable to bullying or pressure or leverage by the foreigners.

[00:03:41]The second is that that Mao understood and she understands that the fall of the Soviet Union was in part because they did not have a lot of trading partners.

[00:03:51]They were con they were confined to a very few products that they produced and a very few countries to sell them to.

[00:03:58]and he she X she X she X she X she X she X she X she X she X she X she Xi Jinping was going to make sure that China had a broad range of trading partners and had a very diversified economy and therefore could not be leveraged by the United States or anyone else. Those were really two key points that he draws from the MA period and the fall of the Soviet Union.

[00:04:20]And let me m make one other point that follows up your your point Tom and that is if we learned anything from this summit.

[00:04:28]It is that for the first time in nearly 100 years the US has a peer competitor.

[00:04:36]A peer competitor on military issues, political issues, technology issues and economic issues and a peer both in in scale and in skill. We have, if we didn't know that before, we know it now.

[00:04:51]>> And Paul, David Weston had a brilliant insight. I think it was yesterday or the day before on how we we're back in the time of Robert Horman and there's a whole new China out there as well.

[00:05:01]>> There is. So Bob, what is some of your takeaways or what are some of your takeaways from this President Trump, President Xi? I guess we call it a summit here. I'm not sure what was really accomplished, but what what are your takeaways? Well, my takeaway is that Trump came to understand that China is a peer competitor unlike any we have seen for as I say nearly 100 years. The second is that China does business negotiates in a very different way.

[00:05:31]Trump came in with a great deal of flattery of shei. Chinese do not necessarily take the flattery. And she came in with a very crisp agenda and was particularly crisp on Taiwan. And I think it was because he had picked up and the Chinese authorities had picked up that there was a lot of pressure in Washington on Trump to um in effect give away a little bit on Taiwan to move closer to the Chinese position on Taiwan. Um and um and but also um so the that the the people in Washington wanted a statement or something that was clear that said we would we would uh toughen up our support for Taiwan, >> right? and she wanted to make sure that that issue did not arise and that the United States did not use this summit to make any statements that were pro- Taiwan or gave Taiwan additional uh power in terms of at least verbal support from the United States. Trump wanted to avoid that, right?

[00:06:40]>> That's why he made the statement very early on, don't mess around with Taiwan.

[00:06:44]>> Yeah, the first two readouts of the first day were very different. Um, President Trump brought a plane load of uh, American CEOs over to Beijing here.

[00:06:52]Do you think Beijing as wants to do business with the US with the West here?

[00:06:59]>> Yes. Okay.

[00:07:00]>> I think that they realize that they have a need. They see a lot of companies looking for new supply chains, diversifying away from China. Y, >> they want to make sure that they don't that that does not continue. And therefore I think it was smart to bring those CEOs and every one of them has the potential to make a deal that can actually enhance our capability and maybe theirs. The problem is is a lot of them encounter a lot of complex difficulties on regulatory issues, intellectual property issues. So you're killing me. Bob Homer knows I'm going to interrupt here. So we brought over a boatload of billionaires CEO there were what's the shoes of the white souls?

[00:07:41]They're all decked out in the Laura Piana shoes. Hormmans wouldn't be called dead notes. We didn't take Nicholas Burns. We didn't take William Burns. We didn't take Robert Hormatz. We didn't take the Demetrius of James Baker out of Rice University. Can we rebuild your world at state?

[00:08:00]Not in the way we're doing it now. If you look at the number of diplomats who Trump took over relative to the number of CEOs he took over, the latter vastly outnumbered the former. And I think that it China is is a matter of building trust. And China trusts a few people who've worked on China. Not that they always agree with them, but there are a lot of there are several diplomats and Nick Burns is certainly one. I think I'm another and there are several others who have a long history with China. I think he would have done well to consult with those people and bring them over to show continuity right >> with the with the China the knowledgeable people about China from the past. Not necessarily that you agree with them, but >> that would be a way.

[00:08:45]>> I got to run. Can we do a once a month thing with you? Can your people talk to my people so we can figure out a once a month? Yeah.