CHARLES: PRESIDENT TRUMP NOW
ALLOWING U.S. COMPANIES TO DO
LIMITED BUSINESS WITH CHINA
TELECOM GIANT HUAWEI.
THE REVERSAL SPARKING PUSHBACK
FROM DEMOCRATS AND REPUBLICANS
WHO SAY THAT THE COMPANY IS
STILL A NATIONAL SECURITY RISK,
AND THEY HAVE MAJOR CONCERNS
OVER HUAWEI'S TIES TO THE
CHINESE GOVERNMENT.
JOINING ME NOW GORDON CHANG,
ASIA ANALYST AND AUTHOR OF "THE
COMING COLLAPSE OF CHINA".
THIS HAS BEEN SOMETHING YOU HAVE
BEEN AGAINST AS WELL.
>> YES YOU CAN'T SEPARATE HUAWEI
OF THOSE THAT CAUSE A THREAT AND
THESE THAT DON'T.
THE ADMINISTRATION IS SAYING
SMART PHONES AREN'T A PROBLEM.
THE PROBLEM IS HUAWEI CAN USE
SMART PHONES TO SPY ON THE U.S.
THERE IS MORE FUNDAMENTAL ISSUE.
PROFITS FROM SMART PHONE SALES
ARE GOING TO HELP HUAWEI ON
THEIR SERVERS AND ROUTER
BUSINESS AND THAT CLEARLY IS A
NATIONAL SECURITY THREAT.
WE SHOULD JUST RING FENCE OFF
THIS COMPANY AND SAY NO BUSINESS
AT ALL.
CHARLES: ABOUT A MONTH AGO,
HUAWEI ANNOUNCED THAT THEY WOULD
LOSE 30 BILLION DOLLARS FROM
RESTRICTIONS AND THE SANCTIONS
AGAINST THEM BY AMERICA, IN JUST
TWO YEARS.
IS IT OUR GOAL TO PUT CHINESE
COMPANIES OUT OF BUSINESS?
IS THAT WHAT WE ENTERED INTO
THIS TRADE WAR FOR?
ISN'T THAT A DANGEROUS THING TO
DO?
>> THE GOAL OF THE TRADE WAR AND
YOU LOOK AT THE SECTION 301
TARIFFS, THOSE ARE MEANT TO BE A
REMEDY AGAINST THE THEFT OF U.S.
INTELLECTUAL PROPERTY.
PEOPLE CAN ARGUE ABOUT HOW MUCH
CHINA IS STEALING.
IT IS SOMEWHERE BETWEEN 150 AND
MAYBE 600 BILLION DOLLARS.
THAT'S A GRIEVOUS WOUND TO THE
UNITED STATES WHICH HAS AN
INNOVATION-BASED ECONOMY.
THAT'S OUR GOAL.
OUR GOAL IS TO GET THE CHINESE
TO STOP STEALING OUR
INTELLECTUAL PROPERTY AND IT
WOULD BE A NICE THING IF THEY
ACTUALLY HONORED THEIR TRADE
AGREEMENTS WITH THIS.
THAT'S WHAT THE GOAL OF THIS IS.
CHARLES: ANOTHER GOAL WAS TO
OPEN UP THE CHINESE MARKET SO WE
WOULD HAVE LESS OF A TRADE
IMBALANCE; RIGHT?
IF THEY COULD BUY 150, 200
BILLION DOLLARS WORTH OF STUFF
MORE FROM US, INCLUDING THE
CHIPS THAT THE AMERICAN
COMPANIES WANT TO SELL TO
HUAWEI, ISN'T THAT A KEY PART OF
WHAT THE PRESIDENT ENTERED THIS
FOR?
DO WE FORGET ABOUT THAT PART AND
FOCUS MOSTLY ON THE SECURITY
ASPECT?
>> WELL, YOU KNOW, THE PRESIDENT
HAS TALKED ABOUT THE TRADE
DEFICIT, AND CLEARLY THIS TRADE
DEFICIT IS A REFLECTION OF THE
CHINESE STEALING OUR IP AND ALSO
THE TRADE VIOLATIONS.
SO I THINK THAT IF YOU DON'T
FOCUS ON THE TRADE DEFICIT, AS
ITS GOAL, BUT YOU LOOK AT WHAT
WE SHOULD BE DOING, WE'RE GOING
TO BE AT A MUCH BETTER PLACE.
CHARLES: WE HAVE TO RESTART ON
THIS THING, BUT THE RESTART CAME
WITH A TOUGHER LANGUAGE FROM
CHINA, TOUGHER DEMANDS FROM
CHINA.
OKAY, WE HAVE HIT THE RESTART
BUTTON, BUT WE ONCE THIS, THIS
AND THIS.
ARE THEY IN A POSITION TO BE
MAKING THESE SORT OF DEMANDS?
>> WELL, NOT REALLY, CHARLES,
BECAUSE RIGHT NOW YOU LOOK AT
THE NUMBERS THAT HAVE COME OUT
FROM THE CHINESE ECONOMY FROM
MAY, IMPORTS DOWN 8.5% YEAR ON
YEAR, THAT'S A REAL INDICATION
OF SOFTENING DEMAND.
THEIR CONSUMER NUMBERS ARE NOT
VERY GOOD.
THE FIRST INDICATIONS FROM JUNE
ON THE MANUFACTURING SECTOR SHOW
A CONTRACTING ECONOMY.
SO, YOU KNOW, THEY ARE NOT IN A
GOOD POSITION, BUT THEY THINK
THEY CAN BLUFF PRESIDENT TRUMP
AND BY GETTING TRUMP TO BACK
DOWN ON HUAWEI, AT LEAST PART OF
THE WAY, I THINK THAT THEY'RE
SAYING YEAH, WE CAN INTIMIDATE
THE UNITED STATES.
CHARLES: BUT PRESIDENT TRUMP
STILL HAS -- HE STILL HAS THE
STRONGEST POSITION.
>> OH, CLEARLY WHEN YOU LOOK AT
WHAT'S HAPPENING INSIDE OF
BEIJING RIGHT NOW AND XI
JINPING'S POLITICAL PROBLEMS AND
THOSE DEMANDS ON THE UNITED
STATES THAT CHINA IS MAKING,
THEY ARE IN NO POSITION TO
ENFORCE THEM IF TRUMP USES
AMERICAN LEVERAGE.
CHARLES: THE ART OF THE DEAL AND
THE ART OF WAR, THEY MERGE IN
THIS IN MY MIND, WHEN YOU HAVE A
DEFEATED ENEMY OR AN ENEMY YOU
CAN SQUASH AT SOME POINT, YOU
GIVE THEM AN EXIT, MAKE SURE
THEY CAN LEAVE.
THERE HAS BEEN A LOT ABOUT CHINA
SAVING FACE IN THIS.
HOW DOES AN ELEGANT DEAL LOOK SO
THEY CAN GET SOMETHING THAT THEY
CAN TAKE TO THEIR PEOPLE AND WE
CAN TAKE TO OURS AND RESUME A
REAL FAIR HONEST TO GOODNESS
FREE TRADE RELATIONSHIP?
>> THAT WOULD BE NICE TO THINK
THE CHINESE THINK THAT WAY,
CHARLES, BUT I DON'T THINK THAT
XI JINPING, THE CHINESE RULER
ACTUALLY VIEWS THE WORLD IN
THOSE TERMS.
YOU KNOW, HE VIEWS THIS AS CHINA
BEING THE ONLY SOVEREIGN STATE.
WE CAN DO WHATEVER WE WANT.
YOU KNOW, KICK THE AMERICANS TO
THE CURB, THEY ARE IN TERMINAL
DECLINE, BASICALLY WHAT THEY ARE
DOING IS CHALLENGING OUR
MILITARY, CHALLENGING US ACROSS
THE BOARD, THIS I
CHARLES: THAT DIDN'T TAKE LONG.
TALKING ABOUT THE NEW
RELATIONSHIPS BETWEEN THE UNITED
STATES AND NORTH KOREA HAS
GONE -- HAS GONE SOUTH AGAIN
AFTER THAT SUMMIT BETWEEN
PRESIDENT TRUMP AND KIM JONG-UN
AT THE DMZ.
NORTH KOREA ACCUSING WASHINGTON
OF BEING HELLBENT ON HOSTILE
ACTS AGAINST THE REGIME.
I'M BACK WITH ASIAN ANALYST
GORDON CHANG.
YOU ARE ALSO AN EXPERT ON NORTH
KOREA.
DOES THIS KIND OF STUFF SURPRISE
YOU?
IT FELT LIKE THESE GUYS MADE
HISTORY LAST WEEK AND ALL OF A
SUDDEN WE'RE BACK TO THE SABRE
RATTLING.
>> IT IS SIFRPING, CHARLES.
-- IT IS SIMPLE, CHARLES.
NORTH KOREA HAS NOT MADE ITS
DECISION TO GIVE UP ITS MOST
DESTRUCTIVE WEAPONS AND UNTIL IT
DOES WE WILL HEAR STUFF LIKE WE
DID IN THE LAST 24 HOURS.
CHARLES: LET'S TAKE THE AUDIENCE
TO HONG KONG.
RIGHT HERE, THESE ARE LIVE
IMAGES YOU ARE SEEING, ANOTHER
MASSIVE PROTEST IN HONG KONG.
AND YOU'RE SAYING, GORDON, YOU
WERE TELLING ME DURING THE BREAK
THAT PROTESTERS ARE REALLY
SMART.
THEY'RE ALTERING AND CHANGING
THEIR TACTICS.
>> YEAH, FIRST OF ALL, THEY HAVE
EXPANDED -- BUT NOW THEY ARE IN
A PART OF HONG KONG WHERE YOU
HAVEN'T SEEN THE LARGE PROTESTS
SINCE 2014.
THEY ARE ALSO GOING AFTER
MAINLAND TOURISTS.
TOURISTS FROM THE MAIN PART OF
CHINA ARE COMING INTO HONG KONG.
THE PROTESTERS ARE GOING TO
PLACES WHERE THESE TOURISTS GO,
AND THEY'RE TALKING TO THEM
ABOUT WHAT THEY WANT IN HONG
KONG.
THIS IS REALLY BAD FOR CHINA
BECAUSE ALTHOUGH THOSE TOURISTS
ARE PROBABLY NOT GOING TO
SYMPATHIZE WITH THE HONG KONG
PROTESTERS, THOSE HONG KONG
TOURISTS ARE GOING TO BE
INSPIRED BY THE PROTESTERS IN
THE SENSE OF OH, LOOK, THESE
GUYS ARE PROTESTING.
WE SHOULD GO BACK TO OUR HOMES
AND PROTEST TOO.
CHARLES: THE IDEA THAT THEY
DON'T TRUST CHINA ENOUGH TO WANT
EXTRADITION SPEAKS VOLUMES OF
CHINA AS A PLACE WHERE JUSTICE
OR LACK OF JUSTICE.
>> IT IS NOT JUST THESE
TOURISTS.
IT IS THE BUSINESS COMMUNITY
THAT'S LED THE CHARGE AGAINST
THE EXTRADITION BILL BECAUSE
THEY ARE WORRIED ABOUT, YOU
KNOW, MAINLAND PARTNERS GOING
AFTER THEM.
SO YOU HAVE THE BIG BUSINESS
ORGANIZATIONS, THEY ARE NOW
WORKING ON THIS.
AND IT MEANS THAT A LOT OF THESE
BUSINESSES COULD LEAVE HONG KONG
IF THE EXTRADITION BILL WERE PUT
IN PLACE.
CHARLES: WE KNOW THE CLOCK IS
TICKING TO A FULL TAKEOVER AT
SOME POINT.
BUT THE IDEA WAS ALWAYS THAT
MAYBE SUCCESS, THE SUCCESS OF
HONG KONG, THE FREEDOMS OF HONG
KONG COULD INFLUENCE CHINA
RATHER THAN VICE VERSA.
YOU KNOW, WHO IS WINNING THIS
SORT OF IDEA BATTLE?
>> WELL THE IDEA BATTLE IS BEING
WON BY HONG KONG.
WE SAW THESE LARGE PROTESTS IN
THE MAINLAND OF CHINA.
AND I THINK THAT THEY WERE
INSPIRED BY WHAT IS OCCURRING IN
HONG KONG WHICH IS A VERY SMALL
PLACE, 7 1/2 MILLION PEOPLE,
VERSUS 1.4 BILLION PEOPLE, BUT
IDEAS ARE CONTAGIOUS, AND
FREEDOM IS ONE OF THE MOST
CONTAGIOUS IDEAS.
CHARLES: YOU SEE THEM CONTINUING
THESE PROTESTS?
>> THIS IS GOING TO GO ON FOR A
VERY LONG TIME BECAUSE THESE
PEOPLE IN THE STREETS AND THE
BUSINESS COMMUNITY, THEY'RE
FIGHTING FOR THEIR HOME.
CHARLES: THEY ARE FIGHTING FOR
THEIR HOME.
AGAIN, SCHEDULED TO BE HANDED
OVER.
WHAT CAN THEY ACCOMPLISH?
I MEAN, REALISTICALLY?
>> WHAT THEY CAN DO IS THEY CAN
PRESERVE THEIR AUTONOMY IN THE
SHORT-TERM AND MAYBE THEY CAN
OUTLAST THE PEOPLES REPUBLIC,
CHARLES.