>> I THINK BOTH SIDES RECOGNIZE
HOW TERRIBLE A MILITARY CONFLICT
WOULD BE BUT YOU CAN TAKE
SOMETHING LIKE NANCY PELOSI’S
TRIP --
NEIL: I WAS THINKING ABOUT THAT.
>> OKAY.
NEIL: WILL THAT TRIGGER IT?
>> THE FACT THAT WE’RE SIMPLY
TALKING ABOUT IT, THAT WE’RE SO
CLOSE TO THE EDGE, IT IS NOT THE
OLD DAYS.
THE OLD DAYS --
NEIL: DOESN’T TAKE MUCH, RIGHT?
>> THE UNITED STATES USED TO BE
A DOMINANT MILITARY POWER.
THINK ABOUT IT, THE NEW WORLD
ORDER BEGAN IN 1945.
THE UNITED STATES WON THE WAR.
WE HAD 80% OF THE WORLD’S MONEY.
GOLD WAS MONEY.
WE WERE HALF THE WORLD’S GDP,
HALF THE MILITARY POWER SO
NOBODY WANTED TO FIGHT.
IF YOU LOOK AT THESE THINGS OVER
THE PERIOD OF TIME, WHEN YOU
HAVE COMPARABLE POWERS, THERE IS
DISAGREEMENTS IT CAN BE RESOLVED
QUITE OFTEN BY A CONFLICT.
AND SO THAT’S THE NATURE.
WE’RE NO LONGER THE DOMINANT
POWER.
SO IT BECOMES CLOSER.
SO NOW WHEN WE DEAL WITH
EXISTENTIAL ISSUES FOR DIFFERENT
PARTIES THERE IS A RISK OF THESE
THINGS.
NEIL: YOU KNOW THAT WAS ONE OF
MY MOST FAVORITE INTERVIEWS ONLY
BECAUSE IT IS GOOD TO GET INSIDE
SOMEONE LIKE A RAY DALIO’S
BRAIN, WHO HAS UNIQUE SKILL
CONNECTING WALL STREET WITH MAIN
STREET BUT WALL STREET WITH THE
CONCERNS AND ITS CONCERNS THAT
CHINA, KEEP IN MIND THIS IS
ALMOST A YEAR AGO, THAT CHINA
AND THE UNITED STATES ARE COMING
TO BLOWS.
THAT IT SEEMS INEVITABLE IN ONE
WAY OR THE OTHER, WE ARE GOING
TO COME TO BLOWS HERE.
CHINA FEELS MORE SECURE.
WE’RE NOT THE DOMINANT ECONOMIC
POWER WE WERE.
HE ECHOED THAT THIS PAST
WEEKEND.
ANOTHER FELLOW KNOWS A THING OR
TWO OF THIS WHOLE CONNECTION,
GENERAL JACK KEANE WITH US RIGHT
NOW.
GENERAL, WHAT HE WAS SAYING
ALMOST A YEAR AGO SEEMS TO BE
PLAYING OUT NOW.
THIS NOTION THAT WE ASSUME THAT
CHINA NEEDS US A LOT MORE THAN
WE NEED THEM.
WE ASSUME THAT THEY’RE NOT GOING
TO RISK SHAKING ANY CAGES
BECAUSE, WELL THEY DON’T WANT TO
DO WHAT RUSSIA HAS DONE BE
ALIENATED IN THE WORLD.
HIS FEELING WAS THEY ARE QUITE
CONTENT WHERE THEY STAND, DO YOU
AGREE WITH THAT?
>> YEAH, BUT I DON’T AGREE WITH
HIS CHARACTERIZATION.
THE REASON WHY THERE IS TENSION
AND CONFLICT EXISTS IS BECAUSE
CHINA IS AGGRESSIVE.
THEY’RE REPRESSIVE AT HOME.
THEY HAVE CONCENTRATION CAMPS
WITH THE UYGHURS, WHICH BY THE
WAY MR. DALIO, ISSUED A MORAL
EQUIVALENCY.
HE SAID, CHINA’S UYGHUR ISSUE
COMPARES TO RACISM IN THE UNITED
STATES WHICH I FIND KIND OF
STARK, TOTALLY DISAGREE WITH
YOU.
THE ISSUE CHINA’S AGGRESSION IS
WHY THE TENSION EXISTS. IT IS CHINA FOR THE LAST 10
IT IS CHINA FOR THE LAST 10
YEARS THAT HAS BEEN BEEN
ININTIMIDATING OUR ALLIES,
JAPAN, PHILIPPINES, OUR ALLY IN
VIETNAM.
HUNDREDS OF FISHING SHIPS BEING
HARASSED EVERY SINGLE DAY, TOLD
TO ME BY THE INTERIOR MINISTER,
DEFENSE MINISTER.
THE SAME THING HAPPENED IN THE
PHILIPPINES ON A REGULAR BASIS.
THESE ARE THINGS THAT DON’T GET
VISIBILITY.
CHINA BUILT THE SOUTH CHINA SEA
ISLANDS, TOLD OBAMA THEY ARE FOR
COMMERCIAL, ECONOMIC PURPOSES.
THEY’RE ALL MILITARIZED.
THEY ARE THERE TO TAKE CONTROL
OF THE SOUTH CHINA SEA.
IT IS CHINA’S AGGRESSION IN THE
INDOPACIFIC REGION, THE DESIRE
TO REPLACE THE UNITED STATES AS
THE GLOBAL POWER TO CHANGE THE
INTERNATIONAL ORDER THAT IS
DRIVING THE TENSION.
PRESIDENT XI, IN THE LAST, LAST
MONTH, THREE TIMES, WENT AFTER
THE UNITED STATES AS AN
ADVERSARY IN A WAY THAT HE HAD
NOT IN THE PAST, IMPLYING,
POTENTIAL CONFLICT.
THE PRESIDENT OF THE UNITED
STATES AT BEST WILL SAY THAT
CHINA IS A A COMPETITOR.
I WISH HE WOULD SAY THEY ARE
ADVERSARY WHICH I THINK THEY
REALLY ARE OR AN ENEMY, AS THEY
REALLY ARE.
NO, WE HAVE TO PLACE THE FOOT OF
THIS RESPONSIBILITY WHERE IT
LIES.
THAT IS WITH THE CHINESE
COMMUNIST PARTY AND WHAT THEIR
STRATEGIC OBJECTIVES ARE.
DOMINATION OF THE INDOPACIFIC
REGION AND THE WORLD WRIT LARGE
AND THAT IS WHY THE TENSION
EXISTS.
NEIL: YOU KNOW ONE OF THE THINGS
HE DID GO ON TO SAY, HE IS NOT A
FAN OF THE CHINESE, HE IS JUST
SAYING THAT HE IS READING THEIR
COCKINESS A SIGN HE DOESN’T
THINK WE HAVE THE STOMACH FOR
PROTECTED ECONOMIC WAR WITH
CHINA.
AMERICANS WON’T ACCEPT HIGHER
PRICES, MAYBE NO AVAILABLE GOODS
THAT COMES WITH THAT, THAT WE’RE
SOFT.
WE’RE NOT WHAT WE WERE.
THAT AMERICA’S BEST DAYS ARE
BEHIND IT.
I WANT TO STRESS THAT DALIO DOES
NOT BELIEVE THAT, THAT IS THE
THINKING IN THE CHINESE
COMMUNIST PARTY AND MAYBE COULD
EXPLAIN, SOME, I HOPE I GET IT
RIGHT, GENERAL, ROWDY ACTS, WHAT
DO YOU THINK?
>> WELL THERE IS NO DOUBT THAT
PRESIDENT XI SAID THIS MANY
TIMES, AND BY THE WAY MY SOURCES
DEALING WITH CHINA ARE NOT
WESTERN MEDIA AND WHAT CHINA IS
SAYING TO BUSINESS LEADERS AND
MANY OF THEM, YOU KNOW, MOUTH
THEIR TALKING POINTS.
MY SOURCES ARE WHAT THE CHINESE
ARE SAYING INTERNALLY TO THEIR
OWN BUSINESS PEOPLE, STATE-OWNED
ENTERPRISES AND ALSO TO OTHER
GOVERNMENT OFFICIALS AND THE
REALITY, PRESIDENT XI PERSONALLY
BELIEVES THE UNITED STATES IS IN
DECLINE AND CHINA IS ON A PATH
TO REPLACE IT AS THE MOST
INFLUENTIAL POWER IN THE WORLD.
THAT IS PART OF HIS MOTIVATION
AND THAT IS WHY PEOPLE HIKE
MYSELF WHO KNOW THAT THERE HAS
BEEN EROSION OF MILITARY
DETERRENTS IN THE REGION
PARTICULARLY, VERY SPECIFICALLY
WHEN IT COMES TO DIFFERENT
WEAPONS CAPABILITIES THAT WE
SHOULD CORRECT THAT AS QUICKLY
AS WE CAN AND REPLACE IT WITH
STRENGTH SO THAT CHINA IS NOT
ATTEMPTED TO USE VIOLENCE AND
CONFLICT TO ACHIEVE ITS
STRATEGIC OBJECTIVES.
ECONOMICALLY THE UNITED STATES
IS STILL, HAS THE NUMBER ONE
ECONOMY IN THE WORLD.
AND CERTAINLY WE HAVE OUR UPS
AND DOWNS.
WE’RE HAVING A DOWN PERIOD RIGHT
NOW.
NEIL: RIGHT.
>> BUT GIVEN THE CYCLES OUR
ECONOMY IS GOING THROUGH I THINK
WE WILL COME BACK CERTAINLY AND
WE’LL STILL HAVE A VERY STRONG
ECONOMY.
THE FACT THAT THE UNITED STATES
DOESN’T DOMINATE THE ENTIRE
WORLD ANYMORE ECONOMICALLY AND
MILITARILY SHOULDN’T BE
SURPRISED.
THE UNITED STATES HELPED TO
ESTABLISH A WORLD OUT THERE THAT
HAD PEACE AND STABILITY IN IT
BECAUSE OF THE INTERNATIONAL
ORDER AND RAISED ALL BOATS
ECONOMICALLY AND WHAT TOOK PLACE
IN THE INDOPACIFIC REGION IN
SOUTHEAST ASIA HAS A LOT TO DO
WITH THE UNITED STATES MILITARY
MAINTAINING STABILITY AND
SECURITY IN THAT REGION AND IT
ADDED TO THE PROSPERITY OF THOSE
NATIONS.
GIVE THE UNITED STATES SOME REAL
CREDIT FOR HAVING A LOT MORE
COMPETITORS OUT THERE WHICH I
THINK IS A BETTER THING FOR THE
WORLD ECONOMICALLY THAN WHERE WE
WERE BEFORE.
NEIL: ALL RIGHT.
DOES IT WARRANT THE REACTION
CHINESE ARE GETTING IT NOW, I