Taiwan quite timely. We'll get to that in a moment.
Let's set the stage. We're coming off some pretty high
profile visits, high level visits. Secretary Yellen was in Beijing.
Sure. You know, Anthony Blinken there as well.
Is this relationship, while complex, as stable as one can reasonably hope?
I think it is. I would call it uncomfortable
coexistence. I think we're going to have strategic
competition for great length of time over things like technology, values,
global, South, economic, political. We are in a long term strategic
competition with the Chinese, and it's inevitable the two greatest economic
powers in the world now, really the two great military powers in the world.
We inevitably are in this position, but that doesn't mean war.
And I think Americans are very clear, American military leaders and American
political leaders. We're not looking for war with China,
but we do compete and our values are different and we do have different
ideologies. And that is just a reality that we're
all going to have to live with. That takes us into that Taiwan
conversation. You mentioned war.
The U.S. has said it's not interested in war.
The Chinese have also said it's not something they want.
Right. Why do we keep talking about it, then?
Because there is a danger here. And the danger is that if Beijing were
to ever feel that peaceful unification is impossible, then the political
leadership in Beijing would be under pressure to do something about the
situation. I do worry that William Lai, in his
inaugural address went too far. I think he provoked Beijing a little
bit. The fact that he did not say that
negotiations would be under the principle of the Republic of China
constitution was a dangerous thing to say because it gets away from the one
China concept. So I worry that we are in a little more
tense period, that Beijing and Washington are going to have to
carefully manage William Lai. Washington can't love Taiwan too much.
There is a danger with all of these congressmen and senators loving giant
Taiwan that the leadership in Taiwan might get the sense that they can move
further. And I think that's very dangerous.
The status quo is wonderful. My president, when I served him, George
Bush, established the principle of you. No unilateral changes to the status quo
by either side. I think that's the perfect position.
Taiwan gets a certain degree of independence.
Beijing is assured that the United States isn't going to support
independence. I think that's where we want to be.
If I remember correctly, that takes me into Donald Trump, possibly a 2.0.
One of the first calls he took during his first few days in office was from
the time was then Taiwan President Tsai Ing Wen.
What does that look like for these relations, for the status quo as you
laid it out? I think there's some danger.
I notice that former Secretary Pompeo is in Taiwan a lot.
I wonder what he is saying to the government on Taiwan about what would
happen in a Trump administration. I think personally, Trump actually is
not that engaged on the Taiwan question. I see Trump trying to make a deal with
the Chinese over trade, actually. I think he's got
this whole plan of 64. Ten tariffs is really a way to stimulate
the Chinese into talks. And I think we would actually find that
Trump and Xi Jinping end up with a fairly good relationship.
Is there room for an improvement in relations going into elections, which is
six, let's call it five, six months away?
No, in fact, it goes the other direction.
If you look what Biden and right now is focused on is Wisconsin, Michigan and
Pennsylvania and all the anti-China steps that have been taken recently on
tariffs, on EVs. It's all about those states.
If Biden is going to win, he has to take those three states.
My friend Charlie Cook, who's here as well, makes that case.
The only way Biden wins is through those three swing states.
So he is doing everything possible to galvanize and get out the union vote,
and that's an anti-China vote. And so that's why you're seeing these
steps. And I would anticipate more of them
before the election. What do you expect from the Chinese
side? They probably know they likely know this
is all political noise to the U.S. Understand what's going on.
They're not going to overreact because it's politics.
They want to make a point, though. They will want to make a point.
And we're going to see them do some things.
We've already seen them threaten a few things.
I think they'll have to in part to keep the Europeans from doing some of these
things. Remember, on the leaves, there's the
whole issue of Europe now and what steps Europe might take.
So I think the Chinese to scare the Europeans off a little bit, we're going
to see them take some some retaliatory steps.
What does this mean for businesses? Certainly the cost of doing business has
gone up. China, China plus one reshoring
derisking, Right. Companies are sometimes willing to make
that investment if there is certainty ahead, if they can make that investment
back. Yeah, there's the level of uncertainty
even get worse from here. Or do you see things as bad as they can
possibly get? I think a little more uncertainty.
One of the problems is that on emerging technologies, the administration is
going to keep looking at these and keep ratcheting up.
We're not at the end because think about emerging technologies as they continue
to move and the administration is going to have to make decisions on new
technologies and how much to restrict those.
And so the small yard high fence is going to get bigger, The yard is going
to get bigger, the fence is going to get higher.
That is an inevitability just because of the nature of technology.
And for those companies that rely on China, whether as an end market, as a
part of their supply chain, and China has maintained and said it's open for
business, it says, come in, we welcome foreign investments, but foreign
investment has trickled. Screw it.
It's not pre-pandemic levels just yet. What do you make of the messaging coming
out of Beijing? What do you think they need to do to get
that message across? Because there seems to be also this
information, this asymmetry, this gap in between the difficulty in Beijing right
now is that there is this emphasis on national security.
They have this problem with Chen Gong. I believe Chen Gong was an espionage
case. I think that scared Beijing.
And you can see that the man has been allowed to do much more publicly than it
had before. So there's this tension between national
security and wanting the West to come in.
And it's going to be interesting to see how Beijing navigates that.
I'm very interested, obviously, in the third Plenum coming up and what that
tells us about Chinese economic policies and about the opening to the West.