GREGG: AS TRADE TENSIONED MOUNT
CHINA IS CONDUCTING MASSIVE WAR
GAMES IN THE SOUTH CHINA SEA.
CHINA HAS LAID CLAIM TO NEARLY
90% OF THAT BUSY ASIAN WATERWAY.
JOINING ME TO TALK ABOUT IT,
GORDON CHANG.
GORDON, GREAT TO SEE YOU.
IS THAT A BELLIGERENT ACT WHAT
THEY ARE DOING?
THEY ARE CLAIMING SOVEREIGNTY
OVER MOST OF OF A VITAL TRADE
ROUTE.
>> CERTAINLY VITAL.
PEOPLE SAY $A TRILLION OF
COMMERCE OVER THE SOUTH CHINA
SEA HE YEAR.
WE ARE TALK ABOUT A LOT OF GOODS
THAT TRANSVERSE THE SOUTH CHINA
SEA.
WHAT CHINA HAS DONE IN THESE
DRIZZLE, THEY LINED UP THEIR
SHIPS LIKE THEY DID IN THE
19th CENTURY 2 X 2 AND THE.
YOU IS
19th CENTURY 2 X 2 AND THE.
YOU IS TO INTIMIDATE.
GREGG: DO WE NEED TO JUST
MAINTAIN A PRESENCE?
>> WE NEED TO DO MORE THAN
MAINTAIN A PRESENCE.
WE NEED TO TAKE BACK THE AREA
CHINA CLAIMED IN EARLY 2012.
THE OBAMA ADMINISTRATION DIDN'T
STOP THE CHINESE FROM DOING
THAT.
AND WHAT HAPPENED?
CHINA JUST INCREASED ITS
AMBITIONS AFTER THAT, PRESSURING
ISLAND IN THE SOUTH CHINA SEA
AND EAST CHINA SEA AND
PRESSURING JAPAN.
THERE MAY BE SOME PAIN IN THE
NEAR TERM, BUT THE ACTS OF CHINA
HAVE BEEN FOR SO LONG SO
MALICIOUS AND DAMAGE TOGETHER
U.S. ECONOMY, IS IT RIGHT THAT
THE PRESIDENT IS TAKING ACTION?
>> IT'S ABSOLUTELY RIGHT.
THERE ARE A LOT OF PEOPLE
EQUITABLING OVER HIS TACTICS.
BUT THE IMPORTANT POINT ABOUT
THIS PRESIDENT IS HE'S FIGHTING
BACK.
THIS IS IMPORTANT BECAUSE THE
CHINESE HAVE BEEN MALICIOUSLY
TAKING UP SEATTLE INTELLECTUAL
PROPERTY AND DOING OTHER THING
TO UNDERMINE THE U.S. ECONOMY
AND COUNTRIES HAVE TRIED TO HAVE
DIALOGUE WITH THE CHINESE.
THE U.S.-CHINA BUSINESS COUNCIL,
JUST A FEW HOURS AGO CALLED FOR
DIALOGUE.
IF YOU CALL FOR DIALOGUE THERE'S
GOING TO BE NO DISRUPTION IN THE
ECONOMY.
WE JUST GET STALLED AND THE
CHINESE CONTINUE TO STEAL TO THE
UNITED STATES.
GREGG: I PAY NO ATTENTION TO ANY
ORGANIZE THAT END WITH THE WORD
COUNCIL.
THAT INCLUDES THE SPECIAL
COUNSEL WHICH IS SPELLED
DIFFERENTLY.
BUT IT'S A COUNCIL NONETHELESS.
DO YOU ENVISION A TRADE BALANCE
OR SURPLUS SOMETIME IN OUR
LIFETIME?
>> IT COULD VERY WELL BE.
BUT RIGHT NOW IT'S GOING IN THE
WRONG DIRECTION.
THE DEFICIT HAS GOWN, NOT DOWN.
IT'S A LITTLE BIT LESS IF YOU
INCLUDE SERVICES BECAUSE WE HAVE
A SMALLER ADVISES SURPLUS.
BUT THIS MERCHANDISE DEFICIT IS