FRIEND.
THANK YOU VERY MUCH.
>> GREAT SEEING YOU.
NEIL: ALL RIGHT, THE GUY WHO IS
UNCANNILY PRESCIENT OVER MANY
YEARS I HAVE KNOWN HIM, TALKING
ABOUT CHINA, WHETHER WE CAN
TRUST THEM OR DELIVER THE GOODS
OR MAKE GOOD ON THE WORDS THAT
THEY ARE GIVING SEEM ALL THE
WRITE WORDS.
GORDON CHANG, BEING, AUTHOR OF
MANY OTHER CLASSICS THE COMING
COLLAPSE OF CHINA.
HE ENDEARED HIMSELF TO THE
GOVERNMENT BUT I AM GLAD HE IS
HERE TO GIVE US SOME INSIGHT.
GORDON WHAT DO YOU THINK IS
HAPPENING?
WE HEAR WHISPERING SOMETHING
HAPPEN.
WHAT DO YOU THINK WE'LL GET?
>> I THINK THERE WASN'T GOOD
DEAL CLOSE TO THE END OF THE
90-DAY TRUCE.
I DON'T THINK THAT IS GOOD THING
THOUGH, NEIL.
WE'VE SEEN THIS STORY SOME TIMES
BEFORE, THE CHINESE PROMISE BUT
DON'T DELIVER.
I THINK THE TRUMP ADMINISTRATION
NEED TO KEEP THE PRESSURE ON
UNTIL THE CHINESE PERFORM.
WE HAVEN'T GONE THAT ROUTE
BEFORE.
EVERYTHING WE TRIED ABSOLUTELY
FAILED, NEGOTIATIONS,
AGREEMENTS, WTO CASES, WE'VE
DONE EVERYTHING.
OVER THE COURSE OF DECADES IT
HASN'T WORKED.
WE NEED TO TRY A NEW APPROACH,
BASICALLY SAY TO THE CHINESE,
YOU GET YOUR BENEFITS ONLY AFTER
YOU COMPLY FIRST.
NEIL: WE ALWAYS FORGET, SEEMS
LIKE A CAPITALIST JUGGERNAUT
CHINA HAS BECOME, THAT AT THEIR
CORE, THEY'RE NOT EXACTLY A FREE
SOCIETY AND THEY ROUND UP PEOPLE
ON THE STREETS AND THEY
DISAPPEAR.
IN THE CASE OF HAVING A TIFF
WITH CANADA, THEY ROUND UP A
COUPLE KEY CANADIAN OFFICIALS,
FORMER OFFICIALS, AND WE DON'T
KNOW WHY.
SO I ONLY SAY THAT IN THE
CONTEXT OF WHATEVER WE GET OUT
OF THE CHINESE, ARE WE VERY
AWARE OF WHAT WE'RE DEALING WITH
AND WHO WE'RE DEALING WITH?
>> I THINK THAT MOST AMERICANS
FUNDAMENTALLY MISUNDERSTAND THE
CHINESE.
YOU KNOW, BASICALLY BEIJING HAS
BEEN ROUNDING UP HOSTAGES OVER
VARIOUS ISSUES FOR MORE THAN A
DECADE, EVEN BEFORE HUAWEI
STARTED WE HAD THIS AMERICAN,
TWO CHILDREN, THEIR MOTHER,
WERE, AMERICAN CITIZENS BEING
DETAINED FOR NO REASON OTHER
THAN THE FACT THAT THEIR FATHER
AND DAD IS ACCUSED OF FRAUD.
THE CHINESE DO THIS ALL THE
TIME.
SO THE CANADIANS SHOULDN'T BE
REALLY SURPRISED ABOUT THIS.
WHICH REALLY MEANS BY THE WAY,
NEIL, THAT AMERICANS AND
CANADIANS IN CHINA SHOULD
CONSIDER LEAVING BECAUSE THIS IS
GOING TO GET A LOT WORSE BEFORE
IT GETS BETTER.
NEIL: THERE ARE A LOT OF U.S.
BUSINESSES AS YOU REMINDED ME,
GORDON, WILL WANT PROOF THAT THE
CHINESE WILL MAKE GOOD ON THE
COMMITMENT TO OPEN MARKETS TO
THEM.
FINANCIAL INSTITUTIONS WAITED
FOR THAT IN THE PAST, THEY'RE
STILL WAITING.
AUTO MANUFACTURERS WAITED FOR
THAT IN THE PAST, THEY'RE STILL
WAITING.
SO WE OBVIOUSLY HAVE TO HAVE A
MEASURE WE SEE PROGRESS.
IT IS WAY TOO EARLY TO TELL HOW
WE WILL GET THAT.
SAY HYPOTHETICALLY, MAYBE NOT
HYPOTHETICALLY WE DON'T?
IN OTHER WORDS, THE CHINESE VERY
EARLY ON CHEATING, THEN WHAT DO
WE DO?
>> I THINK WE HAVE TO GO BACK TO
THE PRESSURE CAMPAIGN IF WE LET
THE FOOT OFF THE ACCELERATOR.
YOU KNOW, AS YOU SAID, NEIL, WE
JUST DON'T THE WAY CHINESE THINK
ABOUT THIS.
XI XINPING BELIEVES IN A
STATE-DOMINATED ECONOMY.
HE IS GOING BACK ON REFORM.
HE IS CLOSING THE COUNTRY UP AND
FOR HIM IT IS VERY IMPORTANT
THAT CHINA DOMINATE, FOR
INSTANCE, THOSE 10 SECTORS
MENTIONED IN MADE IN CHINA 2025.
NOW 11 SECTORS.
THAT 11th SECTOR BY THE WAY
IS 5G.
5G IN CHINA MEANS HUAWEI.
THIS WILL BE VERY DIFFICULT FOR
US.
XI XINPING IS DROPPING HINTS
THAT CHINA IS THE WORLD'S ONLY
SOVEREIGN STATE, IF HE DEALS
WITH PRESIDENT TRUMP, IN
XI XINPING'S EYES HE IS GRANTING
CONCESSION GRADUATION SCHUSSLY.
HE IS NOT DEALING WITH TRUMP ON
ONE-ON-ONE, EQUAL BASIS.
I THINK PRESIDENT TRUMP NEEDS TO
UNDERSTAND THE MENTALITY OF SOME
ONE WHO THINKS HE IS THE WORLD'S
ONLY SOVEREIGN.
NEIL: YOU MENTIONED THE 5G
THING, "BARRON'S," MAYBE "THE
ECONOMIST," TALKING ABOUT ALL
THE FIRMS GETTING JUMP ON THIS
TRYING TO DEFINE THE TECHNOLOGY
TO MAKE MONEY BEHIND THIS.
I THINK THE FIGURE, MORE THAN
HALF HAD SOME SOURCE BACK TO
CHINA.
>> YEAH, OF COURSE AND OUR
NUMBER ONE 5G COMPETITOR IS
QUALCOMM AND QUALCOMM OF COURSE
HAS RELATIONS WITH CHINA.
NEIL: RIGHT.
>> EARNS A SUBSTANTIAL AMOUNT OF
REVENUE IN CHINA.
ALSO HAD SUBSTANTIAL
DIFFICULTIES IN CHINA AND THOSE
DIFFICULTIES ARE NOT JUST THE
PRESENT SPAT IT HAS WITH APPLE.
THESE GO BACK --
NEIL: BY THE WAY THEY HAD THE
COMPLETE BLESSING OF THE CHINESE
GOVERNMENT TO SUPPORT ITS
GETTING iPHONES OUT OF CHINA.
>> THAT IS CERTAINLY BEIJING
TOOK ADVANTAGE OF THAT TOO.
NEIL: SURE.
>> WE HAVE TO REMEMBER BEIJING
HAS GONE AFTER QUALCOMM TO TAKE
ITS TECHNOLOGY.
THIS IS AN IP ISSUE FOR US.