Elizabeth Economy Talks Trump/Xi Relations

Summary

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Bloomberg Talks: Elizabeth Economy Talks Trump/Xi Relations

Date: November 25, 2025
Host: Bloomberg
Guest: Dr. Elizabeth Economy, Senior Fellow at Hoover Institution, Stanford University

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Episode Overview

In this episode, renowned China scholar Dr. Elizabeth Economy joins Bloomberg to discuss the evolving dynamics of U.S.-China relations, focusing on the interplay between President Trump and President Xi Jinping, the growing tensions around Taiwan, China’s long-term strategic mindset, and the perspectives of regional actors like Japan. The conversation covers internal Chinese developments, U.S. policy ambiguities, and the complex web of regional security concerns in East Asia.

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Key Discussion Points & Insights

Xi Jinping’s Military Overhaul & Uncertainties

• Xi’s Reshaping of the Military
  • Xi Jinping has radically restructured China’s military since taking power, modeling parts on the U.S. joint structure and advancing military hardware and capabilities.
  • “He’s been a transformative military leader.” (Elizabeth Economy, [01:10])
  • Despite modernization, frequent purges of top military officers create uncertainty about Chinese military readiness.
    • “The constant roiling of the senior Chinese military leadership, I think, is a real challenge for Xi Jinping and the party leadership.” (Elizabeth Economy, [01:56])

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Taiwan: Heightened Threats and Regional Fallout

• Growing Pressure on Taiwan
  • Chinese rhetoric and military actions near Taiwan have intensified.
    • “The rhetoric out of Beijing and ... the military activity around Taiwan, the air flights, the crossings in the Taiwan Strait ... have only increased.” (Elizabeth Economy, [02:30])
  • Xi expects the military to be ready to move on Taiwan by 2027, not necessarily indicating imminent action but setting a preparedness deadline.
    • “He’s just put that down as a marker for when he would want the military to be prepared to take Taiwan.” (Elizabeth Economy, [03:16])
  • On-the-ground insight: Chinese officials convey impatience, suggesting “China is not prepared to wait 200 years, that it is prepared to take any form of military action.” ([03:30])
• Japan’s Reaction & Escalation
  • Japan’s statements about defending Taiwan triggered swift and intense responses from China, including economic boycotts.

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How China Views Trump—and U.S. Policy

• Chinese Perceptions of Trump
  • Trump is seen as unpredictable but open to deal-making.
  • Xi’s recent direct outreach suggests probing if Trump would negotiate on Taiwan amid broader U.S.-Russia negotiations.
    • “The perception in China is that President Trump is a deal maker ... willing to put everything on the table and to trade things in and out.” (Elizabeth Economy, [04:56])
• U.S. Policy Ambiguity on Taiwan
  • Concern exists over Trump’s commitment to Taiwan—he’s never clearly affirmed its strategic value to the U.S.
    • “He’s never come out and said that Taiwan is a very valuable partner ... He’s been critical of Taiwan on some fronts.” (Elizabeth Economy, [05:37])
  • Secretaries Rubio and Hegseth are staunch supporters of Taiwan and Indo-Pacific allies, but fractures within the administration over issues like Russia foreshadow possible splits over China/Taiwan policy.

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China’s Long Game vs. Washington’s Political Timelines

• Strategic Patience and Vision
  • Xi and the Chinese system operate on decades-long timelines, with clear milestones for global leadership in tech and other key sectors.
    • “They have a long-term vision and a long-term strategy to achieve that vision. This is the long game.” (Elizabeth Economy, [07:35])
  • Xi is seen as preparing for another five-year term beginning in 2027, with expectations to remain influential even beyond that.
    • “We can count on at least another five-year term beginning in 2027 ... After that, I imagine he’ll still want to at least be in the background.” (Elizabeth Economy, [08:01])

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Public Opinion and Internal Diversity in China

• On the Chinese Street
  • Chinese citizens are divided: some want more openness to the West, others back Xi’s assertiveness.
    • “There are as many different opinions within China as there are in the United States.” (Elizabeth Economy, [08:34])
  • Not universally behind Wolf Warrior diplomacy or post-Ukraine Russian alignment.

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China-Japan Friction & Security Geography

• Proximity and Security Fears
  • Japan and China are close—about 70 miles at the nearest point—fueling disputes like the Diaoyu/Senkaku Islands.
    • “The distance between the closest point of Japan and China is only 70 miles.” (Elizabeth Economy, [11:29])
  • Japan’s direct stake in Taiwan’s security is shaped by history (colonial legacy), language ties, and reliance on trade routes.
  • Anxiety in Tokyo: if China succeeds in Taiwan, “is Japan next?”

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U.S. Commitments: Allies’ Wariness

• Confidence in U.S. Support
  • Under Biden, U.S. alliance commitments were clear. Under Trump, there’s a strong sense of strategic ambiguity and unpredictability.
    • “There’s a much higher degree of uncertainty about our commitment to our allies and partners.” (Elizabeth Economy, [13:24])
  • Even among U.S. officials, the initial phase of the Trump administration raised doubts about Aukus and other Indo-Pacific initiatives.

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Notable Quotes & Memorable Moments

• “He’s been a transformative military leader.” – Elizabeth Economy ([01:10])
• “[On Xi's readiness deadlines] He’s just put that down as a marker for when he would want the military to be prepared to take Taiwan.” – Elizabeth Economy ([03:16])
• “The perception in China is that President Trump is a deal maker ... willing to put everything on the table and to trade things in and out.” ([04:56])
• “It’s unclear ... and I think we’ve seen a fracturing ... on the Russia issue. It’s not impossible that we’d have a similar fracturing on the China, Taiwan issue.” ([05:57])
• “They have a long-term vision and a long-term strategy ... This is the long game.” ([07:35])
• “There are as many different opinions within China as there are in the United States.” ([08:34])
• “The distance between the closest point of Japan and China is only 70 miles.” ([11:29])
• “There’s a much higher degree of uncertainty about our commitment to our allies and partners.” ([13:24])

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Timestamps for Key Segments

• Xi's Military Reshuffle & Readiness: 01:10–02:07
• Taiwan Threat & Japan’s Involvement: 02:29–04:05
• How the Chinese View Trump & U.S. Policy: 04:19–05:24
• U.S. Commitment and Policy Fractures: 05:35–06:20
• China’s Strategic Timeframes: 07:05–08:13
• Chinese Public Opinion: 08:34–09:34
• Japan-China Proximity and Security Dilemma: 10:52–11:25
• U.S. Ally Confidence Gap: 12:42–13:24

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Episode Tone & Style

The conversation remains candid, analytical, and pragmatic. Dr. Economy combines rigorous scholarship with real-world policy insight. The tone is thoughtful, laced with urgency regarding East Asian security, and balanced with nuance about internal Chinese diversity and the unpredictability of American politics.

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This detailed breakdown serves listeners seeking a comprehensive yet accessible guide to the critical issues shaping U.S.-China relations and East Asian security, as discussed by one of the leading analysts in the field.

Transcript

[Host]

Indiana University is proving how higher education can create solutions with industry. We're working side by side with industry partners to fuel economic growth that powers a future ready workforce. Explore IU's impact at iu.edu impact.

[Elizabeth Economy]

Bloomberg Audio Studios Podcasts Radio News Elizabeth Economy.

[Interviewer]

The Hoover Institution at Stanford University changed our dialogue on China where their Michigan graduate school book the River Runs Black and has done the rarest thing. She had a triumph in graduate school and then continued forward with book after book after book. She's the only one who's read all of James to region and as well. Dr. Economy, thank you so much for joining us. Because of you, I am buried in a nerd book. Joel Wolf now and Philip Saunders, China's Quest for Military Supremacy Elizabeth Economy do you have any idea idea the makeup and the power of President Xi's China military force?

[Elizabeth Economy]

I mean, if you're reading the book, then you know that Xi Jinping has made radical changes to China's military over the past 13 years. Since he came into power, he's reorganized it certainly he's reshuffled the top Chinese military. He's modeled it in many cases on the US Sort of joint structure. And he certainly increased and advanced China's military hardware, capabilities, abilities. So he's transformed. He's been a transformative military leader. That being said, of course, we've also watched these purges of the senior military leadership, most recently at the fourth Plenum, and it's very unclear, you know, sort of the readiness of the Chinese military, certainly at the top, to take any kind of military action moving forward. So just the constant roiling of the senior Chinese military leadership, I think, is a real challenge challenge for the for Xi Jinping and the party leadership.

[Interviewer]

Liz Paul Sweeney brought this up brilliantly this morning. The basic idea is we all have a perspective of Taiwan, and maybe it's Chiang kai Shek and Mrs. Chiang Kai Shek coming to Washington and then on to this and Nixon and Kissinger and all that. Is this a fulcrum point where Taiwan is actually under threat?

[Elizabeth Economy]

Look, there's no doubt that Taiwan is is under threat. And over the past several years, the rhetoric out of Beijing and the sor of the military activity around Taiwan, the air flights, the sort of crossings in the Taiwan Strait over the median line have only increased. And I think what we saw, you know, just over the past few weeks was Prime Minister of Japan Takaichi when she said that if China were to take military action against Taiwan, Japan could be forced itself to take some sort of military action. That China came out very hot and said Japan had crossed a red line and that it started banning boycotting Japanese seafood, Japanese films, et cetera. And so I think there's no doubt Xi Jinping has said he wants the Chinese military to be prepared to take action by 2027. That doesn't mean that they're going to launch any kind of military invasion in 2027. He's just put that down as a marker for when he would want the military to be prepared to take Taiwan. So I'll just say I was in mainland China, just came back Saturday, and one of the things that our delegation heard was from a retired senior foreign policy official that China is not prepared to wait 200 years, that it is prepared to take any form of military action. So I think the heat is it's only getting hotter for Taiwan at this point.

[Host]

Elizabeth, President Trump and President Xi have been on again, off again, having discussions on trade. What's the perception within China of President Trump, this administration, and maybe the policies as it relates to China?

[Elizabeth Economy]

I think, look, there's still a sense within China that President Trump can be very unpredictable. They see some openings with President Trump, and I think the recent phone call that was initiated by Xi Jinping is evidence that Xi Jinping wanted to send a message about Taiwan, certainly that Taiwan is part of China and doesn't want the United States to wade into this Japan mainland China brouhaha. But I think he was also probing to see whether President Trump might be willing to do something on Taiwan, especially in the wake of this U. S Russia negotiation over Ukraine and that initial peace plan that they put forth. Is there something that President Trump and President Xi could discuss on Taiwan when they meet in April? So I think the perception in China is that President Trump is a deal maker, that he's willing to put everything on the table and to trade things in and out. And so I think that's what they're looking to assess.

[Host]

Now, do you believe from the US Perspective that putting things on the table would include Taiwan? Do we have any indication President Trump would consider that?

[Elizabeth Economy]

You know, I think there's always concern when it comes to President Trump's commitment to Taiwan. He's never come out and said that Taiwan is a very valuable partner for the United States. You know, he's been critical of Taiwan on some fronts. I think what we do know is that Secretary Rubio and Secretary Hegseth have been very strong in their support of Taiwan, very strong in their commitment to our Indo Pacific allies and partners and to sort of A continued U. S dominant presence in the Indo Pacific in the security space. So, you know, it's unclear and I think we've seen a fracturing to some extent of this administration on the Russia issue. It's not impossible that we'd have a similar fracturing on the China, Taiwan China issue.

[Interviewer]

Elizabeth Economy with us, an extended conversation of course, for the Hoover Institution and Stanford University, Margaret Patel, Chris Whelan coming up. And later we'll be looking at the gambling across America. Dr. Economy the world According to China your must read, you say. Rewriting the rules of the game My China 101 also learned at the altar of Elizabeth Economy is that Presidents have a four year window, an eight year window. China has a 20, 30 year X axis. Rewriting the rules of the game. One of your chapters here, does President Xi, as he shorten the China exit or are they playing the long game each and every day?

[Elizabeth Economy]

He's certainly playing the long game, as you say, each and every day. And you know, they continue to invest in all the resources and capabilities that they need to, you know, win the game over to 2035-2049. And you see this in all the targets and timetables that they put forth, for example. And you know how they're going to achieve global technology dominance. But it also plays out across, you know, a range of areas. Whether we're talking about the Arctic or space or deep seabed mining or de dollarizing the global economy, they're constantly putting markers out for the future. Five years, 10 years, 15 years out. What do they want to achieve? How are they going to get there? They have a long term vision and a long term strategy to achieve that vision. So this is the long game and Xi Jinping doesn't see himself exiting anytime soon. So I think we can count on at least another five year term beginning in 2027 for Xi Jinping. After that, I imagine he'll still want to at least be in the background guiding the next leaders of China.

[Host]

So if Xi Jinping seems secure for the foreseeable future, how's the average Chinese person on the ground feel about the world? Are they comfortable with China becoming, I guess, ever more ostracized from the West? Do they want to integrate with the West? What's the feeling on the ground?

[Elizabeth Economy]

I mean, I think, look, there are as many different opinions within China as there are in the United States. And I think there are people who continue to advocate and desire that China be more open politically, even more open economically these days to the West. There were people who Said Xi Jinping made a mistake when he decided to align with Russia as opposed to the west after Russia's invasion of Ukraine. And then there are people that are very comfortable with China's more sort of robust posture on the global stage. It's more wolf warrior diplomacy. So there's not one particular view, I think within China, but I think we see how Xi Jinping, you know, his approach is, you know, the much activist and expansionist and ambitious China and one that's not afraid to take on the west and to assert Chinese interests, Chinese values and Chinese priorities.

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[Interviewer]

Dr. Economy in the time we've got left, I've got to go to what you led with, which is this new tension between a new government in Japan and with China. And folks, I'm ignorant of this. Okay, I got it. We're doing. Can we do some surveillance geography now?

[Host]

Yeah, Google Maps.

[Interviewer]

Okinawa, which is seared in the memory of all Americans. And you, you come down southwest. There's Miya, Kayama, Tarama, Ishigaki, Takatomi and Paul, help me here. There's a little piece of land. Sweeney nailed this at Lawrenceville years ago. Yona Gooney. And on a clear day from Yonaguni, sometimes you can see Taiwan.

[Host]

Can you?

[Interviewer]

Okay, Japan is that close to China. Liz, what is our biggest ignorance about the modern Chinese, Japanese relationship?

[Elizabeth Economy]

I mean, there are. There continue to be tensions between China and Japan. There are important trading partners. But yeah, I think the distance between the closest point of Japan and China is only 70 miles, they continue. They have their own territorial conflict over the Dia Use and Kaku Islands, which Japan administers. But China claims and China, as assertive as it's been toward Taiwan militarily over the past few years, it's been equally assertive and aggressive militarily toward Japan around this particular dispute. So I think from the perspective of Japan, they're concerned for Taiwan. Taiwan used to be a colony of Japan. Many people in Taiwan actually speak Japanese, feel close to Japan. So they have their own concerns about Taiwan. They have concerns about China dominating the Taiwan Strait and trade routes there that Japan depends on. But they're also concerned about their own security. And if China takes action against Taiwan is successful, is Japan next? So I think there are a number of issues sitting back in the minds of the Japanese when it comes to Chinese military action against Taiwan. That prompted Prime Minister Takaichi's comment.

[Host]

Elizabeth, how do you think Japan and our other allies in that part of the world, do they view the commitment from the United States these days? Are they confident as maybe they have been in past years, or is that wavering?

[Elizabeth Economy]

No, I think the commitment starts from the top. And President Biden was very clear on a number of occasions he said that the United States would come to the defense of Taiwan if China were to attempt a blockade or a military invasion. President Trump has not reiterated that commitment. He's gone back to the policy of strategic ambiguity. But I think more than that, there's a sense that everything was under review at the outset of the Trump administration. You know, were they going to continue to support the Aukus, Right, the nuclear submarine deal between Australia, the UK and the US There was a lot of uncertainty. Ultimately, we did support it, but everything seems to be, you know, up for grabs, you know, with President Trump again, Secretary Hickset, Secretary Rubio had been very firm from the minute that the administration took office that there was going to be continuity in the U.S. commitment to the Indo Pacific. But with President Trump, you know, there's a much higher degree of uncertainty about our commitment to our allies and partners than, you know, not only Democrats, but Republicans in the past.

[Interviewer]

Dr. Economy, thank you so much for the generous time this morning. Really, really appreciate it, Elizabeth. Economy there folks from Hoover and from Stanford as well.

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