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- [00:00]
JVL
Hey guys, it's JVL from the Bulwark here with the great Bill Bishop from Cynicism. Cynosism.
- [00:08]
Bill Bishop
Cynicism. But that's okay. It's one of those things. Call it what you want, just be nice.
- [00:15]
JVL
And we were just chatting about. Bill was substack number one first outside writer on substack in 2017. Did you come from Axios?
- [00:25]
Bill Bishop
No. So I had my own blog that had turned into a newsletter and I was sort of casting around for how to turn into a business. I'd been talking with Ben Thompson over at Chatekri and looked at his tech stack, which was worked, but at the time was a bit kludgy and I have no technical skills. And so I was about to launch what he had in the sort of mid spring of 2017 and then had some family issues, so I pushed it off. And you know, you never want to launch that newsletter in August, so to speak. And in that interim period, I heard from Hamish, who I know from his reporting days, and he's like, hey, we're working on this thing. And I was like, why not? I'll give it a try. I liked Hamish and I like Chris best when I met him and it seemed like they knew what they were doing and so figured I'd just take a flyer. So we launched in September, October 2017 and it was just email. It's very primitive.
- [01:17]
JVL
Wow. And you, so your, your focus is China. Where, where do you live now? You lived in China previously.
- [01:24]
Bill Bishop
You're. I live in D.C. now. I studied Chinese in college back in the late. Lived in Beijing in the 1989 and then in the like 91 and 93, and then did graduate work, got a master's in basically Chinese politics and then went and worked in Silicon Valley for about 10 years and did a startup, became MarketWatch.com, which we ultimately sold to Dow Jones in late 2004, late 2005, then it moved back to Beijing in 2000, end of 2004, tried to do another startup that didn't work, but ended up leaving there for 10 years doing some other things. And during that period while I was in Beijing, I ended up launching what, what became this newsletter. So I've been doing cynicism in one form or another for probably I, I should know by Now, I think 13, 14 years.
- [02:16]
JVL
It's a long stint, man. It's a lot of, a lot of words.
- [02:19]
Bill Bishop
Yes, it is. It is a lot of work. It's a full time job. But I, you know, happy doing it.
- [02:25]
JVL
Good. So, I mean, you couldn't have picked a better subject because China is like, eternally important. And it's, it's even more, it's funny, we haven't had like, direct conflict with China since like the Trump inauguration. And yet China, because of what Trump has been doing sort of at home and abroad, China has, has gotten all sorts of opportunities. And I guess I want to start with just an open ended. What, what does the world look like from China's perspective now that we are in the second Trump administration? Do the Chinese, does the Chinese government look at this and say things have shifted and there are opportunities for us and we can start making moves on the street?
- [03:23]
Bill Bishop
So I think they have a sophisticated view of how things are. I think there are certainly. And they talk about this. They see challenges, they see increasing external pressure, most of it driven by the US on trade issues, on technology issues, things like the chip controls. They also, though, see massive opportunities to continue to reshape the international system in ways that are more favorable to the PRC and its view of how the world should be ordered. And that in many ways what they're doing is there's a long strand of consistency in PRC foreign policy going back to the Mao Zedong years when they hooked up with the developing world and Latin America, African countries and other Asian countries, and now it's the global South. And so China calls itself developing country. They say they're effectively the leader of the global south. They advocate for the global South. And so they're pushing for a more democratic international order with the UN at its core, with the WTO as the core of the trading system, but of course revised in ways that are favorable to China. And as the US appears to be pulling back from those key institutions, it creates more space for the prc. It's not clear though, from the PRC perspective, they may make more inroads in the global south. They have their own problems with Europe, they have their own problems with other countries in Asia, like South Korea, like Japan, like Vietnam, like India, and obviously the Philippines. And so it's a very complicated picture. I think the Trump administration especially adds a lot of volatility to the relationship and a lot of uncertainty, and they don't like that. But at the same time, again, they create space for certain opportunities. And so it's just a mixed bag, but it is a. And this is the thing, when Trump, when we go through the election last fall, there were countless op EDS about who China preferred. And the answer was official line was they don't prefer a candidate. And I actually think most people I talked to were like, well, on the one hand, Biden's been tough on us, but he's stable and predictable. On the other hand, Trump is transactional and maybe there's a bigger deal to be had, but who knows, because he can also be crazy, right? And he caused the Chinese a lot of problems in his first term and then they got a trade deal that was kind of a BS deal. But, you know, everyone said we got a deal and then Covid hit and then the floor fell out. And so that's a long answer to say. I think that they are, they see opportunity, they say risks. The one thing I think a lot of people need to remember or pay attention to is that in the intervening years since the first Biden administration, they have put a lot of work into hardening their system, hardening their economy to be able to withstand increasing U.S. pressure. And they've also built the whole pretty significant toolbox to be able to strike back in ways, not just additional tariffs. If the US Tariffs them, they tariff back, but other ways to launch investigations to restrict access to certain critical minerals. So they have a more sophisticated approach. Their economy also has a lot of problems. And so there are significant risks for them. But in general, I think the Trump administration, here we are, what, 70 something days in the Trump administration. I think it's also still unclear exactly how Trump is going to go after, like how he's going to deal with China. Right. It's still, they're still waiting for the sort of to figure out what does the Trump administration want and what are they really going to do. And I mean, I'm not, again, I'm not, I'm in D.C. i'm not sure that people in the Trump administration necessarily know.
- [07:11]
JVL
So you, yesterday you, you mentioned sort of sardonically, you asked if anybody understands why the Trump administration is pulling the plug on all this research and tech while China is trying to get more invested in it and exert more influence in it. Let me know you talked a little bit about that because this is right then wasn't a new a statement that they the was it the politburo just put out?
- [07:34]
Bill Bishop
Well, so yesterday there's a magazine that comes out twice a month that's under the Central Committee of the Communist Party called Choshu, which is called Seeking Truth. And every edition, every issue, the lead essay is something from Xi Jinping. And this one that just came out yesterday, lead issue is a speech he gave last June at the National Science and Technology Conference because China under Xi, you know, they've, they've long predating Xi Long predating Trump. The Chinese have wanted to achieve self sufficiency in certain core technologies. The, the Trump administration's actions and then the Biden administration action actions really accelerated that process. And so there's a massive whole of nation effort underway to achieve essence science technology breakthroughs, especially in core areas like semiconductors. And so the Chinese government is spending massive amounts of money on research and development. And over the last couple of years, they've also embarked on a really significant sort of bureaucratic government restructuring to try and streamline the process for research development and, and actually do a much better job of taking research output and then being able to productize it, turn it into products, turn into companies, raise money. And so this speech last summer was again was a reiteration of those goals, announcing some new initiatives. And the ambitions are breathtaking. What the Chinese want to do. And it feels like in some ways where we were, the US were in the 50s and 60s. You think back to some of the speeches about John Kennedy, about the space program and how it was inspiring the country to. There's a lot of that going on in China. And so the question, right, is on the one hand, the US Government identifies China as really its main strategic competitor and the Chinese feel the same way about the U.S. they see. And I'll just read a quote from this article if that's okay. I think just it gives a good encapsulation of how Xi Jinping and the Chinese system see this. And so he wrote that the world is undergoing changes unseen in a century that are accelerating with technological revolution and great power competition intertwined, making high technology fields the forefront and main battlefield of international competition, profoundly reshaping the global order and development problem pattern. Although China's science and technology undertakings have made significant progress, original innovation capability is still relatively weak. Some key core technologies are controlled by others, others being the US particularly, and top scientific and technological talents are insufficient. We must further enhance our sense of urgency, further increase efforts in science and technological innovation and seize the commanding heights of technological competition and future development. It is run by the Communist Party. The Party is driving this process of S and T development. But people, I think, underestimate at their peril both the focus of the system on these problems, the amount of resources that are going to it, and really the ability for them to innovate even while they're still an authoritarian country.
- [10:49]
JVL
Yeah, it's funny just hearing the verbiage. It really does sound like the old Soviet.
- [10:56]
Bill Bishop
Yes, yes, right. And it's easy though, to say, oh, the Soviets failed. You know, the Soviets actually have pretty good science. You know, I think, you know, one of the things too is, you know, Xi Jinping, one of the animating sort of ideas in the Communist Party. And Xi Jinping is basically how not to be the ussr. Yeah, right. To basically like be the Soviet Union, but actually succeed in a lot of ways.
- [11:17]
JVL
It's very impressive. And we are, I mean, you know, I mean, just for instance, with like biotech, it does seem like America has decided we're going to take a big step back.
- [11:30]
Bill Bishop
And yes.
- [11:31]
JVL
I don't know, like, if you're a researcher and you want to work in this field, like, why would you stay in America? Right.
- [11:38]
Bill Bishop
Well, and that's, you know, and that's, and that's the real question, right, is, you know, the researchers need money and they need support. And if we, if the government is now cutting all this funding, right. And there are massive layoffs today, I think they hit NIH as well. You know, researchers are going to go where there's money and freedom. And so, you know, China, they want to attract global talent. And that has always been our strength. Right, right. We have been the place that's attractive to the best scientific and technological minds around the world. I think it's a challenge for the Chinese to attract global talent given the nature of their system. However, it is not. I think there are still some pretty terrific international talent who will want to go to China, but more likely you'll see Canada, Europe benefiting from the cuts and the pressures here in the US that are driving some of these, potentially either driving them away or having people decide they don't want to come to the US Right now, they're going to pick another country. And that's to our detriment. That is absolutely to our detriment. This is one of our core strengths.
- [12:46]
JVL
What made the US So attractive, for instance, was we had strong rule of law, predictable institutions, and people didn't get disappeared off the streets.
- [12:54]
Bill Bishop
No, that, I mean, those things aren't true anymore.
- [12:57]
JVL
After seven weeks, those things are all off the table.
- [13:00]
Bill Bishop
And one of the things I worry about is there's this sense that when we're American, America, we're, you know, we're exceptional, we'll recover. And, you know, I think, I worry people underestimate how quickly these kind of, you know, how deep and long term damaging these cuts are, but also how quickly the idea that you're a stable place with rule of law to invest and live in Those that can be damaged quite quickly and then it takes a really long time to recover from that.
- [13:24]
JVL
Yeah, yeah, those things don't recover. Those things take a generation to recover. Because once the seal's been broken, you have to prove that it can. First you have to fix it and then you've got to prove that it can stay fixed. What, what about the usaid? So with USAID fed into the wood chipper, it. I mean, does China have any specific response to this? Has this created any like, were they decide, oh, we can go into developing countries. You talked about the Global south and how they want to make that sort of more multinational, more dem. You know, largely democratic now, my small d. Democratic, but basically not, you know, unipolar. What does, what, what impact does the, the demise of USAID have on China's approach to that world?
- [14:08]
Bill Bishop
So they don't have a sort of a like to, like replacement. But you know, the USAID was. And again, just to be clear, you know, governments have big bureaucracies. There are reasons to regularly look at bureaucracies and, you know, certainly make some cuts and clean some things out if you need to, but you do it with a plan and a strategy and you do it in a measured way, Right. That's not what clearly is what is happening in the current administration. So the Chinese don't have a, like, they have an aid agency. They don't do what the USA does. They, they, I don't think they will sort of take it on like, for like. But they will fill the gap in some areas. But at the same time, it's also, you know, when you talk about the importance of soft power, right. You know, the fact that the US was showing up and was, was contributing in ways to, you know, all sorts of medicines for health care, health core solutions for people in the Global South. That's all gone. You know, we, not only from a moral level are we probably contributing to the deaths of lots of people now because we're no longer supporting them with healthcare and medicines. But, but also it damages America's brand, right. It creates a vacuum that someone will fill. Right. Because nature forms a vacuum and that the Chinese are certainly one of those countries that is well positioned to fill. One example right now is at least as of yesterday, there's a terrible earthquake in Myanmar. Usually the US would surge, they'd figure out how to get people in there, they'd surge all sorts of aid. At least as of last night, we weren't doing anything.
- [15:42]
JVL
That's great. What a country. Very quickly. So when you knew when I were emailing before this I had said hey, I want to pick your brain about the announcement yesterday about some sort of partnership between China, Japan and South Korea just because like hey, these are three countries which historically have a lot of history between them. And you were like I think that's over reported. Can you tell me what the real story is on this? Because so they.
- [16:06]
Bill Bishop
So the three countries had a trial meeting like it was their. It was the economic and trade ministers meeting between Japan, South Korea and China. Sorry, I thought. I was not disturbed. I apologize. And so the headlines that came out, picked up I think by Reuters were that the three countries had agreed to jointly respond to US Tariffs. And that appears to have been based out, based on a report from the Chinese side. And one of the challenges is the Chinese side readouts reports they don't always fully reflect what was discussed or agreed to on the meeting. And so that story got a life of its own based on the official readout from the other two or from the actual media statement from the three. There's nothing in there that says that. And so I think they are concerned about sort of disruptions in trade. But this is not something like we're going to work together to respond to the U.S. that is nothing that they said publicly.
- [17:03]
JVL
That's very helpful information.
- [17:05]
Bill Bishop
I mean I think there are reasons to expect. There are increasing trade tensions between the US And South Korea, US And Japan. It would be pretty shocking if suddenly those three countries said hey, we're going to work with the Chinese. Encounter the U.S. that would be. And that's why it got such a. It sort of went viral. But I think it's kind of BS Good.
- [17:26]
JVL
Well that is very helpful to know. So one, one in in a past life I spent many years writing about demographics and so China was always a particular interest to me just about demographics. And they, they put aside the one child policy. This is now six years ago, I want to say maybe seven. And it's getting demographic information out of China is difficult because you're never sure how accurate it is. It does not seem as though getting rid of one child has materially raised the total fertility rate there. And so this isn't a problem now, but projecting out into the future is demographics on the radar of leadership in.
- [18:13]
Bill Bishop
China that this is absolutely. It's been a real switch from we have to have the one child policy because we have too many people to now they are in the process over the last several years they've started to try to roll out pronatalist Policies get people to have children, do his best. I think it's various subsidies, various policies, and they're now intensifying those efforts because they haven't worked to date. And so they're doing trials where they're in certain cities, they're giving a bunch of money for your second kid and even more money for your third kid. Preferential housing. The central government, none of that is going to work. Probably not. The central government just last week announced they're sending out these teams to do research around the country to figure out ideas. But if you look at other countries who've sort of gone into this demographic decline, it doesn't work. But it's something they're clearly concerned with. They have a lot of big problems in their pension system. I think there's some talk, well, they're probably the leader in humanoid robots, so maybe robots can at least replace the labor force. But based on what the top leaders are doing and the policy pronouncements, they are displaying a pretty significant concern about the demographic challenges.
- [19:26]
JVL
Yeah, when people talk about demographics, there is a lot of like, oh, well, robots will take over the labor that really, I would say, you know, this. I'm just talking to the audience here. That is at best half the problem. The problem really is like, getting from here to there because what happens is you wind up with an enormous number of old people and not enough resources to support them. And in China, you then also have a problem of sex imbalance because they have massive sex selective abortion, which is. I forget the number, but it's something like 117 boys for every 102 girls.
- [20:07]
Bill Bishop
It was something like that. And I think it's narrow, but not fully.
- [20:11]
JVL
Yeah, so you wind up with a whole bunch of men who are basically unmarriageable. And historically unmarried men, when the labor force is a little bit slack, are trouble. Like, it's just throughout history, it's never good to have single men who don't have jobs. But. So this is. I do have a labor force question for you though, which is like. And that is, where are they now? So in, in China, what does the workforce look like? Are they still at full employment? I mean, what is the current state of play? And what is again, not talking about recession or. But like over the next five to 10 years, what is that?
- [20:53]
Bill Bishop
No, they're not. I mean, the official employment rate, unemployment rate is like 5%, thereabouts, and it's remained steady. They have a significantly larger unemployment rate among youth, especially new graduates. They put a lot of emphasis on and expanded the tertiary education system, a lot more universities, a lot more spots. And then it turns out they've been graduating more people than there are jobs for white collars. They have a significant gig economy, people doing things like their version of Uber or the food delivery services, et cetera. So unemployment is. The employment situation is not great. It's also, I mean, the economy's been in a. Been struggling for several years. Covid, again, Covid was one of the things where the first year after the outbreak, China actually did better than most countries around the world because they were able to really tamp it down and then stay open. But then 15, 18 months in, when Omicron hit, it just destroyed the economy and they're still struggling to come out of that. And it did a lot of damage to confidence, consumer sentiment. And then, so I think employment is, it's again, one of the things that the leadership talks a lot about. They're doing a lot of things to try and improve the employment situation because they see, rightfully so, that large numbers of unemployed or not fully employed people are potentially social stability problems, which is true, but they're not yet doing the kind of things in terms of economic policies to really resolve those problems. So it is a real challenge for the country.
- [22:31]
JVL
Interesting. So talk to me about Taiwan. This is the, you know. No, this is one of those problems that is intractable, I think.
- [22:42]
Bill Bishop
Yes.
- [22:43]
JVL
And has no good answers. And where. Also correct me if I'm wrong, but it's really, really. What's the word I'm looking for? Path dependent. Is that the term contingent? I would say maybe contingent is a better word. Nobody knows how this story ends, and it really could go any number of different ways. Is that right? Or do you think that there is a likely ending to this or a likely path for it?
- [23:18]
Bill Bishop
So I think Taiwan is effectively operates like an independent country, although it's not. And the mainland Beijing, they see it as a renegade province that needs to be brought back into the country. Plenty of people in Taiwan don't like to use the term reunified because they say they were never part of the People's Republic of China. Right. Taiwan is a democracy. Right. It is one of the most vibrant democracies in the world. And I think that there was even a decade, maybe a decade plus, there was some way to see a path where there could be some sort of a political condominium or political settlement that allowed for a solution that was acceptable to both sides. That path, I think, is gone because of the way the society and the politics that developed in the prc. What happened with Hong Kong?
- [24:21]
JVL
I was going to say Hong Kong.
- [24:22]
Bill Bishop
Right. And sort of the crackdown there. You'll very hard to find serious people in Taiwan who think they're, they're, they want to be part of that. I mean, there are some, but it's a, it's a, you'll get any polling. It's a very small percentage. Most prefer the status quo. They just want to be left alone. And, but the Chinese side, the PRC side, can't leave it alone. For example, just few hours, like 12 hours ago, or they, or 15 hours ago, they announced a new round of exercises to practice blockading. I think is practice blockading Taiwan. Very aggressive, showing off lots of new weapons. Put out some propaganda videos, including one depicting President lyching the Taiwan president as a parasite and then sort of burning him alive over an exploding, burning Taiwan island. Yeah, it's pretty gross. It's pretty grim. And that kind of dehumanizes a little unambiguous. No. And that kind of dehumanizing of a democratically elected president is also one of those things that people can sort of say, oh, that's just BS propaganda, but that's not really disturbing.
- [25:25]
JVL
So how does the Chinese leadership think about the cost benefit analysis on this when they look at Taiwan? I mean, I, I understand the benefits, I guess. I, I don't fully understand their view of the cost structure to this. You know, what, what are acceptable costs that they'd be willing to pay? What do they think they would have to pay in order to do it? I mean, do they look, and how much are they influenced by, for instance, the Russian invasion of Ukraine or, you know, America pulling back from NATO?
- [26:04]
Bill Bishop
So those are great questions. I think it isn't known, at least publicly, what are the acceptable costs to them? I think though, the sense I get is their preferences for political solution. And if they had to use force, it's a failure because they have a massive and for a long time, many, many years, massive political apparatus to try and effectively soften up Taiwan and create the conditions for peaceful unification. And I think what they appear to be trying to do is, yes, they're building up their military capabilities so that if they had to, they could get to a point where they could actually achieve success in an invasion or a blockade of Taiwan where Taiwan basically had to surrender and sue for some sort of a condominium. But they, their military is untested. The US is making it very clear that, has made it clear that they're trying to get Taiwan to Arm up. They're giving Taiwan more capabilities. They're working with allies like Japan to prepare for contingencies, to raise the cost for the Chinese if they wanted to use force. And so that equation keeps changing for the Chinese, where I think their capabilities get better, but the cost also keeps rising as the US Leads countries like Japan, some other countries, to say, we're not going to allow this to happen, or we're going to inflict some sort of pain for you if you take these steps. And so I don't think that the Chinese side is confident that they could successfully execute, say, an invasion of Taiwan. And if they were to fail in an invasion, that would be catastrophic from a political perspective domestically. But at the same time, if, for example, Taiwan were to announce independence or the US Were to recognize Taiwan as an independent country or other countries were, there's probably a point at which the Chinese, assuming Xi Jinping still leader, the Chinese would just go anyway. Because it really is an existential issue. It's become an existential issue in the political system and in the national psyche. Right. And so the best, the best piece I ever read in D.C. from one of the think tanks about how to work this, as you called it, intractable problem, was it was by a guy at Brookings, Ryan Haas, and a guy then at CSIS and Outran, Julie Blanchett, which basically the piece was like, we just have to figure out how to kick the can down the road and hope something changes in the future. Maybe different leadership so that there's some sort of a different approach to a political solution. Because. Because this is a totally intractable problem. The only thing we can hope for is time status quo, and over time, maybe things will work themselves out. That's pretty sad. That's more wishful thinking, I think, than a strategy. To your question about how they saw the Ukraine, the Russians invasion of Ukraine, I think there's a bunch of lessons they learned. I'll focus on a couple. One is first that while the Russian military was woefully underprepared, the equipment wasn't working right. And they're massively corrupt. And so the pla, and there's been a rolling wave of pretty significant investigations, corruption and corruption and loyalty sort of related investigations in the PLA that are ongoing. They also, though, I think, looked at all of the ways that the US and its allies sanctioned Russia and all the things that the US and the allies did to punish Russia. And they've taken that and looked at that as a playbook and mapped out how those similar Things could be applied to China in the event of a Taiwan contingency. But also, of course, how then they can harden their system to be able to sort of minimize the pain or the economic damage from those types of sanctions if it were to come to that.
- [30:13]
JVL
Yeah, that's what you talked about from the very beginning today. You talked about they were trying to harden themselves and become more independent and stuff. Yeah.
- [30:20]
Bill Bishop
Yes.
- [30:21]
JVL
Yeah. No, I guess. I mean, the US Policy really has always been just kick the can down the road and hope that at some point someday there's regime change in China. So China doesn't want Taiwan anymore. Right.
- [30:35]
Bill Bishop
That's the American hope, I think, that China will always want Taiwan. The question is whether or not there's a different leadership, that then the two can work something out. And I think, again, it's hard to be optimistic that's the case. But that seems to be the best solution anyone can come up with at this point. Because, again, Taiwan should be. And I think people to Taiwan should be very concerned. The president, they are clearly getting more concerned about PRC rhetoric, PRC actions, PRC's constriction of Taiwan's international space exercises like the one that's ongoing today. The trend lines are all bad.
- [31:17]
JVL
How about the American pullback from NATO? It's my, my thesis is that NATO is dead and that it was, it was put on life support when Trump was elected. But, and the, the hope, the best case scenario was that Trump would just sort of neglect the NATO alliance.
- [31:36]
Bill Bishop
Right.
- [31:37]
JVL
The Greenland stuff seems to suggest that he views Europe not with the intention of benign neglect, but basically as prey, and that this is problematic. He's actively working against European interests, voting with Russia and Belarus and the United nations, those sorts of things. What influence is that having in the Pacific? Do people look at it and say, oh, well, this is just the United States pivoting to Asia and this means they will become more involved over here and we should take them more seriously. Or do they look at this and say, yeah, America's withdrawing from the world, the country's public does not have the stomach for overseas adventures, and we can expand to fill the vacuum.
- [32:26]
Bill Bishop
So the jury's out. I mean, I think that the Secretary of Defense Hagsth was just in the region. He was in Philippines and Japan. He also went to Guam, I think, in Hawaii. And his message was very much, no, we're not. We're focusing on this region. We're focusing on the challenge from China. China. And we're going to work more with the Japanese. We're going to work more with the Philippines. And he said, then there was this memo that the Washington Post reported on yesterday. This internal guidance memo that he signed is based on a heritage report from last year. But it was very clear that the US Needed to build up deterrence around Taiwan to deter the PRC from taking any military actions. And so that message from the Secretary of defense, or those messages were, I think, sort of run counter the idea that, oh, the U.S. is going to leave NATO and therefore they're going to leave us, too. That said, there's all these relationships. You have to have more security, right? You have to have trade, right? You have to have all these other ties that we're smacking them over the head about. And ultimately, one of the challenges with President Trump is what does he want and what does he want at that moment of that day? And so we just don't know. His staff and a Secretary of defense is basically like, his staff can go out and say things that sound like they're the right things and say, we're gonna make these commitments, and yet he'll wake up one day and potentially he'll decide he wants something else. And so I will say, on the NATO side, China is happy, probably for a couple reasons. One is, during the Biden administration, there was a push to actually expand NATO into parts of the Asia Pacific, for example. And the Chinese were going nuts about, you know, NATO is sort of the, you know, it's a Cold War relic, and, you know, bringing it to the, to the Asia Pacific and Indo Pacific will just lead to war. And so I think that's probably off the table right in the, in this Trump administration. And then, you know, again, it's a mixed bag on, okay, if NATO really does collapse and the European countries, all, you know, they, many of them or some of them really do arm up. I think the Chinese hope, and they've been pushing for a long time this idea of pushing the EU and especially countries like France, Germany, for strategic autonomy, multipolar world, to prize them apart from the US because the thing the Chinese fear the most is a united front from the biggest and most powerful and richest developed countries around the world. And so Trump breaking NATO would help on that bit, but also could cause if it leads to some more conflict in Europe or parts of Europe that isn't necessarily good for China. I mean, China, I think that this goes back to earlier comments. They are the thing I read where Xi talks about sort of the changes unseen in a century. And he's been saying that for several years. It's actually true. Right. You see how the world is changing. So much of what they're trying to build around is this concept of sort of how to be flexible and how to protect themselves while figuring out the places where they can maximize their opportunities. And, you know, chaos is bad. Chaos is good. Right?
- [35:51]
JVL
Chaos is a lot. Yeah. Last question, then. I'll let you go. What does Japan do with all this change happening? Japan's right there.
- [36:01]
Bill Bishop
You know, I mean, that's a, that's a, that's a great question. I'm not a Japan expert. I, I will say I think that you, you've seen a pretty significant shift in, you know, the national security parts of the Japanese government and establishment towards really being significantly concerned about the prc, significantly concerned about Taiwan, and, and really feeling like Taiwan becoming a part of the PRC is almost an existential problem for the Japanese. And so the Japanese, I think they are starting to trying to increase their military budgets. They certainly did a lot with the Biden administration to improve working with the US military. But ultimately, if Japan gets the point, I mean, they're also a democracy. They certainly could. Their prime minister is not particularly popular. It's possible the next prime minister is someone who has a different view of China. And so that could shift some of those views, but ultimately Japan. And if the US were to really pull back and say, Japan, you're on your own, go spend 15, 10% of your GDP on defense, otherwise we're going to cut you off, which I don't think they're saying yet. But ultimately they're a neighbor of China and China is a big powerful country getting more powerful by the day. And so they have to live in that neighborhood. And so if we're not leaving the US or not there to support them, then they have some really difficult decisions to make. If I could add one thing on your USA question, please, which actually goes back to. It ties into also the gutting of the Voice of America, Radio Free Asia, et cetera, also in usaid. Usaid, it turned out, was a huge funder of a large number of NGOs that were doing work around Chinese activities globally and in China around things like human rights issues, labor issues, disinformation. The Chinese have a long and very well funded effort to what they say, improve their global discourse power, which has effectively shaped the conversation about China globally, not just in the Chinese language, but in any language. And so they view themselves as in an information war globally and the US and they looked at the US and they're very critical of aid and the NGOs it funded, they're very critical of Voice of America, very critical of Radio Free Agents, some of these other organizations. They passed an NGO law a few years ago because they were so concerned about some of the work NGOs were doing in China and how it was actually potentially giving people wrong ideas about rule of law and political systems. So the Chinese have responded in many ways, both defensively, but also offensively, globally in the information space. And then the Trump administration came in and unilaterally disarmed and just withdrew from the field. That, from the Chinese perspective, is okay for that. We love you. Right? That's great.
- [39:16]
JVL
Yeah. Couldn't ask for it.
- [39:18]
Bill Bishop
No.
- [39:19]
JVL
Couldn't ask for more.
- [39:20]
Bill Bishop
And the thing is, is for all this talk about master dealmaker, and maybe there's a big deal with China, we just gave it up for nothing.
- [39:26]
JVL
It's kind of weird and also not surprising. Bill, thank you for being so generous with your time. Guys. If you're not subscribed to cynicism, sinosism, sinic cynicism, cynoc. Ism to cynicism, it's really one stop shopping for trying to get smart about this stuff, which is what I like, actually, with my. I subscribe to. I won't even tell you. I do not let my list of substack subscriptions be public because people would shame me for how much money I spend on substacks.
- [40:05]
Bill Bishop
Oh, I should turn mine off. I'm in the same camp, fortunately. Right? I mean, we should. There's so much. There's so many great people.
- [40:12]
JVL
That's the thing. And it's our business. But what I like to do for specialty stuff is to find one person who is a deep enough expert that I can get all that itch scratched. And Bill, is it for China. And not just in like, substack world, like out in foreign policy world. They all read Bill and it's fantastic. Bill, thank you for doing what you do. I really appreciate it. And everybody who's on this, hit the button to give Bill a follow and go subscribe and support what he's doing. And we'll be back. I think we got one more of these things next week.
- [40:48]
Bill Bishop
Anytime. Happy to chat. I love these lives, actually. They're super useful and they help me procrastinate. So it's great.
- [40:54]
JVL
Awesome.
- [40:55]
Bill Bishop
Thanks, Bill.
- [40:55]
JVL
Guys, take care.
- [40:56]
Bill Bishop
Good luck. Thanks, everybody.