← Sharp China with Bill Bishop
Sharp China with Bill Bishop
Questions and Expectations for Trump 2.0; Looming Trade Tensions and PRC Responses; Volatility and Intermediaries; TikTok’s Last Hope?
01:04:44
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- [00:00]
A
Foreign. Hello and welcome back to another episode of Sharp China. I'm Andrew Sharp and on the other line, Bill Bishop. Bill, how you doing?
- [00:15]
B
Hey Andrew. Hey Everybody doing well? Hope everyone's doing well. Been a momentous week here in D.C.
- [00:20]
A
Yeah, some unseasonably warm days around D.C. this week. Spectacular weather. I would say the mood is decidedly mixed around D.C. this week, but here we are. You know, regardless of who's president, the commanders are 7 and 2. The Wizards are looking a little frisky. I don't know whether you've caught any Wizards. A little sharp. Try to sports at the top. But the Wizards are the only sports team I truly care about and I feel good about them for the first time in about seven years. So I'm in a good mood because of a bunch of 19 year olds that are giving me hope for the Wizards.
- [00:54]
B
Well, I hope your hope isn't crushed. That's all I can say. The Wizards. The last time the Wizards won, I think a champ championship, I was in elementary school and they were the Bullets. Oh God. Yep, it's been a while. You probably weren't even born yet. I don't want to go there.
- [01:10]
A
They've never won 50 games in my lifetime. So one day we'll hit that mark. I'm not even worried about a championship. But in any event, yes, the election was resolved in about one day and was not a weeks long fight that drove the ENT country insane. So we've got that going for us. Former President Trump is now the President Elect and as apolitically as we can, I want to talk through some of the US China implications of a Trump presidency, which you wrote about on Wednesday. There are a lot of unknowns here, but I'll start with Reuters. They write China's President Xi Jinping congratulated Donald Trump on his US Presidential win and urged both nations to find the right way to get along. Stable, sound and sustainable China US Relations serve the interests of both, xi said on Thursday, adding that the international community would expect the two powers to, quote, respect each other and coexist peacefully. And she also discussed forging the right path for China and the United States to get along in the new era, benefiting both countries and contributing to the world and China daily. They portrayed Trump's second presidency as a potential new beginning in US China relations if the chance that has been offered is not wasted. So Bill, what did you think of Xi's congratulations to Trump? And have there been any other indications from state media as to how the PRC is processing this news no, that.
- [02:47]
B
I think is the best indication is that congratulatory message to President Elect Trump. There was some reporting that she had called him. He didn't call him. He sent a congratulatory message. And, you know, the language, I mean, the thing that most interesting I thought was just language. I mean, again, it's most of it or all of it in various forms we heard before. But it's sort of the Xi saying that hope they can forge the right path for China and the United States to get along in the new era, benefiting both countries and contributing to the world. And of course, the right or correct path is one of those things that's up for debate. And it will certainly tie into the, you know, one of the complaints the Chinese always have is that the U.S. you know, the admonitions to the Biden administration is, you know, you have to have the correct perception of China. And I think that they're going to find that from their perspective, President Trump and his team probably don't have the correct perception of China either.
- [03:35]
A
Right.
- [03:36]
B
And so I think, you know, what else is she going to say? I mean, you know, in some ways, they know Trump. Right. They've dealt with Trump for four years. She dealt with Trump for four years. And so they might be able to cut through some of the sort of sniffing around to get to know you BS that you would have with a new or untested president and their team. And so maybe it may mean, it may end up that, you know, things move faster on the US China side once Trump gets back into power, just because they're. And a lot of that will depend, of course, on how Trump populates his team. But from the Chinese perspective, I think they clearly have understand Trump. And to the extent that you can, they have a lot of experiences. I think one of the things that they bring to the table this time is that they are in a much better position to deal with what Trump and his team would throw at them than they were six or seven or eight years ago. And one of these interesting right. Is today we're recording on November 7th. This comes out on November 8th. Number eight is seven years ago, Trump was on his sort of, I think it was like state visit plus to China and, you know, got a nice tour of the Forbidden City with Xi.
- [04:43]
A
I saw that picture of him in the Forbidden City. Yeah.
- [04:46]
B
So again, this is a mostly a known quantity. I think from the US Perspective, it really one of the things that will be interesting to see how the Trump team and the president himself, what kind of recognition they have about how quick how much China has changed and also how much Xi has pushed the country towards being in a much stronger position, both in terms of moving towards more self sufficiency in a lot of areas, but also in terms of building up a toolkit to respond to tariffs, trade coercion, et cetera.
- [05:20]
A
Yeah, no, exactly. I mean it certainly seems like and I don't know how much of that was inevitable and how much of that was a response to some of the experience during the first trumpet administration and lessons learned then. And you know, she looking to solidify the economic base so that they're not vulnerable to that sort of coercion in the future.
- [05:43]
B
I think it was inevitable but accelerated. And then I think also the sanctions around on Russia, around Ukraine also accelerated that work. And so I would not expect the Chinese to do anything that they think would quote unquote anger Trump before he gets back into power for January 20th. But I also don't think that there will be a lot of patience on the Chinese side for big blustery threats and then moving quickly on say adding tariffs. I think the Chinese will are less likely this time to just kind of take it and hope they can figure out some sort of way to mollify Trump and more make a point of saying we are different too now things have changed is I think how they're probably more likely to approach it. But to start I think they would much prefer to find a way to not even get to the point where they have to do that.
- [06:31]
A
Right. Well this congratulations full of stock language is a worthy move in that direction.
- [06:40]
B
Well the real stuff the real action will be so who are they now sending to the US to try and augment the PRC embassy's work around who matters in Trump world. How can they start getting meetings and get a better sense of what a Trump administration will look like in terms of China policy? They I think I wrote about it yesterday. We talked I talked about it a few weeks ago in that election dialogues thing I did with Chris Johnson. I think the Chinese government had a pretty good sense of who say a Harris administration China team would be. They know a lot of those people, a lot of them are in think tanks now are already in the government on the Trump side there really there's a lot more of still uncertainty about who's going to staff what positions, especially around China policy and at least at the sort of the let not the top levels. And so I think that the Chinese are scrambling now to understand who to deal with. And I would not be surprised if we see the former ambassador, the U.S. fei Tian Kai, who's been coming to the U.S. a lot will probably pop up, maybe even in Palm beach, just because he had a relationship with Jared Kushner and Trump's daughter Ivanka. You know, again, whether or not they're going to be involved in this administration that he, when Chei was ambassador, he was very assiduous in working the first daughter and her husband, Jared. And that was a. Turned out to be a very important, I think, useful back channel for the Chinese.
- [07:56]
A
Yeah, well, and it's pretty interesting because the Financial Times wrote about it a month or two back, and we mentioned it on the podcast before. But because of the Russia scandal in 2016 and just general paranoia in the lead up to this election, nobody who might be associated with the Trump administration over the last six months wanted to take meetings with PRC emissaries and be seen dealing with anybody that might be seen as, like, making inroads into the Trump campaign. And so it created this sort of barrier as the PRC tried to get a sense for how this might play out. But before we get to how this might play out, I want to go back to the four years of interactions that we've already seen between the Trump campaign and the PRC, or the Trump administration and the prc. And I came up with a list of questions here on Trump 2.0 implications. This was actually number two on the list of questions, but I'll start here just to provide a baseline. So for anyone in the strikery audience who's new to these issues or who only started paying attention after we started hosting the best China podcast anywhere, can you refresh people's memory on how the trade tensions emerged in the first Trump administration, what the trade deal was, and why Trump thinks that China reneged on its end of that trade deal?
- [09:26]
B
So it was about a trade deficit. Trump wanted to fix the trade deficit. You know, the US Was importing more from China than they were importing from the US and it ramped up. Trump had a lot of campaign rhetoric about China. Then 2017, he was inaugurated in January, I think by May or so forget the exact date, but there was the Mar A Lago summit where Xi Jinping came to the US and they actually met at Mar A Lago. And there was talk of trying to figure stuff out. There was threats. And then you had basically Bob Lighthizer, who was head of usdr, who launched an investigation that then led to Trump administration saying, we're going to put all these tariffs, and then they but they were trying to negotiate through some sort of a broader deal. And, you know, the US Had a. I mean, just for purposes of simplification, I'm skipping around a little bit here, but so basically, the US Said, you know, they wanted China to buy more stuff, specifically agricultural goods, one of the. One of the key items, again, because that's also an important constituency for politicians here in the US they also wanted China to make certain commitments to structural reforms that would open up their markets more and level the playing field for foreign companies, but specifically American companies and reduce subsidies, et cetera. And basically they went back and forth on these negotiations. The point person on the Chinese side was Liu He. On the US Side, it was really mostly it was Trump, but then it was then Treasury Secretary Mnuchin and USTR had Lighthizer, and basically, ultimately, they couldn't get a deal. They thought they had a deal a few times. So then Trump adds these tariffs, then they get it. Then they announced a deal. But the way they finally sliced the deal was instead of just one big deal, it was sort of phase one, phase two, phase three, where the understanding really was phase one was the Chinese agree to buy a bunch of stuff, and that's easy. The Chinese would have bought stuff the first day if that's all the US Wanted. And then phase two was supposed to be some of these more structural things which no one expected would happen, and they didn't. But then even on the commitments, the purchase commitments on the Chinese side, they didn't hit them. And, you know, they'll say, well, Covid hit, there's pandemic, et cetera. But ultimately, it was not a. It was not a successful deal for the US and now you have to wonder when Trump, you know, he comes back in, in 74 days or so, he doesn't need, you know, again, he's not also worried about reelection.
- [12:03]
A
Right.
- [12:04]
B
So he may not be so concerned about modifying certain constituencies in the US So quickly, one of the questions then is, do they re. And especially it goes back to, well, you know, what role, if any, will Ambassador Lighthizer have? And, you know, keep hearing, probably a pretty significant role. I think he's not happy with how that deal ended up. And so then you. The question will be, will the US make sort of broader demands for, again, more of these structural changes, changes that have actually in some ways gotten even worse in the. In the. In the intervening four years? You know, when the US Talks about overcapacity, of course the Chinese say there's no overcapacity. But the US and the allies talk about, you know, industrial subsidies, overcapacity. That I think, well, is something that the Trump administration, economic folks would also agree with. And so I think there's a reasonably high likelihood that pretty quickly you'll get right back into that sort of heated rhetoric. And potentially, I mean, Trump has talked about up to 60% tariffs. I think we should think he, I think we should take him at face value. Maybe they're not 60, they'll be 20 or 30 because there's, you know, you say a big number to negotiate, but it isn't at all clear what the Chinese can offer to get him to back down on the talk of putting more tariffs on Chinese goods. Mm.
- [13:19]
A
And I think what he says essentially.
- [13:21]
B
Well, and I also, I also just think that they're unlikely to just go back down the old road they went down in Trump, one that really ended up with not a particularly good deal.
- [13:30]
A
Right. Well, and Bob Lighthizer, you linked to this in your cynicism piece on Wednesday, his essay in the Financial Times, I believe a week ago he said, what we have seen in recent decades is countries adopting industrial policies that are designed not to raise their standard of living, but to increase exports in order both to accumulate assets abroad and to establish their advantage in leading edge industries. These are not the market forces of Smith and Ricardo. These are beggar thy neighbor policies that were condemned early in the last century. Countries that run consistently large trade surpluses are the protectionists in the global economy. Others, like the US that run perennial huge trade deficits are the victims. So that pretty clearly distills where Lighthizer is at least. And it doesn't name China explicitly, but is pretty much that describe.
- [14:27]
B
That's a lot of. That is China. No, that's, that's right. And I think that, you know, the other thing though Trump did in, Trump won, as you know, started, you know, he had the moment where he basically cut off zte, the telecoms company, and then a week or so later tweeted that he had a conversation with Xi Jinping, who asked him to uncut off ZTE because people were gonna lose their jobs. And so he backed off. But then the US his administration moved forward on Huawei. They put on several restrictions. They asked the Canadians to arrest the CFO who was transiting through Vancouver. So that again, I think when you fast forward to January, it's hard to see how the Trump team will have a less dark view of China's development than they did four, four and a half years ago.
- [15:10]
A
Right.
- [15:11]
B
And it's interesting, too, because if you look at the Biden administration, the Biden administration really continued and intensified many of the policies the Trump administration put in place around trade and technology. You know, they did it with, with more of a smile and more of an attempt to persuade allies to get on board. I think that the Trump administration will be more likely, not really worry about that. Well, you know, I think they would prefer, I think they understand that it's better to have other countries involved if they're willing to, but they're probably going to be a little more forceful and sort of get on board or, you know, my way or the highway.
- [15:48]
A
Ftpr. Yeah. No, I mean, it is interesting. I just, in terms of thinking back, I mean, I was not hosting this podcast during the first Trump administration, and I was not thinking about these issues every week, but thinking about China policy under Trump, my memories, I mean, I would say two things. I think Trump deserves credit for breaking with past administrations and understanding China as a competitor and not a potential ally, and developing a framework for understanding the PRC that, as you said, has remained pretty consistent under the Biden administration. The way they execute policy and approach. Some of these conflicts may differ from administration to administration, but the baseline understanding has been pretty consistent. As far as actual policy, though, I mean, I recall the China approach as being almost schizophrenic, where, like, the security and business folks were pushing different agendas. And on the outside, it seemed like some of the decision making depended on who happened to have Trump's ear that day. Um, and so I, I'm curious as to whether some of that schizophrenia continues.
- [17:03]
B
I mean, that's the big question. It was exhausting. It was exhausting, I think, for people working in the administration, it was exhausting people trying to figure out what's going on. You know, a lot of it was policy by tweet.
- [17:13]
A
Right. Or phone conversation with, with XI about zte.
- [17:18]
B
And, and, and so, no, I, I, that is one of those questions where we just don't know. And that's why it's in, in many ways, it's, it's really hard to say anything specific about what Trump may do. I think, I mean, I'm fairly confident in the general direction of travel. However, you know, there is always a chance that there's some reason to make a deal or there's something that's offered that he decides this makes more sense. And I think that the way, I mean, like, he listens, at least in the first administration, he listens to outside other businessmen, you know, People, especially billionaires who have views, think they had a pretty direct feedback into parts of China policy. That will probably happen again. I wrote about it a little bit yesterday and I think Ben may have mentioned it. I mean, he certainly had the piece about Elon Musk and Sir Techery on. Maybe it was on Wednesday. But I think when you look at a guy like Elon Musk who obviously he did a lot to help Trump get elected, and not just with money, obviously with Vex, he's also of all the, he's the richest of all the billionaires who talk to Trump. And he's also the one with the most exposure to China because of Tesla's both sales in China and manufacturing for the China and the global market out of Shanghai. Yeah. And so I think the question really is going to be how will the Chinese try to use that conduit as a way to short circuit a return of brinksmanship over trade deals and instead work out some sort of a try and see if there isn't a way to work out some sort of a broader deal.
- [18:56]
A
Right.
- [18:56]
B
That is possible. Never. Never say never.
- [18:59]
A
No, I mean, and it's one of the questions I have as we look ahead at who might be appointed to various Cabinet secretary positions. I mean, I have no doubt whether Lighthizer is appointed to run treasury or Commerce or wherever. I have no doubt that Trump will find various policy folks who are hawkish on China. And, you know, Tom Cotton I saw floated as a potential Cabinet secretary. But what I'm curious about is whether there will be like a Steve Mnuchin type who, if memory serves, was fairly effective at scuttling some of the more ambitious policies devised by like the Matt Pottingers of the world and, and Musk. I don't know whether Musk will be part of a Trump administration. I mean, that's kind of crazy to think about, but Musk could end up wielding that sort of influence. And I know in the past you've asked like, who is Kissinger 2.0? Maybe Musk could be a Kissinger 2.0 in the eyes of the PRC.
- [20:02]
B
Well, yeah, I think, I think the Chinese will end up with a bunch of mini Kissingers. And I think Musk will be the top of the list. You've also got John Thornton, who, you know, who was when there was the signing deal in the Oval Office for or at the White House for the first phase one of the US China trade deal. Neil Huff from China was there. Trump gave a speech, thanked a bunch of people, he included. He Thanked John Thornton. Right. So you've got someone like him. You got Steve Schwarzman. There are a lot more variables in this policy. And to your point earlier, there's also, I think really the process in the first Trump administration wasn't particularly structured or disciplined.
- [20:42]
A
Yeah.
- [20:43]
B
And, you know, maybe it'll be different in Trump too. I guess skeptical facial expressions don't come on a work on an audio podcast. I think, I think it's, it's, it's again, never say never. But I think the, you know, if I were to post on Polymarket McBet, it would certainly be, you know, more, it'll be more like Trump won. And then there's a lot more ability for outside actors to sort of shape the way things go. And so that I will say, you know, the Ministry of Commerce in China, you know, put out a statement today and basically they talk about how they want to have, you know, it's a positive, you know, the normal win, win cooperation, peaceful coexistence, resolve, discipline, you know, resolve the differences based on sort of mutual communication and respect. I think the Chinese are very much signaling that they don't want a trade war. They don't want to have it. They don't want to do it all over again. I think it was exhausting. It was exhausting for them. But it's also their economy. On the one hand, their economy is different than it was six, seven years ago. They have, I think, more of an ability to withstand the pressures from the US up to a point. At the same time, their economy's not doing great and they would prefer not to have to fight that fight. So I think they are incented to try and figure out what they can offer the Trump administration, particularly that sort of what they can offer to forestall an intensification of the trade pressures on China. We'll see if they're successful, but I really don't think they're going to come out, they're not going to come out the gate like fighting. I think they've been using various think tankers, the Chinese think tankers come through town. They've been using various people in the media to signal we've got all these tools that we can use. You know, we have a, we have a much more robust toolkit to respond. But they're also saying we, you know, basically we don't want to use that if we don't have to. So let's find a way to figure it out.
- [22:40]
A
Well, as far as the tools, I did have one question because on Wednesday, you cited Scott Kennedy and a piece in Foreign Policy. Scott Kennedy is at csis, and he wrote about the trade tensions. And he wrote, last time China faced US Tariffs, President Xi Jinping appointed Vice Premier Liu he to negotiate. But this time, Xi might well authorize a disproportionate response. The first step would be to massively penalize a few Fortune 500 US companies. Most vulnerable are those in sectors with capable Chinese alternatives. China could expand restrictions on exports of critical minerals and move forward with other export controls. It could sell off $100 billion or more of its $775 billion in U.S. treasuries. And one might expect Beijing to act even more aggressively in the South China Sea and around Taiwan, raising anxieties about the prospects of a. Of a kinetic conflict. Its biggest weapon, however, may be to allow its currency, the UN to fall from its current peg of 7.1 to the dollar to 10, 11 or 12 to the. To the dollar. And if markets don't cooperate, engineer a downward devaluation. So I understand in broad strokes that devaluing the yuan would undermine the effectiveness of any tariffs and could destabilize markets in the US but can you explain any more about how that would work and how would devaluation affect the PRC and its own economy?
- [24:11]
B
Yeah, I think that's more of an empty threat. I don't. I actually think that that kind of a. You know, they let the UN Devalue a little bit during the first trade war with Trump. The idea that they would go to 10 or 11, I mean, it's certainly possible, but I think that's more a bluster from the Chinese side because that would be very destabilizing both domestically. Domestically, because, again, you know, Xi Jinping is very clear about the importance of having a strong currency. And it very much fits in his idea of building out a sort of a modern financial system with Chinese characteristics. It also is something that would have a huge ripple effect throughout emerging economies. Also what they call the Global south, and would, Would. Would harm. Probably harm a lot of global south countries in ways that China says they're not going to do. So I'm, I'm less. I just think that's something where they're going to put out a bunch of ideas that sound really threatening. You know, I think the things around export controls, you know, on certain types of critical minerals, you know, we've already seen that with gallium and geranium and. Yeah, you know, there are more that they can do. You know, one of these is interesting is back. I think it was 2019 when both sides, they thought that was a deal. I think then Treasury Secretary Mnuchin actually announced that there was a deal. And then Trump tweeted there wasn't a deal. Basically, a couple days later, I don't have the timeline right in front of me. She then made an inspection tour out to Jiangsi Province. And Jiangsi Province is probably, I think it's the biggest production province for rare earth minerals. And you know, he, he visited, I think it was a rare earth production processor processing company and then he's checking it out.
- [25:45]
A
Yeah.
- [25:46]
B
And he also visited a monument marking the start of the long March. And you know, it was pretty obvious. He didn't say we're going to, you know, we're going to use rare earth to fen you, but it was pretty obvious exactly what he was doing. Right. And you know, now fast forward what is a five, five and a half years. Right. We've seen them again, build much more of a legal framework around how they can use export controls and things. Like they have their own entity list. So, you know, they can put company, US Companies. They did that last week on the entity list. Right. Last week it was. Well, a month ago they put the drone company skydio. Then last week we learned that, well, skydio basically can't, you know, produce. They can't sell drones right now because they can't get batteries because the battery manufacturer in China is not allowed to sell to them. Right. And so I think that the Chinese, they have more tools, but the more they use them, the more it's going to force the decoupling. I don't think. It's not like it's going to force the Trump team to say, oh gee, okay, we're going to back off.
- [26:45]
A
Right? Yeah.
- [26:46]
B
It will become much more of a sort of a self reinforcing dynamic. And so on the one hand, I think you're seeing the Chinese signaling these are all things we can do. And I think some of them are quite legitimate and could cause some harm. Again, I'm skeptical of devaluations of 10 or 11, but I mean, again, never say never. The other thing though is you will see real attempts to prevent this kind of escalation so that there can be something where they, because the Chinese, again, it was exhausting for everybody in Trump one and they don't want to deal with that anymore. And you know what?
- [27:18]
A
My understanding is that it hurt China more than it hurt the US In Trump won and they don't want to go through that again.
- [27:24]
B
No, it has hurt China and it did accelerate. It really sort of was the catalyst for, for, you know, and then of course the pandemic hit and that was even more of a catalyst for some movement towards, call it friend shoring or you know, moving supply chains partially out of China. But has again, it hasn't. The US is and many, most countries around the world are still very reliant on China for lots of things. And you know, China's point continues to be that they want that supply chain reliability because it gives them leverage.
- [27:56]
A
Right.
- [27:56]
B
And the costs for these foreign American companies to move their supply chains out of China are quite high. And again like we're seeing with the most recent one, skydio, I don't know, you know, they can't, no one else seems to make the batteries they want.
- [28:12]
A
Well, yes, it's a challenge for the west over the next several years.
- [28:16]
B
The lesson is if you've got a company that has a critical supply chain reliance on China, you probably shouldn't be publicly lobbying against Chinese companies like they were lobbying against dgi. Right. And what they, they had it, they sold stuff to Taiwan, but it was like Taiwan's fire agency. It wasn't even weapons.
- [28:33]
A
Well, yeah, but I would also say that the lesson is if you are over levered on Chinese manufacturing and, or various critical components, that is a weakness that can and will be exploited at some point by the prc. I mean that's what we're seeing here. And I don't know if it's inevitable that it will be exploited, but it's like a real sort of existential risk to a lot of these businesses.
- [28:59]
B
And one of these, like the Scott Kennedy article you talked about where he mentioned, you know, maybe they go after some of the ambiguous companies just sort of to make the point. You know, the problem with that is like is you pull the gun out and as soon as you pull the gun out then you freak people out. And so they were, if they were to say like, oh gee, you know, we need to do an inspection for health or labor violations at the Tesla Gigafactory. So the Tesla Gigafactory shut for a week. Right. That would be an obvious sign of hey gee, nice factory you got there.
- [29:32]
A
No, exactly. And at that point.
- [29:33]
B
But that would be counterproductive. That's very counterproductive.
- [29:36]
A
And from a fiduciary standpoint, if that happens and you don't start exploring alternate manufacturing options like you're reckless at that point as a corporate leader or corporate officer. But yes, the main reason I asked that is because I'VE seen the UN theory floated a lot over the last couple of weeks, like, well, that's the card that the PRC will play in response to any tariff subs. So that's really helpful context for me.
- [30:05]
B
And the same thing with the treasury, the problem. I mean, the Chinese are far from the biggest buyer of Treasuries now. The US keeps trying to sell lots of Treasuries. Also, the Chinese need somewhere to park all the foreign exchange they're earning from their massive trade surpluses. And so there aren't really many better alternatives for them that are so liquid and relatively stable. And so, you know, again, it's, it's a. They're sort of stuck too. I mean, maybe they start buying bitcoin. I'm just kidding.
- [30:31]
A
But, well, bitcoin is looking up in the wake of this week's election results. One question for you. So, China, you've mentioned Liu He a couple times in the podcast so far. China relied on Leohe as an intermediary during the height of the trade war. So how instrumental was Leo during those years and during those negotiations? And is there any sort of successor who might play that role going forward?
- [31:01]
B
You know, I mean, Lioho was, he was a vice premier and he really took on the role of negotiating with the US And I think that they obviously have plenty of econ technocrats and people who negotiate trade deals all the time. It's not clear if we get back into sort of more intense trade war trade negotiations with the prc. It's not clear by sort of title or by rank. It should be he. Lifong. Yeah, he is. From folks who've met him, he's just not as dynamic as Liu he is in terms of dealing with foreigners.
- [31:36]
A
It is pretty interesting. I mean, the Wall Street Journal doesn't.
- [31:39]
B
Mean he won't be the person.
- [31:41]
A
Yeah, well, and his ascendants. I mean, the Wall Street Journal had a big feature on he a few weeks ago, and that was my first introduction to the term barbarian wrangler to describe PRC intermediaries with Western politicians and businessmen. Great term. So I appreciate the Journal for that, but I thought the story was pretty interesting, mainly as a reflection of where the PRC is today and what the priorities are because, like, huh, doesn't speak English, doesn't seem to have the CV that one would expect from somebody who's like, supposed to be navigating complex negotiations with the West.
- [32:19]
B
I mean, he's, he's, he's got a much bigger portfolio than that. But yeah, he, he's, he he's not as sort of used to like, suavely dealing with foreigners as Leo Ho was.
- [32:28]
A
Right. But he does have a decades long relationship with Xi. And then, you know, my takeaway from that profile, and it could be wrong, was just that the lack of expertise in that area from her at just dealing with the west, that might be more of a feature than a bug in terms of the way the PRC sees itself these days. Because there's just more concern with developing its own dominant industries than like keeping Westerners happy and pacified. But they will probably need someone to be an intermediate Trump campaign.
- [33:03]
B
I joked yesterday that maybe they'll bring, you know, they'll bring Liuhu out of retirement. I think it's unlikely, but I certainly think it's not unlikely that he would be consulting just because he, you know, he's seen it all from the Trump side.
- [33:13]
A
Right. And knows.
- [33:16]
B
And why waste, why waste that knowledge if you're going, if you have to go through some version of it all over again?
- [33:21]
A
Indeed. Well, final Trump question from the BBC. Trump said in October that if he returned to the White House, he would not have to use military force to prevent a Chinese blockade of Taiwan because President Xi knew he was effing crazy and he would impose paralyzing tariffs on Chinese imports if that happened. Do you buy the idea that Trump's volatility is a strategic advantage for the US in its interactions with China?
- [33:52]
B
I think it's less. We'll have to find out. My guess would be it's sort of like you do it a few too many times and people just kind of get like, okay, crazy Ivan, move on. And I think also particularly the Taiwan issue, so much of what the Chinese are doing around hardening their economy, building, call it a fortress economy, appears to be to be able to withstand crushing economic sanctions in the case they need to do something on Taiwan. And Taiwan is so important to the party, so important to Xi. You know, they're willing to go through a lot of hardship if they have to, but they successfully are able to incorporate Taiwan into the prc. And so I'm not sure that threats of massive sanctions are going to be enough to dissuade Xi if he decides he has to do something on Taiwan.
- [34:45]
A
Yeah. With that specific threat, I would imagine that China is pricing massive sanctions into anything that they're going to do in Taiwan and understanding that that's going to be the global response.
- [34:57]
B
We've talked about it. I mean, the, the Ukraine, the Russia's invasion of Ukraine and the west. And the West's response has been, I think, extremely useful to the Chinese because they see the, they have an entire playbook of how sanctions would play out. And they know exactly where they, you know, not exactly, but they know lots of areas where they need to fix things, change things, harden things. And so, and the longer that drags on, the more they have time to prepare so that when it, if it comes to their turn, so to speak, they're much more hardened and much more resilient.
- [35:28]
A
Yeah, well, and the reason I asked the question and the reason I included it is just because I saw that quote and on its face, it sounds like a ridiculous idea, but when I think about the US Interactions with China, particularly over the last couple years, like, one of the consistent themes with US China policy conversations is that, like, US Leaders are reluctant to take certain actions because they're worried about what Xi will do, because there's at least a chance that Xi isn't a rational actor and will escalate conflicts to a place that's detrimental to both sides and to global stability. And like. So to the extent anyone requires proof of concept of what Trump is describing there, I would say the last 10 years of US China relations are evidence that, like, a leader's perceived volatility can have strategic benefits. But I take no position on whether China sees Trump that way. And Trump's volatility could also benefit China in certain ways if it erodes relationships with allies around the world. So.
- [36:33]
B
Well, I mean, that's the thing, I think when you look at, I think when, and I tried to talk about this in my newsletter yesterday, when you look at how, and, you know, we've talked a few times about, well, what is, who does China want? And a Harris administration would have been different. There would have been lots of problems with the Harris administration. There were lots of opportunities in this case with Trump. You know, I think they understand, again, they've been through it, so it won't be the same, but they, I think they have a general sense of what could happen with the next Trump administration. And especially on the economic side, those are not things they prefer not to happen because their economy is not doing great. And they would prefer not to have increasing external pressure, which is what is likely coming unless they can really figure out a way to mollify them and get a real, some sort of real deal quickly. But at the same time, I think they see lots of opportunities from Trump. And, you know, they, they see that there's a reasonable chance that Trump will damage or undo some of the, you know, Certainly, some of the, some of the work that the Biden administration has done to build coalitions of countries to deal with China in certain areas there, you know, may push, may cause problems in NATO, may cause problems with the eu. Honestly, I think that they're, you know, they also may see this as, especially if Trump is, you know, doesn't want to keep funding, sending, you know, keep funding Ukraine, then this will be an opportunity for China, I think, to swoop in with their peace plan and sort of show up and say, look, we're the peacemakers and try and take more of a leading role in putting together some sort of a Ukraine peace package, you know, so I think, you know, you can go on the list, right? I think one of the things, you know, climate change is not on the top of the agenda for the Trump administration. So the Chinese will continue to, and, you know, look at, look at what they've done in terms of renewable energy technology. They'll be able to say, look, we are the leader of climate change. We are trying to work with the Global south to talk about how, you know, we are, we are trying to address climate change. And, oh, look over there. Look at the Trump administration. They don't, they don't care. Right? You've got similar things around trade, right? I mean, one of the consistent messaging you get from the Chinese now, you know, they are the, basically, they're the upholder of the multilateral system and the global trading system and, you know, defenders of the wto, whereas the US and increasing the EU are the ones who are trying to break it.
- [38:56]
A
Right.
- [38:56]
B
You know, the US Will say, well, you know, the Chinese broke it. But regardless, the point is, is that message, I think, resonates in a lot of other countries, especially in the Global south, and will especially resonate in a Trump administration. True or not, right? In some ways, it doesn't matter if it's true or not. It's a message that will have an audience.
- [39:13]
A
Right? No, the perception of Trump will make other countries more sympathetic to PRC messaging is I think, the overarching theme on, in terms of what might benefit the prc, there are real downsides, and then there are certain opportunities and vectors where they can make progress.
- [39:31]
B
Again, I think, I think, you know, and then the other thing that I think is important, especially I know a lot of listeners work in technology, is if we see a resumption of the China initiative that was put in place under former Attorney General Sessions and the Trump administration, that will most likely accelerate a brain drain of Chinese and Chinese American scientists to China, it's a great point. And that will be happening at a moment. China in the face of the U.S. the Biden administration increased technology restrictions. They have restructured their entire science and technology complex. There's this new Central Science Technology Commission, they restructured the Ministry of Science Technology there. It's all around the much accelerated, decades long push for self reliance and core key technologies, what they call chokehold technologies. And one of the things that they are really pushing and you hear it whenever she talks about this or they have a meeting of, around the science technology issues. They talk about how they want to build China into a global science technology hub by attracting global talent, talent from all over the world. And so that is something where they will probably be able to use a, if there, if there's an increase of pressure on Chinese, Chinese Americans around, you know, you can't access certain, you can't access certain things to study or you know, research labs, etc. That will probably accrue to the PRC's benefit if people decide, well, we're going to go where we're welcome, right?
- [41:07]
A
Well, if I'm putting my America hat on, I think that America is still a more attractive place for most of the world's top scientists. But it is a really important issue to highlight.
- [41:18]
B
No. And we need that as our, that is one of our key strengths and so we have to make sure that it stays that way. So the long winded. The point is just that I think when they look at, I think when they look at Trump, I think they see that there's more potential volatility, there's more potential for, I think rapidly accelerating tensions around trade, for example. But there's also, I think more opportunity.
- [41:41]
A
For further sort of delegitimizing the US.
- [41:46]
B
Delegitimizing, undermining the US and other parts of the world is I think how they see it now. We'll see if that really comes to pass. And if the US Economy, if Trump comes in at his policies, you know, they end up creating a new economic boom in the US and as they say they're going to, you know, it's, it's hard for, you know, that that has its own attraction about the U.S. market, about the U.S. and so it's, it's not, it's not black and white. But again, I think we are certainly, you know, the other thing I would just say is having, you know, I wrote the newsletter through the Trump administration. It's one, it's exhausting. Two, there's a lot of information, but there's a lot of bad information. And you're gonna see lots of reports about so and so in the Trump administration or close to the Trump administration said this or they can do that. It doesn't, a lot of that doesn't matter until Trump decides what he wants to do.
- [42:39]
A
Yeah.
- [42:40]
B
And so, and so you end up with a lot of, a lot of sort of headless chickens running around with sort of some new news that then turns out to just be, you know, just someone had, it's what they wanted, but it wasn't part of the process or it just, it's, it's pretty, it's exhausting. Put that.
- [42:55]
A
Well, I, I said it earlier and I wasn't joking. When I look back, it did really seem like China policy depended on who Trump had talked to on a given day. And maybe that will continue in the second administration here, maybe not. But volatility, I guess will make for good podcasting. I don't know. We're getting it whether we want it or not.
- [43:20]
B
We'll, we'll see.
- [43:21]
A
I see some pluses, I see some minuses as far as US China policy is.
- [43:25]
B
Well, if, if he still, if he still makes market moving China policy through Twitter or through X now, you know.
- [43:32]
A
It certainly don't make me spend more time on Twitter.
- [43:35]
B
It's a, it's a business opportunity for X. If they, if they can, if they can sell their data feed like to, to high speed, like high frequency traders.
- [43:43]
A
Oh boy.
- [43:44]
B
Where you get like the tweets of millisecond ahead and you only want the president's tweets.
- [43:48]
A
I'm so excited to make a lot of money. Long weekend. I'm putting my phone away for 72 hours and just logging off after the last couple weeks online. Well, speaking of phones, sorry, one, one.
- [44:01]
B
One last, one last area of a deal and I think we're going to talk about it. So if I'm doing my podcast segue ahead of time, I apologize. I'm still.
- [44:07]
A
Oh boy.
- [44:10]
B
I mean, one area, and this could really get interest interesting for some of his supporters, especially in Silicon Valley, is the is TikTok. And whether or not I think there is a law that has been passed and signed by the president is actually enshrined in law. So it's a little more complicated if he wants to back off on forcing TikTok to be sold or have the app stores and data centers stop working with them in the US But I believe he can just basically tell the DOJ not to enforce the law. And he has folks who are big supporters, who are, I think, pushing him to effectively drop enforcement of the TikTok law.
- [44:53]
A
When you say big supporters. Big donors. Correct.
- [44:56]
B
Donors, yeah.
- [44:57]
A
Yes.
- [44:57]
B
Jeff Yass and I believe Elon Musk even weighed in at one point and said he didn't think it should be banned. But I could be wrong.
- [45:03]
A
He did say that he was worried about the precedent it would set and how X would be next. And.
- [45:11]
B
Right.
- [45:11]
A
You know, this law. He actually misread the law on Twitter.
- [45:15]
B
I mean, I mean, helpful for everybody. Twitter X now looks a lot. It looks, you know, looks more and more like TikTok too. So it might, you know, again, it might actually be good. It might actually be good for. Good for X if Tick Tock goes away. But my point is, is Tick Tock scenario where maybe there'll be a deal.
- [45:31]
A
Yeah, No, I mean, look, they.
- [45:32]
B
And then that'll drive. That'll drive some of his supporters in Silicon Valley who were very influential and very much pushing for the TikTok ban, to have to figure out how they deal with the fact that he has backed off on that.
- [45:47]
A
Well, the headline from the information was, TikTok sees Trump victory as app's best hope. And yes, I mean, there, the information was helpful because the information, the publication, that is the article. I was thinking to myself, I understand that TikTok thinks that Trump is their best hope, but I don't really know what Trump can do at this point in the process because TikTok has challenged the constitutional validity of the law. They're in court. D.C. circuit will decide, apparently before Thanksgiving, according to the information. But also. And then if the decision is adverse to TikTok, they'll appeal to the Supreme Court. And beyond that, like, the law takes effect on January 19, or the law has already taken effect, but, you know, ByteDance has not divested from TikTok. So the ban takes effect on January 19th before Trump takes over. And I hadn't considered the possibility because I mentioned this on Sharp Tech earlier in the week and said I don't. I don't know what Trump can do to save TikTok, even though that talking point keeps getting repeated. I hadn't considered the possibility that he could just tell the DOJ not to enforce the law. And in this case, that would be enforcing the ban provision and the fines to Apple and Google if they continue to host TikTok in their app store. So I guess that's a possibility. You know, prepare for anything here as we enter this new era. But I think that would be a mistake. And it would upset a lot of different people. But everything is on the table as we move forward. And just as we're talking TikTok, I will note that the CBC wrote this week, citing national security concerns, the federal government has ordered TikTok to shutter its Canadian operations. But users will still be able to access the popular video app. Innovation Minister Francois Philippe Champagne said the decision to wind down TikTok's two Canadian offices in Toronto and Vancouver was based on information and evidence that surfaced during a recent national security review and the advice of Canada's security and intelligence community. First of all, what a name there. Francois Philippe Champagne is about as French Canadian a name as you will ever see. But it's just, it underscores the fact that a lot of countries see issues from a security standpoint. So it'll be interesting to see what happens in our country.
- [48:24]
B
Right. And of course Canada is part of Five Eyes. And so you know, they don't, they, they, they're not disclosing why, what they are seeing to do this, but that, I mean, again, it's an interesting move where you close their business operations but you let the app continue.
- [48:36]
A
Yeah, well. And it made me wonder about the cascade scenario where like if the US did move forward with a ban, how many other countries around the world would follow in the years to come? That's what I would be concerned about if I were ByteDance. And I know Canada is not banning the app, but if the US banned the app, maybe Canada is more likely to ban the app. So a lot of Unknowns on the TikTok front, but there's more hope than they had a week ago. So congrats to all the TikTok lobbyists as usual to keep it moving. I did mention phones earlier and the phone hacking story. We discussed it briefly last week and I said we don't know the full scope of what exactly happened there and how bad it was. That is still true, but more details are trickling out, keep coming out. Yeah, it certainly sounds like this was a very, very, very serious breach. The Senate Intelligence Committee chairman Mark Warner told the Washington Post. It is much more serious and much worse than even what you all presume at this point. It is one of the most serious breaches in my time on the Intelligence Committee. And then Politico wrote Chinese hackers access sensitive cellular logs on a vast number of Americans after pene inside a swath of U.S. telecommunications providers earlier this year. According to two people involved in the response to the hacks. The two people said a China backed hacking Group dubbed Salt Typhoon gained access to a vast trove of so called call detail records. Those contain information on who Americans talk to, how often and when, as well as detailed location data afforded by 5G networking services. What's your reaction to some of the additional details we've gotten? We also got a more grave sort of expose from the Wall Street Journal. I can read highlights from that. But what do you think of all this?
- [50:31]
B
So we, you know, it's possible that the earlier comments on this podcast about the Chinese trying to figure out who to talk to in the Trump world don't actually matter because they just listen to all the phones at this point.
- [50:42]
A
It's on the table.
- [50:43]
B
They may already know everything. Right. Joking. But not actually really. I know. I think this is, this is, seems extraordinarily serious. I think what continues to come up in the reporting is just how even after being discovered, that the hackers continue to try and, you know, keep doing it. And I think someone said they were taunting us. You know, there has not been any sort of official response in terms of pushback on the Chinese. I think that this is the kind of situation where if it's as bad as is being described, as exhausted as the Biden team and disheartened they are after this week and being there for almost four years, this is something where maybe you'll see some sort of a brush back between now and the inauguration to basically try and tell the Chinese that this is too much on the one hand. And I sort of made a flip comment in the newsletter, I think on Monday, which is, look, we'd do it too if we could, right? I mean, any capable foreign intelligence service would love to be able to access phones around politicians in any country and phones of advisors to a president or to a leader. And so on one hand it's like, okay, kudos to the Chinese, they're actually pretty good and they did it. And shame on the US telecom companies for not having investing enough in cybersecurity. But at the same time, at some point you go too far and you basically have to push back and you have to do something, not just send like a mean letter, right? Or, or, or you say something mean about China on an open line that you know they're listening to. You actually probably have to do something in their systems to show that one, you're pissed off, two, that you can cause damage to, and three, they need to back off.
- [52:27]
A
Yeah.
- [52:27]
B
And it's not clear. One, it's not clear that the Biden guys will do it. This will Be an interesting case for the Trump team when they come in if, if the US has not really responded, because this will probably continue to dribble out more stories. They'll probably, you know, plenty of people working around Trump and who may end up with big positions in his administration probably have had their phones accessed, if not actually audio of their calls or their text messages. They may be personally angry. I mean, you know, this is the, you know, they, last year, right. We learned there, two years ago or last year, they were reading Blinken's emails. They were, you know, reading non classified, unclassified emails, Ramondo's unclassified emails. And again, maybe the US did something classified, but it didn't seem like nothing became public. And the Chinese behavior has only, I think, intensified in terms of. This is more like espionage than necessarily. And maybe this is part of where they also plant malware to be able to cause destruction later. This seems like a very successful cyber espionage campaign by the Chinese. I mean. Yeah, so, but, but again, it's just, will the US Actually do something? Will the Biden administration not just because, you know, they're not. They don't seem to be doing the next round of chip controls. They just don't seem to want to sort of deal with it anymore. And so will this then be left in Trump's lap and then how might they respond?
- [53:45]
A
Well, yeah, I mean, it's interesting because I actually, I had one nagging thought after our conversations about the chip controls last week and we talked about the Trump China policies at the start. So this is sort of a bigger picture thought on the Biden policies that I wanted to run by you. Is that okay with you as we close out here?
- [54:03]
B
Sure, sure.
- [54:04]
A
Okay, so the chip policies, after we talked last week, I saw a note about Jake Sullivan trying to engage China to help convince North Korea not to send troops to help Russia in Ukraine. And first of all, that tweet almost reads like a parody after the last four years. But good luck engaging China to intervene. But I saw that as I was putting the show notes together for last week's Sharp China episode and just thinking about the chip controls, and I actually wondered if we might be giving the chip lobby too much credit for swaying the administration because, like, the practical reality is that hammering SMIC and Huawei and creating effective chip policies that really do cripple the PRC ambitions in that area would cause China real pain and make the PRC irate and probably provoke a response from the prc. And so, like lobbying or not, it's not that surprising to Me that the Biden administration won't go that direction because we've seen over and over again similar stories play out where, like, China's support for the Russian war in Ukraine. The administration will talk tough in the international media, but there have been no sanctions on any of the big PRC banks that facilitate sales to the Russian defense industry or work with Iran or whatever it may be. And like South China Sea, no public tactical response to PRC aggression, no consequences for China's role in the fentanyl crisis, which kills, like, 100,000Americans a year. Like, it's just over and over again. Whenever there's a conflict where any meaningful response from the US Runs the risk of really angering the PRC leadership, the Biden administration has not wanted to touch that third rail and run the risk of making the relationship even worse and more dysfunctional and jeopardizing the possibility of future engagement. And it's entirely possible that's the right approach and that ultimately, like, buying time and just avoiding kinetic conflict or, like, outright economic war is the best anyone can hope for at this point. But in the meantime, there have been real costs in terms of, like, corrosive PRC behaviors that the US has had to tolerate and potentially cost US credibility with allies in the South China Sea. And, like, US Restraint has not produced any meaningful benefits or concessions from the PRC to date. So, just as I think back on the last several years, I just think it's instructive to sort of recognize that the Biden administration had a bunch of thoughtful and qualified people taking these issues seriously, and they tried to be transparent and fair with China, try to avoid making anything worse. But the lack of progress in a number of key areas is clarifying in terms of challenges for the next administration here.
- [57:08]
B
Well, and they inherited a lot of.
- [57:09]
A
These challenges from past administrations.
- [57:11]
B
From past administration. I mean, you know, I will say that, you know, I think if you talk to people in the Biden administration, they would, of course, very much vehemently disagree with your characterization of their China policy. I think they would argue they've done some hard things and, you know, made some progress. You know, but I think ultimately you go back to the balloon incident, and, you know, the Chinese, you know, Blinken skipped his trip, and then the Chinese basically cut off contact and sort of did the classic, like, you know, forced the US to feel like, oh, my God, we have to do something to get him to talk to us again.
- [57:48]
A
Yeah. I mean, and it's stupid and that.
- [57:51]
B
And that really kind of reset in a lot of ways, the relationship I Mean, obviously, then, you know, you had, you had Pelosi in Taiwan and then you had the first chip controls. And I mean, it, there were things that have been done. I mean, the chip controls are, you know, again, we've talked ad nausea about them. I mean, they are pretty harsh. The challenge has been around enforcement in some areas, especially around Huawei and smic. And you know, again, we don't have to beat this dead horse. But since our last podcast, Senator Mark Warner sent a letter last, I think last Thursday about enforcement of, you know, restrictions on sales to SMIC and Huawei based on the reports that TSMC had found this chip that was being made for Huawei. And then I think it was another, the Republican, McCall or McFaul I think, wrote a letter, I think on Monday, the same thing to the commerce Secretary talking about how that, you know, the concern that the US that the Commerce Department is not fully enforcing the rules.
- [58:46]
A
Yeah, well, and you know, the one thing, even aside from the chip controls, you mentioned the balloon incident, I, it is stupid to care about this. But like the Biden administration never released the FBI's balloon report. And just as a matter of transparency, I think that would have been the right thing to do. And like, at least according to the reporting, they didn't do that almost explicitly because it would have been embarrassing to the PRC leadership. And it just, it's, it's odd in retrospect to look back at some of the decision making, but maybe they just didn't want to risk making the relationship any worse.
- [59:24]
B
I mean, I think, I think that there was a lot of concern, there was concern among allies, too, that the relationship was going off the rails and then it was going to veer into much more problematic areas or sort of a much more problematic and risky situation. And so there was, I think, a bit of a wake up call that, okay, we have to figure out how to get this back on track. And you know, again, this is something a broader issue where the Trump team comes in. And again, it really is going to depend on who is, you know, who's secretary of state, who's national security advisor, who is running Asia China policy, the National Security Council. If it's some of the same people who are doing it in Trump 1, things could get pretty tense pretty quickly.
- [60:07]
A
Yes.
- [60:08]
B
And I think, and I think you would certainly not find anyone in the, in the Trump, at least in Trump one who would think that the Biden administration and actually some of the folks have said the Biden administration, they like the way that because basically the Biden administration continued a lot of their general direction of travel on policies towards the prc. But they're, you know, maybe didn't push hard enough or were too willing to go back to trying to make sure that they were talking. And so again, it's, it's a, it's. The problem is, you know, China is a rising superpower that is increasingly unwilling to be lectured to and sees the US as, you know, making lots of threats and still powerful, but not as powerful as it thinks it is.
- [60:51]
A
And the US Is overextended, I mean, and overextended.
- [60:56]
B
And then they're just increasingly willing to basically say we're going to call BS and that does not lend itself to a easy relationship, especially when whether it was Harris or certainly the Trump administration, they're not going to be like, yeah, okay, you're right, we need to back off on some things. That's not how the Trump guys, I think, are going to roll. And so that's why I think on net there's really hard to find a high probability scenario where the US China relationship gets better anytime soon.
- [61:28]
A
Yeah, well, there's been a lot of BS calls coming from the PRC over the last several years. And I mean what I say when I say that it's possible that just buying time, kicking the can down the road and avoiding things getting worse is the best strategy and trusting that over time the US Dominance in a number of important areas will prevail and China will sort of collapse on itself with.
- [61:54]
B
Yeah, that, that bet has not worked so far.
- [61:56]
A
And I think it is not aggressive.
- [61:59]
B
Well, and they've also, you know, again, their economy is not doing great, but it's also not about to collapse. And I know that there's a lot of hope. Trump comes back, puts more pressure on China and this will be the, you know, this will be the straw that breaks the camel's back. Right. I don't bet on that. I wouldn't bet on that. I think also again. And then we will, I know we need to wrap up here, but this podcast will come out on Friday morning on the 8th Eastern Time on the 8th of November. And by the time it comes out, we should know the, the stimulus number. That's right, stimulus number. And today, today there was, the markets were up big in China because there were rumors that it may be bigger than people thought and there might be like 2 trillion renminbi for consumption. And we'll see. Right. And I think, I do think that.
- [62:45]
A
But they have tools is the key point is to avoid a collapse.
- [62:50]
B
Yeah. And again, the economy. They've done a bunch of things over the last six, seven weeks. The economy is the goal here seems to be stabilizing and I think that they have done enough that we're going to continue to see growth and even into next year. I think there's an expectation that things will actually be a little bit better next year just because of all the policies they've already put into place and so doesn't mean they don't need more fiscal support. But again, I hope listeners, I mean, we've only been doing this podcast for two years, but these sort of boom, the crash or boom, China's taking over.
- [63:27]
A
The world or China's collapsing has historically.
- [63:31]
B
Just been a load of hooey and I think people need to avoid that.
- [63:34]
A
Yes. Well, I will be at your house at 6am tomorrow. Tell Tasha to get the coffee ready. I'm sad if we were releasing this podcast a day or two before, we could invite the entire audience over to your house at 6am oh God, we.
- [63:49]
B
Can have a CCTV watch party. Exactly. Sounds awesome.
- [63:53]
A
I hope everybody has a wonderful weekend. However you feel about the state of US Politics. Things are looking up for the Washington Wizards. So everyone get excited about that team full of 19 year olds. Never been better here. They're going to lose 60 games this year and I'm going to enjoy the ride. But Bill, I hope you have a great weekend. We are coming back with a podcast that will be dedicated to reactions to whatever the NPC Standing Committee announces on Friday. So more domestic PRC news next week. But until then, give Tashi my best and I will talk to you soon.
- [64:34]
B
Thank you. Thanks everybody.