← Sharp China with Bill Bishop
Sharp China with Bill Bishop
Trump, Takaichi and a Game of Telephone; Japan Jawboning Continues; An Internet Governance Study Session; China Making Trade ‘Impossible’
01:03:11
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- [00:00]
A
Foreign.
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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?
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B
Hello. Doing well. Nice to be back. We missed everybody. It's been two weeks, Andrew.
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A
It's a long time indeed. A nice long break. I hope you had a good Thanksgiving. I hope Tashi had a good Thanksgiving. It's freezing cold in Washington, D.C. pouring rain also, so great podcasting weather. You know, we could go four or five hours on this episode.
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B
Don't worry. Anything that's not a threat, we won't. But no, it was nice, nice to have the kids home from college for a few days. So, you know, Tashi was happy. He's actually sick of turkey, though.
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A
Oh, well, yeah, well, I think everybody gets sick of turkey after Thanksgiving. Really. Once a year is enough turkey for just about everybody. But I'm glad he got his share of turkey and, and it is good to be back. We've got a lot to catch up on after the last 10 days or so. We'll start with two headlines from last week. First headline from the Wall Street Journal, trump after call with China Xi told Tokyo to lower the volume on Taiwan. And then a follow up from Bloomberg, Japan denies report that Trump asked PM not to provoke China. So, Bill, we didn't podcast after the surprise phone call between Xi and Trump last Monday. But then, as those headlines reflect, there was about a week of speculation in the wake of that call. The Wall Street Journal also reported that she had initiated the call, which would have been the first time a Chinese leader has initiated a call to a US President in decades. That report was later denied by the US Side and eventually the PRC side as well. Do you have any reaction to the confusion surrounding who initiated this call between Xi and Trump, why they did it, and what was said on that call? What do you think?
- [02:06]
B
So first, the Xi Trump call. It was interesting that Wall Street Journal really set the set the narrative around the call because they were out early. It really sort of contributed to this narrative that, you know, Xi was taking the initiative to talk to Trump. It was in the context, in part.
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A
Of the Japan crisis.
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B
Japan, China crisis. You know, Secretary Besant went on TV the next morning, went on CNBC and said, no, you know, we asked for the call. The Chinese Foreign Ministry said something to the effect of, as far as I understand, you know, the US Side asked for the call. My understanding is that the US Asked for the call and it was actually Trump wanting to make sure that she.
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A
Fulfills the soybean commitment.
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B
Well, Fulfills what was agreed to in the trade deal. Yeah, you know, the US Side had been talking up signing a deal by Thanksgiving that does not appear to have happened. But they, you know, wanted to make sure the soybeans, the amount that the US side said the Chinese committed to for 20, 25 would be purchased. You know, there's, there's less than a month left now also around rare earth magnets and sort of this idea of general licenses. And today Reuters has a, today we're recording Tuesday, Reuters has a story that now there are actually three companies have gotten general licenses. So. Okay, you know, that was an interesting, caused a big uproar.
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A
Well, it was interesting because the initial reporting from the Wall street journal spawned about 36 hours of takes on the significance of Xi reaching out to Trump and what it means.
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B
And the takes in the context of Xi said it, you know, trying to get Trump to work with China to rein in Japan was, I think, you know, simplifying a bit. And it was, it was unfortunate. Does not appear to have actually been the case. The Washington, as far as I know, didn't has to change their story. They updated it with sort of that the Chinese side had said they, you know, they still stuck with the story that she had initiated the call.
- [03:55]
A
Yeah, I'm actually glad we didn't record last week because it was a fascinating story to watch play out over several days.
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B
Part of it is just, you know, the Chinese side is their discipline. They put out their readouts quickly. The one, the readout.
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A
That's right, the Xinhua readout from this.
- [04:10]
B
Call was almost immediately was, was sometimes they put it out during the call they've gotten. I think, I think the Biden team got upset with some of that. And so they now they usually wait till it's over, but they put them out quickly, at least in Chinese and the English follows not too long after. But it's easy to translate. We all had to wait for a bit for the President Trump. They don't, the US Side doesn't, in the Trump administration, they don't issue readouts. They issue truth posts, true social posts. You know, in previous administrations, both the earlier Trump administration and also the Biden administration, for example, they would then have, the NSC would then host a background call for say, reporters or a background call for like think tank, think tank people and other analysts to sort of give more background notable substackers as well. Yeah, I know. I was, yeah, I was on some of the think tank analyst calls and they would just give you try and give you a little more background into what, what was discussed. Trump administration doesn't do that. And so we're left with what, what did the president post about a true social? And then fast forward to the call between President Trump and Prime Minister Takeichi. And I don't think the president ever actually issued even a true social. And so the Japanese readout was pretty short, pretty sparse. The Wall Street Journal again drove the narrative with this piece you quoted. There was certainly some pushback. There were other sources that were said this isn't as described, is not what happened on the call. The Japanese government, I think, has tried pretty hard to change that narrative. The problem is everybody lies. And so we just don't actually know. And certainly the president, President Trump gave remarks, I think on Air Force One the following day or later that day, and it wasn't a full throated support of Japan. Now he may have, you know, the sort of not said tone it down. It just, he just may have said, you know, let's not escalate things.
- [06:06]
A
Let's not let it get, let's not escalate further. And there was a statement in the second Wall Street Journal story to that effect, like, let's keep the peace. Everyone involved here benefits from peace. It's just if you'd only been reading the Wall Street Journal, you would have thought that she took a dramatic step to call President Trump, perhaps because of the escalating crisis with Japan. And then with a journal follow up, you'd think that Trump turned around and took a dramatic step to effectively do the PRC's bidding and tell Prime Minister Takeshi to calm down the rhetoric. But at this point, it's unclear what exactly happened. And the story has gotten much murkier since those initial journal reports. And as it stands now, what we know is that Takaishi has not retracted her comments about a Chinese invasion or blockade of China.
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B
She tried to sort of clarify that it was.
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A
They've attempted to moderate. Correct?
- [07:03]
B
Right, they've attempted to moderate, which I think you would expect, whether or not they had a call with President Trump. But they certainly, you know, the Chinese keep demanding that she retract what she said. And she's not gonna do that.
- [07:12]
A
Yeah, well. And Japan has also stationed missiles in the Ryukyu Islands, 110km off the river.
- [07:20]
B
I think it was Yonaguni, if you pronounce that right. I mean that, you know, that happened before the Trump she call, before the Trump Takechi call. And so, you know, again, going back to what.
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A
But China's upset About that. Right, of course.
- [07:32]
B
Of course they are.
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A
Because the media, they've been. They've been banging that drum pretty hard.
- [07:35]
B
Because only, only, only China can have missiles. No one else can have missiles. Right. China's missiles are defensive and everyone else is.
- [07:41]
A
I forgot rule number one. That's right. My bad. But, yeah, I mean, and. And the economic countermeasures from China continue apace. But so far it's stopped there. Like, they've come cut a lot of flights to Japan. I saw a Japanese performer get pulled off of stage mid performance.
- [08:01]
B
I think there's more. More than a dozen performances. Concerts have been canceled. The travel, you know, the reduction in travel is going to have an impact on the Japanese economy. They can handle it. And a fair number of the most affected businesses are actually run by Chinese nationals in Japan. Not all of them, for sure, but this is hurting a fair number of Chinese nationals in Japan. And there's the seafood. Once again, they're playing the seafood card like they played with the Fukushima water. But they haven't gone up to rare earths yet. There was a recurring rumor that the Japanese side has decided to pull back on sales of certain chemicals related to semiconductor manufacturing and to stop servicing some of the machines they've sold into China. That does not appear to be accurate. It's been going around X, but that does not yet appear accurate. So.
- [08:52]
A
But that's a car Japan has to play if China were to restrict rare earths.
- [08:57]
B
Right. And I think so. So right now we're, you know, and then today there was a bit of a standoff around the Dalyu Senkaku Islands between the two coast guards. You know, this has happened before. The Japanese coast guard is very good that the Chinese. You know, they're not the. No offense to Philippine listeners, but they're not the Philippines Coast Guard. Um, and, you know, so China has to be, I think, fairly cautious in how they circumspect. Yeah. And how they manufacture these kinds of standoffs. Because. Because the Japanese Navy, Japanese coast guard are world class interesting. So, you know, and then there's all this lawfare going on. You know, the China, the Chinese are talk, you know, and it goes back to. We'll spare the listeners all the details, but they're going back to, you know, weaponizing history a bit is what they were doing with the commemorations of the 80th anniversary of the end of World War II with Russia, where they talk about the post World War II international order, but in ways that are sort of fit the narratives that the Soviet Union, Russia want to push and that China wants to push.
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A
And so they're creative reinterpretations of history is what was happening there. Yeah.
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B
And then there's a lot of efforts around, you know, painting the Japanese government as reviving the militarism that led to World War II and, you know, the horrible.
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A
There have been several letters to the United nations.
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B
Two, two from the Chinese, you know, more commentaries, op EDS than I can count in authoritative propaganda outlets.
- [10:19]
A
And Wang Yi invoked World War II, appealing to both the UK and France to oppose Japan in the United States.
- [10:25]
B
Yeah. And the thing is, most countries have moved on, and so Chinese can say what they want about this stuff, but other than, you know, like North Korea and Myanmar and Russia.
- [10:36]
Not really getting much traction. I think the Singapore Prime Minister a couple weeks ago at a Bloomberg event in Singapore, you know, he. And I'm. I don't have the quote in front of me, but he, he got, he's actually gotten a lot of heat online in China because he said, you know, look, most, most countries in Southeast Asia, they actually like Japan. Japan is, you know, effectively Japan has atoned. You know, they, you know, Japan has a lot of support. And so that sort of. The Chinese efforts, where they're really, really. They've dialed it up to, I mean, 11 is kind of low. I would say 13 on the volume.
- [11:05]
A
Yeah. The shrillness trying to isolate Japan.
- [11:08]
B
Absolutely. The shrillness of this propaganda around Japan is, is, you know, maybe it plays well inside China, but it is not helping China's case outside, you know, internationally. And so, but how, how it gets walked back. You know, we saw the, you know, the, the, the really hysterical reaction of the Fukushima water where, you know, the, the Chinese. My understanding is the Chinese side thought that the Japanese would back down quickly, and then they kind of got stuck because they wouldn't. This case is a little more, is a lot more sensitive because it involves Taiwan. And so I don't think we should expect the Chinese to back down anytime soon. So I think we're just in a. We're going to be in this kind of, I mean, it's crisis. Maybe crisis is too strong a word, but we're going to be in this much more tense scenario for, I think, many months. I mean, as I wrote yesterday in.
- [12:02]
A
The newsletter, state of heightened uneasiness, let's say, is best.
- [12:07]
B
Basically, as long as this is contained to tourism, seafood culture, performances, people to people exchanges, then probably in the best case scenario, the crisis should be manageable until the PRC finds a Way to walk things back in a few months. But the Japanese prime minister is not going to recant what she said. She's not going to retract it. It's also a reflection of, I think, a fairly strong consensus in at least the Japanese national security establishment. And so, you know, the Chinese side, you know, they need to do this because they need to try and signal to other countries that there is going to be a cost if they, if they cross China's red lines around Taiwan, even rhetorically. But, you know, I think ultimately this is kind of a no win situation for China at this point. But that doesn't mean they're not gonna continue to double down on what they're doing.
- [12:53]
A
And so, yeah, I mean, we're about three and a half weeks in. Would you say the Chinese countermeasures have been effective? It's hard to know what China's goals are.
- [13:01]
B
I mean, I think, you know, I don't think certainly they haven't been effective in the sense that they've change, you know, had the prime minister retract what she said.
- [13:10]
A
The conversation, the rest of the world.
- [13:12]
B
Either with President Trump was a week ago or so. And her conversation with Trump doesn't seem to have had her retract what she said. The economic pain will take some time to play out, but other countries have been through this. Korea went through this when they deployed. The US Deployed, I think, one or two thaad batteries, the missile defense batteries into China. And so, you know, I think Japan will just have to take the modicum of economic pain that's going to come from this as long as the Chinese don't start dialing things up. I mean, what's interesting is on the propaganda side, the Chinese side is amping up the historical revisionism around World War II and the post World War II order. And they reopened this, this whole Ryukyu island discussion, which they did in 2013. The Ryukyu Islands are a series of islands. Okinawa was the most famous one. They sort of stretch from Japan down towards Taiwan. I actually wrote a paper on this at Sais grad school back in 1995, I think. I don't, I don't remember.
- [14:14]
A
I don't remember it on the show.
- [14:16]
B
I couldn't find it because it's actually in paper.
- [14:19]
A
Great.
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B
So. And I forget, but I, but I. It was one of those.
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A
That's how long ago you were in college.
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B
Thank you, man. I appreciate that. I'm sitting in, I'm sitting down today in a chair because my back hurts. And now you're reminding me how old I am. This is great.
- [14:32]
A
That's all right. I'm right there with you. My back flares up from time to time. Well, they, they have hinted at revisiting this every three or four months. I'll see a story about contesting the history surrounding Okinawa. And so that effort is being renewed in the midst of all this, is that right?
- [14:51]
B
Well, it's. Yeah. Okinawa being the biggest one. It is, it is being renewed. It is, to use a political science term, it's bullshit. Sorry to my listeners, but that doesn't mean.
- [15:01]
A
Did they teach you that at sais? That's good.
- [15:03]
B
That doesn't mean that the Chinese are not going to try and push, keep pushing on this. And of course, the primary target. And you've seen this with Okinawa politics. And I'm not, I'm not, we're not going to get into Japanese politics. But you've seen over the years pressures for, you know, Okinawan citizens, you know, organizing, wanting to get rid of the US bases on Okinawa, which are very important. And the Chinese hate. So really what the Chinese are trying to do is make this an issue. I don't think they actually believe that these islands will somehow be split off from Japan. But it's a useful way to try and foment more of some of the citizens, Japanese citizens say in Okinawa to try harder for self determination and to effectively vote the US Military installations off the island. Not gonna happen.
- [15:46]
A
The US Military.
- [15:47]
B
I mean, this really is China interfering in Japanese internal politics. Right. Which of course, you know, imagine the Japanese saying, oh, well, Tibet, Tibet, really? The sovereignty of Tibet is in question or the sovereignty of Xinjiang is in question. Of course, you know what the reaction would be? Right. But that is what China is doing here. And somehow that's okay for them to do it, but then other countries can't do that. So this is sort of the propaganda system and parts of the foreign. And the foreign affairs system have stirred themselves up into this. I think they're not really thinking things through logically, but they have to react and they have to sort of cycle up this propaganda lawfare. And, and we're still, I think, in the cycling up phase. And so it could get uglier.
- [16:28]
A
Yeah, well, we're also cycling up on Taiwan because like the Chinese embassy to the US wrote a letter to the Washington Post criticizing an op ed from William Lai saying that Taiwan, and this was the embassy, a spokesman for the embassy in a letter to the Post saying that Taiwan is part of China's territory and therefore there is no basis for a president of Taiwan. Why do you think China has decided to heighten its rhetoric on Taiwan now?
- [16:57]
B
I think that's like, it's like they just have a button now that whenever they see like a Taiwan politician that, you know, vice president, president, maybe foreign minister, writes an op ed in, you know, in any country's big newspaper, that local embassy, basically they have sort of, they cut and paste the letter.
- [17:13]
A
Okay, so that's just standard operating procedure. SOP yeah, well, and it's interesting though because like in the Xinhua readout from the Trump Xi call, Taiwan was foregrounded by the Chinese side in the U.S. it's really true. We can only rely on Truth Social for readouts from these calls. But Trump didn't mention Taiwan once related to the call with Xi. But it seems like even if it's just domestically, there's more of an emphasis being placed on tarring Japan centering the Taiwan issue. Do you think that's being driven by changes to the external environment or is it more internal focused? I mean, it's a purely speculative question, but I'm wondering.
- [17:59]
B
So I think, you know, one, they have to react for domestic audience, of course. Right. But this is also, I think they believe they need to make an example of Japan. So no one else is so bold as to sort of say what the Prime Minister said.
- [18:14]
A
And to be clear, what she said was that a Chinese invasion or blockade of Taiwan would potentially constitute a survival threatening situation that could trigger a military response from Japan, which is long standing Japanese policy, but has never been explicitly.
- [18:33]
B
Set by out that way by a sitting prime minister. In the die she was, she was responding to questions. But also the reality is any Taiwan contingency if it comes to using force, having Japan involved in any way is very complicating for the Chinese because one, I think it's clear Japan won't get involved unless the US Is involved. But then if the US Is involved, especially if they're given the geography, likely using bases in Japan, it becomes a much bigger military challenge for China. Yeah. And, and so they want to, you know, I think they just, they want to try and make sure that Japan understands that they can't get involved. And I don't what I think though, that the way that they have escalated and the just the hysterical shrillness of the propaganda. So far the polls in Japan show support has gone up for the Prime Minister.
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You know, they've actually, I think been quite clarifying to a lot of people about, wow, Jesus, this is like, this.
- [19:41]
A
Is Not a rational actor.
- [19:42]
B
Yeah, or this. Or things could get really bad really quickly and we better start working harder, preparing faster for other contingencies, because this doesn't seem to be a rational actor, like you said.
- [19:53]
A
And are we effectively watching Japan call China's bluff in the midst of all this? Because, like you said, Takaishi's popularity has increased over the past several weeks and Japan is attempting to moderate its language. I mean, it's not retracting anything, but it is clear that Japan is open to an off ramp. But every time they hint in that direction, a different Chinese spokesperson comes out and says, no, she needs to fully retract her comments. And it just seems like this could be a replay of the Fukushima situation where there's so much bluster from the PRC side. But ultimately, Japan is going to do what it needs to do, and the PRC will have to quietly unwind some of these countermeasures in a couple of months.
- [20:41]
B
It's a lot harder to unwind over the Taiwan issue than it is over the.
- [20:46]
A
The wastewater.
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B
Wastewater issue. Yeah. You know, I think, I think that, like I said, best case, this is where months long in this slow simmer for several months. I mean, we just have to hope there isn't, for example, this, you know, whatever happened around the Diaoyu Senkaku Islands today, you know, where there was, you know, the headlines say standoff between, you know, Japanese and Chinese coast guard vessels. Just have to hope that no one is stupid and there's a collision or anything, because then things again get, you know, then things will escalate.
- [21:18]
A
Yeah. Yeah. Well, and we also still don't know what message was delivered from Trump to Takahashi, but they don't seem to have really altered their behavior in the week since that call.
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B
And then the other thing to look for is then, you know, going forward, what, what are the US And Japan do. Or their, you know, the, the, you.
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A
Know, there have been talk of, of deepening.
- [21:41]
B
Are there military exercises? Are there other weapons? I mean, they're just, it's, you know, it's one of the things where we're going to, I think, really get a sense of what the US has really been telling.
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Has said to the Japanese side about this ongoing situation, from actions versus leaks to media and sort of spinning back and forth from various government officials on multiple sides. So again, I think that there was. We shouldn't be surprised if President Trump sort of said, we don't want it to escalate. But that's very different than saying, tone it down. Or back off.
- [22:18]
A
Yeah, yeah. Well. And as far as the leaks to the media, what do you make of the messaging in the Wall Street Journal over the last week or so?
- [22:25]
B
I don't know.
- [22:28]
I just have to say that I'm just skeptical in any. Any publication of sources close to the use of, like, sources close to Beijing, because my reaction is like, source code. Does that mean they're in Hubei or does that mean they're, like, next to Xi? I mean, it's just this. Really.
- [22:41]
A
Well, and what are. They.
- [22:42]
B
Could be a lot of things. And. And so sometimes.
- [22:47]
But. But ultimately, I think the problem is, for anybody who's trying to figure out what's going on, is if somebody on the Chinese side who looks like they're in a position of having accurate information about intentions or actions is leaking to foreign media or think tankers, they're not leaking to you because they think you're smart or they like you. Yeah, right. So what's going on?
- [23:11]
A
Yeah, no, exactly. And honestly, when I hear it, it's still edifying to read sources close to Beijing because it shows you what they're trying to telegraph to the rest of the world. But also, I take those reports with a grain of salt. It was interesting to see the way it sort of warped the conversation around that call last week. And then to watch the truth become more complicated.
- [23:38]
B
The problem is government officials in every government, you know, lie, and they lie to reporters all the time. And so, you know, the US Side's leaking to reporters that no, we. We arranged the call. Could be true. Exactly.
- [23:49]
A
When Bessant came out and said we arranged it, I was like, I don't know what to make of that.
- [23:52]
B
But Besson saying it on CNBC is like, okay. I mean, let's be fair. He hasn't always told the truth about things. I think is a. Probably a fair statement. But why would you lie about something like that? It's just one of those, like, weird. Like, like they're more important things to dissemble about.
- [24:06]
A
Indeed.
- [24:07]
B
And then on the call with the Japanese, you know, the Japanese side, I mean, of course they're going to spin that Trump, you know, didn't say what looks like it would, you know, something looks bad for Japan. Maybe he didn't. Maybe did. We just don't know. Again, let's see what the actions are over the next several weeks between the US And China, the US And Japan relationship, and let's see if the US Seems to actually be pressuring Japan or actually is showing support through actions versus, you know whatever may or may not have been said on this call.
- [24:34]
A
Yeah, I think that's a responsible way to handle it. Watch what they do and take what they say with a grain of salt.
- [24:41]
B
Watch what they do, not what they spin.
- [24:43]
A
Yeah. Indeed. Indeed. All right, well, to keep it moving, the November Politburo meeting was held last week. The study session was held last week and the study session focused on strengthening the governance of the Internet ecosystem, which will involve AI. You wrote about the study session on cynicism and said Xi Jinping framed AI not only as a challenge but as a vital quote, support condition for the regime. This phrasing you write suggests a strategic directive to harness these technologies to bolster governance capabilities, explicitly tasking officials with utilizing AI to, to better understand public opinion and enhance forward looking or predictive governance. The call to promote application scenarios within a governance context implies a mandate for the cyberspace administration of China and security apparatus to accelerate the deployment of AI driven censorship and surveillance tools. So Bill, there was more in the readout, but what do you think of these efforts? I can't say I'm shocked that AI is going to be utilized to improve surveillance and censorship tools under the CCP regime.
- [25:56]
B
No, I mean, I think, you know, China has long taken a very proactive approach to Internet governance and AI is a new technology that offers challenges and opportunities and I think the party is smart about recognizing those challenges and those opportunities and so no one should be surprised. You know, the readout also talks about cracking down on. So I'm going to pull the whole thing up here. To quote it exactly yesterday. By the way, yesterday's newsletter was too long. I need to actually blow up my newsletter and reduce it by 90% I think is my goal.
- [26:30]
A
I enjoy it. It's an 11pm read for me every single night.
- [26:34]
B
So I read, I read fast. And so I have. That's my problem is I actually the length of the.
- [26:40]
A
We do need. We need a little bit more sports. Jang Hanson has been struggling in port this year.
- [26:45]
B
I'm working on today, so maybe we'll get something in on Tuesday. Back, back to it. I mean, in this, in the readout from the study session, you know, things like shaping cyberspace with positive voices, mainstream values, making the Internet an important position for ideological guidance, moral cultivation and cultural inheritance. You know, and then they want to, they're going to talk about cracking down on things like what they call Internet chaos that pollutes social morals and infringes on the interests of the masses. So they're going to really Go after things like these multi channel network that are basically like handle like promoting celebrities and live streaming.
- [27:19]
A
Okay.
- [27:19]
B
And so this, this meeting more broadly I think signals intensify and crackdown on certain parts of the Internet to clean up the Internet, to clean up cyberspace.
- [27:29]
A
Yeah. And it's interesting, I mean even within the Chinese system where there's already a heavy hand as far as censorship is concerned, the Party is concerned about what the Internet could mean for social stability.
- [27:41]
B
Oh, they always are and they always have been and they are always. I think it's, you know, on the one hand it's, it's a sort of a dual edged sword. On the one hand there's a lot of benef benefit from harnessing the Internet. They've figured out how to use it, you know, to better understand public opinion, to it helps with governance, social stability. But at the same time they understand things can get out of control. And so they. This is, you know, this is a constant, I don't want to say struggle. It is a constant struggle balancing between the risk and the challenges and the benefits to the party and how. And the economy, of course. Right. Because it drives so much economic activity.
- [28:15]
A
And job applications for some of the biggest companies in the world, the biggest, most successful companies in the world. And the meeting delivered a command to quote, cut off interest chains. This economic root cause analysis represents a tacit acknowledgment that Internet chaos ranging from sensationalism to organized rumors is fundamentally driven by profit seeking. By grouping, quote, interest chains with industry change, the Party is signaling a broad crackdown that extends beyond individual content creators to the entire ecosystem that monetizes traffic. So this could be something that is really bad news for companies like ByteDance or Tencent in China. Is that accurate?
- [28:58]
B
It could be. I mean, I think, I think they'll see some impact, but they're also fairly used to working with, I mean they're extremely used to working with the party. And so.
- [29:08]
I think that we should expect to see more of a crackdown. But I don't think it's going to be like the crackdowns we saw two or three years ago where they destroyed industries because the Internet's too important. It's more about, I mean there's, and there's an ongoing crackdown.
- [29:24]
The cybersecurity administration, there's an ongoing cleanup of the Internet. And so I think this just marks potentially an intensification. But also the comments about AI are interesting. And then the last bit for, from the readout was about so taking a global view where she talks about participating in the formulation of international rules around Internet governance and then also talks about. And this is where we're going to. I mean, if you think, if you think like the party propaganda on X and YouTube is bad now it's getting. And substack it's going to get. And Facebook it's going to get. It's going to get better or get bigger because he talks about the last sentence of the readout is we must strengthen the construction of international communication Internet platforms and capabilities. Use the Internet to spread China's voice and tell China's story while vividly displaying a credible, lovable and respectable image of China.
- [30:16]
A
There it is always telling China as well.
- [30:18]
B
Sounds great, but there's certainly the constant propaganda barrage on Japan is not right now displaying a credible, lovable and respectable image of China. Yeah. And it's not a little bit of a controversy, in fact.
- [30:32]
A
Yeah, indeed. Well, did you see Deepseek finally released its new model? Perhaps Deepseek will be part of those efforts in the years to come.
- [30:40]
B
I don't know if we want to get into it, but also yesterday's newsletter had a translated piece that was in the Friday, November 28, study times, which is. Study Times is a very important newspaper for cadres. And this piece was written by the deputy director in charge of daily work for. For the Beijing Propaganda department. So an important municipal propaganda department. But since Beijing actually many of the big Internet companies are based in Beijing, it's actually a very important regulator. And he specifically. It's a long piece. I've translated the whole thing. But he talks about a couple things. One, when he talks about AI, he talks about the. One of his lines is persist in value guidance and guard against algorithm supremacy.
- [31:28]
A
Okay.
- [31:29]
B
The widespread application of algorithmic technology easily leads to content following algorithms and people being controlled by algorithms exacerbating the information cocoon effect and fueling the spread of false and harmful information. Gee. So makes keeping TikTok in the US even more sensible, right?
- [31:46]
A
Oh my God, yeah. I mean everything the party says about the Internet, I will just confess I also share those concerns about the American.
- [31:56]
B
No, I mean, I mean they're not. I mean the thing is, is that the thing is lot of a lot of the. The sort of the way they diagnose problems with the Internet and things like the algorithm. And if they're right, this is the thing.
- [32:06]
A
The solution is often very. Solution is different dystopian. But I mean these. Everybody all over the world is going to be grappling with these issues for the next 50 years.
- [32:18]
B
Yeah, I mean, and so, but then he talks about, to your, to your point about Deepsak. He, he then he talks about.
- [32:25]
Talking about AI and the quote is.
- [32:28]
One is, we want to ensure that technological applications are conducive to spreading core socialist values, promoting positive energy and cultivating noble aesthetic tastes among the people. We must accelerate the construction of autonomous, indigenous and controllable mainstream corpora. Use mainstream corpora to train large AI models and ensure that core socialist values are embedded throughout them. We must persist in planning ahead and ensure the source guidance and native implementation of values in new technological applications. No, it would be these. All the AI models are going to, you know, this is saying we're going to have to basically implant all these into all the AI models which are then going global. And then China's open source models are global, cheap and good enough or very good in some cases. And you know, this goes back, we talked, I think last podcast, the podcast before we, we talked about at least my view how, how absolutely nuts it is that some of these companies in Silicon Valley with lots of VC money are actually building on build the Chinese open source models. Yeah, politically this is a really bad idea given the, given the politics in the US Statements like this from Chinese regulators only reinforce the concerns.
- [33:39]
A
Well, they explicate them. But anybody who's surprised by statements like that hasn't been paying attention for the last.
- [33:46]
B
Exactly. And a lot of people don't pay attention. A. And especially if you're on the technology side, you don't. Oh, it's just politics. It can't happen. And we can clean the models out and we can make sure. CrowdStrike had a report last week where they tested.
- [34:01]
Open source model. Let me pull it up here. So CrowdStrike research security flaws and Deep SEQ generated code linked to political triggers. And so they don't say why, but what they found out is that actually when they do these things that the likelihood of it producing code with severe security vulnerabilities increases by up to 50%.
- [34:20]
A
There you go. Well, can't say I'm shocked.
- [34:23]
B
They don't know why this happens, but it just goes back to if you're running a business that is, for example, in a regulated industry or wants to have U.S. government contracts, you are nuts. If you're building off of an open source. Chinese, Chinese open source AI model, you just don't, you just don't understand all the potential risks.
- [34:44]
A
Yeah, well, I mean, the other interesting aspect of the Deep SEQ release is that the paper they released in tandem with the new model, said the gap between the US models and China models is widening for complex tasks and expanding GPUs is the only path forward to improve the Chinese models. The question is whether they'll get those chips from Nvidia or Huawei in the future. Certainly looks like it's going to be Huawei in future, but there is a gap in performance right now because of the limits.
- [35:17]
B
Is there? I mean, I saw it come out yesterday and I mean, looking, you can't really find good information on X about it because there are so many boosters.
- [35:25]
A
Totally in both directions.
- [35:27]
B
In both directions. And so I'm waiting for some more neutral analysis of how good. I'm sure it's good, but is it Gemini 3 good or is it. I don't, you know, but from what it sounds like it was trained on the Huawei chips. They are working very closely with Huawei and so, you know, maybe they'll catch up as Huawei expands production and, and also builds out their, you know, those big clusters they've been talking about.
- [35:50]
A
Yeah, well, and I'm sure we'll get more information on the model in the weeks to come, so we could revisit it as the story becomes clearer. But I just thought it was notable that a number of AI scientists pointed to that piece of the paper from Deep Seq and said, oh, the chip access is actually hurting their development right now. So we shall see. It's always hard to know what to make of any of these models in the couple days after anyone's released. I mean, Gemini hit every benchmark and was amazing. And then when you compare some of the answers to ChatGPT, it's a little bit murkier. So we shall see. But Deep Seek, after months of delays, finally released its new model and the Internet governance efforts continue apace with the party.
- [36:38]
B
And I mean, the party, they're smart. They're smart about regulating the Internet. And so no one should be surprised and no one should be surprised if they actually.
- [36:45]
A
Well, and AI is like a super weapon for regulating the Internet. So, yeah, of course they're going to implement AI solutions to better control public opinion and to crack down on areas where the Internet is fomenting unrest or unproductive behaviors in one way or another. Again, it's sort of tracks with core priorities of the party for decades now.
- [37:10]
B
And I mean, it's, it's all about political security. And so the Internet, the Internet again has a lot of risk, but it has a lot of opportunities and they're focused on both and they've done, to be honest, they've done a pretty good job managing over the last decade plus.
- [37:24]
A
Yeah. And telling China's story well, one TikTok at a time abroad.
- [37:28]
B
TikTok one substack one one YouTube post, one Facebook post. But they are thinking about these issues in ways that I think very few other governments are. Yeah.
- [37:38]
A
Indeed. Well, to keep it moving, tell each other's story. Well with sourced reporting in the Wall Street Journal as well. To keep it moving. Now, now, sorry, the efforts are multifaceted. We've got a few updates on the economy from Bloomberg. Two of China's private data agencies withheld monthly home sales figures at the government's behest, people familiar with the matter said, stoking transparency concerns in a critical sector of the world's second largest economy. The delayed data disclosure came after China Vanke Co, long considered one of the sector's healthier firms, sought to postpone repayment on a local bond for the first time last week. Vanke's surprise move added to the industry's woes after years of falling sales and massive defaults by China's Evergrande Group, Country Garden holdings company and others. So the specific news on Vanke was that they are seeking a one year delay before paying a $283 million note that was originally due on December 15th. Vanke is one of the largest builders in China. I'm not sure whether I'm pronouncing that correctly.
- [38:50]
B
Yeah. Thank you. Yeah, thank you.
- [38:52]
A
How, how much of an impact do you think that news has on systemically on the real estate sector?
- [38:59]
B
So, so, so the mass of Yankee has actually been a slow moving train wreck or subway wreck since I think the Shenzhen metro was a was or may still be or maybe was transferred to another part of the Shenzhen government was a big investor.
- [39:10]
A
Okay.
- [39:11]
B
It's, it's massive. If Yankee were to, were to collapse like Evergrande did, it would be quite shocking. But this is again, this has been ongoing for quite some time. I just am amazed that anybody would still buy their bonds and think that was good money. And so, you know, you saw a collapse in some prices of some of their bonds over the last week. I think now they're trying to extend for a year at least one of the bonds. We'll see if they get it. I mean if it's mostly domestic investors, then they'll get it because the government will make sure that everybody effectively plays along. But it's just another, it's just another marker of how the dire state of the Chinese real estate market.
- [39:49]
A
And yeah, I mean it's a crazy risk to assume if you're buying the bonds of any real estate and bank.
- [39:54]
B
Is good, historically been a good developer, pretty good quality homes, very middle, upper middle class. And it just is another blow to confidence. Like why, you know, again, where's the bottom? Right. Yeah. You know, the data release is kind of weird because, you know, on the one hand, you know, it's, that can hide the data. This is, this is far from the first data set that has suddenly not been made public. The Bloomberg report did say it would still be made available to financial institutions. So the numbers will get out. And then today there's reports the China Index Academy issued the data on secondhand homes for November and the data shows that prices of secondhand homes declined in China's 101st to fourth tier cities in November, down nearly 8% year on year and 0.9% from the previous month. And so they're not, they're not completely hiding this data. I don't know why they specifically single out those two private ones. Maybe they're even worse and they can't really control it. But, but it's.
- [40:54]
A
Are you surprised they're not hiding it more than they have been over the last year or so? I mean, if the data gets progressively worse, we've seen, I think the data reporting other statistics, I mean, I think.
- [41:05]
B
They'Re, the fact that they're trying to limit the release is again, not a sign that they're confident that the market is stabilizing any better. Remember a few months ago, I think it was the Politburo meeting, one of the popular meetings, Xi Jinping, the poppy meeting, said we want to halt the decline in prices. And that hasn't happened. And so for whatever reason, the top leadership on the one hand wants to halt the decline in prices, but on the other hand isn't willing to actually take much more aggressive or robust steps to try and halt the decline.
- [41:37]
A
Put a bottom in. Yeah.
- [41:39]
B
And in terms of the data, you know, honestly, I think people, the real prices, I think in a lot of cities are the actual market clearing prices are still significantly lower than what you see in the official data.
- [41:51]
A
Well, that's always the story. If the data is bad that we're, that they're actually releasing, the real story is usually even worse.
- [41:58]
B
Yeah. And you know, you had, I think it was again, it was last week or the week before, I forget it was since our last podcast, Tyson had one of their annual summits and you know, they, they had a former minister of finance, Loji Wei, who's, who's, you know, he's talks a lot and says a lot of things that appear to be out of school. But he had a, he said something along the lines of the, you know, it's going to be five years for the real estate market to really stabilize and bottom.
- [42:23]
A
That's right, yeah.
- [42:24]
B
And you know, I think that right now.
- [42:28]
Again, if you're, if you're looking to buy in China, I mean if you, if you need housing because your family's growing or you need to get mar. You know, you sort of have rigid demand, you're going to buy in good shape. Speculation that they're like this is dead money. If you're speculating, right. And also you have, you can take your pot of money that would be a down payment for say a nicer home that you don't really need, but you want to upgrade or you want to get a second home, you can put it on the stock market. Right. And to what extent is that. So why would you tie it up in the Chinese in real estate right now? Because, so the mentality I think about sort of real estate as a store of value has the party, you know, the last few years of trying to rein in the real estate, you know, end the real estate bubble and switch from, you know, to this new mantra that was repeated for a long time, the houses for living and not for speculating on. That's worked.
- [43:17]
So there just doesn't seem to be any real catalyst for the market to stabilize or prices to stop going down right now.
- [43:23]
A
So it's worked the specific goal of curbing housing speculation. It's also decimated household wealth and killed some of the economy.
- [43:33]
B
And there's still, of places, there's just still too much supply. Not everywhere, but in a lot of places. And so, you know, Vanke, it will be interesting if the central government decides not to get involved to effectively bail out the company and its big shareholders and if they let it actually end up in bankruptcy, where I think it should be, if it were like a normal market based system. But one of the questions would be what are, what you know, how, how big are the risks? What kind of contagion might there be if thank you. Were really to go under and yeah, maybe they have an answer. Maybe they're trying to figure it out or maybe, or maybe they actually don't think it's, it's been long enough this slow sort of train wreck. It's been long enough that it won't be that bad. I, I think it's probably pretty bad. So I would expect them to not, I don't think it's going to go the way it ever mean. Well, I know. I think they're going to find ways to intervene because, I mean, also Vanke, it's just such a, it's a household name. And so for it to really blow up again, it's just really symbolic of the state of the real estate market.
- [44:40]
A
Right. As Bloomberg noted, considered one of the sector's healthier firms once, not recently.
- [44:46]
B
I think for a long time it was considered healthy. No one paying attention is considered a healthy context for quite some time.
- [44:52]
A
Yeah. Well, another story from Thanksgiving week, China Banking News. Beijing has given marching orders to China's commercial banks to extend, quote, special loans, end quote, to financially distressed government entities running late on their payments to regional businesses. China's policymakers hope the move will help give a boost to regional economies by providing smaller private companies with an infusion of funds, while also helping to lift market expectations and stabilize corporate lending. So this dovetails with a number of conversations we've had about the struggles in various provinces around China and potential actions that Beijing might take. What is the news signify in the broader context of the PRC economy? What do you think?
- [45:40]
B
Well, I mean, I think they're, you know, there's also, every, every year and it started now, there's a, there's a campaign to make sure that, that wages and bills that are in arrears are paid before the end, before the holidays, end of the year. And I think it's particularly, it's acute every year. I think it's particularly acute this year. And this is probably part of that. But it's also more broadly just part of local governments. Lots of local governments have been stiffing lots of vendors, lots of contractors, lots of service providers. And then those service providers, vendors, contractors, they can't pay their own wages. And so it has this really significant negative ripple effect throughout the economy. And so this is smart in the sense that if the money actually flows not to the local government, that then spends it on something else, but actually flows through the local government to the.
- [46:29]
A
To the regional businesses, to this, for.
- [46:31]
B
Example, they specifically say what kind of business to those businesses that has some sort of a stimulative effect. But again, it's more debt and ultimately who's going to pay the debt back?
- [46:41]
A
Right. You're definitely solving debt problems.
- [46:43]
B
You're moving money, you're moving money from the center through the black hole. You hope it moves through the black hole to things on the edge that actually have some productive use. But ultimately you haven't resolved the problem of the local government finances, which are in many, many reasons are significant and.
- [47:01]
A
Remain significant and are related to the pivot in the property sector. So it's all one story in some ways, but we shall see. It was just, it was one of those stories. It went minorly viral over Thanksgiving week in part because of what it looks like, basically just taking on even more debt to address endemic debt problems. And we'll see whether it works.
- [47:28]
B
So the next big thing that, you know, people are looking for, right, we're in December now. Every December, sometime in the first two weeks, usually is the big Central Economic Work conference. And they haven't set a date yet. It sounds like it's going to be early to mid next week, so say the 8th, 9th, 10th, but we'll know officially when basically it's over. It's usually about two days.
- [47:52]
They'll sum up the economic situation and then they'll put out the priorities for the next year. That is important to see if, you know, for example, given we talked about Vanke, for example, in the real estate market, do we see any shift in how they're talking about the real estate market or potential support for more support for trying to stabilize the market? So we're going to be hearing, you'll be hearing a lot more about this essentially economic work conference over the next few days. You'll start seeing more speculation in the media because academics might write something and they'll say this and that, and then you sort of figure out, well, okay, this guy, this person, maybe they're an advisor, maybe they know something, you know, and so there'll be a lot of guessing over the next few days about what's coming out of this work, this work conference. It's always interesting. We should know. I doubt we'll know by the next podcast, but we should know by the end of next week. And that might give a. We'll certainly get more clarity about the priorities for next year. My general guess is that since we just had, you know, we just had the fourth plenum, I don't. And we, you know, and we had the recommendations for the new 15th, the.
- [49:01]
A
New five year plan.
- [49:02]
B
Yeah, five year plan. I don't think we're going to see any real significant changes or breaks from the messaging we've been seeing so far. I think it'll be fairly consistent, if not totally consistent.
- [49:14]
A
Indeed. Well, speaking of the five year plan, we can close with one story and one email, the Financial Times there's this was an op ed by Robin Harding and the headline was China is making Trade Impossible. And the Financial Times writes, Robin Harding writes, there is nothing that China wants to import, nothing it does not believe it can make better and cheaper. Nothing for which it wants to rely on foreigners a single day longer than it has to. For now, to be sure, China is still a customer for semiconductors, software, commercial aircraft and the most sophisticated kinds of production machinery. But it is a customer like a resident doctor is a student. China is developing all of these goods. Soon it will make them and export them itself. It leads to the following point which I put to my interlocutors and I put to you now, if China does not want to buy anything from us in trade, then how can we trade with China? This is not a threat, but a simple statement of fact. Workers in Europe, Japan, South Korea and the US need jobs. We do not want our economic development to go into reverse. And, and even if we did not care, without exports we will eventually run out of ways to pay China for our imports. And it went on from there. This column was written from a European perspective and for a European audience. And it appeared to strike a chord with a wide variety of folklore in Europe and the US. Last week went viral at a couple different places. Why do you think this particular column resonated this message now?
- [50:52]
B
Because I think it's a very clear eyed view of reality and it comes.
- [50:57]
A
Statement of reality and it comes as.
- [50:59]
B
The EU is, is still struggling to figure out how to deal with the growing challenges from China all the way up the value chain. And I think it resonates because it is articulating what a lot of people who are focused on this think. Yeah, whether it actually translates into anything more than a viral FT op ed is a totally different story.
- [51:20]
A
Well, I mean that's the interesting question here is because like I also saw a headline where Keir Starmer in the UK was talking about deepening. The headline was Starmer says China poses security threats but urges deeper business ties. And then Emmanuel, Emmanuel Macron is visiting China this week. So it's like the Europeans are becoming more clear eyed about the problem, but it's hard to say when or if they will ever take actions in response to these new realities.
- [51:57]
B
I don't know, it's great question. I think it's Macron's fairly clear eyed, more so I think than his German counterpart. But, but you know, no one's economy's doing great and China's still important. And so it's a hard, it's a really hard problem that people have, you know, just governments, successive governments have allowed to fester for many years and there is no easy fix. Yeah, whatever, whatever they do will bring pain.
- [52:22]
A
And the US has more leverage than Europe does with the relationship with China. And so I think to the extent that Europe wants to adopt more protectionist policies, there would probably be more pain on the European side among economies that are less equipped to handle it.
- [52:42]
B
The US is also, it's also one government. The Europe is, I think, you know, the EU is what, 27 different.
- [52:47]
A
Yeah, 26.
- [52:48]
B
27 different governments that are, you know, are not going to adopt a common position on China because several of them are to be, you know, just to be fair, I think have been pretty well co opted by, by Beijing. And so, you know, 27 different governments. It's much easier to divide and conquer.
- [53:08]
A
Yeah, well, I thought I would mention it in part because I read it. It's about a 700 word column, but it lays out the problem very clearly and echoes a lot of our conversations over the last couple of years.
- [53:25]
B
It echoes also things I, you know, I've heard just how, you know, there's a lot of.
- [53:32]
I think, triumphalism, a lot of just, it's just inevitable from the Chinese side. It's just inevitable that we're going to take over the commanding heights of modern industry and you're just going to have to deal with it.
- [53:41]
A
Yeah, well, and Robin Harding, he was going around China talking.
- [53:45]
B
Yeah, he was getting that. He was, you know, that is just. Chinese interlocutors can say that, but that is not something that most responsible governments can accept. Right. And so then you end up with a bit of a contradictions and then the question is how you deal with it. I think the US has taken one approach in some ways tougher than a lot of other countries, but obviously not has had challenges and have found places where the Chinese have a ton of leverage and so have backed off. For example, rare earths. Right. And you know, so, so if the US can't even really push through everything it wants because China has so much leverage, I mean, think about what that means for other countries.
- [54:23]
A
Right. Where does that leave the eu, which the EU is apparently continuing to struggle with some rare earth access in the midst of all this and those problems, obviously.
- [54:33]
B
Well, it sounds like the U.S. the U.S. is buying up everything they can and acting faster than the eu. And so the EU is sort of, sort of like musical chairs. They're Kind of looking for the chair.
- [54:41]
A
Oh, I didn't know that. I didn't know that's part of what's driving the frustrations.
- [54:46]
B
But so anyway, I mean, no.
- [54:49]
It'S, none of it's good. Right. You've got Macron is there, I think starting tomorrow the third, and then the German Foreign Minister is heading there pretty soon. The UK Prime Minister supposedly is going sometime early next year, as is, I think the German leader, Mertz, you know, and you get interesting hawkish leaks about what the EU is thinking. You know, they're sort of putting in new policies, but so far at least it doesn't seem like they have the policy making coherence or policymaking consistency to actually push on really hard policies on China. And then Noah Barkin, who writes, who works at German Marshall Fund, he has a good piece today, his monthly newsletter, just about the three different choices facing the eu. None of them are good. And how depending on the country, it's basically just capitulate to be tougher but then suffer a lot of pain. We'll put a link to it in the show notes. But it was a good articulation, I think, where the EU is. And it's again, it's not good. And sorry, Tashi is barking, if you can hear him.
- [55:45]
A
I hear Tashi rustling.
- [55:47]
B
Tashi, we're editing you out.
- [55:49]
A
Or maybe not, who could say? But Noah Barkin does a great job and really does a nice job distilling how maddening the policy conversations can become in Europe.
- [56:01]
B
Yeah, but it's also, it's just a political reality. Right. Again, 27, 26 countries, it's just a political reality.
- [56:07]
A
Yeah, well, but it also takes so much longer for them to act because of those political realities. And given the environment that we all inhabit today, Europe is at a real disadvantage because of some of the bureaucracy that they have to work through to get anything done and various countries that are compromised in one way or another. And so I think the op ed is a clear eyed recognition of the problem and why the current environment is just not sustainable. Because Robin Hardy, he was going around asking various interlocutors in China, what will you import in the years to come? And there just weren't very many good soybeans.
- [56:48]
B
Cognac.
- [56:49]
A
Yeah, exactly.
- [56:50]
B
And so I don't know where that.
- [56:52]
A
Leads the rest of the world.
- [56:53]
B
Right. The answer can't be suck it up. Yeah, the answer can't just be suck it up. And that is, I mean every country, we know this, every country has domestic politics and we've already seen how China related trade has impacted politics in some US for example. And so it just we're heading again. It's just more friction. More. What's the right word friction. I don't want to say confrontation, but certainly more challenging negotiations and more difficult decisions. And again there are no good answers.
- [57:21]
A
And more of the policies that created this reality to go back to the five year plan. I mean China's not changing course at all.
- [57:28]
B
No. And the five year again the the idea that China is going to fix this by the anti evolution campaigns or massively increasing consumption, suddenly none of that is going to move the needle in on the massive or revalue surplus.
- [57:44]
A
Renminbi is floated as well, but they've had 15 years to do that and aren't interested in revaluing.
- [57:52]
B
I think it's slowly creeping up. They have a lot of reasons to not want to do anything suddenly.
- [57:56]
A
Yep. Well in any event, final note here. This isn't a correction per se, but a listener wanted to add some context to our discussion on the Shenzhou 21 rescue mission in space, which we discussed on the last episode, and the NASA efforts to rescue the two astronauts on the Boeing Starliner. Thomas says. Andrew and Bill love the podcast, but I just wanted to provide some information in defense of the NASA actions around the astronauts who were quote unquote stuck on the International Space Station and highlight some differences in the situation that would lead to different responses from the US and the Chinese. The nominal crew size for a US launch is 4, but all spacecraft have an emergency return capability of 7 members. This meant that in the case of an emergency, the US crew could return from the International Space Station to home safely, just in an off nominal configuration. The flight of two astronauts on the Boeing crew flight test was done with knowledge of this and the ability to pivot and ensure the crew can return home safely. I have much less knowledge of the Chinese capabilities, but in a damage to a capsule situation that's a huge issue because you no longer have a contingency return capability which would drive the Chinese rush to launch. On the US side, the NASA bureaucracy is thick and there are lots of issues to work through, but I just wanted to contextualize the criticism. The U.S. the U.S. astronauts were up there for nine months, which is slightly longer than the six months prior and eight months normal stay on orbit, but not out of the ordinary or record setting in any way. P.S. i work on the ISS at NASA, so I just had to give a little defense of the U.S. so there you go, Bill. It's Great to know first and foremost that we've got listeners.
- [59:48]
B
Yes, thank you for that.
- [59:50]
A
Thank you so much, Thomas. Also reassuring to know that the delay on the US Side was not quite as dramatic as it may have seemed to an untrained news consumer.
- [60:02]
B
No, that was, thank you for that. That's very helpful. Since I think our last podcast, the Chinese did send up, I think it was the Shenzhou 22 mission, empty, uncrewed.
- [60:11]
A
Okay.
- [60:12]
B
And so now there's a, there's a new return vehicle they can use. And then they also apparently sent up some kit that might allow them to repair. I think the head of the, some official from the space program yesterday talked about, gave a briefing about what had happened. And it was a tiny little, looked like a little almost like paint spattering on the windshield of the capsule that was some sort of, you know, looked like it was cracking. And so maybe they'll be able to repair it. But now that the crew on the Shenzhou 21 crew, I think I've got my numbers right, who had no ability to return for several days if there were an emergency, now has a capsule that can allow them to return if need be.
- [60:49]
A
Okay.
- [60:49]
B
So the Chinese turned it around quite, quite quickly, got the, got those astronauts home and then now have a, have the current crew up on their space station repairing it in space.
- [61:00]
A
Wow.
- [61:01]
B
Well, they have, that's a sort of another backup. They have the ability to return with a, with an undamaged capsule and then maybe they'll be able to repair the one that had the problem. But it's interesting.
- [61:11]
A
That's the important takeaway.
- [61:12]
B
But that was great. That was great context. Thank you for reminds you that we have lots of listeners who are much smarter than we are. So that's great. Indeed.
- [61:19]
A
Well, and I read a little bit more about it and I think what happened is that it became a heavily politicized issue where Trump wanted to make the Biden administration look bad and was talking about these stranded astronauts. And I read.
- [61:38]
Yeah, and they tap musk to come in and save the day. The astronauts themselves, Suni Williams and Butch Wilmore, were the U.S. astronauts. They did an interview with Anderson Cooper where they made very clear we don't feel like we're stranded. We don't feel like we're abandoned or stuck. We both get it. And so it's interesting that once you put that story through the US Domestic politics machine, it creates a scenario where millions of Americans think they're a stranded astronaut.
- [62:10]
B
But it is it also true that I don't think the US had the capability to send up a new rocket with the capsule within like two weeks?
- [62:17]
A
That's correct. And I also think it was a bearish indicator on Boeing's space prospects, given the way the test flight went. But in any event, I appreciate Thomas for clarify because I learned something new as a result of the email, and I'm happy that the Shenzhou crew is going to come home safely at some point.
- [62:38]
B
It's good to end on a relatively positive note. That's right.
- [62:41]
A
Every now and then we get some good news here. So on that note, Bill, we will come back next week and see where the news takes us. But it's great to hear you, great to hear from Tashi on this podcast, and I look forward to coming back on the other side. Enjoy the rest of the week and I will talk to you soon.
- [63:01]
B
Thanks, Andrew. Thanks, everybody.