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- [00:01]
Progressive Insurance Announcer
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- [00:30]
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- [00:55]
Kaiser Kuo
Grocery Outlet Barg. Welcome to the Cynical Podcast, the weekly discussion of current affairs in China. In this program we look at books, ideas, new research, intellectual currents and cultural trends that can help us better understand what's happening in China's politics, foreign relations, economics and society. Join me each week for in depth conversations that shed more light and bring less heat to how we think and talk about China. I'm Kaiser Gool, coming to you this week from my home in Chapel Hill, North Carolina. Sinica is supported this year by the center for East Asian Studies at the University of Wisconsin, Madison, a national resource center for the study of East Asia. The Sinica podcast is and will remain free, but if you work for an organization that believes in what I'm doing with the show and with the newsletter, please consider lending your support. I know you think of this as boilerplate by now, but seriously, I am looking for new institutional support. The lines are open and you can reach me@senecapodmail.com or just my first last name at gmail. Listeners, please support my work by becoming a paying subscriber@synecapodcast.com seriously, help me out. I know there are a lot of substacks out there and they start to add up, yes, but I think this one delivers some serious value. You get my stuff, the China Global south podcast, the fantastic content from Trivium, including not only their excellent podcast but also their super useful weekly recap. You get James Carter's wonderful this Week in China's History column. You get Andrew Methven's Chinese Phrase of the Week. I am really trying to deliver value for your hard earned dollars, so please do sign up things are tough. I get it. But consider help now. Tough for me, too. As we move into the second year of Donald Trump's seemingly interminable second presidency, US China relations have once again defied easy characterization. What began as a return to tariff escalation hardball trade tactics has somewhat unexpectedly given way to a period of relative strategic calm marked by pauses, truces and even a noticeable softening of tone at the very top. Even in the national security strategy and the national defense strategy that was just released, the once dominant language of great power competition has definitely receded, and many of the most vocal China hawks who shaped Washington's approach over the past decade appear to have been sidelined. In their place, we've seen a policy posture that reflects Trump's highly personalistic approach to foreign affairs, an emphasis on leader to leader rapport, Xi Jinping's my friend deal making over doctrine, and a willingness to bracket or at least downplay ideological disputes in favor of transactional progress on trade, on technology risk reduction. Trump's repeated praise for Xi Jinping, his apparent sensitivity to certain of Beijing's red lines, including on Taiwan, it seems, and his apparent comfort at treating China as a peer rather than a civilizational rival, mark a sharp departure from recent bipartisan orthodoxy in Washington. If you indeed believe that it was a bipartisan consensus, supporters argue that this shift has lowered the risk of conflict and delivered, you know, tangible gains. Critics, though, counter that the United States is conceding leverage without securing durable returns. Either way, the result is a relationship that feels, well, less confrontational. For now. In my private communications with certain among my more panda hugging friends, there is this sort of bewilderment. It's like we kind of agree that Trump is awful for this country but not so bad for US China relations, right? But beneath the surface calm lie unresolved structural tensions, deep mutual dependencies, of course, that can be weaponized, parallel efforts in both capitals to reduce those vulnerabilities. So what comes next? Are we headed toward a genuine, lasting stabilization or a familiar snapback to the acrimony that once dominated once our expectations collide with reality? Or a more ambiguous middle path, one in which both sides buy time and avoid escalation and quietly work to insulate themselves against future shocks? Well, to help us think through all these questions, I am joined by Ryan Hass, director of the John L. Thornton China center at Brookings and one of the most clear eyed analysts of the US China relationship working today. Ryan has just published an essay on the Brookings website laying out three plausible pathways for the relationship under Trump, scenarios ranging from a soft landing to, to a hard split to what he sees as the most likely outcome, a period of uneasy calm in which both Washington and Beijing seek stability not out of trust, but out of mutual constraint. He joins me from D.C. and Ryan, welcome back to Seneca Man.
- [05:57]
Ryan Hass
Thank you, Kaiser. It's wonderful to be back with you.
- [05:59]
Kaiser Kuo
So, Ryan, like I said, you're joining us from Washington, so let me start there. One of the strengths of your piece is that it treats leaders as, you know, not free agents but constrained actors. So from where you sit in D.C. what are the most powerful domestic forces that are shaping the US China policy right now, and which of them actually do you think matter to President Trump?
- [06:23]
Ryan Hass
Well, it's a really interesting question and I have to say, sitting in Washington, D.C. one thing that is very palpable is a hope, a wish amongst many inside the Beltway that we will soon snap back to the way that things were before. That this one to two year window is just sort of a brief pause from the long term trajectory of intensifying competition and confrontation. I'm a little less confident of that. In fact, I'm fairly skeptical that that's where things are headed. But that's, that's certainly a palpable sense of mood within, within the Beltway. But to your question, I actually think that President Trump is fairly unconstrained in terms of his approach to China. I think that he is pursuing the approach that he believes is going to yield the best benefit for him personally and politically, but also for the country and the basic contours of it. To the extent that you can sort of assign strategy to what President Trump is doing, I think that he is trying to lower the temperature of the US China relationship through direct engagement with President Xi. I think he's trying to show tremendous respect to President Xi and by extension, China in service of that effort. But I think that at the same time, he is also working to build deterrence in Asia militarily. I think he's trying to reduce dependence upon China for critical inputs to the US Economy. And I think in his own way he's trying to rebalance the US China economy. So that's the direction that he is trying to take things. I don't think that he surveys the landscape of the US Political class and finds too many threats to his vision and his approach to the relationship.
- [07:55]
Kaiser Kuo
But he's thinking about midterms and he is thinking about 2028 and he's thinking about affordability and things like that. I mean, is that part of the logic that's driving him to soften things with China right now. To hit pause.
- [08:07]
Ryan Hass
Yeah, I think that there are a few things that are causing him to. One, I think that he does believe that China has us over a barrel in terms of their control of rare earths and other critical inputs. And until we get out from under the sword of Damocles that the Chinese have above our head, I don't think that he sees a lot of value in sort of taking the US China relationship toward a head on collision. I think he also recognizes that he's managing a lot of other problems around the world simultaneously. And adding to that list with intensifying confrontation with China may not be wise or prudent. But I think that he also recognizes that there isn't a ton of appetite in the United States among the body politic for head on confrontation. This is something that Kaiser, you have written about and talked about the vibe shift in the United States. President Trump, one of his unique strengths is his reptilian feel for the mood of the American people.
- [09:01]
Kaiser Kuo
Right, right.
- [09:02]
Ryan Hass
And in this regard, I think that the President reflects what he can sense from the American people in terms of what their expectations are for the US China relationship today.
- [09:12]
Kaiser Kuo
Well, that's comforting. The other questions, I mean, you know, industrial policy coalitions used to be they were at various times a ballast for stability or even sort of an active force for improved relations with China. Are they acting on him today? Is there business pressure somewhere? Is Jensen Huang a major force in his thought these days?
- [09:39]
Ryan Hass
Well, I think that President Trump operates much differently than traditional US Presidents in the sense that he is not sitting in the Oval Office waiting for his staff to bring him options for him to decide upon as it relates to China, as we've talked about before in Berkeley and elsewhere, he is his own China desk officer. He takes his own responsibility for sort of calling the shots and setting the direction of US Policy towards China. And in doing so, he is not informed by stale turgid intelligence briefings that stone face people deliver to him early in the morning. He is talking to a range of people in and outside of government. He's talking to people he treats as peers and considers his peers, including Jensen Huang, but not just Jensen Huang. And he is basing judgments upon the sort of the body of inputs he's receiving, which are far broader than a traditional US President would.
- [10:30]
Kaiser Kuo
So if he is so unconstrained and if his policy toward China, as with all things, is such a function of his idiosyncratic whims and his character. Is this current pivot away from ideology credit where it's due? It's something that I'm really happy to see. Is this something that could survive Trump or is it inseparable from his personal instincts and his incentives?
- [10:57]
Ryan Hass
Well, I'll try to take this in two parts. The first is that I think Trump is in a category of one amongst the US political class in his willingness and tolerance to affect the change in America's overall orientation towards China. And you noted this very articulately in your introduction, that he has moved the United States away from sort of an emphasis and a framing of great power competition as the sole lens through which to view the US China relationship to something that's much broader. I think of it as sort of non conflictual coexistence, sort of a more pragmatic, realistic appraisal of the nature of the US China relationship than than preceded President Trump. But it does raise the question, I think a very legitimate question that you're asking, which is, is this just something that will perish when President Trump departs office? I can't tell you. I honestly don't know. But my instinct would be that no, that this has the potential to outlast President Trump. However, for it to do so, a few things will need to happen. First, President Trump will need to demonstrate return on investment over the next couple of years. He'll need to demonstrate that this less harsh approach to the U S China relationship yields tangible benefits for the American people and American workers. But secondly, whoever succeeds him, whether Democrat or Republican in 2029 will need to be able to make a case for what America's national goals are and how China relates to them. And it's impossible to know how those two variables will play out. But it is certainly a possibility that we could see an elongation of this period beyond just Donald Trump.
- [12:34]
Kaiser Kuo
The ball then is sort of in Beijing's court. They need to pay a return on that investment and I think if they want it to endure beyond Trump. But speaking of Beijing, let's flip the lens to Beijing. Is Xi similarly unconstrained? Is he a sort of singular determinant of Chinese policy toward the U.S. or does he have domestic determinants of China's policy toward the United States at this point? I mean, and if they are, I mean, is it like economic stabilization in the post Covid period? There's plenty of things that bedevil the Chinese economy right now. Is it elite risk aversion among his broader circle of elites? Is it concerns about regime stability? Is it his longer term project of technological self reliance? Is it something else? What are Xi's, as far as you can tell, his considerations?
- [13:28]
Ryan Hass
Well, one of the unique aspects of this moment is that we are in a situation where the two countries are driven by very personalistic leadership styles. And there are some, for me, uncomfortable similarities now in the way that the two countries are sort of operating. I don't think that Xi is perfectly unconstrained. I've never subscribed to the view that he has a monopoly on power in China and that he alone can determine the outcomes for 1.4 billion people. But I do think that there are certain things that he is very invested in and that his brand is associated with his political brand. One of them is making progress towards greater self reliance and less dependence upon the United States and the west for China's future growth, innovation and technological breakthroughs. And this period of relative calm in the relationship, I think serves that purpose. It gives breathing room and space for China to make progress down the path of greater self reliance. The second is being able to give proof to the narrative that time is on China's side, that China has winded its back and that it's the United States that on a relative basis is declining. And I think there are plenty of proof points that President Xi and those around him can point to to build that case persuasively inside China today, which I think also gives some momentum to the current direction that we're in.
- [14:47]
Kaiser Kuo
I mean, I know it's hard to say with any certainty, but is it your sense that there's debate within the Chinese system about how hard or soft to lean into this current period of calm? Is this something that is he facing opposition? In other words, are there people are saying, hey, America's showing weakness, time to press our strength, or does it seem to be Xi's calling the shot in that case?
- [15:11]
Ryan Hass
It's a good question. My latest touch for that is a bit dated. I was last in Beijing and Shanghai in December. So I'm a month, month plus out from my last contact with, with people who are in policy circles in, in China. But based upon that last round of conversations, my view is that that many people recognize that this moment is serving China's interest well, that China's goal is to try to relieve pressure and sort of unblock the path to China's continued rise. And to the extent that President Trump is willing to play a role in that by relaxing pressure upon China, whether it be through reducing tariffs, lowering export controls, reducing strategic pressure on China. I think that those are all sort of indicators that this is working to China's long term benefit.
- [16:06]
Kaiser Kuo
So, Ryan, a central claim or assumption in your essay is that both sides, Beijing and Washington, are behaving less out of mutual trust than out of mutual sense of vulnerability. That, I think isn't a claim that many people would challenge. Actually, I wouldn't. To what extent do you think that policymakers in both capitals genuinely understand this as kind of a negative sum dynamic? And to what extent are they simply discovering through painful trial and error that they are mutually vulnerable and that they need to chill out?
- [16:39]
Ryan Hass
Well, I have a pretty high degree of conviction around this point, but I don't have some smoking gun evidence that I can point to to prove it. My sense is that both leaders and those around them have come over the past year to recognize that the other side is capable of doing immense harm to itself. And I think that this has been a revelation, more so on the US Side than the Chinese side. The Chinese side has been well aware for a long time that the United States is capable of being a dangerous superpower that can do immense harm to China. But when President Trump and Secretary of Treasury Bessant and others entered office last year, you know, they entered office with a certain degree of bravado and hubris. Secretary Bessant famously said that China is holding a pair of twos in terms of, you know, the cars it has in its hand and the lack of leverage it has over the United States. No one is talking like that anymore. Through painful trial and error, both sides have come to realize that they are each capable of doing harm to the other and that if one side initiates action against the other, it should expect painful retaliation and response. And so I don't think that President Trump and President Xi over the past year have developed, you know, some, like, brotherly friendship where they decided not to do harm to each other. I think they both come to recognize that if they take actions that are harmful to the other, that they will get hit back in response in the devil fruit.
- [17:59]
Kaiser Kuo
That was the whole lesson in 2025 leading up to Busan.
- [18:02]
Ryan Hass
Right, right.
- [18:03]
Kaiser Kuo
And you know, your trip may have been a couple months ago, but that was still in the post Busan era. So I think you, you have a probably quite accurate read of how they're feeling right now. Not much has changed since then, so.
- [18:16]
Ryan Hass
Right. Yeah, there haven't been many, many major ruptures or fluctuations from then till now,
- [18:20]
Kaiser Kuo
except the rupture that, you know, Mark Carney spoke Of So Ryan, let's, let's jump in with your first scenario, the soft landing. In this pathway, both leaders invest in improving the relationship. They maintain regular contact, they lower barriers to trade and investment, and they move toward a narrative of peaceful coexistence or managed competition. What would actually have to go right on each side for this to move from a theoretical possibility to a durable trajectory? I suppose you could point to a couple of things that say, well, this step actually does seem to have been taken. I mean, they're really talking about investment right now. We've got Ford talking about working with Xiaomi, possibly according to the ft, at least on battery plant.
- [19:10]
Ryan Hass
Right? Yeah, you're absolutely right. I think for this scenario, the soft landing scenario to take root, a couple things would need to happen. The first is that both leaders would need to discipline their systems to actually prepare thoroughly and meticulously for leader level engagements so that they yield durable breakthroughs and not just sort of ephemeral headlines. And this is sort of the challenge of the personalistic leadership style of both countries is that more so in the United States and China. I think that President Trump doesn't really want to be particularly constrained by the preparatory process. You know, he wants to have room to maneuver and decision space to be able to get in the room with President Xi and sort of work things, things out. So that's the first prerequisite. Second is that both sides need to take costly signals to invest in durably improving the relationship over the long term.
- [20:01]
Kaiser Kuo
Right.
- [20:01]
Ryan Hass
And I think that the types of things that you're pointing to, if the United States became more welcoming of Chinese investment, that would be a costly signal. I think that one of the things that some people point to who are advocates of this approach would be some type of grand bargain. So we know that President Trump is planning to travel to China in April. If that visit were to yield a sort of significant breakthrough on a contentious issue, most people would identify Taiwan as the likeliest candidate. Taiwan combined with some type of transactional benefit for the United States and its workers, then that would sort of give momentum or solidity to the idea that we could travel down this path. But short of that, I think it's hard to imagine both sides really sort of believing and acting in ways that both leaders believe that they can sustainably improve over the long term. The nature of the relationship, what makes
- [20:58]
Kaiser Kuo
that costly from the American side, in
- [21:01]
Ryan Hass
the case of inbound investment, it could potentially displace entrenched interests in the US Economy. It could invite criticism of President Trump and sort of his, his judgment that he is growing too soft and sort of giving away the store to China in service of soybean sales or whatever it is that he's setting up.
- [21:21]
Kaiser Kuo
So you say that it would require both sides to send costly signals. What sorts of signals are we talking about from Beijing and what would be costly about those and how hard would they be to deliver domestically in Beijing?
- [21:34]
Ryan Hass
It's a great question. I think that in the case of China, you know, there is a certain degree of skepticism about whether the Chinese leadership would be comfortable seeing some of its companies and its crown jewels invest in produce outside of China. We see this in particular with, you know, Meta's efforts to acquire a Chinese origin AI company that relocated to Singapore.
- [21:59]
Kaiser Kuo
Manus.
- [22:00]
Ryan Hass
Yeah, yeah. Another area, you know, in like, in the Taiwan context would be if President Trump were to alter long standing declaratory policy toward Taiwan, would China reciprocate by agreeing to withdraw its military actions to its side of the center line, the unofficial center line of the Taiwan Strait, would it make a reciprocal statement about its commitment to resolving cross strait differences without use of force? These are the types of questions that, you know, sort of point to CASA signals that each side would, would sort of expect the other to give if they were to give it themselves.
- [22:36]
Kaiser Kuo
I have trouble seeing that is costly to China compared to the electoral costliness of signals from America. So it feels like, I mean, China can ram this through. Trump faces electoral pressure.
- [22:50]
Ryan Hass
Yeah, he might. But let's keep in mind he's never going to be on a ballot again for the rest of his life.
- [22:55]
Kaiser Kuo
That's true.
- [22:57]
Ryan Hass
And so, and President Trump has never shown a lot of conviction about election outcomes that don't involve his name on the ballot.
- [23:03]
Kaiser Kuo
Ryan, looking back over recent US China history, is there precedent that you can point to for, you know, kind of restraint, for restraint actually holding for any decent length of time?
- [23:15]
Ryan Hass
I can't think of anything off the top of my head right now that would give a lot of confidence to the notion that restraint for restraint is a time tested and, and, and well established trend. This is, this is the critique that I think people of the soft landing approach would make, is that the soft landing would involve the United States making concessions to China without receiving reciprocal benefits in return. And there's a pretty calloused skepticism that is built up over years, including within the Trump administration, as a consequence of the underperformance of China in the phase one freight deal.
- [23:52]
Kaiser Kuo
So obviously you floated this possibility that something like a fourth joint communique on Taiwan could anchor the soft landing. You're talking about the grand bargain. What problem would such a document actually be trying to solve? What would be the content of a fourth communique? And is Taiwan ultimately the issue that makes this scenario maybe politically untenable? Even if both. This whole soft landing scenario, even if both leaders are inclined toward restraint? I mean, is Taiwan going to flummox this?
- [24:24]
Ryan Hass
I think it will be very difficult. The idea would be that the last time that the United States and China have had a communique was in 1982. That's right. A lot's happened in the last 40 plus years. And that a new framework that sort of sets out a baseline of understanding for how both sides will approach cross regulations may be a useful stabilizing mechanism. I'm, I'm on the more skeptical end of the spectrum on this question. I don't think that the challenge is a lack of understanding about the nature of crossroad issues. I think that there's just, you know, competing interests involved that need to be managed. In Washington, it's treated as sort of a foregone conclusion that Beijing is desperately seeking a fourth communique or some type of new understanding related to Taiwan with President Trump. And I think that there are a few factors that may mitigate against that as a foregone conclusion. The first is that, you know, it's not entirely clear that on a day to day basis, President Trump has absolute control over his bureaucracy. His bureaucracy does things that surprise the Chinese and surprise the president. On a not irregular basis.
- [25:30]
Kaiser Kuo
Yeah.
- [25:31]
Ryan Hass
Secondly, President Trump changes his mind often. He is adaptive, flexible, fluid in his thinking, as we've seen with Greenland and with other issues. And so if he agrees on the spot with President Xi that he has, you know, adopted a new way of thinking about Taiwan, will that survive contact when he comes back to the United States? Thirdly, I think that the Chinese have to ask themselves whether or not this will be sort of an ephemeral understanding that exists between President Trump and President Xi. President Trump has a, you know, shelf life of three years in office. And then lastly, the Chinese have to ask themselves if they've reached an understanding with President Trump over Taiwan, will that trigger Congress to become more active and engaged to try to counterbalance whatever concession members of Congress would believe that President Trump had made in return for some type of commercial transaction?
- [26:26]
Kaiser Kuo
Yeah, yeah, yeah. I mean, just to remind everyone, this is your most optimistic scenario. And in this most optimistic version, there's still a sense, the way you wrote it up, that the soft Landing would still be kind of inherently provisional. Something closer still to a pause than to a full reset. I am ineradicably optimistic, but I still have trouble seeing either polity really arriving at some kind of durable modus vivendi right now. There's just no trust. There are many deeply entrenched habits of mine on both sides. So. Yeah, but there are other scenarios that you posit here. This second scenario is the one that I sincerely hope to avoid. A hard split. You frame this as a familiar arc. Trump starts conciliatory, but grows very frustrated and then swings really, really hard. We've seen this many times. What are the most plausible triggers that could push the relationship down this kind of, you know, a path toward a hard split?
- [27:31]
Ryan Hass
Well, I think that there are a few ways that we could get here. One, there could just be a misunderstanding on what each side agrees to. President Trump comes to the conclusion that the Chinese are under delivering on their promises. He grows frustrated, angry, and we find ourselves back following the same cycle as we did during the first term, where the first three years were focused on trying to negotiate a phase one trade deal, and in the fourth year was focused on sort of letting it rip because the President was so angry and frustrated that Covid had spread and sort of undercut his reelection prospects.
- [28:01]
Kaiser Kuo
Right.
- [28:02]
Ryan Hass
I think it also could be possible if China takes actions against American allies that involve use of force and put the United States in a very difficult position of deciding whether or not to employ force against China to come to the defense of their allies and uphold Article 5 commitment. Source or traditional understandings of security commitments,
- [28:22]
Kaiser Kuo
the Philippines or Japan program.
- [28:25]
Ryan Hass
Right. And then what some people in Washington would say is that as the midterms get closer, the political incentive for President Trump to become harder and harder towards China will grow. And that the political imperatives of President Trump wanting to hold off Democrats gaining control of the House and relaunching impeachment probes against him will compel him to. To grow tough. This is the hope, I think, of a lot of people in Washington who want us to get back into the business of great power competition. And I'll just offer just a quick caution, Kaiser, as to why I'm not yet convinced that this is the natural course of events that we're going to find ourselves in. First, the president has demonstrated that he is very sensitive about America's dependence upon rare earths. That dependence is not going to change in the next 12 months, 18 months, even two years.
- [29:12]
Kaiser Kuo
The magnets.
- [29:14]
Ryan Hass
Yes. The second is that President Trump just genuinely is not. He's not activated by the military threat or the ideological nature of competition between the United States and China.
- [29:25]
Kaiser Kuo
Right.
- [29:26]
Ryan Hass
He's much more focused on economic and tech issues. He wants to make deals that he can point to and tout as successes and breakthroughs. And having a hostile relationship with China would sort of move against that, against that objective. I also think that President Trump is pretty comfortable with the status quo right now. He doesn't face immense political pressure at home for where the US China relationship stands. He also likes to brag privately with his colleagues and counterparts about how much tariff money he believes that the United States is generating from tariffs on China. Never mind the fact that it's, you know, US Importers that pay the tariffs. And then lastly, I think that President Trump is very focused on legacy and blowing up relations. Burning down the House with China is not a legacy enhancing exercise. Putting the relationship on a new plane potentially could be.
- [30:25]
Kaiser Kuo
So, I mean, the fear of a blue wave in 2026 in the midterms, I mean, I get that, but part of him also, somebody's got to be showing him these polls that say there's just not a lot of appetite right now among voters for tough on China. It's not a winning campaign strategy right now. I mean, poll after poll after poll is showing that that is fundamentally weakened vibe shift once again. Right. So, I mean, hopefully that's a mitigating force.
- [30:52]
Ryan Hass
Yeah. And traditionally, midterm elections are not animated by China or by foreign affairs. I mean, there really isn't any empiric evidence that going tough on China improves the odds of House and Senate candidates getting elected.
- [31:07]
Kaiser Kuo
So from Beijing's perspective, I mean, it's pretty easy for us to think what kinds of US Actions would collapse strategic calm and force Beijing to take a harder line that would be reciprocated by Washington. I mean, all sorts of triggers. Taiwan, rare earth exports, American export controls. But where do you think miscalculation is especially dangerous? What are the areas where you think that, you know, crossed wires and signals misinterpreted are particularly dangerous?
- [31:40]
Ryan Hass
I would suggest, just as a hypothetical scenario, if the United States became more aggressive with other countries about urging them, insisting that they adopt America's AI tech stack.
- [31:53]
Kaiser Kuo
Right.
- [31:53]
Ryan Hass
And conditioning security support for them doing so, that could be an example of how things could go off track. And if there were further actions, like we saw, you know, last fall, where Department of Commerce rolls out something in an uncoordinated fashion, the 50% rule, the affiliates rule.
- [32:13]
Kaiser Kuo
Right.
- [32:14]
Ryan Hass
Something along those lines that the Chinese perceive as violating the truce, the understanding that was reached between both leaders that could compel the Chinese to reciprocate and retaliate.
- [32:24]
Kaiser Kuo
Well, that problem may be solved. Trump has apparently neutered bis. Right. So we'll see. One thing that struck me is how much this scenario depends on momentum, on anger, compounding on anger. Once the relationship starts moving in this direction, how easy is it to reverse? Are there off ramps? Does it become just self reinforcing super quickly? I ask because this isn't the first time either Beijing or Washington has seen things go sideways. You think that both sides might have learned something about how to manage that sort of crisis, and at least sometimes they've managed to get the relationship back on track. We saw that with the taco meal that resulted in Busan. Has there been any learning? I mean, do you think that there's enough sort of wisdom on either side to avoid that kind of a scenario?
- [33:19]
Ryan Hass
Well, I think that the key to avoiding that scenario is the two leaders. And when things begin to veer off track, it's the two leaders that usually put things back on track. And the challenge, the structural challenge, is that the Chinese traditionally, historically are pretty reticent about requesting calls from President Xi to President Trump. And so if there is an incident that is, you know, an unplanned encounter between naval vessels or whatever it may be, and things begin to sort of go off the rails, pressure builds, we have a spy balloon like dynamic emerge inside the United States where there is just boiling angst and anger about something that China has done that violates American airspace or hurts American sailors or whatever it may be, and the Chinese do not appear to be reaching out to President Trump personally, we could find ourselves in a tough spot. And if the Chinese are perceived to be the instigator of this downward spiral, and they don't communicate directly with President Trump, but try to operate through intermediaries, I think that President Trump could find himself both humiliated and offended in ways that could sort of compound the initial problem.
- [34:30]
Kaiser Kuo
So that's scenario two. One where there's a hard split, not an optimal outcome at all. Obviously, fortunately, you ultimately judge scenario three, which is about buying time and building insulation, as the most likely path. I would certainly concur. But what in your mind makes this outcome more resilient than the other two? Because it seems sort of inherent, inherently unstable. Right. It's provisional. It's about sort of just playing for time. And so it feels very impermanent. But why do you think this is maybe more durable than the other two
- [35:09]
Ryan Hass
possible outcomes, to me, Kaiser, and this is unscientific. This is just sort of a feel. It feels like the most realistic scenario. I don't think that either of the two leaders is prepared to sort of make significant lasting concessions to the other. I don't think that either country is prepared to accept a subordinate status to the other. I think that both countries in their own way are able to tell themselves a story that time is on their side and if they just regenerate or strengthen themselves, that they will be able to outlast and outpace the other. And so this third scenario of sort of buying time and building insulation, it's most appealing to me because it works for both leaders and how they describe their intentions and their goals. President Trump is clear. He does not want a war between the United States and China. He wants to make the United States less dependent upon China and he wants to rebalance the relationship between the United States and China. This scenario allows him to make directional progress on all those goals. And similarly for President Xi, I think that there's a, you know, a fairly mirrored set of objectives. President Xi is very committed to strengthening China's self reliance and sort of moving down that path. He certainly, in my mind at least, does not seek a confrontation or conflict with the United States. But he also isn't interested in making any significant gestures or major concessions to the United States either. I think that the Chinese believe that they have momentum behind them. And the wave of leaders that have come to Beijing over recent weeks to visit President Xi I think have reinforced that perception.
- [36:46]
Kaiser Kuo
So a core insight of your piece, Ryan, is that both sides are constrained by deep mutual dependencies. And I think most people who are listening are aware of some of these and they can rattle them off. I mean, China's dependence on advanced semiconductors, the US Dependence on Chinese processed rare earth elements. But what do you see as under appreciated vulnerabilities on each side that might reinforce this uneasy equilibrium? Are there things that we're not talking about enough where there is mutual dependence?
- [37:18]
Ryan Hass
Well, I'll offer a few. When I was in China last in December, I was discomforted to be reminded in almost every meeting about America's dependence upon active pharmaceutical ingredients for China APIs. And I don't think that that was just sort of a stream of consciousness, you know, idea that that bubbled into the minds of everyone that we were sitting down with. It was a reminder that rare earths aren't the only source of American dependence upon China. Similarly, I think for China, I think that they are painfully aware of their dependence upon the United States and the west for airplane components and parts, everything related to the advanced semiconductor manufacturing, ethane to make plastics, but also at a more intangible level, access to America's higher educational system. This is something both from the students themselves and their future contributions to Chinese society, but also Chinese leaders ability to keep that door open for students, the children of their peers, I think is critically important. And if the relationship were to deteriorate, you know, we've already seen that this is something that the Trump administration has considered using as a retaliatory tool.
- [38:31]
Kaiser Kuo
Right, right, right. Rubio's sudden announcement about, you know, sort of banning all Chinese students at one point. Right, yeah.
- [38:37]
Ryan Hass
And I, you know, to President Trump's credit, he basically called, he said that as in where he wants to go or what he wants to do.
- [38:44]
Kaiser Kuo
Now he's talking about 600000 Chinese students in America, right?
- [38:49]
Ryan Hass
Yeah. And you know, I guess maybe he thinks about them as a service export rather than as human beings who contribute to the flourishing of our academic community. But whatever the case, I think that having Chinese students in the United States, enhancing the education of classrooms that they're a part of is a net benefit for the American people.
- [39:11]
Kaiser Kuo
So Ryan, in this scenario, you kind of suggest that the way we score this is by measuring who reduces dependence faster. I mean, if we look out five, ten years from now, which side do you think is better positioned to actually succeed in reducing those dependencies? I mean, who's working hard at this? I mean, we talk a lot about re industrialization. Is that underway? China talks a lot about technological self sufficiency and there's ample evidence to me at least that that is well underway, that it is a serious priority, that they're putting the effort and the brain power into that. I think there are probably things happening in America right now with rare earth elements that should give people comfort. But what's your assessment of this?
- [39:56]
Ryan Hass
Well, we have a tendency to swing from one extreme to the other in the way that we talk about this in Washington a few years ago. Kaiser, you and I were talking about peak China, whether it's a serious thing, how should we think about it? And everyone was focused on all of China's weaknesses, vulnerabilities and soft spots in, in recent months, it feels like the pendulum has swung to the other extreme where China, you know, China can make everything. China can, can do anything 10 foot tall again, right? Yeah. The world is sort of is gravitating towards China and the United States is, is in dire straits. I'm uncomfortable with either of those extremes.
- [40:34]
Kaiser Kuo
Good for you. Yeah, me too.
- [40:35]
Ryan Hass
I, I think that, that China does have, you know, profound challenges, but it also has immense strengths, and neither of those are going to go away anytime soon. We have to get comfortable, be able to look at both of those side by side. And the same can be said of the United States. And I will just make one observation that I hope is in service of answering your question, which is that I am deeply uncomfortable with the direction that our country is headed in certain respects. I think that right now the social fabric of the country is tearing and national unity is the foundation of national strength. No country can be stronger on the world stage than it is at home. And what we are watching in Minnesota and elsewhere is deeply troubling, both for me from a spiritual standpoint, but also just as a, you know, from a civic standpoint and also in a measure of national power. I. Secondly, I worry very much about America's alliance network fray and unraveling. You know, I think that alliances traditionally have been a force multiplier of American influence on the world stage. Now I think that our alliance network exists more in name than function. And this is going to be a long term cost that the United States is going to pay for the moment that we find ourselves in. But more fundamentally, and this I think speaks most directly to the question that you're asking. I worry that America's economic competitiveness is eroding somewhat. We see manufacturing declining, consumer confidence is at its lowest levels since the, you know, since the shadow of the global financial crisis. Right now, talent is being turned away at our borders. We're forfeiting on clean energy, we're losing ground on biotech. We sort of put all of our bet in on racing to the frontier on AI. And I just feel like, you know, at a certain level, President Trump is pursuing a 19th century strategy of assuming the control of natural resources will be the source of national power. And we find ourselves in a different world today. I think that his resource obsession is a strategic distraction. For me, the goal needs to be to stimulate growth. Growth comes from productivity. Productivity comes from innovation and diffusion. Innovation and diffusion come from talent comes from ideas, comes from efficient allocation of capital, and it comes from a transparent and predictable legal system. And this is how America gains strength. And the further we turn from that, the more that I fear that we will lose our ability to achieve the sort of the escape from dependence that your question was anchored in.
- [43:08]
Kaiser Kuo
Yeah, I mean, it's so frustrating to Me, this is a man whose favorite metaphor is cards, but he's talking about who's got the stronger hand, who holds more cards. It feels like somebody's got to be able to convince him that what he's been doing by, like you say, turning away talent at the border by destroying those things like predictability, rule of law, alliances, all these things that act as force multipliers for us. He's plucking valuable cards out of his hand and lighting them on fire to light his cigars. It's just bizarre. I feel like at this point, Beijing must look at the hands that each side holds and conclude that there's some and very pronounced asymmetry here. I feel also like that that could really make this equilibrium that you describe in scenario three more fragile. I mean, if one side succeeds faster than the other in reducing vulnerability, and right now it looks like China's succeeding faster in reducing vulnerability, that. That actually seems like it would destabilize this equilibrium.
- [44:16]
Ryan Hass
I agree with you. If the equilibrium is measured in bilateral terms only. And. And I thought that Adam Tooze made a very important point in the interview that you flagged of his with Ezra Klein after Davos, which is that if we are thinking about the world as undergoing a power transition from the United States to China, it is going to trigger all the anxieties, insecurities, and antibodies in the United States about China's rise and compel us to try to suppress it. If we rather think about what's going on in the world not as a power transition, but as a power diffusion, where the United States is not significantly declining, but power is growing much more diffuse in the international system. The international system is splintering. It's growing more disordered. Then the nature of the challenge shifts, and the way that we think about and address and respond to it also evolves. I am much more inclined to the latter view, that we are seeing a splintering and a diffusion of power rather than a transition in power. But this is going to be, I think, sort of a core aspect of the debate that will be underway about the way that America relates to the world for the next couple of years.
- [45:29]
Kaiser Kuo
Yeah, it's interesting. I seized on that metaphor that Thu's used, too, and I started thinking about that kind of moral panic securitization that we've seen in this country as an autoimmune response. We got to take some goddamn antihistamines and chill. I agree with you that this scenario, this third scenario that you describe is probably the most likely. Does this framework Just stepping back suggest that we've entered a phase right now where US China relations are less about trying to build trust or establish shared norms, and more just about engineering resilience under assumed conditions of, of enduring mistrust. I mean, where each side, we've got a hand on the other's choke points. They're grabbing our oxygen tube, we're grabbing their oxygen tube. I guess it's structurally analogous to, obviously not identical to mutual assured destruction during the Cold War. If that's right, how should it change the way policymakers even think about stability?
- [46:36]
Ryan Hass
Well, it's a great question. I am inclined to your second scenario that you just described. I do think that we're both sort of holding each other's oxygen tubes to a certain extent. I don't think that there's any outbreak of goodwill or warm fuzzy feelings towards each other right now. And I also think that we're in a pretty fraught moment. Both countries believe that they are gaining a certain degree of advantage over the other or that they can do immense harm to the other. But on top of that, if you look at social science work and some public polling data, the Chinese public feels pretty triumphal and nationalistic right now. The American public feels pretty beaten down, distraught, and just sort of beleaguered at the moment. And so this isn't the time. We are not at a moment where there's going to be some grand breakthrough in the relationship. I think that if we manage it well through this coming period, we will have done a service as stewards of a long term relationship rather than as authors of some concluding chapter to it.
- [47:43]
Kaiser Kuo
Well put, beautiful final question to you. I mean, if listeners wanted to just cut through the rhetoric and only watch for just a handful of real concrete indicators over the next, say, 12 to 18 months, what would you tell them to focus on to assess which scenario we're actually in or which we're careening toward?
- [48:03]
Ryan Hass
I would encourage people to watch the frequency of interaction between the two leaders. How often do they talk on the phone? How often do they acknowledge exchanging views through each other's ambassadors or intermediaries? I would pay attention to the degree to which both sides are preparing for engagements, direct face to face summits between the two leaders, whether this is a professional process or just sort of a slap dash, you know, trip across the ocean. I would watch to see how well the United States is doing in terms of building rare earth stockpiles, reducing its sort of vulnerability to shocks in the industrial supply chain system from China. And similarly, I would watch to see the degree to which China is sort of making progress and innovating around some of the export controls and other obstacles that the United States has put in its development path.
- [48:59]
Kaiser Kuo
Sure. So how important are atmospherics going to be around the April Trump visit to Beijing?
- [49:05]
Ryan Hass
Well, I think it'll be significant. It's somewhat ironic, Kaiser, because traditionally the United States trades form for substance. We decide to negotiate away, you know, different sort of bells and whistles of a Chinese leader's visit to the United States in exchange for substance, because we know that the Chinese leader cares deeply about the imagery that comes out of such engagements because it bestows respect and, and gives people inside China pride that their leader is being treated with, with dignity on the world stage. Right now. I think we're in a moment where sort of the, the roles are reversing, where it's, it's President Trump who will be committed to the trappings of, of dignity and respect and, and will want something grander and more dramatic than what he experienced with the state visit. Plus, in 2017 or 1817, it was, yeah, I expect that he will probably go to a second city this time as part of his trip. And so how he is received by the public, but also, you know, the imagery that comes out of that will, will be important to him. But ultimately, I think that the measure will be, to what extent has his travel to China benefited the American worker and the American people? And, you know, we'll have to see.
- [50:25]
Kaiser Kuo
Well, I will be there on the ground in Beijing in April. I'm leaving very soon, in fact, just two weeks from now. And I will report faithfully. I'll, I'll do a couple of shows about, you know, preparations for the Trump visit and stuff, see how that plays out. Because I think that is a very, very telling indicator. And I think you're absolutely right. We are in this world right now where the Trump presidency cares very much about all the symbolism, the pageantry, all the sort of etiquette, the formalism of it. And I think Beijing knows that. Beijing knew that before November 2017, when he went. They sort of turned up the flatterometer to very, very high. They know how to do this.
- [51:09]
Ryan Hass
Well, I will be listening carefully to your reporting from on the ground, Kaiser.
- [51:13]
Kaiser Kuo
Well, thank you, Ryan. Make sure to read the piece. It's on the Brookings website. And then everything else that Ryan writes, because it's all super, super good. Ryan, thank you so much for taking the time to chat with me. Let's move on to paying it forward. Do you have A younger colleague or somebody who you've been working with who deserves a shout out here on the show. I do this selfishly because I'm looking to cultivate new guests to bring on.
- [51:39]
Ryan Hass
I would point to Audrey Wan, who is a incredibly thoughtful, talented researcher, writer, public intellectual who is doing tremendous work explaining China's economic orientation to the world.
- [51:55]
Kaiser Kuo
Fantastic. And we can find herself on Brookings.
- [51:58]
Ryan Hass
Audrey. I believe she's at USC right now.
- [52:01]
Kaiser Kuo
Oh, okay, okay. Oh, cool, cool. Excellent. Audrey Wong. I will look out for her. And what about recommendations? As you know, we do a recommendation every week. What do you have for us? You got a book or a film or some music? A travel, destination, something that you want to recommend?
- [52:15]
Ryan Hass
You know, Kaiser, I wish that I had something super cool to share. I'm going to just default to a book recommendation from Robert Suttner. He wrote the Conscience of the Party, the biography of Hu Ya Ban. And it's as much just a gripping human story about Hu Yao Bong, the last reformer in China, as it is a sort of a X ray of the Chinese Communist Party system and the way that it operates and how it operates. So it's for anyone who's sort of interested in, in. In the functions of the Party. I think that Robert's book is a tremendous starting point that's been on my
- [52:52]
Kaiser Kuo
list for a while. I really need to, to finally get around to reading it. That's an excellent recommendation. Thanks, Ryan. So I've got a book as well, as well as a couple of China related things. But my book is just for fun. I've been reading the long lost final book that Alexandre Dumas wrote. The English translation that I have is called the Last Cavalier, but it's also known as the Knight of Saint Germain. The French title is Le Chevalier de Saint Her Main. But either way it is a really fun bit of Napoleonic era historical fiction in which actually Napoleon himself is a major character. And Dumas gives him a really kind of believable personality. I mean, much better than Ridley Scott gave him in that lamentable film, which I hope none of you had to suffer through. But there are loads of fascinating characters. Many of them are historical. It sent me scurrying to Wikipedia many a time just to sort of look these people up. But it's also just got a ton of historical material mixed in. It's got letters and decrees and courtroom proceedings all kind of jumbled into the fictional stuff. I mean, the story, the plot is a bit of a shaggy dog. It's maybe 40% fewer total tangential plot lines might have made this book a little more sort of readable, but it's still worthwhile if you're interested in Dumas actually writes himself or his father. I mean, he does this sort of breaking the fourth wall thing where he suddenly starts talking in the first person and then talks about his father who was this Napoleonic general who's also Alexandre Dumas. Anyway, great stuff to take your mind off the world as it is, but still you kind of get to scratch this itch for, you know, political turmoil and intrigue. If you're listening to this show, you probably have such a niche for a couple of quick China related recommendations Some really good sense making on the Chinese economy has dropped just in the last couple of days. For the day we're taping, check out the Asia Society conversation led by Lizzy Lee, who listeners will know of course from her many appearances on the show. She's joined by two of my faves, the former World bank country head for China, Bert Hoffman, and also Gerard Depipot of rand, formerly csis, also just one one of the smartest dudes on the Chinese economy. It's about the challenges of rebalancing the Chinese economy, but it goes way beyond that. It goes into obviously the problems of the property market and much else. It's as good as you would expect with these three all taking part. Related to that is the latest outstanding Trivium China podcast, which you can find on the Seneca Network. It's hosted by Andrew Polk. It is just a banger of an episode. Joe Peissel, who heads macro research at Trivium, is the guest for the first half and they do this thing that they're going to be doing every month or so, just looking at the macro numbers. But this one looks at not just macro numbers for Q4, but for the year. It's a great survey. The second half though, features Danny McMahon and Corey Combs, who are both absolutely brilliant. Denny McMahon looks at markets mainly Corey, they're so lucky to have this guy. Corey covers strategic minerals and supply chains for Trivium. They are both really brilliant. It's on why China is facing headwinds on boosting capital expenditure, which if you follow Chinese economy, you've probably heard dropped really, really precipitously in the last quarter. Check out those shows. I'm a neophyte soul when it comes to the Chinese Chinese economy, but I'm always interested in learning, so these guys have taught me enormous amounts. Anyway, Ryan, great to have you on again man. And this is going to be a very Brookings heavy month because I'm going to be talking to your colleagues Kyle Chan and to Patty Kim about work of theirs recently.
- [56:49]
Ryan Hass
Delighted to hear it and thanks for having me on.
- [56:51]
Kaiser Kuo
Kaiser thank you. You've been listening to the Seneca Podcast. The show is produced, recorded, engineered, edited and mastered by me, Kaiser Guel. Support the show through substack@cinecapodcast.com where you will find a growing offering of terrific original China related writing and audio. Email me@cinecopodmail.com if you've got ideas on how you can help out with the show. Do not forget to leave a review on Apple Podcasts. Enormous gratitude to the University of Wisconsin Madison center for East Asian Studies for supporting the show this year. And of course huge thanks to my fabulous guest Ryan Hass, who is always a favorite fan favorite, my favorite everything. I'm really thank you Ryan.
- [57:31]
Ryan Hass
Once again, thank you guys.
- [57:32]
Kaiser Kuo
Thanks for listening. We'll see you next week. Take care. Sam.
- [64:51]
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