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The Rest Is Politics
410. China, Russia, and Cyberwarfare: Is the UK preparing for the wrong war?
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Alistair Campbell
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Rory Stewart
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- [02:24]
Alistair Campbell
Welcome to the rest is politics with.
- [02:26]
Rory Stewart
Me, Alistair Khan Campbell and me, Rory Stewart.
- [02:28]
Alistair Campbell
Breaking news, Rory, The Dutch government has just collapsed. We might get a few researchers beavering away as we talk. To find out more about that, the Strategic Defense Review presented by Keir Starmer, big news in the uk and I think as well as going into the detail of that, we should look back at the defense reviews that happened, as it were in our time because I think there's some interesting parallels and differences to draw also related to defence. I think the election in Poland at the weekend where Donald Tuskai narrowly lost and that could give him a a headache going forward and difficulties possibly in relation to Ukraine as well. And in the second half I think we should focus on China and Asia more broadly. You've been in Japan at a conference in China, I've been in Kazakhstan where China came up way more than the United States did. So lots to get going on. Let's start with defence. So on your 14 hour flight back from Japan, did you have time to read the Strategic Defence Review?
- [03:21]
Rory Stewart
I did.
- [03:22]
Alistair Campbell
Well done.
- [03:23]
Rory Stewart
Let's give a quick introduction down and dirty to strategic defence reviews. So I guess the cliche on British strategic defence reviews, which has been a long standing tradition, is they tend to be very, very elegant, a very big picture and not funded in a great deal of detail. And actually in a funny way, if you wanted to make a joke about different national characters, you could look at the way the Americans, the Germans, the French and the Canadians do their defence reviews. So the Americans basically sound like a general giving orders. They're very, very brisk. They're connected to rafts of classified documents on funding and they're full of very aggressive language about dominating, deterring the French as you'd im and talk a lot about sovereign capability. But one of the interesting things about the French is that they all are driven by illegally binding law about funding that happens in advance of the review. The Germans are most woke of all. The Germans Defence Review under Schultz, which came out last year, has a lot of talk about feminist defence policy, climate, human rights, arms exports.
- [04:27]
Alistair Campbell
Right up your street, Rory, right up your street. You love the German Defence review.
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Rory Stewart
And the story of British defence reviews is that in my experience, I used to be chair of the Defence Select Committee, so I used to spend a lot of time looking at these things. Is that when they come out everybody celebrates them because partly, I fear, because it's quite a tight knit group, all of whom have contributed to the Defence and Security Review and then a Few years later, they all say they were complete rubbish. So the last one that we had that came before this was put together by your friend and my friend, Boris Johnson. And this was the Strategic Defence Review, which came out in 2021.
- [05:04]
Alistair Campbell
Sorry, just before you go on, Rou, is that the same Boris Johnson who, three months before the invasion of Ukraine, said that it was absurd to think that we'd have a war in Europe involving tanks ever again?
- [05:15]
Rory Stewart
That one, that would be exactly the one. And unusually, being fair to Boris Johnson, this was the complete consensus of all the great poobahs and grandees who were involved in his Strategic Defence Group reviews. So it was released a great fanfare in 2021, and it missed one big thing, unfortunately, which was Russia, Ukraine, which happened within a few months of the review. Instead it said, the big future for Britain is Asia Pacific. And the real kind of headlines of the review were we were going to send an aircraft carrier to sail around the Pacific and reinforce the United States in the Pacific. And we were going to tilt hard towards quantum and AI and away from old fashioned legacy things like tanks, artillery shells, et cetera. Now, the only reason I'm saying this is that at the time I was a very rare voice saying, I cannot see the point of us tilting towards the Pacific. It seemed to me completely mad. Britain has very little equity in the Pacific. We would have done much better concentrating on Europe and on Africa and in fact backfilling the US while the US went to the Pacific, Dan south in Africa. And it's also very striking that it completely ignored Putin invading Crimea in 2014 and that we knew about hybrid warfare and attacks on the Baltic, which the Defence Committee had been writing about. I've just been rereading some of the stuff we did in 2014-15. We wrote about it a lot and yet it really didn't feature at all. And the reason I'm raising it is that this review, which was brought together very elegantly by a man called John Bue, who wrote the biography of Atlee, was really celebrated at the time. There were very few dissenting voices, and yet within a few months it proved to completely misread the risks of the world.
- [06:53]
Alistair Campbell
Well, before we go into explaining what's in this defense review, let's go back to the one that I was involved in in 1998, where I think it was, I guess, at the time, peace dividend was a sort of phrase that was. Was doing the rounds. But that one too actually became somewhat overtaken by events, in fact. So that came out in 1998. And George Robertson, who was then Defense Secretary, was in charge, and he's the guy who was the main author, along with Fiona Hill and General Barons, as the sort of three that put this one together. But after the September 11th attacks, they actually added a chapter to the 1998 Strategic Defense Review. We need to look further into how we should allocate the investment which is needed, including, for example, intelligence gathering network centric capabilities, Special forces capabilities, unmanned aerial vehicles, etc. I also went, had a look at it and some of the kind of headline stuff, and it was really interesting because, you know, at the time, as I say, the country felt pretty confident. We didn't really feel under threat. But let me just tell you the thing about aircraft carriers, for example. So the Strategic Defence Review recommended there are then three Invincible class aircraft carriers should be replaced. And the new ships, the Queen Elizabeth class, as it became known, entered service in 2017 and 2019. So we're talking almost two decades between the review and that happening. The Royal Navy fleet was reduced from 35 to 32 frigates and destroyers. There was a lot of focus in this one about submarines, in the new one in submarines back then, we did confirm the purchase of an initial batch of Astute class submarines. They're now going to go and interesting on nuclear deterrence. So the current one that we're about to talk about, they're talking about £15 billion more. Back in 1998, we did not exploit the maximum capacity of the Trident missile system that we could have. I think we reduced the warheads from 300 to 200. So clearly, although we were increasing the size of the army. The truth is that if you read back to it now, it feels like you're reading in a much more peaceful age. Whereas what Keir Starmer set out yesterday was very much an argument that we are in a more dangerous age than any time since the end of the Cold War, certainly. And that's why we have to up our game.
- [09:08]
Rory Stewart
You've completely identified the challenge which will be at the heart of this defence review. So what you've pointed out in 98 is that these reviews come down to what's the threat, you know, what's the big threat that's coming in terms of national security? And then what kind of kit and what kind of people do we need to deal with that threat? And related to that, your other point, which is procurement and the length of time it takes to make kit, so you have to make a judgment on threat and then you build an aircraft carrier that doesn't appear for 20 years. And obviously the world changes a lot in 20 years. That point of 98 and 9 11, of course is really interesting because it's just another way of, I think, getting listeners to concentrate on how consistently poor we've been around the world and predicting things. I think we talked about the fact that basically no Iran expert predicted the Iranian revolution just before it happened in 79. No Soviet expert predicted the fall of the Berlin Wall in 89 or the collapse of the Soviet Union in 91. And in 1998. I was in government in 1996. I think we talked about this a bit when we interviewed Alex Younger on Leading. We were basically moving to shut down almost all our international counterterrorist capacity within our intelligence and security services. It was a tiny, tiny fraction of what we were doing. And then after 9 11, it became nearly 90% of the entire activity of those organizations sort of changes on a dime. What's the risk here? Well, the risk here is that Fiona Hill, who we interviewed on Leading and we should maybe get George Robertson on. He's keen to get on, actually, I saw him recently and he said he was keen to get on. They wrote this basically in January and it's been ready to go for some months and privately they've been pretty frustrated about how long it's taken to get out. But in some ways it's fortunate it took so long to get out because of course it was written initially for an old world. So the George Robertson that I spoke to in Edinburgh, I guess in November, was a George Robertson who was still very much we're focused on fighting Ukraine with the US as the major funder and donor, the kind of Biden world, US and Europe against Ukraine. And you can still see traces of that in the report. So there's still quite a lot about buying American kit, so buying these incredibly expensive multi hundred million dollar American F35 aircraft, using American nuclear missiles to be fired off those aircraft. But in between they've had to change it to adapt to the fact that suddenly we have a very different Trump, a Trump who isn't interested in the war in Ukraine and who is much less interested in data and almost certainly is going to be removing American assets that we were relying on from Europe much more quickly. But what it hasn't quite got to, and I think this is maybe the gap, is that I think if it had been written three months later, it could have been much, much bolder about thinking about the new European defence and security architecture. It recognizes a Little bit belatedly that the American thing is fading. It hasn't quite got the full direction to the future.
- [12:14]
Alistair Campbell
That's why in the end the politics around it becomes so important. And I actually thought the message, the overall messaging of the government yesterday was pretty effective. Talking about moving to war, fighting readiness, never fighting alone. And that was, that was, there was a lot of emphasis on NATO without actually going into. And Fiona Hill is very, very articulate and very robust about her view that Donald Trump is frankly unreliable in relation to our relations with the rest of NATO, but seeing it as the alliances that we can build. But not always just talking about America and then the whole thing about innovation and so forth. Just very briefly to go through what the key announcements were. There are a lot of recommendations, but we talk about 12 new nuclear powered tax submarines and the 15 billion investment in the warhead program. I mentioned massive focus on a hybrid Royal Navy blending drones with warships and submarines and planes. And we should maybe talk a little bit about that incredible Ukrainian operation the other day when we talk about drones. A new drone center, £4 billion worth, new digital targeting web, £1 billion, six new munitions factories. And it was interesting how much Keir Starmer and John Healey wanted to focus on the jobs element, British jobs, making British munitions, new stockpile of 7,000 British built long range weapons, better housing and equipment for members of the armed forces and my God, they need it. And I think there was an understanding that we are going to need more troops and that is going to mean pay and morale being addressed. So they were the sort of, the, the main, the main chunky bits and there's a lot in it, I guess what I wonder and I'd be interested in your take on this. And we mentioned last week that conversation I had with the reform member and he said he doesn't think the young people, if we were in a world war, young people wouldn't fight it. Do you think there's a risk in Keir Starmer talking about war readiness, almost saying like we have to be ready now and imminent, there's an imminent danger from Russia. Do you think if then nothing happens that sort of feeds into the idea that young people just think they're being played and they don't really feel that they're part of the defense of the realm, as it were?
- [14:23]
Rory Stewart
Yeah, I think there's always a big risk of that, isn't there? But part of the problem is how do you talk honestly about risks? Because the temptation for politicians is always to, instead of saying the truth of the matter, which is we don't know much about the world. We can't be certain exactly what kind of threat Putin faces. Some people think that he would take four or five years to recover from what he did in Ukraine. That's the Alex Younger, more optimistic position, and that we've got time. Other people think that if he were to do well in Ukraine, he'd be moving into the Baltic quite quickly. Some people think we need to fight him in Ukraine, some people think we need to fight in the Baltic. And these are real experts disagreeing. So when the government's communicating, what it isn't really able to say to people is we're in an uncertain world where we don't quite know what could happen. The US could become more normal again after Trump. Or it might not. Putin might back off. Xi Jinping, might not go into Taiwan. We need some capacity just in case. And the threats to us are not Napoleon or Hitler trying to land on British soil. And that means that the risk is that you need to excite people because you want them to pay more tax. You want to increase, let's say you increase GDP from two and a half to 3%. That's tens of billions of pounds extra. You're taking in tax.
- [15:40]
Alistair Campbell
Are you saying that part of the job is, is actually to explain to people that we might have to invest very significant sums of money, as we are doing in Ukraine right now, in places like Lithuania and Latvia and Estonia, and our troops might have to go there rather than give any sense that we might actually have to see British people fighting in Britain. That's the bit that I think was when we talked about this, they talked a lot about this kind of Home Guard idea, people getting more engaged in the reserve of cadet force and so forth. It is sort of trying to shape the psychology of the nation to think that, you know, we can no longer take it for granted that Britain might not be involved in a conventional war very close to home.
- [16:20]
Rory Stewart
Yeah, well, if you look at detail of what they predict, the most likely nature of a conflict with Russia would be it's much more about missile exchange than it is about Russian soldiers landing on British soil. I suppose the point I was trying to make, though, which is, you know, goes to the core of what you were involved in in Iraq and we were all involved in in Afghanistan, is that in order to get votes through Parliament and raise money, you're under a lot of pressure to really emphasize how much of a threat it is. I mean, obviously, the most controversial is this question about weapons of Mass destruction. But the same was true in Afghanistan, which is Obama saying, in order to catch a sun bin Laden, we need to win in Afghanistan and stabilize Pakistan, or. Afghanistan's an existential threat to global security. And the problem with it is it creates in the short term, as I think you were implying, the sort of motivation, maybe from the public or politicians to get behind something. But in the longer term, the risk is that people think you've overstated your case and they then overreact in the other direction and think, as they do now with Iraq and Afghanistan, that these were $3,000 trillion dollars wars and that they weren't really much of a threat to us anyway. So that's why I think. I don't know whether this is what she was saying, but that's only been my instinct. The really good politics, really great leader is able to say this really matters without pushing the argument so far that you create kind of exhaustion and a reaction against you.
- [17:46]
Alistair Campbell
Well, I just looked at a. Just looking at some polling. 41% of under 30s say they would refuse conscription in the event of a world war. So I think this thing about, you know, one of the lines in the review is that every part of society will need to play their part. That that is trying to engender a sense of real risk, real threat. And they sort of analyze the threats as Russia being kind of imminent, not imminent, but a real threat to our. To our way of life. And a lot of focus on cyber attacks. China's probably next in line, and then North Korea and Iran as being very, very unpredictable. I thought this was interesting, the way that Keir Starmer and John Healey, both emphasizing this never fight alone, this sense of the alliances. And I think that goes back to. It was interesting. I watched a little bit of the parliamentary debate once they got over the fact that there was lots of the speaker very angry and lots of MPs angry that this whole thing was announced in a shipyard in Glasgow rather than in Parliament. But once John Healy got up on his feet, really emphasizing this point about, you know, the alliances that we have to build and working with other European nations. But then we're going to talk about Poland in a minute and just think about that. You were saying there the challenge for politicians to persuade the country to take a threat seriously, and, you know, the fact is that even though it was a very, very narrow defeat, Donald Tusk, the Prime Minister, his candidate losing, presumably if Poland was totally signed up to this side, they're now spending almost 5% of their GDP on defence. If Poland was fully signed up to the threat that he's talking about, then you might have expected his candidates to have won that election. So the challenge for politicians in this is really, really tough.
- [19:25]
Rory Stewart
I just want to take about one more stage, which is just to remind people what a hole Britain is in. So Fiona Hill and George Robertson and General Barons are dealing with a British military where the number of soldiers we've got is famously at the smallest level since Napoleonic War. You've got some figure about a football stadium.
- [19:43]
Alistair Campbell
Yeah, they can fit in one of our bigger stadiums. Yeah.
- [19:45]
Rory Stewart
And if you look at the figures, the US will have something like two and a half thousand battle tanks ready to go and about another 1700 in reserve. The Chinese have about 5000. The Poles have about 777. This is a slightly unfair question, but guess how many ready tanks we have in Britain?
- [20:03]
Alistair Campbell
I'm saying 120.
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Rory Stewart
20 to 25 ready.
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Alistair Campbell
Oh, God. How many unready do we have?
- [20:08]
Rory Stewart
Well, we've got about 148 going through upgrades at the moment.
- [20:11]
Alistair Campbell
Right, okay.
- [20:12]
Rory Stewart
But the gap between Poland having 777 in a pretty good state and us having 20. And the same's true with our ships. You know, half the time our aircraft carriers are being refitted. We have a particular problem around our frigates where only six of them are really able to float around. We've only got, if you look at planes. We built these two enormous aircraft carriers and each aircraft carrier can take between 60 and 80 of these F35s, but we've only had the money to buy 33. That means that you can't fly the number of sorties remotely that the US or the French could. And you don't have a carrier battle fleet to defend them. I mean, one of the reasons why Boris Johnson Defence Review was a sort of classic Boris production, it was quite elegant in literary terms. It made great claims about global Britain. But in the end it came down to a British aircraft carrier bobbing around somewhere in the Pacific, completely dependent on American planes to fly off the deck and American ships to protect the aircraft carrier. It was a completely sort of. It was a bit like Boris stuck on a zipline. So getting from that state and getting from a massive 15 billion pound, famously kind of black hole in our finances.
- [21:25]
Alistair Campbell
22 billion.
- [21:27]
Rory Stewart
22 billion. Who knows what the black hole is?
- [21:29]
Alistair Campbell
There is 22 billion. I believe Rachel Reeves on this.
- [21:33]
Rory Stewart
No, no, no. This is the Ministry of Defense unaccounted for. Black hole. This isn't. Not really in her figures. And I think Where George Robertson and Fiona Hill are being a bit polite is a. George Robertson, really, I'm sure he can correct me if I'm wrong, would have wanted the government to come out with a clear commitment to three or even three and a half percent of GDP on defence.
- [21:54]
Alistair Campbell
That is where a lot of the politics was yesterday, because there was all this sort of, you know, dancing around what was a commitment, what was an ambition, what was a hope. And Labour were very much holding to the line that because they'd said they would get to 2.5, and they have that when they say there is the ambition to get to 3%, they will. But what you're saying is even at that point, there is a huge gap between what that would deliver and what others are feeling that they, maybe those particularly those that are closer to Russia, feel they have to. They have to develop. And of course, if the Americans maintain that they're going to. They're not going to provide the sort of security guarantees that we've taken for granted since the Second World War, then the bill goes up.
- [22:38]
Rory Stewart
Yeah. And if you look at one of the bits in the plan, which I guess is not an iron dome or a golden dome, but a kind of British tin dome, which is a sort of slightly cheaper British version of trying to knit together electronic warfare satellites to provide protection for the uk, they've put, I think, a budget of about a billion behind it. That would almost certainly, I would guess, 12, 20 billion to do it properly. You know, you defend a very, very small amount of the UK with that kind of budget. And the same is this question around, are we really serious about, instead of really leaning into Europe, really working out what European defence procurement would look like, developing a new generation of European fighters to keep being reliant on these American F35s, where access to software is always tricky and where this idea of flying nuclear weapons off them, the idea would have to be to fly American nuclear weapons off them. And again, do we really think we're in a world where we can completely rely on the US being willing to actually give us control over American nuclear weapons off them? Bottom of our planes. Not really. The problem with all these reviews that you've pointed out is that we're always fighting the last war. We always find it impossible to predict what the next one will be. We didn't see fall of Soviet Union, we didn't see 9, 11, we didn't see Ukraine. So what are we not seeing now? Because the risk is that actually this is about the last war, this is about US fighting the Russia, Ukraine war. What could the future war be? Well, it could be, obviously, China, Taiwan, and that's not necessarily about China attacking Britain, but that's about all American assets suddenly being stripped out of Europe as they rush off to deal with China, Taiwan, leaving us with nothing. It could be quantum computing. So this is this extraordinary idea that we could get to a quantum computing that could completely overwhelm all our encrypted, classified military systems in the space of about a week, allowing enemies to get into every detail of the way that our command control works. It could be wars in space, it could be autonomous swarms of drones, it could be biological warfare.
- [24:38]
Alistair Campbell
You'd be scaring quite a lot of people here, Rory.
- [24:40]
Rory Stewart
Yeah, but I suppose the reason we're scaring people is that Britain, as usual, has made a very elegant, sort of exquisite, sort of Oxbridge essay on what it thinks the world will be like and how we're going to focus on. But we don't really have the money to have the mass and the coverage across multiple threats. And that's the problem because we're so short of cash, we're always having to make a bet.
- [25:07]
Alistair Campbell
Now, of course, the other thing which all three of the reviews have alighted upon is the role that our special forces play. I think we do have to recognize the extraordinary operation of the Ukrainian special forces and intelligence services. And these drones taking out so many Russian bombers. I mean, that was James Bond s getting these drones into Russian lorries, getting them to four airfields deep inside Russia.
- [25:36]
Rory Stewart
Yeah. And getting a lot of them on the other side of the Russian position. So firing in from Siberia.
- [25:41]
Alistair Campbell
Absolutely. And taking out. So they've, they've, you know, I mean, who knows what the, the true value is? And, but if it's true that they've taken out a third of the planes that were responsible for these sort of long range bombing attacks on Ukraine, I mean, that is a hell of a hit. And I don't know if you saw or yesterday I just saw a picture of the meeting in Istanbul which didn't really go anywhere between the Russians and the Ukrainian delegation, supposedly to talk about a ceasefire, but actually yet again, just agreeing a few releases of prisoners. But my God, the Russians looked like they'd swallowed a really, really, really bad pill. And the Ukrainians were looking quite chirpy psychologically.
- [26:18]
Rory Stewart
Quite clever too, wasn't it? Because I gu story that was being sold in the international media was here are the naughty Russians mounting attacks just before the peace conference in Istanbul. And that may well have lulled the Russians into thinking, well, the Ukrainians aren't going to attack us at the moment because we're about to go to Istanbul. The other final point, I guess is that Britain has always liked to spend a lot of money on very high status, very, very expensive bits of what we call exquisite precision kit. That of course is a reminder that in a world of swarming drones, some very cheap things and you can get, you know, some of those Iranian drones basically cost $1,000. You can get up to a 10, $30,000 drone, can take out incredibly expensive bits of kit. And we haven't quite worked out, I think, either the procurement mechanisms because a lot of these companies that manufacture stuff don't want to manufacture thousand dollar drones, they want to manufacture 350 million dollar aircraft. We haven't found out how to deal with the sensitivities of the Navy and the Air Force who love these expensive bits of kit and obviously feel, always feel threatened by the idea of things that don't have humans in them.
- [27:32]
Alistair Campbell
Before we go to the break, let's just have a quick brief discussion on Poland and the election at the weekend. So this was so close. I mean, the exit poll gave it to the liberal pro EU Mayor of Warsaw, Raphael Chaskowski. But then when the results were finally counted, he did not win. The winner was this pro Donald Trump nationalist historian Karol Navrotsky, 50.89 to 49.11 with a record turnout, almost 73%. So the 27% who didn't vote again had a very, very big impact because had they all voted for one candidate or the other, it would have been been very, very clear. But as I mentioned earlier, this now has pretty big implications for Donald Tusk because the president in Poland has the right of veto of the legislative program. And so unless you can have as a kind of sort of weird cohabitation, unless they can get good relations and it's very unlikely that they will. And this guy who's won, Navrotsky survived an awful lot of sort of scandal stuff that was thrown at him involving violence and prostitutes and houses and all the usual stuff.
- [28:45]
Rory Stewart
He's an interesting character, isn't he? He was a proud football hooligan.
- [28:48]
Alistair Campbell
Yep.
- [28:49]
Rory Stewart
And has got along with the Polish team. He's got Chelsea tattooed on his body. He was a sort of boxer and a bodyguard and seems to at least Donald Tusk says very openly was connected to gangsters and to the mafia. It's also a reminder of what we saw two weeks ago in Romania which is almost the same story in Romania. Again it was the liberal mayor of Bucharest, so the capital city running against a right wing populist who had the rural areas behind him. And in this case the rural areas came through. And I think the map of Poland is extraordinary just how geographically, I mean, it's almost as though there are two completely different countries in the way that they vote.
- [29:29]
Alistair Campbell
And also a lot of division between gender as well. Young men voting for the, the, the, the kind of Trump backer. Also yet another election where the American administration interfered directly. Trump met him in the Oval Office.
- [29:43]
Rory Stewart
Amazing thing to do. Met, met him in May, didn't he? In the, in the Oval Office.
- [29:47]
Alistair Campbell
Yeah. And then Christine Om, the security person, she actually went to the cpac, the right wing conference in Poland and spoke out in favor of him. So you could be, if, if you're Trump, if you've got those sort of nuts, narcissistic tendencies. He's probably thinking, they're thinking that, you know, I swung it by my endorsement is probably what took him over the line. But it does mean now that Poland has a, has an issue. Donald Tusk is going to be having a vote of confidence so that he can get some, the political authority back. The Law and Justice Party. I mean this guy is not an official candidate but he had their backing. But they are now hoping they'll be able to sort of, you know, disable the government so as they come the next election they'll be back in. So, you know, it just shows the ups and downs. There was Tusk not that long ago, seemed to be flying high there. He's on the train to Ukraine with Starmer and Macron and Mertz and one of the big guys in Europe. And now he's having to deal with this very difficult domestic situation again.
- [30:43]
Rory Stewart
Yeah, and it comes back to our theme that we've been exploring a lot last two years, which is it may be that the movement back to people like Tusk, the sort of apparent return to the kind of more liberal centre and what we saw in Australia and Canada may turn out actually to be the exception in Europe. And that this victory in Poland and the rise of reform in Britain and the position of the AfD in Germany and what you've just mentioned in the Netherlands.
- [31:08]
Alistair Campbell
I think you're being too pessimistic, Roy. I think it's all to win, all to play for, all to win for.
- [31:13]
Rory Stewart
All to play for, all to win for. Can I finish this just before we go to the break? I've been very, I noticed very pompous and silly about this defensive security review. I think given the the brief they were given, Lord Robertson, Fiona Hill, Richard Barrons have done a really, really good job. It's one of the best defense and security reviews that we've seen in 25 years. And the government has accepted every single one of its recommendations. So broadly speaking, it's really positive. And obviously, people like me can sit and backseat drive and point out all the things that they might have missed and the fact that there's nae money. But I think they did a hell of a good job.
- [31:51]
Alistair Campbell
Okay, good. Let's take a break and then we'll talk about China, Japan, Kazakhstan and all things Asian.
- [32:03]
Rory Stewart
Welcome back to the Restless Politics with.
- [32:05]
Alistair Campbell
Me, Rory Stewart and me, Alistair Campbell. So, Rory, how was Japan?
- [32:09]
Rory Stewart
Well, amazing at the moment. I'm really lucky of going there almost every year. And I was in Kyoto and as you say, meeting with a lot of people talking about China and a lot of Chinese business people. I think that the most dramatic thing that's changed in the last six months is the incredible resurgence of optimism amongst a lot of Chinese businessmen. If we'd been talking, let's say, a year ago, and I think we did a bit of this on the podcast, there was a very gloomy story, property market going wrong, banking going wrong, a lot of people very worried about Xi Jinping's nationalism, slight sense of balance of payments, money flowing out of China, people pretty unhappy about the way the regime was behaving. That's not the feeling that you're getting now. And I think there are two main things. One of them is that the economic indicators are looking better. So they made their growth forecasts in the first quarter. Now we're not talking about 10% growth, but we're talking something more like 4%, 5% growth, which is still obviously going to be double that of the United States. And the second is tech, of which one big example is deep SEQ catching up on AI, but actually also Huawei making big advances on chips and some big advances on quantum. So some of the things the few remaining areas in the world where the US Thought okay, China can do everything except AI chips. China now seems to be catching up and my goodness, on things like energy and manufacturing. So there was a real sense of.
- [33:40]
Alistair Campbell
Of China rising, that confidence and the scale of ambition was what I felt in Kazakhstan as well. These things go up and down and they come and go and people get moods and the whole sort of vibe thing. But was really interested. I went to Kazakhstan a fair bit between 2010 and 2015. And I'd completely forgotten that it was in Astana, the capital of, of Kazakhstan, that Xi Jinping launched the Belt and road initiative in 2013. And when we think about, we talk about, we talk a lot about how we're sort of bedeviled by short termism. So just get this, the, the Belt and Road Initiative, it emerged from Zhang Zemin, his predecessor, his, what he called his go out policy. He launched it in Kazakhstan. He then went a month later in October 2013, to Indonesia, where he added the whole idea of the maritime Silk Road to the, to the literal roads and rail, and then presented two years later a document entitled Visions and Actions on Jointly Building Belt and Road. Two years after that, it was incorporated into the constitution of the Chinese Communist Party. So I suppose at its heart, the Belt and Road Initiative is a project that's economic, it's geostrategic, it's geopolitical, but it's using existing routes for trade and adding new routes for trade that essentially connects China to as many parts of the world as can be done. So you've got the south belt, which goes from China through Southeast Asia, South Asia, onto the Indian Ocean through Pakistan. You've got the Central belt, which goes through Central Asia and West Asia, the Persian Gulf and the Mediterranean, and then a north belt that goes through Central Asia and Russia to Europe.
- [35:35]
Rory Stewart
And I think there are two things for it. One is that at the core of it all is infrastructure. China building roads, ports, broadband networks, train lines. So, for example, if you get on the train from Mombasa up to Nairobi, at the moment it's completely, not just a Chinese train, it's completely staffed by Chinese people. It's also these huge ports. So you can see them near Colombo, near Malacca, on the Pakistani coast, a big port beginning to open. That gives them a lot of different advantages. One of them is that the Chinese navy is able to dock in some of these ports and will be able to do that more easily in the future. So US Chinese naval base now developing in Djibouti. It's also though that it can define the new terms. So, for example, when they roll out the Huawei 6G network, they can essentially create the digital protocols for a lot of these countries. They've got very, very good technology. But if they define their digital protocol as standard rather than a US protocol, you could imagine in the future, US autonomous vehicles, maybe a Tesla wouldn't be able to operate on that network. BYD would operate on that network. And then the final thing is that the finances of these things are very odd. Often these ports haven't been profitable. Many of them are loss making. It's not absorbing as much Chinese cash as people would hope, but it's certainly putting a lot of people into bad debt who are facing huge interest rates, which gives China a different form of control over these countries and the sums of money you're talking about. I remember first trying to get my head around this when I was in DFID because Pakistan was the UK's single largest international aid project and I discovered we were spending £400 million and I was told this made us the most important country in Pakistan. Then I found that China by that Stage had committed 42 billion, which was not just 10 times as much, it was 100 times as much. In other words, they were doing as much in a year as potentially as we could do in 100 years. Now, it won't all come, not all that money will come, but it gives you a sense of the gap in scale.
- [37:31]
Alistair Campbell
The other thing to understand about the way that it operates in networks, you've got what you might call the hard infrastructure, like rail and road. And there's also what they refer to as soft infrastructure. And these are the trade deals. The fact that they have legal structures and court systems that cover the whole initiative, not just necessarily relying upon one nation state. So it adds enormously to their soft power. And my God, did they exploit it. And get this, Rory. The project which is now touching 140 countries, representing 75% of the world's population and half of the world's GDP, is set for completion in 2049 to coincide with the centennial of the founding of the People's Republic of China. That is long termism.
- [38:22]
Rory Stewart
It's very long term. And the other things which are extraordinary is that China decided very explicitly that it was going to also pursue green technology, batteries, critical minerals and rare earth, solar panel production, electric vehicle production, and now chips, AI quantum. And in almost every case they're meeting those targets. And they do it in the most extraordinary model. The Chinese economic model is a very interesting mixture between subsidy, particularly from local government, putting money in, and then crazy competition. So if you take EVs, state subsidy will go into electric vehicles, but it will start with 4 or 5,000 quite small Chinese companies duking it out, ferocious competition, a lot of them going out of business, until eventually you get two or three national champions emerging, like byd, which are now producing this extraordinary range of vehicles. I mean, all the way from affordable vehicles, which you can sell In Southeast Asia, right the way up to $100,000 luxury electric vehicles, which are as good as anything Tesla produces.
- [39:35]
Alistair Campbell
I noticed the day at Walking the Dog that our local C11 bus is now a BYD. And BYD is now selling more cars in Europe than Tesla. And I'll tell you something I find really strange about the way that America looks at China. And it really was brought home by JD Vance and that statement he made about, you know, we subsidize Chinese peasants to make goods that we then buy back from the Chinese peasants. I mean, the stuff that they're involved in is a level of, of scope and sophistication that we really, really ought to take more seriously. And when, when you, you're sitting as I was watching some of these presentations about the range of this thing and Kazakhstan's not a bad place to do it because Kazakhstan is an incredible country that's in the ninth biggest country in the world, but with a population of under 20 million. So you have the lowest population density in the world. The longest train journey is 31 hours. You've got 15,000 kilometers of train line going across these vast empty spaces. But they're linking up different parts of the world. And when you talk about these 140 countries, I mean, okay, we're not there. France is not there, Germany's not there. But we talked earlier about Poland. Poland is, and the Baltic States are now, some countries come and go. But I think that it was interesting. I was talking to some, quite a lot of diplomats who were there, and it was, it was the classic sort of event full of diplomats and spooks and soldiers and the usual lot. But it was interesting. Meloni was the only European leader who was there. She sat down during the day with all five Central Asian leaders. And I think we underestimate the economic opportunities in some of these countries and the extent to which they are just looking to China. And when you look at the list of African countries now directly involved in the Belt and Road Initiative, and I was talking to one guy who's sort of expert on this whole sort of debt diplomacy thing. He's American and he was saying, look, this is part of the sort of looking at them all as peasants. Actually, the systems that they use, they're not that different to the systems that say, the World bank and the IMF use. So we like to think that we're dealing with it. We still want to think that we're dealing with something a bit backward. But this is probably going to go down in history as a project On a par, politically and strategically, with something like the Marshall Plan run by the Americans.
- [41:59]
Rory Stewart
China is unbelievable. I went there first in 1981. So my first memory of China is Beijing essentially being just bicycles, and everybody's still in Mao jackets with little red books. The big change. And I think we've seen two big changes since then. The first one was what Deng Xiaoping did, where he achieved this extraordinary 10% growth. But he did it with a very different model. His model was that there would be term limits on the leader. It was very decentralized, and it was very much a market economy. And he had this slogan. Hide our capabilities, bide our time, get things done. Real restraint in foreign policy.
- [42:35]
Alistair Campbell
Was that really the slogan?
- [42:37]
Rory Stewart
Yeah, yeah, yeah.
- [42:37]
Alistair Campbell
Give that to me again.
- [42:39]
Rory Stewart
Hide our capabilities, bide our time, get things done.
- [42:43]
Alistair Campbell
Secrecy, patience, action. It's not bad. It's not bad.
- [42:50]
Rory Stewart
Secrecy, patience, action. That's better. Much better way of putting it. And the big shift comes, like a lot of the shifts in the world, weirdly, in this 2004-14 period, because, as I say, China's still smaller than the Italian economy in 2003. And then it shoots ahead. So, bigger than France 2004, bigger than Britain, 2005, bigger than Germany, 2006, bigger than Japan, 2007. By 2014, it's 60% of the size of the US economy. And this is. In a hundred years, nobody's been 60% of the size of the US economy. This wasn't true for Germany in the First World War, not true for Germany and Japan during the Second World War. And it's at that point that China, because Xi Jinping comes in in 2012, begins to shift from this very restrained approach to Deng Xiaoping to becoming more assertive. That's when you see these islands being taken over and military bases being built. That's when you see Chinese naval vessels going out, confronting claims from Vietnam, Philippines and Japan. This is, as you say, when the Belt and Road initiative comes rolling out. 2013, 2014. And it's particularly encouraged, I think, by three things. Firstly, by the 2008 financial crisis, which convinces China that the west has lost the plot. Secondly, by 2016, where they're very struck by the first lecture of Donald Trump and Brexit. I mean, those are moments where they really think these people lost the plot, are losing it. And from that moment onwards, I think there is a real sense in the Chinese leadership that they are inevitably going to be the global power. And that then pushes America into this very opposition, because America, although it's still theoretically bigger than the Chinese economy. It's not if you look in purchasing parity terms and if you actually look at how much Chinese are paid and how many people they can employ. So the Chinese defense budget's much smaller than the American defense budget. But the Chinese army is twice the size China can manufacture. It's manufactured this year, I think 1,000 commercial ships, ships compared to five in the United States. It's got a capacity of 240 times larger in terms of shipping tonnage. So we're not quite good enough at translating these headline GDP figures into the ways in which China is already much stronger than the United States across a lot of fields.
- [45:07]
Alistair Campbell
The center for Economics and Business Research, they reckon that the Belt and Road Initiative is going to increase the world's GDP by $7 trillion a year by 2040. The World bank reckoned that it's going to boost trade in 155 countries by 4.1%. And of course the other thing that that's doing is it's helping their soft power. This is the other thing that came through talking to some of the non American people who were there, which was the majority was just the extent to which they don't look at China. Now we rightly focus on things like the, the Uyghurs and the repression and all this stuff, but they, they don't see it in the same way. The perspective they're getting is of a, of a country that's, they think, treating them with respect, modernizing them, developing them. And the scale of these projects, I mean the one, the one that I don't know if you're aware of this because I know you know a bit about India and, and Pakistan. But the biggest single, the biggest single sort of strand of this whole thing is this China Pakistan Economic Corridor. $62 billion of infrastructure projects throughout Pakistan. And the reason why Kazakhstan is such an important thing within this, even though it's population wise a small country, is that the Chinese see it as a hub for the whole Belt and Road Initiative. It's got the big dry port. So you go through the thing, it's just like, is mind blowing. And then the point you made about confidence and okay, listen, this was a conference where Kazakhstan were trying to show themselves in the best possible light. But I was mesmerized by this presentation they did of a new town that they're building called Alatau, a new city and the aim is to have a population of 2 million people. And okay, at the moment it's just A sort of, it's just a display. Okay. But the display is mesmerized. I in terms of what it is going to bring to that region and how it's going to fit into this broader, bigger economic plan. And so I just think at a time when the Americans seemed absolutely hell bent on damaging their soft power, on insulting a lot of other smaller countries than them, China seems to be doing the opposite.
- [47:22]
Rory Stewart
Yeah. There's a book by Rushdushi, who was, was one of Biden's China experts, led on a lot of the China policy called Long Game, and it was written relatively recently. And in it, he argues America isn't going to be able to actually challenge China dollar for dollar anymore. China's too big, too powerful in purchasing power, parity terms to do that. Instead, what America needed to do, he said this was under bay, is emphasize three things, alliance balances, values and predictability. And now you look at what Trump is doing. Where are the allies? Where are the values? Where are the predictability? So the entire competitive advantage that the US Was supposed to have in terms of balancing China in terms of this vision goes out the window.
- [48:07]
Alistair Campbell
Yeah, they've already got apparently half of all containers, shipping containers are already on the maritime part of this thing. They've also now Russia and China have agreed a thing called the ice Silk Road. Maybe this is why Trump is so fixated on Greenland going along the, through the Arctic. So the scale is mind blowing. And I think because we've become. Because America's become America first. America first. Because we in the UK I think, have become so much insular since Brexit, because Europe's fixated on its own problems. I don't really think we focus nearly enough on the opportunities that that come from an operation of this scale. So anyway, it was really, really interesting to be there. And Rory just made me think when you were talking about Japan. So I remember was it last year I was talking about a friend of mine, Russell Jones, who's an economist. He wrote a book about the history of the British economy, and he's now written one about the history of the Japanese economy, which is again, really interesting because it's not that long ago that we thought Japan was going to be, you know, Japan was the sort of rising star of the global economy. We thought it was even going to be challenging United States. So stuff can go up and it can come down as well as go up, but China feels like it is. And what was that slogan again? Because they're not blowing their trumpets in the way that maybe Trump does hide.
- [49:28]
Rory Stewart
Our capabilities, bide our time, get things done. And for real sort of professional listeners, I'll try to remember what Deng Xiaoping's Chinese phrase is, which is much snappier, although I like. I like your. Your way of putting it. Secrecy, patience, action.
- [49:44]
Alistair Campbell
I'm going to tell you, Russell Jones is the title of his book. I think. I think I may have. I may have told you that I absolutely hate the phrase. It is what it is. It's the worst phrase in the English language, but it sounds quite good in Japanese. It's shoga nai. So the book's called A Modern Economic History of Japan. But I think, as you've just been to Japan, you'll enjoy it because it takes you through the. Quite techy at points, but it takes you through this sense of really commanding and other countries following everything they do and then these demographic and political realities kind of catching up. But, of course, what the Chinese don't have to worry about so much is all the democratic pressures, and that's the danger in all this.
- [50:25]
Rory Stewart
I think this is still the big question. And of course, six months ago, people were much more liable to say, china is about to become Japan because. Because its population has declined for the third year in a row. It's the first country to become old before it becomes rich. A lot of this is the one child policy implemented, which means that the population's dropping very quickly in China. And it's also true that Japan, it was very startling what happened, because it was in such a technologically strong place. It was about half the size of the American economy, four times the size of the Chinese economy in 1989. And it was leading everything. It wasn't just leading in technology, you know, manufacture of cars, Walkmans, but it was also leading in culture. You know, it was generating Transformers and Pokemon and new cartoons, new films, Super Mario, Nintendo. So it was dominating our children's lives. And then something very odd happened. I mean, it sort of halted. And now it feels, partly because it's aging, as though it simply doesn't have the cutting edge in innovation or tech anymore. So that's what might happen to China. But I was talking to a software. Very, very senior software person in Japan. So he's the CTO of one of the largest companies in the entire world. He's got 150,000 software engineers working for him. And he said, person for person, the software engineering graduates from Tsinghua University in Beijing are so much better now than any European or American, partly because their mathematical skills are far superior and that underlies their coding. And he finds it very difficult to understand how we can really compete when the quality of the skills training is so high in China. There's so much more to say about China. We'll keep talking about it and I think it's worth us not getting so starry eyed that we forget all that stuff that you mentioned. Which is what? What is happening in Xinjiang, what is happening with human rights, the ways in which Xi Jinping is really crushing down on dissent internally and how uncomfortable a Chinese dominated world will be. There's a lot more to discuss in Question Time. So what are some of the things you wanted to get onto when we get on to Question Time tomorrow?
- [52:33]
Alistair Campbell
Well, we had a really big response to when we asked for views from young women about whether they felt they were being ignored in politics and if so, why we should probably cover off the Dutch situation with the government collapsing.
- [52:45]
Rory Stewart
And we're also going to have to do a little bit, I think, on Gaza humanitarian, the US courts versus Trump.
- [52:52]
Alistair Campbell
Absolutely. And just to say to people that as you probably know, we there's 24 hours between the main episode going out and Question Time. But if you become a Trip plus member, you can listen to Question Time right now. No need to wait. Well, there we are. Busy week, Busy week. Are you traveling again? I'm in the Channel Islands now.
- [53:13]
Rory Stewart
You're in the Channel Islands. I'm off to Switzerland tomorrow. Off to see the Gnomes of Zurich.
- [53:17]
Alistair Campbell
Very good, very good. We'll have a have a lovely time.
- [53:21]
Rory Stewart
Thank you. Thanks.
- [53:22]
Alistair Campbell
See you soon.
- [53:23]
Rory Stewart
Bye bye. See you soon. Bye bye.
- [53:33]
Alistair Campbell
Right, well done everybody. Who's still listening because that means you've listened to right to the end of the episode. Thank you. Very impressive. But can I ask you something? Did you hear an advert on today's episode and did you think, you know what? I'm sure the listeners would rather hear about my brand rather than all these other things they're promoting. Well, you could be right, but there's only one way to find out.
- [53:54]
Rory Stewart
That's right. You could be the next NORDVPN or betterhelp. Put your brand in front of millions of like minded listeners by advertising on the rest is politics and other shows across the goal hanger next network. So who are Gohanger? Well, they're the company behind this very show and if you're in the market to increase the value of your brand, they want to hear from you. You can register your or your company's interests by going to goalhanger. Com Right now that's goal. H A N G E R com See you.