Latest / Sharp China Podcast / Sharp China: A 5% GDP Growth Target; Evolving Two Sessions Symbolism; US to Investigate Connected Vehicles; New TikTok Legislation

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Sharp China: A 5% GDP Growth Target; Evolving Two Sessions Symbolism; US to Investigate Connected Vehicles; New TikTok Legislation · Sharp China Podcast

• 0:04
  SPEAKER_01: Hello and welcome back to another episode of Sharp China.
• 0:08
  SPEAKER_01: I'm Andrew Sharp and on the other line, Bill Bishop.
• 0:12
  SPEAKER_01: Bill, how you doing?
• 0:13
  SPEAKER_02: Hey, Andrew.
• 0:14
  SPEAKER_02: How are you?
• 0:14
  SPEAKER_02: I'm doing well.
• 0:15
  SPEAKER_02: Hi, everybody.
• 0:16
  SPEAKER_01: Hope you're all doing well.
• 0:17
  SPEAKER_01: Good.
• 0:17
  SPEAKER_01: Yeah, I'm doing well also.
• 0:19
  SPEAKER_01: It's a dreary day in D.C., but that means it's a great day to be inside podcasting, you know?
• 0:25
  SPEAKER_01: Yes, it is.
• 0:26
  SPEAKER_01: So here we go.
• 0:27
  SPEAKER_01: And, you know, before we get to the news of the day, I actually forgot to put this on the rundown and remembered about five minutes ago.
• 0:36
  SPEAKER_01: We do have an update from last week.
• 0:39
  SPEAKER_01: Several listeners responded across multiple mediums.
• 0:42
  SPEAKER_01: There were comments, there were emails, there was a tweet.
• 0:46
  SPEAKER_01: I think we can now say with confidence that the correct pronunciation is plenum unless you disagree.
• 0:52
  SPEAKER_02: No, I completely agree.
• 0:53
  SPEAKER_02: And I'm kicking myself because of course, it really comes from the Latin and having, you know, taken four years of Latin in middle school and high school.
• 1:01
  SPEAKER_02: Of course, you know, once I started learning Chinese, my brain's too small, I got squeezed out.
• 1:05
  SPEAKER_02: But of course, of course, it should be plenum.
• 1:07
  SPEAKER_02: So thank you for that comment.
• 1:08
  SPEAKER_02: And we will go with plenum and we will ignore the incorrect AI pronunciations.
• 1:14
  SPEAKER_01: That's right.
• 1:14
  SPEAKER_01: All the chatbots got it wrong, or I think two of the three chatbots got it wrong.
• 1:18
  SPEAKER_01: But the Latin geeks win the day for now.
• 1:23
  SPEAKER_01: So with that said, let's get into it.
• 1:26
  SPEAKER_01: It's time for some Consultative Democracy.
• 1:29
  SPEAKER_01: We talked about the two sessions last week.
• 1:32
  SPEAKER_01: The meetings have been underway for the last few days.
• 1:35
  SPEAKER_01: So a few headlines to get us started here in terms of what we've learned thus far.
• 1:40
  SPEAKER_01: China's GDP growth target for 2024 is set at 5% and the inflation is targeted at 3%.
• 1:47
  SPEAKER_01: There has been no giant stimulus announced and markets have been down in response.
• 1:55
  SPEAKER_01: There will be no announcements of a new foreign minister to replace Wang Yi, as we'd speculated might happen in our conversation last week.
• 2:04
  SPEAKER_01: China on Tuesday announced a 7.2% increase in its defense budget, which is already the world's second highest behind the United States.
• 2:14
  SPEAKER_01: And then Premier Li Chang will break from the tradition of the past 30 years and won't be giving a press conference at the end of the National People's Congress.
• 2:23
  SPEAKER_01: So among those headlines, what do you make of what we've seen so far?
• 2:29
  SPEAKER_01: Where do you think we should start?
• 2:31
  SPEAKER_02: So I think no big surprises in the Premier's work report.
• 2:35
  SPEAKER_02: The target of around 5% for GDP growth is pretty ambitious, given last year it was also around 5%, but they were coming off a very low base.
• 2:45
  SPEAKER_02: This year, it's going to be much harder.
• 2:47
  SPEAKER_02: And the announced fiscal policy is not
• 2:53
  SPEAKER_02: Again, it just leaves a lot of the analysts thinking that this is going to be a bit of a stretch.
• 2:58
  SPEAKER_02: This is going to be a pretty hard slog for them to achieve actually around 5% growth.
• 3:02
  SPEAKER_02: It's one of the reasons why very quickly you saw the Hong Kong markets sell off.
• 3:07
  SPEAKER_02: The Chinese markets, the mainland Chinese markets were actually up at the end of the day, but that probably had to do with a lot of state buying as opposed to positive investor sentiment about this report.
• 3:18
  SPEAKER_02: So again, I think it shouldn't be a surprise to people.
• 3:22
  SPEAKER_02: It's really, you know, the general tone of the work report was things aren't great, but our prospects are still very strong.
• 3:31
  SPEAKER_02: We have the right leadership.
• 3:32
  SPEAKER_02: We know what we need to do.
• 3:34
  SPEAKER_02: We're going to work through these issues.
• 3:35
  SPEAKER_02: And, you know, it's the same kind of messaging we got from
• 3:39
  SPEAKER_02: For example, the Central Economic Work Conference in December, all of your meeting in January is what we hear repeatedly in state media.
• 3:49
  SPEAKER_02: And so really there were no surprises.
• 3:50
  SPEAKER_02: I think there were still some folks hoping that there'd be some sort of bigger movement around physical stimulus that would change the general view that it's sort of grinding away as they sort of steady as they go, as they grind through all these problems.
• 4:06
  SPEAKER_02: Anyone still hoping for that, I think is it really should probably just cast aside those illusions because it's pretty clear the government is going to be very restrained.
• 4:16
  SPEAKER_02: You know, I was talking to someone this morning and the word was really just like, it's just kind of a boring report.
• 4:21
  SPEAKER_02: It's important, but there aren't any really surprises there.
• 4:24
  SPEAKER_02: You know, we all have to parse through it.
• 4:26
  SPEAKER_02: And I read through it once.
• 4:27
  SPEAKER_02: But, you know, you got to go through it a bunch of times.
• 4:29
  SPEAKER_02: And but there's nothing in there that jumps out as anything that is surprising from what
• 4:36
  SPEAKER_02: Bits of the bureaucracy and what Party Center has been saying through various meetings over the last several months.
• 4:42
  SPEAKER_02: It's really more of a sort of a crystallization of what they were doing anyway, what they've already said they were going to do.
• 4:48
  SPEAKER_01: Now I know why you were sarcastically excited last Monday talking about the two sessions.
• 4:54
  SPEAKER_01: You texted me this morning, boring, boring, boring.
• 4:56
  SPEAKER_01: So that's where we are right now.
• 4:58
  SPEAKER_01: Can you put some of the numbers?
• 5:01
  SPEAKER_01: Just for perspective, though, how seriously should we take the 5% target in terms of its grounding in reality or the inflation that's being discussed?
• 5:12
  SPEAKER_01: Like I was under the impression that there was deflation happening across China.
• 5:16
  SPEAKER_02: Well, not quite there.
• 5:18
  SPEAKER_02: I don't think deflation was mentioned in the Premier's report.
• 5:20
  SPEAKER_01: Well, certainly not.
• 5:21
  SPEAKER_01: Yeah.
• 5:21
  SPEAKER_02: And so they're targeting, you know, same as last year, they're targeting around 3% for the CPI increase.
• 5:29
  SPEAKER_02: That seems to stretch and, you know, 5% on
• 5:36
  SPEAKER_02: 3% inflation 5% GDP growth on 3% inflation is a lot more reasonable than 5% growth on deflation or no inflation yeah uh and so no i think i think ultimately you know the five percent number barring some sort of real exogenous disastrous event like for example the pandemic in in 2020 where they you know they've had to just cast aside the the target or the targets
• 6:02
  SPEAKER_02: Evolving Two Sessions Symbolism
• 6:32
  SPEAKER_02: Realities, I mean, that's what I'm trying- The fiscal deficit, the special bond issuance, the thing they talk about in this report, does it really all add up?
• 6:40
  SPEAKER_02: Again, I think the 5% is important inside the system.
• 6:43
  SPEAKER_02: It's a signal inside the system.
• 6:44
  SPEAKER_02: There had been talk years ago where there were some people saying if China is really serious about reforming the economy, they'll get rid of the GDP growth target because it builds in all sorts of perverse incentives.
• 6:59
  SPEAKER_02: But in fact, they've kept it because it's actually how the system organizes.
• 7:02
  SPEAKER_02: And so this is how you get all the various levels of government and various levels of bureaucracy to focus.
• 7:09
  SPEAKER_02: They need a number to motivate and to push the cadres.
• 7:15
  SPEAKER_02: So even if it's at the end of the year, it's not really around 5%.
• 7:20
  SPEAKER_02: It has everyone sort of working in the sort of general same direction.
• 7:23
  SPEAKER_02: If they just really got rid of it, I think the system wouldn't really know what to do.
• 7:28
  SPEAKER_01: Okay.
• 7:28
  SPEAKER_01: Yeah.
• 7:28
  SPEAKER_01: No, that makes sense.
• 7:29
  SPEAKER_01: I'm just trying to get a sense for how out of step with the economic realities on the ground some of the projections are.
• 7:37
  SPEAKER_01: And it sounds like it's an open question, but there is definitely room for skepticism among international investors.
• 7:45
  SPEAKER_01: Is that right?
• 7:46
  SPEAKER_02: Well, I think also domestic inspectors and investors in Hong Kong.
• 7:49
  SPEAKER_02: I think, again, there seems to be a disconnect between how the top of the leadership sees the economy and then people, businesses, investors see it.
• 7:59
  SPEAKER_02: And that I think is reflected in the markets.
• 8:03
  SPEAKER_02: And Hong Kong in some ways is a better reflection because it's not as distorted as the mainland markets.
• 8:08
  SPEAKER_02: We've moved on from last summer's back-to-back economist covers of various forms of China collapse to
• 8:26
  SPEAKER_02: It's not great.
• 8:28
  SPEAKER_02: They're grinding through lots of problems.
• 8:30
  SPEAKER_02: They believe they have a plan to get through it, but it's going to be more difficult and more painful than I think a lot of people realized even a few months ago.
• 8:39
  SPEAKER_01: Yep.
• 8:40
  SPEAKER_01: The other big headline that jumped out at me Monday morning was that there's no press conference coming from Premier Lee Chung.
• 8:48
  SPEAKER_01: And talking to you last week, I came away with the impression that the National People's Congress and the two meetings more generally carry a lot of symbolic significance.
• 8:59
  SPEAKER_01: And it seems in the reactions to this press conference being canceled that that too carried a lot of symbolic significance.
• 9:08
  SPEAKER_01: So
• 9:09
  SPEAKER_01: What do you make of no appearance before the media from Premier Li?
• 9:14
  SPEAKER_02: Well, I think it's an unfortunate sign of just the increasing opacity of the government and policymaking.
• 9:22
  SPEAKER_02: But I also think it is just another sign of how the party is effectively eating the state.
• 9:29
  SPEAKER_02: The National People's Congress is the state, the premier runs the state part of the system.
• 9:34
  SPEAKER_02: I think all of his predecessors, since Zhu Rongji would give an end of MPC session
• 9:41
  SPEAKER_02: A 5 GDP Growth Target
• 10:01
  SPEAKER_02: Another sign of a kind of a diminution of the importance of the State Council and the NPC and the Premier's job.
• 10:12
  SPEAKER_02: And I think also it's a sign that, you know, this Premier, Premier Li Qiang, he gave the press conference last year, so he did it in his first year as Premier.
• 10:23
  SPEAKER_02: But I think it's a sign of him
• 10:26
  SPEAKER_02: A 5 GDP Growth Target
• 10:42
  SPEAKER_02: There's any sort of a second or alternate power in the system, right?
• 10:46
  SPEAKER_02: Because you had a lot of hopes cast on Li Keqiang, for example, right?
• 10:51
  SPEAKER_02: In the year before the 20th Party Congress, you know, there were a bunch of leaks and sort of reporting about how, you know, Li Keqiang was trying to change policy and, you know, yada, yada, yada.
• 11:02
  SPEAKER_02: And of course, at the end of the day, when you got 20th Party Congress, it was, you know, basically the sort of she ran the table from a personal perspective and
• 11:10
  SPEAKER_02: A 5 GDP Growth Target A 5 GDP Growth Target
• 11:34
  SPEAKER_02: The premier job is basically like another minister.
• 11:37
  SPEAKER_02: It's not a second, almost like general secretary kind of job.
• 11:41
  SPEAKER_01: Yeah.
• 11:41
  SPEAKER_01: No, I mean, Lingling Wei at the Wall Street Journal wrote, the move is in keeping with how Xi has torn down the pillars of the Chinese governance model built during the Deng Xiaoping reform and opening era.
• 11:52
  SPEAKER_01: Gone are the days when the premier as the de facto head of the government was given authority over economic policy while the party chief took charge of ideology and politics.
• 12:03
  SPEAKER_01: So it's symbolism here, but it's just very grim symbolism to see Li Chang recede to the background like that.
• 12:12
  SPEAKER_01: Have we seen any photos of Xi yet?
• 12:14
  SPEAKER_01: I know last week we said he'd been out of public view.
• 12:17
  SPEAKER_02: No, no, he's been around.
• 12:18
  SPEAKER_02: He's been out a lot the last few days.
• 12:20
  SPEAKER_02: And today we've already got one of the most important
• 12:23
  SPEAKER_02: A 5 GDP Growth Target
• 12:44
  SPEAKER_02: All the meetings where she goes, of course, it gets massive coverage, but the propaganda pushes sort of what his key themes are because his messaging meshes with the key priorities in the work report.
• 12:59
  SPEAKER_02: So this first meeting with Jiangsu was, you know, the headline in Chinese and English was she stresses developing new quality productive forces or new productive forces.
• 13:10
  SPEAKER_02: And that is this basically it's a it's a sort of they
• 13:14
  SPEAKER_02: Couched in Marxist theory, but it's really about technological and innovation upgrading to make China an innovation in technology and a science and technology power and to become more self-reliant in technology and to break through from, they didn't say specifically this time, though there was no mention of the US, but to break through the Western and especially American strangleholds on certain core technologies.
• 13:39
  SPEAKER_01: The other thing that you raised on Monday was the latest issue of Chiosha carries an article titled, How Should the Economic Situation Be Viewed?
• 13:48
  SPEAKER_01: And you wrote, if you wanted an authoritative explanation as to how Marxist political economy explains why there is unlikely to be big stimulus forthcoming, this may be one of the clearest ones out there.
• 14:01
  SPEAKER_01: And from the article, they write, The changes in the speed of economic growth are an inevitable reflection of the phased characteristics of our country's development, not subject to human will.
• 14:13
  SPEAKER_01: It should be understood objectively and rationally, and policies should be correctly formulated based on this understanding.
• 14:19
  SPEAKER_01: As General Secretary Xi Jinping pointed out, it is not the case that a higher economic growth rate means the situation is very good, nor does a decrease in economic growth rate mean the situation is very bad.
• 14:33
  SPEAKER_01: We must adhere to the correct view of achievements.
• 14:36
  SPEAKER_01: Not simply judge heroes by the GDP growth rate and not be swayed by short-term economic indicators.
• 14:43
  SPEAKER_01: We should focus on improving quality and efficiency to promote sustained and healthy economic development, pursue genuine, not inflated GDP, and seek effective, high-quality, and sustainable economic development.
• 14:56
  SPEAKER_01: Lenin once pointed out that Marxists when analyzing a situation should not start from what is possible but from what is real.
• 15:10
  SPEAKER_01: In analyzing the economic situation, we should also adhere to starting from reality
• 15:15
  SPEAKER_01: Not from Subjective Desires.
• 15:18
  SPEAKER_01: And you bolded that quote from Xi.
• 15:20
  SPEAKER_01: I just find it striking alongside the months of speculation we've had about whether there may be a giant stimulus coming because Xi seems pretty emphatic in terms of his dedication to long-term sustainable growth and not chasing the short-term indicators.
• 15:38
  SPEAKER_01: It gets hard for him to be more explicit.
• 15:41
  SPEAKER_01: Did you have any additional thoughts on what's happening there?
• 15:44
  SPEAKER_02: No, I mean, I think that this is something we've talked about before.
• 15:47
  SPEAKER_02: I've certainly written about it in the newsletter.
• 15:49
  SPEAKER_02: I think that, you know, a lot of people have come to realize over the last few months that actually she is very serious about this, you know, shifting to high quality, sustainable economic development.
• 15:59
  SPEAKER_02: And, you know, it's going to be very painful.
• 16:02
  SPEAKER_02: I think it's going to be more painful than a lot of people have realized.
• 16:06
  SPEAKER_02: And that's part of the
• 16:08
  SPEAKER_02: Stimulus to Save the Day
• 16:33
  SPEAKER_02: I really think that they need to pay more attention because they're very clearly telling everybody that it's that's not going to happen and we're going to grind through these issues and when you look at what they're doing outside of the economic realm in terms of really around sort of hardening all sorts of parts of the economy and society to be able to deal with more a more difficult and
• 16:55
  SPEAKER_02: Economic Situation, you know, I think, I think it's, I certainly believe that Xi Jinping, you know, at the top, they see things could get pretty difficult.
• 17:04
  SPEAKER_02: And they know that, but they believe or he believes that they need to get through that to get to this, this sort of, you know, quote, unquote, promised land of high quality development.
• 17:13
  SPEAKER_02: And they're going to stay focused on that.
• 17:15
  SPEAKER_01: Yeah.
• 17:15
  SPEAKER_01: Yeah.
• 17:16
  SPEAKER_01: I mean, it's just I honestly I come away reading that quote and it's like I want to make a public appeal to journalists to just append that quote to every article speculating about a stimulus for the rest of 2024 because it's hard to be any clearer than she was there.
• 17:32
  SPEAKER_01: And then you juxtapose it with what's happening on the ground.
• 17:36
  SPEAKER_01: Bloomberg had a story this week that was headlined, Xi's one-man rule over China's economy is spurring unrest.
• 17:43
  SPEAKER_01: Thousands of angry retail investors last month flooded the US embassy's Weibo page with criticism of the government's handling of the economy in the midst of a $7 trillion stock route.
• 17:54
  SPEAKER_01: Compounding the problems is a broad drop in wages among civil servants who have seen bonuses slashed in recent years as indebted local governments struggle to earn enough revenue.
• 18:04
  SPEAKER_01: Quote, As long as my income was decent, I didn't complain, said Joe, a mid-level policeman in a southwestern city who asked to be identified only by his surname.
• 18:13
  SPEAKER_01: But now, he says, the economy is in bad shape.
• 18:17
  SPEAKER_01: The leadership needs to show us some hope.
• 18:19
  SPEAKER_01: So, none of that is to suggest that there's some burgeoning uprising, but it's worth keeping in mind what that high-quality development model actually looks like on the ground, because the pain is going to continue to broaden, one would expect, at least over the next year and more.
• 18:38
  SPEAKER_02: Well, I think it's quite possible it will, and I think that they... But I also think that
• 18:44
  SPEAKER_02: You know they have that the leadership is aware of that and they have all sorts of tools and mechanisms around social governance to keep you know it's not a binary people are happy and everything's great or they're unhappy and they go hit the streets right and they have a lot of ways to keep people from you basically force people to or prevent people from really say protesting or
• 19:12
  SPEAKER_02: There's always been lots of grumbling.
• 19:14
  SPEAKER_02: There'll probably be more grumbling this year, but there's a big difference between grumbling and something that becomes much bigger or, or more of a threat to the, to the, to the party.
• 19:23
  SPEAKER_02: And I think we're a long way from that.
• 19:25
  SPEAKER_01: So when we talk about hardening the system, it can mean different things in different contexts, where sometimes if you're talking about hardening the system in advance of sanctions, it's controlling key supply chains and making sure that China can be self-sustaining in the event of some sort of isolating international incident.
• 19:44
  SPEAKER_01: But hardening the system in this context is what exactly?
• 19:48
  SPEAKER_01: Just heightened surveillance capabilities?
• 19:52
  SPEAKER_02: Well, it's it's so even in the report, there's a section on social governance.
• 19:56
  SPEAKER_02: They talk about improving this, this Feng Chao experience, which is this idea.
• 20:00
  SPEAKER_02: It was it started under Mao in the 60s, but it's basically like pushing sort of community based.
• 20:07
  SPEAKER_02: Now in the new era, it's really community based policing and managing
• 20:13
  SPEAKER_02: Contradictions at the where they start at the level they start letting them allow them allowing to to to sharpen or move up the system into other parts of the country and it you know in the Mao era it was it has some pretty nasty outcomes in terms of sort of mass events and people versus people uh in the Xi era it's more about a more institutionalized
• 20:38
  SPEAKER_02: It's one of the tools that they're really honing as part of what they call this Peaceful China Initiative to, again, improve social governance.
• 20:50
  SPEAKER_02: And social government has a lot of elements.
• 20:51
  SPEAKER_02: Some are positive around education, taking care of the elderly, childcare.
• 20:56
  SPEAKER_02: But some are in the more sort of harder or coercive areas around security.
• 21:01
  SPEAKER_02: and you know so they've got a whole bunch of levels levers there you've also got in terms of hardening for example the financial system where you know one of the things they talk about again in this work report is is you know making sure they deal with risks and financial you know risks around um the financial system i forget the exact language but that that's
• 21:19
  SPEAKER_02: I'm paraphrasing here.
• 21:21
  SPEAKER_02: And so they know they need to continue to try and clean up the financial system, deal with a lot of the risks related to real estate debt, local government debt.
• 21:30
  SPEAKER_02: So again, it goes back to reading this report.
• 21:35
  SPEAKER_02: On the one hand, they talk about the challenges and the, you know, the difficulties they're facing both domestically and in the external environment when it comes to the economy.
• 21:43
  SPEAKER_02: On the other hand, it is a, it's a very ambitious document, like a lot of their documents in terms of how they want to transform the economy, what they want to do for the PRC and for PRC citizens.
• 21:53
  SPEAKER_02: I mean, it has a, you know, whether or not they hit it and, you know, some people, you know, just from reading it, you can see that they,
• 22:03
  SPEAKER_02: I read it as a, they are projecting confidence that they can achieve these goals, even though it will be difficult.
• 22:11
  SPEAKER_02: Now, plenty of people will quibble and say, well, they can't and it's, you know, the numbers are fake, blah, blah, blah.
• 22:17
  SPEAKER_02: Leaving all that aside, it is actually quite, I think, from the party's perspective, it's quite a positive document.
• 22:25
  SPEAKER_01: Right.
• 22:25
  SPEAKER_01: Yeah, I think what's what's striking and prompts a double take as an outsider is it's just a departure from a lot of the conversations that you and I have been having about the state of the economy and the outlook, at least near term.
• 22:40
  SPEAKER_01: After the last six months or so, it's now all about ambition and everything that's going to be achieved this year.
• 22:47
  SPEAKER_02: But it's but it's it's every year.
• 22:49
  SPEAKER_02: It's like I mean, the thing is, I'm not surprised.
• 22:51
  SPEAKER_02: Yeah, they don't come and say, oh, we're screwed.
• 22:53
  SPEAKER_02: You guys are right.
• 22:57
  SPEAKER_02: But it is, again, I think it's just, you know, and we've made this point on this podcast, the newsletter too.
• 23:04
  SPEAKER_02: I mean, you know, you go back to what the Central Economic Work Conference in early December or second week in December, and you go back to that readout and the propaganda around it.
• 23:14
  SPEAKER_02: You know, if you had really dug into that, there's really little to nothing in this
• 23:20
  SPEAKER_02: Work Report That Would Surprise You.
• 23:21
  SPEAKER_02: Right.
• 23:23
  SPEAKER_02: They're very consistent.
• 23:23
  SPEAKER_02: And it goes back to they laid out the priorities for economic worth for 2024 back at this December 2023 work conference.
• 23:32
  SPEAKER_02: Yes, the stock market had a real rough period in the first...
• 23:36
  SPEAKER_02: December into the first few weeks of January but otherwise the data wasn't a surprise so it's not like they would you know suddenly hair on fire we got to change everything because oh my god it's collapsing right it's it's very much their problems the belief that their problems we know what they are we have a view we have a view of how we're gonna get through these and we're gonna buckle down and it's gonna be hard but we're gonna grind through these problems
• 23:59
  SPEAKER_01: Yeah, no, Beijing seems to have been clear-eyed and consistent on all of this for months now.
• 24:05
  SPEAKER_01: It's why after our talk last week, I came away with the impression that, all right, most of the key decisions were made months ago, and this is more of a symbolic... Yeah, and that's the other thing which is interesting too about sort of the earlier discussion around no longer having the premier's press conference.
• 24:23
  SPEAKER_02: And then yesterday, the spokesperson for the NPC also said that
• 24:28
  SPEAKER_02: It won't just be this year, it'll be years in the next few years unless forget the exact word, but like special circumstances.
• 24:34
  SPEAKER_02: But it's also this, this NPC started yesterday, the fourth, it ends on the 11th.
• 24:40
  SPEAKER_02: It's seven days.
• 24:42
  SPEAKER_02: It's much shorter than it used to be.
• 24:44
  SPEAKER_02: Right?
• 24:45
  SPEAKER_02: And so there was a period in the pandemic- It used to be what?
• 24:47
  SPEAKER_02: Two weeks?
• 24:48
  SPEAKER_02: Close to two weeks.
• 24:49
  SPEAKER_02: In the pandemic, it was, it was a, you know, it was shortened for pandemic reasons, but it's, but there's no reason to do that now.
• 24:57
  SPEAKER_02: It really seems like this is just,
• 25:01
  SPEAKER_02: It's kind of being condensed both in terms of length, but also in terms of its... I mean, it's still important.
• 25:08
  SPEAKER_02: It's an important part of what the party calls its whole process democracy.
• 25:13
  SPEAKER_02: But again, it has a relative, I think, just in the Xi era, it's just relatively less important.
• 25:21
  SPEAKER_02: And that's by design.
• 25:23
  SPEAKER_02: I mean, back in the day before the Xi era,
• 25:27
  SPEAKER_02: In the MPC, the two sessions, two weeks where you had the CPPCC meeting and the MPC meeting, they were like party time in Beijing.
• 25:34
  SPEAKER_02: Interesting.
• 25:35
  SPEAKER_02: No, no, it was so corrupt.
• 25:37
  SPEAKER_02: People would come, they would like, the delegates would come.
• 25:39
  SPEAKER_02: And I mean, I had friends who were, you know, they were effectively like Chinese lobbyists in the sort of the Chinese lobby.
• 25:45
  SPEAKER_02: They'd go golfing, they'd go help them buy real estate, you know, like crazy gifts, all sorts of whining and dining.
• 25:51
  SPEAKER_02: It was nuts.
• 25:53
  SPEAKER_02: Yeah, that is not.
• 25:54
  SPEAKER_02: And, you know, frankly, for the better, that is not how it is today.
• 25:59
  SPEAKER_02: I mean, it was it was out of control.
• 26:02
  SPEAKER_01: Well, tradeoffs and everything.
• 26:04
  SPEAKER_01: But yes, I would say that's not the vibe I've been getting from the reactions in the early days of this year's two sessions.
• 26:12
  SPEAKER_01: Did you have any final notes or should we leave it on boring, boring, boring and the days of partying?
• 26:19
  SPEAKER_02: I mean, there's so there's there's also this this
• 26:21
  SPEAKER_02: Some changes to this, like, National People's Congress, I think, or was it State Council Organization Law, which you have to parse through.
• 26:28
  SPEAKER_01: I saw that, yeah.
• 26:29
  SPEAKER_02: But again, it's elevating the party and elevating Xi.
• 26:33
  SPEAKER_02: It's all about, like, a lot of this, what we're seeing is just sort of a general reduction in the state or the importance of state versus the party with, of course, Xi at the core.
• 26:43
  SPEAKER_01: Right.
• 26:44
  SPEAKER_01: A lot of gratitude to the General Secretary Xi Jinping.
• 26:48
  SPEAKER_02: Well, he's at the helm, thankfully.
• 26:49
  SPEAKER_02: I think that was the opening couple paragraphs from the work report was, I'll read you the quote, because I think it does matter.
• 27:01
  SPEAKER_02: Fellow Deputies, we owe our achievements in 2023 to General Secretary Xi Jinping, who is at the helm charting the course, to the sound guidance of Xi Jinping's thought on socialism with Chinese characteristics for a new era, to the strong leadership of the Party Central Committee with Comrade Xi Jinping at its core, and to the concerted efforts of the whole Party, the Armed Forces, and Chinese people of all ethnic groups.
• 27:23
  SPEAKER_01: and also to General Secretary Xi Jinping.
• 27:44
  SPEAKER_02: There's a lot about, you know, the run up to the 20th Party Congress, there's a lot about navigation and the navigator and helming, and it was very, like, for people who lived through the Cultural Revolution or spent a lot of time around Cultural Revolution language, there are very strong echoes of the way Mao Zedong was talked about.
• 28:01
  SPEAKER_01: Yeah, I mean, it's disturbing in that respect and it continues to further concentrate and the results on the ground have not been positive.
• 28:09
  SPEAKER_01: So a lot of the themes here continue to be fairly grim.
• 28:15
  SPEAKER_02: Yeah, but like the industrial upgrading sort of building, you know, the
• 28:20
  SPEAKER_02: Modernization of Chinese Characteristics Modernizing the Industrial System Modernizing Manufacturing
• 28:49
  SPEAKER_01: No one would argue that it's all bad.
• 28:51
  SPEAKER_01: But when you talk about like the Marxist political economy relative to the last 30 to 40 years in China, I think embracing aspects of capitalism and blending with the West has seen some of the most prosperity that China has seen in hundreds and hundreds of years.
• 29:10
  SPEAKER_01: And so Xi deviating from that so dramatically
• 29:14
  SPEAKER_01: is continuing to send shockwaves through China.
• 29:16
  SPEAKER_02: Well, what I think, you know, one of the questions, right, and this goes back to that you can
• 29:21
  SPEAKER_02: It's almost like, I mean, there are lots of debates.
• 29:25
  SPEAKER_02: Are they really Marxist?
• 29:26
  SPEAKER_02: Does she really believe in Marxism?
• 29:27
  SPEAKER_02: Or is, for example, talking about new productive forces as a new leap in Marxist productivity theory or Marxist political economy in the context of that article, is she really a Marxist or is this just cover for what they need to do?
• 29:46
  SPEAKER_01: What they need to do to concentrate power and secure the state.
• 29:50
  SPEAKER_02: Right.
• 29:50
  SPEAKER_02: Because they're a communist party.
• 29:52
  SPEAKER_02: Like they are the Communist Party of China.
• 29:54
  SPEAKER_02: Right.
• 29:54
  SPEAKER_02: Right.
• 29:55
  SPEAKER_02: They have to.
• 29:55
  SPEAKER_02: This is this is their dogma.
• 29:57
  SPEAKER_02: Right.
• 29:58
  SPEAKER_01: Can't go wrong.
• 29:59
  SPEAKER_02: You know, that is still the sort of they're still in debate.
• 30:02
  SPEAKER_02: Like, well, they don't really mean it.
• 30:03
  SPEAKER_02: It's not really Marxist versus, you know, but they need this because what else can they how else can they couch what they want to do versus, you know, maybe she's a true believer.
• 30:12
  SPEAKER_02: Maybe not a lot of people don't believe it, but she might.
• 30:15
  SPEAKER_02: and that is I tend to fall on the I you know she looks more and more like I mean he just maybe he really is a true believer
• 30:22
  SPEAKER_01: Right.
• 30:23
  SPEAKER_01: Well, he's certainly a true believer in his own authority and his vision for the future.
• 30:29
  SPEAKER_01: And that has been the theme through the first couple of days here.
• 30:32
  SPEAKER_01: But on that note, let's shift gears to the international stage.
• 30:37
  SPEAKER_01: One tweet from Tom Shugart, he quotes an article from this week that says four Philippine Navy sailors sustained minor injuries after the two Chinese cutters used water cannons on Unisa March 4th
• 30:51
  SPEAKER_01: Shattering the Wooden Supply Boat's Windshield.
• 30:54
  SPEAKER_01: And then Tom adds, China outwitting hearts and mind in the region with their win-win cooperation.
• 31:01
  SPEAKER_01: And Bill, I don't really have anything new to say about what's happening between China and the Philippines and the South China Sea.
• 31:09
  SPEAKER_01: I just wanted to note that incident for the record because
• 31:13
  SPEAKER_01: A Every week when we're prepping this show, there are disturbing incidents like that happening in the South China Sea between China and the Philippines.
• 31:21
  SPEAKER_01: And then B The video of that most recent incident is maybe the most shocking media I've seen from the Philippines thus far, just in terms of dangerous PLA intimidation tactics.
• 31:35
  SPEAKER_02: And according to the Philippines side, four of the crew were injured by flying glass.
• 31:42
  SPEAKER_02: They blasted through the windshield of the boat.
• 31:46
  SPEAKER_02: It's a pretty disturbing video.
• 31:48
  SPEAKER_02: It's a pretty aggressive action by the Chinese Coast Guard.
• 31:51
  SPEAKER_02: It's again around the Sierra Madre, the grounded vessel at Second Thomas Shoal.
• 31:57
  SPEAKER_02: and you know the the philippines are i think today i think they were i think they were doing a crew rotation the another boat was was there was a ramming or a collision and you know that the it and this is also going on while australia is hosting this um asian australia special summit in australia and it just it's quite it's quite remarkable that the chinese you know again they
• 32:25
  SPEAKER_01: And for anyone who's new, because this is going to be a public episode, there is contested territory in the South China Sea.
• 32:36
  SPEAKER_01: Most of the international community agrees that that territory belongs to the Philippines, and China has been intimidating Filipino vessels for years now, and that behavior has escalated.
• 32:51
  SPEAKER_01: and the Philippines have responded with a campaign that they describe as assertive transparency basically broadcasting PLA tactics and this latest video someone is taking video inside the ship as China is blasting this wooden ship with water cannons and then the glass just explodes onto the person with the camera
• 33:16
  SPEAKER_01: And yeah, I came away with it.
• 33:18
  SPEAKER_01: I came away from the video just very uneasy about how close we are to this conflict escalating to a point where I don't know whether the U.S.
• 33:27
  SPEAKER_01: would have to intervene.
• 33:28
  SPEAKER_01: I don't know what it looks like if it gets any worse than it already is, because it already is pretty bad and dangerous as it stands right now.
• 33:37
  SPEAKER_02: Well, yes, yes, the Philippines have a treaty.
• 33:39
  SPEAKER_02: And, you know, the question is, was, you know, you know, I think it's invoked that
• 33:45
  SPEAKER_02: If there's an armed attack, and the question is, I guess, water cannon is not an armed attack.
• 33:51
  SPEAKER_02: I think the US doesn't want to consider an armed attack.
• 33:55
  SPEAKER_02: But at some point, if somebody dies in one of these encounters, because the Philippines clearly aren't backing down, again, it's one of the more dangerous flashpoints in the South China Sea right now.
• 34:10
  SPEAKER_01: Yeah.
• 34:11
  SPEAKER_01: Yes.
• 34:12
  SPEAKER_01: So we we will see.
• 34:14
  SPEAKER_01: But I just wanted to note it and we'll include the video in the show notes for anybody who's curious.
• 34:20
  SPEAKER_01: Shifting gears now to the United States.
• 34:23
  SPEAKER_01: On Thursday last week, President Biden announced an investigation by the Department of Commerce into the potential national security risks posed by connected vehicles.
• 34:33
  SPEAKER_01: As Biden said in the statement announcing the investigation, quote, China imposes restrictions on American autos and other foreign autos operating in China.
• 34:43
  SPEAKER_01: Why should connected vehicles from China be allowed to operate in our country without safeguards?
• 34:49
  SPEAKER_01: So today I am announcing unprecedented actions to ensure that cars on US roads from countries of concern like China do not undermine our national security.
• 34:59
  SPEAKER_01: I have directed my Secretary of Commerce to conduct an investigation into connected vehicles with technology from countries of concerns and to take action to respond to the risks.
• 35:10
  SPEAKER_01: What do you make of what's happening here?
• 35:11
  SPEAKER_01: Before we get into the PRC response, mechanically speaking, where do you think this could go?
• 35:18
  SPEAKER_02: Well, I think it's not surprising.
• 35:20
  SPEAKER_02: You know, this has been rumored.
• 35:22
  SPEAKER_02: Bloomberg had a story about it early in February, and it's certainly been rumored around D.C.
• 35:26
  SPEAKER_02: for some time that they were getting concerned about, you know, getting concerned about
• 35:35
  SPEAKER_02: The possibility of a surge of imports of PRC vehicles.
• 35:40
  SPEAKER_02: And even though I think there's a 22% or 22% tariff on them, you have BYD and other Chinese auto companies looking at setting up factories in Mexico.
• 35:50
  SPEAKER_02: And then if they assembled there, they could get around the tariffs.
• 35:54
  SPEAKER_02: And so I think there's trade concerns and using this national security approach allows you to get around that.
• 36:02
  SPEAKER_02: But I think also the quote from President Biden,
• 36:05
  SPEAKER_02: You know, that comes straight from, I think, the way that the PRC has been restricting access to Teslas in certain areas, where the PRC security services have made very clear that they consider Tesla vehicles to
• 36:20
  SPEAKER_02: A 5 GDP Growth Target, New TikTok Legislation
• 36:37
  SPEAKER_01: This is what they can be used for, yeah.
• 36:39
  SPEAKER_02: So if you're the US government, you're on the national security side, that's your responsibility.
• 36:43
  SPEAKER_02: You can't look at what the PRC is doing around Tesla and argue that, oh, they would never do it with their own car.
• 36:50
  SPEAKER_02: So the PRC has gifted this national security argument to the US.
• 36:54
  SPEAKER_02: Legitimate or not, it's very, very hard to... And I think it's legitimate that these things can be used for that.
• 37:02
  SPEAKER_02: Whether they are or not,
• 37:04
  SPEAKER_02: We don't know, but the momentum and the pretext on the US side is is there.
• 37:10
  SPEAKER_02: And so this, I think, is going to go forward in a pretty, you know, there's there's a 60 day period for this study.
• 37:18
  SPEAKER_02: There will probably be a lot of lobbying.
• 37:20
  SPEAKER_02: I mean, you know, US on the one hand, there's a domestic political element because it it helps
• 37:26
  SPEAKER_02: Protect US Carmaker Jobs On the other hand, companies like Tesla, GM, they have a lot of revenue in China that they could be at risk if the PRC government decides to retaliate.
• 37:38
  SPEAKER_02: You've also got some companies, I think like Tesla,
• 37:42
  SPEAKER_02: A 5 GDP Growth Targeted Vehicles
• 37:59
  SPEAKER_02: That has a sort of a PRC connection then there's you're gonna have to bifurcate sort of you're gonna be one set of software for like cars in the PRC or outside the US and one set for cars in the US and not every car maker is sort of mixing the code but I think there are some and so this will be a problem for some car makers may also be a problem for some of the European car makers so it's but you know that what I heard sort of the view from the Biden administration was basically
• 38:25
  SPEAKER_02: Right.
• 38:26
  SPEAKER_02: Once people have cars in their driveway, it's much harder to roll back.
• 38:48
  SPEAKER_01: Any of it.
• 38:49
  SPEAKER_02: And it's an election year.
• 38:50
  SPEAKER_02: So again, there are real domestic political imperatives.
• 38:53
  SPEAKER_02: This helps probably in Michigan.
• 38:57
  SPEAKER_02: But again, is it just PRC cars or is it components in cars from other manufacturers that, for example, allow the cars to be connected, like modules from something like Quechtel?
• 39:10
  SPEAKER_02: New TikTok Legislation New TikTok Legislation
• 39:31
  SPEAKER_02: The reaction so far have been, you know, as expected.
• 39:34
  SPEAKER_02: And, you know, Apple, I mean, there was two different foreign ministry officials invoked Apple and iPhones as sort of spying machines.
• 39:40
  SPEAKER_02: So that's probably not great.
• 39:42
  SPEAKER_01: Well, yeah, I mean, Gina Raimondo was on NBC and said, if you think about it, cars these days are like an iPhone on wheels.
• 39:48
  SPEAKER_01: And then the PRC spokespeople were using that remark against her saying,
• 39:54
  SPEAKER_01: Kindly remind Secretary Raimondo that iPhones are American products.
• 39:58
  SPEAKER_01: Were you suggesting that iPhones, Tesla and even Boeing have been sending secret data back to the US and could be shut down at any time by Washington?
• 40:08
  SPEAKER_01: So that's a not so veiled threat at retaliation there.
• 40:12
  SPEAKER_01: China would also have a lot of incentives to not retaliate against Apple.
• 40:16
  SPEAKER_01: It'd be interesting to see how they respond, depending on what the US does here.
• 40:20
  SPEAKER_02: Yeah, I think we'll hear a lot of sort of veiled threats and comments, but nothing, no substantive response until there's actually something of substance from the US side.
• 40:29
  SPEAKER_02: But again, one of the risks for the Chinese vehicles is whether or not the US actions then open the door for the EU to follow.
• 40:38
  SPEAKER_02: And I think that's even harder on the EU side because the German auto manufacturers make so much money in China that they are resisting even though it basically they will be their businesses will likely be significantly damaged by Chinese imports into Germany and the EU.
• 40:53
  SPEAKER_02: They have been so far resisting any actions against these exports of Chinese vehicles because they have so much business to lose in China.
• 41:00
  SPEAKER_02: It's very messy.
• 41:02
  SPEAKER_01: Well, and it's high stakes because this is also China is trying to grow its economy by exporting because the domestic demand is diminishing at the moment here.
• 41:12
  SPEAKER_01: And so it's interesting because, I mean, for at least in the United States, restricting the influx of Chinese EVs like you can see it in another quote from Biden, China is determined to dominate the future of the auto market, including by using unfair practices.
• 41:28
  SPEAKER_01: China's policy could flood our market with its vehicles, posing risks to our national security.
• 41:34
  SPEAKER_01: I'm not going to let that happen on my watch.
• 41:36
  SPEAKER_01: He adds posing risks to our national security, but China determined to dominate the future of the auto market is its own motivation, including by using unfair practices.
• 41:46
  SPEAKER_01: So the policy, whatever it ends up being, will clearly serve two purposes where there are probably real
• 41:54
  SPEAKER_01: Security Concerns, and then it also does protect the American auto industry from being hollowed out by state financed competitors from the PRC.
• 42:03
  SPEAKER_01: And so it seems to me on either basis that it would make sense to limit what's coming into the country.
• 42:09
  SPEAKER_01: And I guess we'll just have to see logistically how it works, because as you said, the components, if security is the priority, the components that are going into cars that aren't necessarily
• 42:21
  SPEAKER_01: Chinese Made are just as important to be scrutinizing and potentially restricting.
• 42:27
  SPEAKER_02: Yeah, because a lot of us already have, if you bought a car in the last few years, it's already connected.
• 42:32
  SPEAKER_01: Yeah, and it's all software.
• 42:34
  SPEAKER_01: I mean, if you think about getting in your car and, you know, immediately you plug in your phone and it has everything about you.
• 42:41
  SPEAKER_01: And so that's just sort of the reality of how we live now.
• 42:45
  SPEAKER_01: What do you think the lobbying effort will look like?
• 42:48
  SPEAKER_01: I mean, do you expect it to be as much of a knockdown drag out fight as the chip ban turned out to be?
• 42:57
  SPEAKER_02: No, I think they're they're
• 43:01
  SPEAKER_02: The chip ban, there were not many companies that were lobbying in favor of those bans.
• 43:09
  SPEAKER_02: Here, I think you'll have more folks who see the net benefit to them, to their businesses of this kind of a ban.
• 43:16
  SPEAKER_02: Okay.
• 43:17
  SPEAKER_01: Makes sense.
• 43:20
  SPEAKER_02: You know, it's another step in the sort of the reversal of globalization.
• 43:26
  SPEAKER_02: And I think, you know, the thing that things are happening much faster now with Chinese, you know, the Chinese have moved up the industrial value chain.
• 43:33
  SPEAKER_02: You know, these cars are very good.
• 43:35
  SPEAKER_02: They're very cheap.
• 43:35
  SPEAKER_02: You know, CNBC had a story last week.
• 43:37
  SPEAKER_02: They sent their auto reporter to Chile and, you know, lots of Chileans are buying the Chinese cars because they're just 20, 30 percent cheaper and they're good enough.
• 43:47
  SPEAKER_02: If not, if in some cases not better.
• 43:50
  SPEAKER_02: And so, but most industrial companies don't want to lose their auto industry.
• 43:55
  SPEAKER_02: You know, so Germany, South Korea, Japan, the US, you know, it's not going to be allowed to happen from a political perspective.
• 44:04
  SPEAKER_02: And so this is going to, these forces are all going to be colliding in the next few months.
• 44:09
  SPEAKER_01: Yes.
• 44:10
  SPEAKER_01: Well, elsewhere in Washington, as we were coming on to record here Tuesday afternoon, news broke.
• 44:18
  SPEAKER_01: I'll read from The Verge.
• 44:19
  SPEAKER_01: After a long reprieve from serious congressional scrutiny, lawmakers are taking another crack at getting TikTok to sever ties from its Chinese parent, ByteDance.
• 44:29
  SPEAKER_01: The leaders of the House Select Committee on the Chinese Communist Party, Chair Mike Gallagher and Ranking Member
• 44:35
  SPEAKER_01: Raja Krishnamoorthy announced the introduction of the Protecting Americans from Foreign Adversary Controlled Applications Act.
• 44:43
  SPEAKER_01: The bill, which has 19 lawmakers signed on so far, would make it illegal to distribute apps controlled by ByteDance, including TikTok, unless they sever ties from the Chinese tech giant.
• 44:56
  SPEAKER_01: So here we go, Bill.
• 44:58
  SPEAKER_01: The movement to ban TikTok is being resurrected.
• 45:02
  SPEAKER_01: Ban or force divestiture.
• 45:04
  SPEAKER_02: and quite quickly I mean this bill and we can um it's not very long it's I guess it's getting a markup Thursday so it's it's this joint it's coming out of both the China Select Committee and the like the House Energy and Commerce Committee I think and it has bipartisan support we'll see you know I mean again I we have had discussions about this on this show and we did it with our three-way with Ben back in November um we'll see how far this bill gets
• 45:32
  SPEAKER_02: One of the things that could change is have some of the big lobbying shops and PR firms and law firms in DC, have they dropped ByteDance and TikTok as clients?
• 45:42
  SPEAKER_02: As some of them have dropped other PRC firms in recent weeks.
• 45:46
  SPEAKER_02: And if they have, and if there has been pressure on the Hill on these companies to basically say, if you're representing ByteDance and TikTok, then we're not going to talk to you about anybody.
• 45:56
  SPEAKER_02: If that lobbying chain is broken, then perhaps it will make more progress.
• 46:01
  SPEAKER_01: Yeah, I mean, we mentioned a few weeks ago that Anita Dunn's former lobbying firm, SKDK, was working on behalf of TikTok at one point.
• 46:10
  SPEAKER_01: Who knows what the relationship looks like now?
• 46:12
  SPEAKER_01: The Biden administration joined TikTok a couple of weeks ago and immediately encountered backlash.
• 46:19
  SPEAKER_02: Well, the Biden campaign.
• 46:21
  SPEAKER_01: Sorry, the Biden campaign.
• 46:23
  SPEAKER_01: And yeah, we've talked about it in the past.
• 46:26
  SPEAKER_01: It just does not make sense to have an information weapon that powerful in the hands of a foreign adversary.
• 46:34
  SPEAKER_01: It's pretty simple.
• 46:36
  SPEAKER_01: I don't understand.
• 46:37
  SPEAKER_02: Congress has certainly been dysfunctional.
• 46:39
  SPEAKER_02: Maybe ByteDance, TikTok is the thing that forces some functioning.
• 46:46
  SPEAKER_02: Again, I think it's got to get through the House, then it's got to get through the Senate,
• 46:51
  SPEAKER_02: There's a lot of steps in the process from putting up a bill to actually turning it into law.
• 46:56
  SPEAKER_02: What's interesting is the way it's written is it would effectively force Apple and Google to stop offering it in the app stores.
• 47:04
  SPEAKER_01: Which would be the most efficient way to ban it.
• 47:07
  SPEAKER_02: Yeah.
• 47:08
  SPEAKER_02: And basically, if you're violating the law after a certain period, they'll fine the companies $5,000 times the number of users in the US.
• 47:19
  SPEAKER_02: All right, let's increase the tax base.
• 47:22
  SPEAKER_02: $5,000 times $100 million is how much?
• 47:25
  SPEAKER_02: Apple can afford it, frankly.
• 47:27
  SPEAKER_02: No, but I even... So again, this is for those who want to either ban or force a divestment of TikTok from ByteDance, this is progress.
• 47:40
  SPEAKER_02: But it's like they were first down on the 20, now they're on the 26-yard line.
• 47:48
  SPEAKER_01: Well, I don't know.
• 47:49
  SPEAKER_01: I thought the game was over for a couple of years here.
• 47:53
  SPEAKER_02: So it's alive.
• 47:54
  SPEAKER_02: And again, there was somebody who's on the China, the US Economic Security Commission who was criticizing people who were too cynical.
• 48:04
  SPEAKER_02: Maybe he was sub-tweeting us.
• 48:05
  SPEAKER_02: I don't know because we've been cynical about how
• 48:08
  SPEAKER_02: Congress' efficiency around this issue, but this is certainly something that the ByteDance TikTok folks will not be happy with because it is a sign, I think, that their lobbying efforts have weakened a bit because they've been able to forestall stuff for a while.
• 48:24
  SPEAKER_01: Right.
• 48:24
  SPEAKER_01: Well, and what I would argue is productive is to force a public discussion of these issues, because if you're the Biden administration or the Biden campaign, newest members of TikTok, you can't coherently on one hand say it's a complete national security threat, an urgent national security threat that we're studying because all this information from Chinese EVs could potentially imperil American citizens going back to Beijing and Beijing could
• 48:54
  SPEAKER_01: Evolving Two Sessions Symbolism
• 49:15
  SPEAKER_01: Cognitive Dissonance.
• 49:16
  SPEAKER_01: Well, yeah, I mean, look, I put nothing past Congress and elected officials as far as cognitive dissonance is concerned.
• 49:24
  SPEAKER_01: But I think it's good to continue to push on this issue because it is a national security issue.
• 49:31
  SPEAKER_01: And speaking of good news, I don't know it's good news, but it is an update on a conversation we had a couple of weeks ago
• 49:41
  SPEAKER_01: BGR's public relations arm has stopped working for controversial Chinese LiDAR maker Hasai Group, a BGR spokesperson told Politico.
• 49:51
  SPEAKER_01: Hasai, which was recently placed on a Pentagon entity list denoting ties to the Chinese military, was also dropped as a client of Brownstein, Hyatt, Farber, Shrek,
• 50:01
  SPEAKER_01: and Akin Gump Strauss last week after Politico reported that several members of Congress were considering banning lobbying firms that represented such Chinese clients from meetings.
• 50:11
  SPEAKER_02: No, no, there has been.
• 50:13
  SPEAKER_02: I mean, that's that there has been.
• 50:14
  SPEAKER_02: There's been movement.
• 50:15
  SPEAKER_02: Movement on the Hill.
• 50:17
  SPEAKER_02: And I think that that again, if that happens to the folks representing ByteDance and TikTok, then we will have to probably change our view on the likelihood of this bill passing.
• 50:28
  SPEAKER_01: Yeah, well, and it is difficult because the military-civil fusion is so expansive that even companies that aren't explicitly making military-grade technology can be leveraged to lobby on behalf of PRC interests or CCP interests, that is.
• 50:47
  SPEAKER_01: A 5 GDP Growth Target
• 51:03
  SPEAKER_02: You know, I'll be cynical.
• 51:04
  SPEAKER_02: It's D.C.
• 51:06
  SPEAKER_02: How much of this movement on the Hill towards this bill is actually because the Biden campaign went on it.
• 51:11
  SPEAKER_02: And so maybe some folks who weren't that enthusiastic all of a sudden said this is a way to get the Biden campaign.
• 51:17
  SPEAKER_02: I mean, you just don't know.
• 51:18
  SPEAKER_02: So we will we will have to watch it and see how it progresses through the markup Thursday and sort of where it ends up.
• 51:24
  SPEAKER_02: But it is it is movement.
• 51:27
  SPEAKER_02: And, you know,
• 51:29
  SPEAKER_02: I don't know.
• 51:29
  SPEAKER_02: It's one of those things where you, I think in a few years, people look back and say, how did this happen that TikTok got such a hold on Americans' minds?
• 51:39
  SPEAKER_02: It's quite amazing.
• 51:41
  SPEAKER_01: Well, and I think that that's certainly what the Biden administration is looking to avoid on the EV side in terms of letting Chinese companies take significant market share and have a foothold in the American auto market before everyone realizes it's a problem and then it's too late to solve it.
• 52:00
  SPEAKER_01: So it makes sense to be proactive on that front.
• 52:04
  SPEAKER_01: But
• 52:05
  SPEAKER_01: Yes, we shall see.
• 52:06
  SPEAKER_01: I won't be joining TikTok anytime soon.
• 52:09
  SPEAKER_01: I know you have a no TikTok policy in your house.
• 52:16
  SPEAKER_02: Well, so if I sound a little shell-shocked, some of you who've been reading Sinocism for the years, you've heard about my kids over the years.
• 52:26
  SPEAKER_02: This is a daunting week because they turn 18 in a couple of days.
• 52:30
  SPEAKER_02: And so
• 52:32
  SPEAKER_02: I think I can't block them from having TikTok anymore.
• 52:35
  SPEAKER_02: I don't know.
• 52:36
  SPEAKER_02: No more authority.
• 52:38
  SPEAKER_02: All sorts of things change when they're actually legally adults, including I think my I don't know if it's going to be it's going to be it's going to be a very proud of them.
• 52:47
  SPEAKER_02: But it's it's it's quite a quite a thing to have your kids become 18.
• 52:51
  SPEAKER_01: Yeah, look, it's been a big couple of weeks here because Tashi turned five years old a couple weeks ago.
• 52:58
  SPEAKER_01: Your daughters are turning 18.
• 53:00
  SPEAKER_01: My son turns one year old in three weeks or so.
• 53:04
  SPEAKER_01: So we are on the other side of the spectrum there.
• 53:07
  SPEAKER_01: But still, momentous occasions all around here.
• 53:11
  SPEAKER_01: On that note, it's always great to see you.
• 53:14
  SPEAKER_01: Hopefully next week we'll have more exciting news coming from the remainder of the two sessions.
• 53:20
  SPEAKER_01: I'm not going to hold my breath though, but we'll keep it rolling regardless.
• 53:24
  SPEAKER_02: This day, the first day is usually the most exciting.
• 53:28
  SPEAKER_02: Put it that way.
• 53:28
  SPEAKER_01: Yes, that's what I recall from last year.
• 53:31
  SPEAKER_01: It sort of petered out.
• 53:33
  SPEAKER_01: So again, not holding my breath.
• 53:35
  SPEAKER_01: But we're coming back next week.
• 53:37
  SPEAKER_01: And look, it was raining at the start of the podcast.
• 53:39
  SPEAKER_01: Now it's sunny as I look outside my window.
• 53:42
  SPEAKER_01: It's warm in D.C.
• 53:43
  SPEAKER_01: So things are looking up here.
• 53:45
  SPEAKER_01: Yes, they are.
• 53:46
  SPEAKER_01: I will talk to you next week.
• 53:48
  SPEAKER_02: Yes.
• 53:49
  SPEAKER_02: Thank you, Andrew.
• 53:49
  SPEAKER_02: Thanks, everybody.