Latest / UK Column Radio / America’s China Strategy Backfires and the World is Changing | Silk and Steel

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America’s China Strategy Backfires and the World is Changing | Silk and Steel · UK Column Radio

• 0:02
  Speaker 1: Hello and welcome to another episode of the silk and
• 0:05
  Speaker 1: steel podcast i'm your host carl zha today i have
• 0:08
  Speaker 1: back on my show dr warwick powell from australia who
• 0:12
  Speaker 1: is an expert on geopolitics and everything related to china
• 0:17
  Speaker 1: uh we have a lot to talk about uh first
• 0:20
  Speaker 1: of all welcome back to the show uh warwick it's.
• 0:23
  Speaker 2: Great to be with you again carl.
• 0:26
  Speaker 1: So, as always, we always have a lot to talk about. Recently,
• 0:32
  Speaker 1: the war in the Strait of Hormuz just escalated. The
• 0:37
  Speaker 1: United States launched an attack on Iranian tankers parked near
• 0:41
  Speaker 1: Kark Island. And in retaliation, Iran has launched a massive
• 0:46
  Speaker 1: barrage of missiles toward a U.S. base in Jordan, as
• 0:51
  Speaker 1: well as two U.S. missile destroyers parked in the region.
• 0:55
  Speaker 1: And from the reports that's coming in, it looks like
• 0:58
  Speaker 1: the United States have launched a massive amount of missile interceptors.
• 1:03
  Speaker 1: I don't know how long they're going to keep up
• 1:06
  Speaker 1: with that pace, but it looks like Iranian missiles and
• 1:09
  Speaker 1: drones are still getting through. And now the oil price
• 1:13
  Speaker 1: is hovering. It's about to break 100. You know, this
• 1:17
  Speaker 1: is this is. definitely concerning because Trump is trying to
• 1:22
  Speaker 1: win an election that's coming up and everything is definitely
• 1:27
  Speaker 1: not going well for him. But this is a big
• 1:31
  Speaker 1: drag on the world economy because this is the whole,
• 1:37
  Speaker 1: anytime the energy price goes up, it affects everyone. So
• 1:43
  Speaker 1: I would like to get your take on this situation.
• 1:47
  Speaker 2: The fact that the situation in the Persian Gulf has
• 1:52
  Speaker 2: escalated again is not surprising. The problem, there's a short-term
• 1:57
  Speaker 2: problem and a long-term problem. The short-term problem revolves around
• 2:02
  Speaker 2: the status of the Strait of Hormuz and the ability
• 2:06
  Speaker 2: to exercise or exert control over the movement of ships
• 2:11
  Speaker 2: up and down through that strait. Over the course of
• 2:15
  Speaker 2: the last month and a half to two months since
• 2:17
  Speaker 2: the MOU was signed and then it fell apart, there
• 2:22
  Speaker 2: have been contending narratives around who controls the Strait of Hormuz.
• 2:28
  Speaker 2: Iran has been insistent that it does exercise effective control.
• 2:33
  Speaker 2: The Americans and others within the sort of broader Western
• 2:37
  Speaker 2: media landscape have periodically published claims that, the oil is
• 2:43
  Speaker 2: flowing and that X number of ships are able to
• 2:46
  Speaker 2: get through, seeking to undermine the claims that Iran makes
• 2:52
  Speaker 2: as far as control over the straits is concerned, and
• 2:55
  Speaker 2: in doing so, trying to affect expectations concerning future oil supply, obviously,
• 3:02
  Speaker 2: but also as part of a tactical arm twisting, if
• 3:07
  Speaker 2: you will, around the resolution of this Hormuz Straits question.
• 3:14
  Speaker 2: The fact that oil prices are going up, the fact
• 3:17
  Speaker 2: that diesel prices in the United States, for example, continues
• 3:22
  Speaker 2: to be extremely high, would suggest actually that claims made
• 3:27
  Speaker 2: about the flow of ships is a bit of an exaggeration.
• 3:35
  Speaker 2: There are ships that get through, Most of them, incidentally,
• 3:40
  Speaker 2: are headed to China. Most of them are going through
• 3:48
  Speaker 2: because Iran lets them go through, would be my proposition.
• 3:52
  Speaker 2: There may be the odd leakage here and there of
• 3:56
  Speaker 2: non-permitted ships getting through, but the numbers are incredibly low,
• 4:00
  Speaker 2: particularly compared to the volumes of ships going through the
• 4:03
  Speaker 2: Straits in January and February. I think the idea that
• 4:10
  Speaker 2: the United States has effective control over the Straits is
• 4:17
  Speaker 2: less likely to be true than the reverse claim, which
• 4:20
  Speaker 2: is that Iran actually is still in the driver's seat.
• 4:25
  Speaker 2: Bodies of water aren't easy to fully contain, right? There's
• 4:29
  Speaker 2: always going to be some leakage. The question for mine
• 4:31
  Speaker 2: is whether the extent to which what movements there are
• 4:36
  Speaker 2: are actually part of a controlled geopolitical management. And I
• 4:42
  Speaker 2: think that there's much more of that than simply a
• 4:44
  Speaker 2: case of the Americans are managing to evade the Iranians.
• 4:52
  Speaker 2: So that's your short-term tactical question as to who is
• 4:55
  Speaker 2: able to exercise control over the straightforward moves. The broader consideration, though,
• 5:01
  Speaker 2: actually goes to what the objectives are, particularly from an
• 5:08
  Speaker 2: Iranian point of view, in light of the fact that
• 5:11
  Speaker 2: they were attacked. And the objectives, and it's becoming increasingly clear,
• 5:17
  Speaker 2: but they were stated back in May, and they've been
• 5:20
  Speaker 2: restated since on a number of occasions, that the aim
• 5:25
  Speaker 2: is to fashion a new regional security architecture that is
• 5:31
  Speaker 2: based that is created by the states of the region,
• 5:38
  Speaker 2: for the region and run by the states of the region.
• 5:43
  Speaker 2: The code there is a security architecture that does not
• 5:48
  Speaker 2: include the United States as a dominant security provider. And
• 5:55
  Speaker 2: that process remains one which is certainly not mature. It
• 6:02
  Speaker 2: certainly hasn't stabilised, but you can see threads of it
• 6:07
  Speaker 2: emerging in things like that trilateral agreement between Saudi Arabia,
• 6:11
  Speaker 2: Pakistan and Turkey. There's talk that others are being invited
• 6:17
  Speaker 2: to join it. We've had Lavrov mention Algeria and Egypt,
• 6:22
  Speaker 2: for example. We have previous reports that Turkey The Iranians
• 6:30
  Speaker 2: were themselves approached about joining. So there is ongoing discussions
• 6:37
  Speaker 2: around a new security architecture. But we know that that's
• 6:42
  Speaker 2: not settled because at the same time, we've obviously got
• 6:45
  Speaker 2: ongoing military intensification, escalation. And we also, I think, remembering
• 6:51
  Speaker 2: in the last couple of days had some hostilities in
• 6:57
  Speaker 2: relation to American bases in Saudi Arabia as well. So
• 7:02
  Speaker 2: the issues aren't settled and there's a lot of movement
• 7:05
  Speaker 2: and flux, but I think we've got to look at
• 7:08
  Speaker 2: the dynamics in place as one that has both immediate
• 7:13
  Speaker 2: short-term implications, but they're part of something that's slightly broader,
• 7:20
  Speaker 2: which is whether or not Iran... and the other states
• 7:25
  Speaker 2: in the region can ultimately fashion a satisfactory detente that
• 7:32
  Speaker 2: ultimately leads to a stabilized new regional security architecture that
• 7:41
  Speaker 2: is very different from what existed before the 28th of February.
• 7:46
  Speaker 2: And that's the question that I think is yet to
• 7:49
  Speaker 2: be answered. issue of the Strait of Hormuz and global
• 7:53
  Speaker 2: oil markets, of course, is it is abundantly clear that
• 8:00
  Speaker 2: the global market has had a substantial amount of oil
• 8:04
  Speaker 2: and other petrochemicals taken out of the equation for quite
• 8:09
  Speaker 2: a long time. And whilst for many months, the Trump
• 8:14
  Speaker 2: administration and President Trump in particular has been able to
• 8:19
  Speaker 2: strong arm the market and let's call it manage the
• 8:25
  Speaker 2: market by the timing of different kinds of announcements on
• 8:29
  Speaker 2: Fridays and Mondays or Fridays and Sundays, reality ultimately will
• 8:34
  Speaker 2: back last. You can have as much expectations and as
• 8:38
  Speaker 2: much rhetoric as you want, but if reserves are being depleted,
• 8:47
  Speaker 2: if crack spreads are wide and sustainably wide, then we're
• 8:54
  Speaker 2: going to see an increase in the price of a
• 8:58
  Speaker 2: whole bunch of downstream refined products. Diesel is, of course,
• 9:04
  Speaker 2: the one that I've mentioned to you before, and the
• 9:08
  Speaker 2: evidence is the price at the bowser, and it's getting
• 9:13
  Speaker 2: close to $ 6 a gallon now. So reality is starting
• 9:18
  Speaker 2: to poke its head up. and ensure that it can't
• 9:23
  Speaker 2: be ignored. And I think that that's roughly where we're at.
• 9:30
  Speaker 1: Speaking of security, new security framework, Iran recently attended the
• 9:38
  Speaker 1: SCO Summit, Shanghai Cooperation Organization Summit in Bishkek, Kyrgyzstan, which
• 9:46
  Speaker 1: was also attended by other SEO members like Russia, China.
• 9:53
  Speaker 1: And this event is actually very poorly covered in uh
• 9:59
  Speaker 1: the western media but i think it's a significance should
• 10:03
  Speaker 1: not be overlooked uh you know we saw some spectacle
• 10:06
  Speaker 1: coming out of the opening of the world nomad games
• 10:10
  Speaker 1: which you know really put kyrgyzstan on the map but
• 10:12
  Speaker 1: beyond the these uh visual imageries right what what is
• 10:18
  Speaker 1: really going on um in the summit when China, Russia,
• 10:23
  Speaker 1: Iran are all getting together?
• 10:26
  Speaker 2: Well, the SCO is, as you say, an underreported and
• 10:31
  Speaker 2: a poorly understood organization, particularly for people in the West.
• 10:36
  Speaker 2: The SCO emerged formally in the early 2000s, but it
• 10:41
  Speaker 2: actually came from a more informal ad hoc gathering back
• 10:47
  Speaker 2: in 1996 in Shanghai. initially for countries to come together
• 10:53
  Speaker 2: to respond to various forms of concerns related to terrorism.
• 10:59
  Speaker 2: By the time it was formalised in, from memory, 2001,
• 11:02
  Speaker 2: it had six members to kick off with, and the
• 11:07
  Speaker 2: aim there was to enable multinational, so between the members,
• 11:14
  Speaker 2: so not a lot of members, but importantly they were
• 11:17
  Speaker 2: committed had shared concerns related to terrorism, extremism and separatism.
• 11:27
  Speaker 2: And by coming together and forming this organisation called the
• 11:32
  Speaker 2: Shanghai Cooperation Organisation, they aimed to tackle what they called
• 11:36
  Speaker 2: these three evils. And they did that by creating protocols
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  Speaker 2: through which the security apparatuses of the member states would
• 11:48
  Speaker 2: coordinate and share information that would be valuable to each
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  Speaker 2: of them in the interest of tackling these three things.
• 11:57
  Speaker 2: That organization had, of course, in that sense, a very
• 12:01
  Speaker 2: narrow scope of responsibilities. It has grown since then to
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  Speaker 2: 10 permanent members. It added India and Pakistan in 2017
• 12:13
  Speaker 2: and others since, including Belarus and others. But the thing
• 12:23
  Speaker 2: to note about it is that it has, I guess
• 12:27
  Speaker 2: you'd say, three important elements. One is its original objectives
• 12:32
  Speaker 2: around those three things, which lays the foundations for security-based cooperation. Now,
• 12:40
  Speaker 2: notice that those three things are related to risks to
• 12:45
  Speaker 2: national stability caused by... formally caused by non-state protagonists in
• 12:54
  Speaker 2: terms of separatism, extremism and terrorism. So the organisation was
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  Speaker 2: not created with a third party state in mind as
• 13:05
  Speaker 2: a security risk. And that sentiment and that strategic orientation
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  Speaker 2: has been part and parcel of the SCO's ethos. It
• 13:17
  Speaker 2: is not focused on mutual defence against non-member threats. It
• 13:23
  Speaker 2: is focused on the sort of security issues that I mentioned.
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  Speaker 2: The second element is that its conceptualisation of cooperation in
• 13:32
  Speaker 2: the name of security has broadened. So it's gone from
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  Speaker 2: those three things to an organisation that is now actively
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  Speaker 2: involved in transportation cooperation, energy cooperation, and information systems and
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  Speaker 2: architecture cooperation, both in terms of information communications technologies, and
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  Speaker 2: more recently, out of this summit, some frameworks on artificial intelligence,
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  Speaker 2: big data, et cetera, et cetera. So we now have
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  Speaker 2: an organization with an extensive footprint across the Eurasian landmass,
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  Speaker 2: covering actually about 35% of the world's population. and not
• 14:19
  Speaker 2: a dissimilar proportion of global GDP. So about 44% of population,
• 14:24
  Speaker 2: about 35% of GDP. So a substantial body of humans,
• 14:29
  Speaker 2: a substantial land mass and substantial economic clout are now
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  Speaker 2: focused on the economic foundations of regional security. And the
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  Speaker 2: third dimension is actually an operating culture that is very
• 14:44
  Speaker 2: much oriented towards staying within the rails that they've agreed
• 14:51
  Speaker 2: to amongst themselves, acknowledging that the member states are actually
• 14:56
  Speaker 2: in their own ways quite different, but not letting those
• 15:00
  Speaker 2: differences get in the road of the pursuit of the
• 15:04
  Speaker 2: things that they share in common. The fact that you
• 15:07
  Speaker 2: have India and Pakistan, for instance, in the same security
• 15:10
  Speaker 2: organisation speaks volumes for how this security organisation is able
• 15:16
  Speaker 2: to live with difference whilst at the same time pursuing commonality.
• 15:22
  Speaker 2: So they're the three elements about the SCO that I
• 15:24
  Speaker 2: think people need to understand as backdrop. The fact that
• 15:29
  Speaker 2: it's also got a broader set of observer nations now
• 15:33
  Speaker 2: makes it even more important because it has enabled others
• 15:39
  Speaker 2: who aren't directly members to actually be engaged in discussions
• 15:43
  Speaker 2: and share information without necessarily being tied into anything else
• 15:49
  Speaker 2: related to it. And we have Turkey, for instance, who
• 15:51
  Speaker 2: is an observer and was participating in the recent summit. And,
• 15:57
  Speaker 2: of course, this enables the cornerstone members to create a
• 16:04
  Speaker 2: second concentric circle around them of interested parties, which, again,
• 16:11
  Speaker 2: broadens the remit, creates elbow room for future growth and development,
• 16:16
  Speaker 2: but importantly also enables the consolidation of, I guess you
• 16:21
  Speaker 2: could call it an economic and security buffer. So when
• 16:27
  Speaker 2: you have this collection of nation states and their leaders
• 16:31
  Speaker 2: come together as they did the other week, the obvious discussions,
• 16:36
  Speaker 2: particularly concerning the situation in Iran, led to some important
• 16:43
  Speaker 2: discussions So the communique that came out of the summit,
• 16:51
  Speaker 2: consensus communique, including Pakistan and India, was actually condemned the
• 16:59
  Speaker 2: aggression of Israel and others, number one, but it also
• 17:05
  Speaker 2: saw some bilateral commitments made and we saw in particular
• 17:11
  Speaker 2: the Russians make it clear that they would provide whatever
• 17:18
  Speaker 2: assistance they could to Iran to deal with the threatened
• 17:24
  Speaker 2: American campaign of isolation. China, of course, has made it clear,
• 17:29
  Speaker 2: and we've discussed this on a few occasions already, that
• 17:32
  Speaker 2: it will not join in the Americans in sanctioning Iran,
• 17:38
  Speaker 2: regardless of America's threats of secondary sanctions. So in that sense,
• 17:46
  Speaker 2: what we saw out of this SCO in so far
• 17:48
  Speaker 2: as Iran and the Persian Gulf situation is concerned is
• 17:53
  Speaker 2: a public commitment from major economic and military partners to
• 18:00
  Speaker 2: support Iran through this particular moment where it's coming under
• 18:06
  Speaker 2: increasing American economic pressure, not to mention the military campaign
• 18:13
  Speaker 2: that is being waged and which ultimately aims to consolidate
• 18:20
  Speaker 2: the broader security and economic architecture that stretches from the
• 18:27
  Speaker 2: Middle East all the way through to the East China
• 18:32
  Speaker 2: Sea and up into Russia proper. This was a very
• 18:40
  Speaker 2: important gathering. It had agreements on things like artificial intelligence,
• 18:46
  Speaker 2: which of course are very important. There's ongoing discussions and
• 18:50
  Speaker 2: progress being made on the SCO Development Bank, which I
• 18:55
  Speaker 2: think will become reality sometime in the next six months
• 18:59
  Speaker 2: or so. And I wouldn't be surprised if on the
• 19:05
  Speaker 2: back of this meeting that Iran's speaker, who has been
• 19:13
  Speaker 2: delegated with responsibility for managing relations with China, will also
• 19:17
  Speaker 2: pay a visit to Beijing in the not-too-distant future to
• 19:21
  Speaker 2: progress some of these, particularly the economic issues, and also
• 19:26
  Speaker 2: probably to progress discussions around long-term infrastructure, and I don't
• 19:33
  Speaker 2: mean bridges and things, but more that the information infrastructure
• 19:37
  Speaker 2: and financial infrastructure. that will enable Iran to fully migrate
• 19:45
  Speaker 2: itself off the swift ecosystem which leaves it exposed to
• 19:52
  Speaker 2: American sanctions.
• 19:56
  Speaker 1: Yeah. While this intensified diplomatic activity was going on in Bishkek,
• 20:06
  Speaker 1: The Trump administration recently sent their envoy, Trump's son-in-law, Jared,
• 20:12
  Speaker 1: to Kushner and Witkoff to negotiate with Russia. It looks
• 20:20
  Speaker 1: like what might shape up to be a potential end
• 20:26
  Speaker 1: of the Ukraine war. What's your take on that?
• 20:32
  Speaker 2: Well, before they went, We had the CIA director go
• 20:38
  Speaker 2: for a fly-in, fly-out visit. And I think you've got
• 20:42
  Speaker 2: to put these things together and also set this against
• 20:47
  Speaker 2: the context of the last four months to five months.
• 20:51
  Speaker 2: Over the course of the last four to five months,
• 20:53
  Speaker 2: there has been a growing tide initially of Western narrative
• 20:59
  Speaker 2: and reportage that pointed to a turning of the tide again,
• 21:07
  Speaker 2: that Ukraine, by virtue of its drone offensive, was getting
• 21:14
  Speaker 2: the better of Russia and that the Russian economy was
• 21:20
  Speaker 2: suffering extreme stress, both because of the drone's campaign disrupting
• 21:28
  Speaker 2: oil supplies domestically, but also it disrupted Russia's export trade.
• 21:35
  Speaker 2: That's been the story. The story and reality, however, have
• 21:41
  Speaker 2: been slightly different things. The reality is that as much
• 21:47
  Speaker 2: damage as these drone attacks did cause and disruptions caused
• 21:53
  Speaker 2: on domestic fuel supplies, particularly to Crimea, the disruptions to
• 21:59
  Speaker 2: traffic flows, again, particularly to Crimea, periodic disruptions to the
• 22:05
  Speaker 2: production of oil or export markets. Despite all of that,
• 22:12
  Speaker 2: as well as large attempts to attack Moscow itself, I
• 22:19
  Speaker 2: think it's not unreasonable to say that Russia has coped.
• 22:26
  Speaker 2: It is on top now of the energy disruptions that
• 22:31
  Speaker 2: were to some extent a problem during the course of May, June,
• 22:35
  Speaker 2: and to some extent into July, its export trade actually
• 22:41
  Speaker 2: has not been dramatically impeded. And with higher global prices, nonetheless,
• 22:48
  Speaker 2: it has been doing very well as far as foreign
• 22:51
  Speaker 2: reserves are concerned anyway. And on the battlefield, it is
• 22:58
  Speaker 2: actually abundantly clear that Ukraine is suffering now from the
• 23:05
  Speaker 2: fatigue of attrition. The attritional war that Russia has been
• 23:12
  Speaker 2: waging ultimately has worn down the capacity of Ukraine to
• 23:23
  Speaker 2: withstand the barrage that is coming at them and continues
• 23:27
  Speaker 2: to come at them, both in human resource terms, And
• 23:31
  Speaker 2: we've seen the response to that, which is handcuffing people,
• 23:36
  Speaker 2: forcing men into buses, shipping them off to the front line,
• 23:40
  Speaker 2: and a growing chorus of public outcry in Ukraine itself
• 23:43
  Speaker 2: around these recruitment strategies. We have seen the progressive encirclement
• 23:51
  Speaker 2: and loss of critical towns and fortifications in the Donbass
• 23:58
  Speaker 2: to a point where Sometime, I think, in the course
• 24:02
  Speaker 2: of the next few months, some of these last fortified
• 24:06
  Speaker 2: townships and city strongholds in Donbass will fully fall to
• 24:13
  Speaker 2: the Russian forces, which will then leave open large tracts
• 24:17
  Speaker 2: of relatively flat, difficult-to-defend land between those towns and the
• 24:25
  Speaker 2: Dnieper River. At the same time, Russia's air campaign on
• 24:32
  Speaker 2: Ukrainian infrastructure, on its logistics systems, its warehouses, its factories,
• 24:38
  Speaker 2: and more recently, a couple of decision-making centers in Kiev itself,
• 24:45
  Speaker 2: have been prosecuted without any viable response from Ukraine. Ukraine's
• 24:52
  Speaker 2: air defense capability has largely been destroyed. So we actually have,
• 25:01
  Speaker 2: as we come towards the end of the Northern Hemisphere summer,
• 25:06
  Speaker 2: a military situation which spells disaster for Ukraine. And I
• 25:14
  Speaker 2: say this not because I wish there to be a disaster,
• 25:19
  Speaker 2: because many people are dying. It's a tragic disaster, but
• 25:24
  Speaker 2: it's a description of where I think things are at.
• 25:29
  Speaker 2: That sets the backdrop for why the CIA director went
• 25:34
  Speaker 2: to Moscow and what Kushner and Witkoff are trying to accomplish.
• 25:41
  Speaker 2: They are trying to bring an end to this, but
• 25:45
  Speaker 2: I don't think they're going to succeed. Russia has laid
• 25:50
  Speaker 2: out terms for a settlement that actually go back not
• 25:53
  Speaker 2: only to June 2024, but actually go back to November 2021,
• 26:02
  Speaker 2: when Russia articulated views about the long-term security arrangements that
• 26:09
  Speaker 2: it would view as acceptable and which will ultimately reshape
• 26:17
  Speaker 2: the security architecture of Europe writ large. At this stage,
• 26:23
  Speaker 2: neither the Americans nor the Ukrainians nor the Europeans or
• 26:26
  Speaker 2: the English are able to accept Russia's terms. And so
• 26:35
  Speaker 2: Russia isn't going to stop. If people have watched the
• 26:40
  Speaker 2: comments coming out of not just President Putin himself, but
• 26:45
  Speaker 2: his spokespeople, Lavrov and other senior figures of the Russian administration,
• 26:52
  Speaker 2: it is very clear that Russia understands that It has
• 26:57
  Speaker 2: been duped in the past and it won't go down
• 27:00
  Speaker 2: that path again. That it has clear objectives that it
• 27:04
  Speaker 2: seeks to accomplish politically and if not through negotiations and
• 27:09
  Speaker 2: via military means. And it will continue to pursue those
• 27:14
  Speaker 2: objectives until it is satisfied that it's achieved them. And
• 27:19
  Speaker 2: so Kushner and Witkoff, I think, went to Russia will
• 27:26
  Speaker 2: have left empty-handed. This is not going to help Ukraine.
• 27:34
  Speaker 2: Ukraine's president has in the last couple of days been
• 27:37
  Speaker 2: desperately calling for military assistance, for financing, mainly to buy
• 27:44
  Speaker 2: more military arms, but none of that's going to be forthcoming.
• 27:51
  Speaker 2: It's because there isn't anything to give. This is what
• 27:55
  Speaker 2: attrition looks like. So you've got to remember that the
• 28:00
  Speaker 2: Ukrainian army was increasingly an extension of the NATO and
• 28:08
  Speaker 2: the American military industrial system. It had been progressively trained
• 28:14
  Speaker 2: and armed and equipped by NATO and to NATO standards
• 28:19
  Speaker 2: and with NATO equipment during the course of the 2010s,
• 28:23
  Speaker 2: particularly after 2014, and ever since the special military operation,
• 28:29
  Speaker 2: it has been wholly supplied by the Americans and the
• 28:36
  Speaker 2: other NATO members. So for all intents and purposes, Ukraine
• 28:41
  Speaker 2: is an informal extension of the NATO system. And the
• 28:47
  Speaker 2: NATO system has clearly been depleted, right? Now, this is
• 28:54
  Speaker 2: the most significant thing coming out because if you look
• 28:57
  Speaker 2: at the timing of all of this now, we have
• 29:01
  Speaker 2: an unfolding catastrophe in Ukraine. We have a depletion of
• 29:07
  Speaker 2: military capability that can't be magicked away. We have Russia
• 29:11
  Speaker 2: that is manufacturing thousands of ballistic missiles a year at
• 29:18
  Speaker 2: greater proportions by a factor of five to 10. compared
• 29:22
  Speaker 2: to that of the West. It's doing the same with drones.
• 29:27
  Speaker 2: And over the course of the Northern Hemisphere autumn into
• 29:31
  Speaker 2: the early winter, I think we are going to see
• 29:34
  Speaker 2: some very significant transformations in the battlefield that will consolidate
• 29:40
  Speaker 2: the trajectory of attrition that I've just been describing. And
• 29:45
  Speaker 2: at the same time, we are going to see the
• 29:52
  Speaker 2: material consequences of the war in the Perth and Gulf
• 29:59
  Speaker 2: on global petrochemicals markets, but particularly the American petrochemicals market, diesel,
• 30:06
  Speaker 2: and the flow-on effects of that. And all of this
• 30:10
  Speaker 2: is going to come together sometime between the end of
• 30:12
  Speaker 2: September and November. These are incredibly powerful pressure points economically, militarily,
• 30:22
  Speaker 2: across the transatlantic that I think are going to shape
• 30:26
  Speaker 2: up firstly in terms of the midterm elections in early
• 30:29
  Speaker 2: November in the United States, but it's clearly already working
• 30:33
  Speaker 2: its way through the body politic on continental Europe as well.
• 30:37
  Speaker 2: And we saw that a couple of days ago with
• 30:41
  Speaker 2: the German Lander elections where the alternative for Deutschland secured 43.8%
• 30:46
  Speaker 2: or thereabouts of the vote and is within a whisker
• 30:53
  Speaker 2: of securing a majority of seats in in the state
• 30:58
  Speaker 2: parliament to form a government. They are one of a
• 31:01
  Speaker 2: number of small parties. Well, they're not that small anymore.
• 31:04
  Speaker 2: They are the major party that is proposing that a
• 31:10
  Speaker 2: detente be arrived at with the Russians and that gas
• 31:13
  Speaker 2: and oil flows from Russia directly to Europe or directly
• 31:16
  Speaker 2: to Germany, more to the point, is re-established as well.
• 31:19
  Speaker 2: So the pressures that are building are going to put
• 31:22
  Speaker 2: NATO under increasing strain. It's going to put the Brussels
• 31:27
  Speaker 2: political elite and their supporters in national capitals in continental
• 31:31
  Speaker 2: Europe under increasing pressure. The White House itself is going
• 31:36
  Speaker 2: to be under increasing political pressure, which I think will
• 31:39
  Speaker 2: have some as yet to be seen unpredictable consequences, particularly
• 31:44
  Speaker 2: into the second half of President Trump's term. We are really,
• 31:51
  Speaker 2: I think, watching the unravelling of a 70 to 80-year
• 31:58
  Speaker 2: economic and military architecture. And it's unfolding now, you know,
• 32:04
  Speaker 2: before our very lives. This is an amazing time to
• 32:08
  Speaker 2: be sitting here watching what's going on in the world.
• 32:12
  Speaker 1: Yeah. I just saw a Bloomberg panel where the Bloomberg
• 32:23
  Speaker 1: anchor said, If you could come up with a PSYOP
• 32:26
  Speaker 1: to have China take over the world, this is what
• 32:28
  Speaker 1: you would do. You would launch a war to drive
• 32:31
  Speaker 1: the oil price, which currently saw the Chinese EV export
• 32:37
  Speaker 1: to the world shooting up and the Chinese solar panel
• 32:40
  Speaker 1: export to the world shooting up. And again, it also
• 32:51
  Speaker 1: much cheaper because China has plenty of energy compared to
• 32:55
  Speaker 1: the rest of the world. And he said, well, this
• 33:01
  Speaker 1: is spinning because China has been best positioned for this
• 33:05
  Speaker 1: coming war, for the present situation. You know, it's not planned,
• 33:10
  Speaker 1: but it's, you know, China has been prepared. And, you know, like,
• 33:15
  Speaker 1: but again, this is all thanks to Trump's dominant position
• 33:20
  Speaker 1: in the world. At the end, it's actually working to China.
• 33:25
  Speaker 2: You're breaking up a little bit, but I got most
• 33:26
  Speaker 2: of that. And look, I think you're right. China has
• 33:36
  Speaker 2: been very well prepared for these kinds of contingencies. We've
• 33:42
  Speaker 2: discussed probably about some programs ago, China's own preparations concerning
• 33:49
  Speaker 2: the question of energy. And it has spent over 20
• 33:52
  Speaker 2: years working assiduously to develop alternative energy delivery systems that
• 34:01
  Speaker 2: would reduce the risk that its own energy security faced
• 34:05
  Speaker 2: in the event of some kind of curtailment to oil
• 34:12
  Speaker 2: and petrochemicals from the Middle East, whether it's by virtue
• 34:15
  Speaker 2: of a war in the Persian Gulf or by some
• 34:20
  Speaker 2: kind of interdiction campaign or blockades being run in the
• 34:24
  Speaker 2: South China Sea or in the Strait of Malacca or wherever.
• 34:29
  Speaker 2: China has worked very hard to prepare itself for this.
• 34:35
  Speaker 2: In being prepared for this, of course, it's also enabled
• 34:42
  Speaker 2: itself to be a provider of a solution to others.
• 34:47
  Speaker 2: So by solving its own problems, it's also now in
• 34:51
  Speaker 2: a position to solve other people's problems of a similar nature.
• 34:57
  Speaker 2: And so we have seen in the last six months
• 34:59
  Speaker 2: an acceleration of electrification, not only in passenger motor vehicles,
• 35:04
  Speaker 2: which is the obvious case in point, but increasingly in
• 35:09
  Speaker 2: heavy vehicle transportation. And we are now also seeing the
• 35:14
  Speaker 2: rolling out of solar, wind, and battery technologies, particularly into
• 35:21
  Speaker 2: the global south. Over the course of the last six months,
• 35:27
  Speaker 2: China's trade and export performance has actually withstood the world's
• 35:34
  Speaker 2: current instabilities. It's withstood the tariffs attack from last April, 2025.
• 35:44
  Speaker 2: the so-called Liberation Day tariffs. And much of its growth,
• 35:50
  Speaker 2: if you look at the data for the first half
• 35:54
  Speaker 2: of the year, which obviously covers most of the post-war
• 36:00
  Speaker 2: on Iran period, the growth in exports has been above
• 36:08
  Speaker 2: average to the global south. So geographically, exports to the
• 36:13
  Speaker 2: global south have been growing at a faster rate than
• 36:16
  Speaker 2: China's growth of exports, generally speaking. And the categories of
• 36:23
  Speaker 2: goods that have experienced above average growth rates is also
• 36:27
  Speaker 2: very telling. Electric vehicles, of course, solar PVs, wind turbines, batteries,
• 36:39
  Speaker 2: machinery and equipment, and semiconductors have been the major, and
• 36:45
  Speaker 2: 3D printing, by the way, that's the other one, have
• 36:48
  Speaker 2: been major above average growth engines in China's exports to
• 36:54
  Speaker 2: the world. And what does that tell us? Well, it
• 36:57
  Speaker 2: tells us that global South countries are accelerating their importation
• 37:05
  Speaker 2: of critical energy and critical manufacturing capabilities from China so
• 37:12
  Speaker 2: that they will be able to accelerate their own industrial development.
• 37:18
  Speaker 2: So you see claims about China shocks and China squeeze. Well,
• 37:25
  Speaker 2: I guess if you're a Western company that dominated certain
• 37:31
  Speaker 2: markets for a long time and now you are facing
• 37:34
  Speaker 2: competition from Chinese companies, you will feel that very, very
• 37:39
  Speaker 2: strongly on your own profit and loss statement. No doubt
• 37:44
  Speaker 2: about that. This is what intense competition does. But the
• 37:50
  Speaker 2: idea that there's a squeeze going on, meaning that somehow
• 37:53
  Speaker 2: China's development is squeezing the global south from its own
• 37:57
  Speaker 2: development potential, is largely nonsensical. The data clearly shows that
• 38:02
  Speaker 2: China's exports are enabling the global south to develop their
• 38:07
  Speaker 2: own industry, industrial capabilities. And so.
• 38:12
  Speaker 2: China is very well prepared for the current circumstance. The
• 38:17
  Speaker 2: other interesting thing, though, is that even though it has
• 38:20
  Speaker 2: reduced its general exposure to oil as a source of energy,
• 38:27
  Speaker 2: it's still, of course, one of the world's major oil consumers,
• 38:32
  Speaker 2: sufficient enough for China to be really the swing buyer,
• 38:36
  Speaker 2: to a point where Chinese refineries buying and selling activities
• 38:43
  Speaker 2: can actually dictate the trajectory of global oil prices. And
• 38:46
  Speaker 2: we saw for about six weeks to eight weeks, a
• 38:51
  Speaker 2: couple of months ago, that Chinese buyers actually withdrew from
• 38:59
  Speaker 2: the market and that took the heat out of the
• 39:02
  Speaker 2: market and kept global prices relatively modest. But in the
• 39:08
  Speaker 2: last week and a half or two, Chinese buyers are
• 39:11
  Speaker 2: re-entering the market and that is contributing to the rise
• 39:16
  Speaker 2: of the crude prices up to that $ 100 mark that
• 39:21
  Speaker 2: you mentioned. So across all fronts, across all fronts, China's
• 39:27
  Speaker 2: position has in many regards been, it's been tested. There's
• 39:32
  Speaker 2: no doubt about it. You know, these energy shocks test
• 39:37
  Speaker 2: a country's set up. Some countries fare better than others.
• 39:42
  Speaker 2: It's tested China. And so far, China has come through
• 39:49
  Speaker 2: not only reasonably well, but in certain aspects of its
• 39:54
  Speaker 2: new economic development drivers, the high tech, the clean energy,
• 39:58
  Speaker 2: et cetera, it's actually consolidated and enhanced its position globally.
• 40:06
  Speaker 1: Yeah, and China's trade numbers, latest trade number clearly shows
• 40:10
  Speaker 1: that because China's export to the world continued to grow
• 40:14
  Speaker 1: despite the US sanction. I mean, the US sanction and
• 40:17
  Speaker 1: US economic war wage on China is about a decade
• 40:23
  Speaker 1: old now because it really started in the first Trump term.
• 40:26
  Speaker 1: And Biden administration just continued and doubled down on the
• 40:29
  Speaker 1: same policy. And now we're Trump's second term. And even
• 40:34
  Speaker 1: though China's dropped from the top trade partner of United
• 40:40
  Speaker 1: States to the third spot, China's increased its export to
• 40:44
  Speaker 1: the global South countries, particularly ASEAN. and Chinese goods continue
• 40:50
  Speaker 1: to find their way to the United States, but through
• 40:53
  Speaker 1: other channels. For example, you just have a lot of
• 40:55
  Speaker 1: Chinese machinery and components that get shipped to Vietnam, and
• 40:59
  Speaker 1: then in the final assembly, it gets put together in
• 41:04
  Speaker 1: Vietnam and slapped and made in Vietnam label, and then
• 41:08
  Speaker 1: it gets shipped to the United States. So that goods,
• 41:11
  Speaker 1: even though it counted as export from Vietnam, but it's
• 41:15
  Speaker 1: really like 60%, 70% Chinese. So if you account for that,
• 41:22
  Speaker 1: the Chinese trade with United States only probably dropped a
• 41:26
  Speaker 1: couple percent, a couple percentage point. And so this whole
• 41:32
  Speaker 1: trade war to re-industrialize United States has really failed because
• 41:41
  Speaker 1: the whole idea was not to push industries to move
• 41:46
  Speaker 1: supply chains out of China to Vietnam or India. Trump's
• 41:50
  Speaker 1: stated aim was to bring manufacturing back to the United States.
• 41:54
  Speaker 1: But we have the latest numbers show that the U.S.
• 41:59
  Speaker 1: lost almost 100,000 manufacturing jobs. The Trump policy has totally backfired.
• 42:06
  Speaker 1: It did not, in fact, re-industrialize the United States. But
• 42:11
  Speaker 1: China continued to grow. regardless of the US policies. And this,
• 42:18
  Speaker 1: which leads me to the question, why is Trump still
• 42:22
  Speaker 1: doing what he's doing? Because it's obviously not working.
• 42:27
  Speaker 2: Look, before getting to that, I just wanted to touch
• 42:30
  Speaker 2: on a couple of things about China's economic structure for
• 42:33
  Speaker 2: the time being, just very, very quickly. The export numbers,
• 42:38
  Speaker 2: of course, are quite strong. But most of China's growth
• 42:42
  Speaker 2: so far this year to September is actually still underpinned
• 42:46
  Speaker 2: by domestic consumption and investment growth. Proportionately speaking, about 80%
• 42:52
  Speaker 2: of China's growth so far this year is actually entirely
• 42:55
  Speaker 2: driven by domestic factors. The other thing to bear in
• 43:00
  Speaker 2: mind is that this has taken place whilst China's fiscal
• 43:07
  Speaker 2: and monetary policies have not been particularly expansive. And in fact,
• 43:13
  Speaker 2: there has been a tightening up of credit growth in
• 43:17
  Speaker 2: the last six months, really as a very conscious policy decision,
• 43:21
  Speaker 2: I think for a number of reasons. One is that
• 43:24
  Speaker 2: there is an attempt to pull back on infrastructure investment
• 43:31
  Speaker 2: and an expansion of capital formation to deal with the
• 43:38
  Speaker 2: involution issue actually, right? So the capital formation was growing
• 43:44
  Speaker 2: at such a rate that the intense competition that that
• 43:48
  Speaker 2: gave rise to was actually creating very unhealthy forms of competition.
• 43:54
  Speaker 2: So the central authorities were actually quite mindful of that.
• 43:58
  Speaker 2: And when people talk about a contraction of Chinese fixed
• 44:02
  Speaker 2: capital investment, and by the way, the fixed asset investment
• 44:06
  Speaker 2: data sets actually pretty bad, but But put that aside,
• 44:09
  Speaker 2: let's just take it at face value. It nonetheless suggests
• 44:14
  Speaker 2: that the authorities have consciously tightened up on fixed capital formation.
• 44:20
  Speaker 2: The second thing is that, which means that there's actually
• 44:23
  Speaker 2: quite a lot of gas in the tank, so to speak,
• 44:27
  Speaker 2: should there be aspirations to keep the economy along a
• 44:33
  Speaker 2: little bit harder. And they may well be in the
• 44:35
  Speaker 2: second half of the year. And we know some of
• 44:38
  Speaker 2: the things that will receive accelerated treatment. And a lot
• 44:42
  Speaker 2: of those are things we touched on last time we
• 44:44
  Speaker 2: caught up, which goes to ongoing urban renewal, urban infrastructure upgrades,
• 44:50
  Speaker 2: the investments into the six networks, you know, water, utilities, electricity,
• 44:58
  Speaker 2: et cetera, et cetera. So China itself has actually been
• 45:04
  Speaker 2: managing this response to these external pressures whilst at the
• 45:08
  Speaker 2: same time keeping a lot of powder dry at a
• 45:12
  Speaker 2: fiscal level, which I think puts the national economy into
• 45:20
  Speaker 2: a reasonably strong position coming into the second half of
• 45:23
  Speaker 2: this calendar year. Why is President Trump pursuing this policy? Well,
• 45:29
  Speaker 2: why does the United States state persist in policies that
• 45:36
  Speaker 2: clearly don't work, but instead double down on them. And
• 45:39
  Speaker 2: it's been doing this now for the best part of
• 45:41
  Speaker 2: a decade or so. Well, you know, if we had
• 45:45
  Speaker 2: answers to that question and we offered that as advice,
• 45:48
  Speaker 2: I think we could, you know, we'd clean up, wouldn't we?
• 45:53
  Speaker 2: So I'll just hazard a guess. There's a lot of
• 45:58
  Speaker 2: vested interest now revolving around China as enemy. Okay, political
• 46:04
  Speaker 2: vested interests. And in a political environment where voting is voluntary,
• 46:11
  Speaker 2: one of the greatest challenges that candidates have is to
• 46:16
  Speaker 2: mobilize a core base. Get out the vote is actually
• 46:21
  Speaker 2: the first order of business for any candidate coming into
• 46:25
  Speaker 2: an election. Because if you can't get out the vote,
• 46:28
  Speaker 2: then your chances of winning are severely diminished. And there's
• 46:34
  Speaker 2: nothing better to get out the vote than mobilising things
• 46:39
  Speaker 2: that drive the passions of your base. And for the
• 46:43
  Speaker 2: best part of 10 years now, China has been increasingly
• 46:46
  Speaker 2: framed as not only some kind of a competitor, a
• 46:50
  Speaker 2: peer competitor, an adversary, an enemy or what have you
• 46:53
  Speaker 2: to America, but it's also the cause of America's own
• 46:58
  Speaker 2: anxieties and problems. So not only is China this awful other,
• 47:04
  Speaker 2: over there, but it's actually the cause of hollowing out
• 47:09
  Speaker 2: of industry and what have you. So tarnishing China and
• 47:17
  Speaker 2: persisting with this campaign against China is viewed by the
• 47:22
  Speaker 2: political class as being helpful from an electoral point of view.
• 47:28
  Speaker 2: There's also a lot of funding now attached to the
• 47:32
  Speaker 2: ecosystems that sustains these narratives, right? So you've got inside
• 47:39
  Speaker 2: the beltway a whole ecosystem of think tanks that receive
• 47:45
  Speaker 2: funding ultimately to write the reports and create the talking
• 47:50
  Speaker 2: points that the politicians prosecute. And the think tanks have
• 47:59
  Speaker 2: increasingly been framing China as an adversary Even the most
• 48:05
  Speaker 2: liberal of think tanks frame China as at least a
• 48:10
  Speaker 2: peer competitor that must be managed. But basically, the milieu
• 48:17
  Speaker 2: inside the Beltway in Washington is so viscerally and intrinsically
• 48:25
  Speaker 2: hostile to China that it's very hard for a president
• 48:35
  Speaker 2: to change course. We saw on another important issue, the
• 48:40
  Speaker 2: war in Ukraine, that President Trump, despite his claims prior
• 48:46
  Speaker 2: to the election that he would end the war, that
• 48:48
  Speaker 2: he would end it in 24 hours and all those things, Ryan,
• 48:52
  Speaker 2: that the machinery of government and the machinery of the
• 48:56
  Speaker 2: political operations in Washington makes that actually very difficult. It
• 49:02
  Speaker 2: makes change of policy direction very difficult. Even when a
• 49:06
  Speaker 2: president says he wants to do something, you know, within
• 49:10
  Speaker 2: a week or two, you know, the pushback comes out
• 49:13
  Speaker 2: of Congress, the lobby groups and all of that. And
• 49:17
  Speaker 2: also inside his own circles, you know, he's surrounded himself
• 49:20
  Speaker 2: with people who in many ways don't hold the same
• 49:25
  Speaker 2: views as he officially does at least. And so in
• 49:30
  Speaker 2: the end, even if it's sensible to do, to change course,
• 49:36
  Speaker 2: The politics makes it almost impossible to change course. So
• 49:39
  Speaker 2: where are you at? Well, you're stuck in a position
• 49:43
  Speaker 2: where you can't be seen to be losing face. See,
• 49:46
  Speaker 2: changing course in politics is a very funny thing because
• 49:50
  Speaker 2: it admits an error of judgment in the first instance.
• 49:55
  Speaker 2: And so that doesn't happen. So then people spend an
• 49:58
  Speaker 2: inordinate amount of time, Carl, trying to figure out ways
• 50:01
  Speaker 2: of essentially changing course but not be seen to be
• 50:04
  Speaker 2: changing course. How do we have diplomatic off-ramps? How do
• 50:09
  Speaker 2: we have face-saving, you know, events that enable a change
• 50:14
  Speaker 2: of direction? And often you need an external catalyst for
• 50:18
  Speaker 2: that to say, well, you know, the world's fundamentally changed
• 50:21
  Speaker 2: and therefore we need to do something different. But even then,
• 50:24
  Speaker 2: it's actually very, very hard in America. It seems to
• 50:27
  Speaker 2: me that for decades, the entrenched permanent state, the apparatuses
• 50:34
  Speaker 2: of the political machinery of government and all the vested
• 50:37
  Speaker 2: interests associated with it, narrow the parameters of policy choice
• 50:45
  Speaker 2: so narrow that it doesn't matter who's in the White House,
• 50:49
  Speaker 2: you know, very, very little can actually be done. And
• 50:51
  Speaker 2: so President Trump, having made tariffs, for instance, his, you know, centrepiece,
• 50:58
  Speaker 2: really doesn't have much political option but to continue to
• 51:01
  Speaker 2: prosecute them. So even after the Supreme Court, knocked out
• 51:06
  Speaker 2: his original round of tariffs. He's been at it using
• 51:09
  Speaker 2: other mechanisms. So you ask the question, why does he
• 51:16
  Speaker 2: persist in policies that aren't working? Well, in some ways,
• 51:20
  Speaker 2: I think Washington is geared to the idea that its
• 51:24
  Speaker 2: objectives are correct. So this is Washington's view of the world,
• 51:29
  Speaker 2: that they have a correct set of objectives. They even
• 51:34
  Speaker 2: have a correct set of policies. The failure of those
• 51:38
  Speaker 2: policies is not because the policies are wrong or that
• 51:40
  Speaker 2: the objectives are wrong. It's that they're not doing them
• 51:42
  Speaker 2: wholeheartedly enough. They're just not committed enough. And in a
• 51:46
  Speaker 2: very typical American fashion, it's no longer about the material
• 51:50
  Speaker 2: wherewithal or how the other parts of the world are reacting.
• 51:54
  Speaker 2: It's simply that Washington's not trying hard enough. And if
• 51:58
  Speaker 2: we just try it harder, if we double down, double
• 52:02
  Speaker 2: down again, then we will eventually have success. And so
• 52:07
  Speaker 2: there's a real mindset inside the Beltway that all America
• 52:12
  Speaker 2: needs to do is actually just double down on whatever
• 52:15
  Speaker 2: it's been doing. So that's my own sense of... And
• 52:20
  Speaker 2: there's a lot more to the story, of course, but
• 52:22
  Speaker 2: I think that part of the institutionalised muscle memory inside
• 52:27
  Speaker 2: Washington is that America... is righteous. America is full of
• 52:37
  Speaker 2: clever people who've devised the correct approach, which usually involves
• 52:42
  Speaker 2: some form of coercion, right? America has become very accustomed
• 52:46
  Speaker 2: to coercing its way around the world. It's stripped its
• 52:50
  Speaker 2: ability to engage in meaningful diplomacy. It didn't really have
• 52:54
  Speaker 2: to for 30 odd years. So a whole generation's been
• 52:57
  Speaker 2: stripped out. So not only did industrial capability get hollowed out,
• 53:01
  Speaker 2: its diplomatic core got hollowed out along the way. And
• 53:05
  Speaker 2: so because of all of this, you know, the only
• 53:09
  Speaker 2: reason why America's not succeeding at the moment is because, firstly,
• 53:13
  Speaker 2: it's allowed others to take advantage of America because of
• 53:15
  Speaker 2: America's good graces and beneficence. And all America needs to
• 53:24
  Speaker 2: do is double down.
• 53:31
  Speaker 1: I just, I'm afraid you are right because I just
• 53:34
  Speaker 1: saw an interview of Secretary of Treasury Scott Besson on
• 53:39
  Speaker 1: Fox News when asked about the latest sanction on Iran,
• 53:45
  Speaker 1: the economic, what they call it, the economic outcast, operation outcast.
• 53:51
  Speaker 1: And Scott Besson says the operation is not only designed
• 53:57
  Speaker 1: to diminish Iran's economic power, It's also designed to diminish
• 54:01
  Speaker 1: China's economic power because all those Iranian oil that was
• 54:05
  Speaker 1: still floating around in the world market is eventually going
• 54:09
  Speaker 1: to draw down. And at that point, China will be screwed.
• 54:14
  Speaker 1: I mean, this flies in the face of all other
• 54:17
  Speaker 1: publicly available evidence. Yet he is still essentially doubling down
• 54:23
  Speaker 1: on saying, This is our policy and it's working as intended.
• 54:29
  Speaker 1: Of course, the dum-dums who actually consume Fox News will
• 54:35
  Speaker 1: probably buy his bullshit. I mean, that's probably why he
• 54:37
  Speaker 1: said it. I would think a market manipulator like Scott
• 54:44
  Speaker 1: Besson is smart enough to know what he said is
• 54:48
  Speaker 1: probably not true. You were just saying that for the
• 54:53
  Speaker 1: public consumption and the fact that we are close to
• 54:57
  Speaker 1: the November election. So this is why we have the
• 55:00
  Speaker 1: deputies director of the CIA recently came out and say,
• 55:04
  Speaker 1: Chinese companies are legitimate target for the CIA because, you know,
• 55:11
  Speaker 1: they contribute to the Chinese economic power.
• 55:15
  Speaker 2: Yeah.
• 55:19
  Speaker 1: White house, uh, uh, a staffer come out with a
• 55:24
  Speaker 1: claim that, you know, in case China's AI is poised
• 55:28
  Speaker 1: to take over, you know, is poised to surpass that
• 55:33
  Speaker 1: of the United States, then US should have a plan
• 55:35
  Speaker 1: to carry out military strike against data centers in China,
• 55:40
  Speaker 1: which is really crazy stuff. I mean, like, I don't
• 55:44
  Speaker 1: even think they mean it. You know, I still think they're,
• 55:48
  Speaker 1: you know, because, I mean, like, China have nukes and
• 55:53
  Speaker 1: China have delivery vehicles to deliver those nukes. Uh, I
• 55:57
  Speaker 1: mean the idea that any kind of American, uh, a
• 56:00
  Speaker 1: stealth bomber will, will, will be able to penetrate China's defense, uh, to,
• 56:06
  Speaker 1: to deliver a bomb BB inside China. It's just ridiculous. Um,
• 56:10
  Speaker 1: and if they do launch something from a American submarine
• 56:14
  Speaker 1: hiding out, say inside of China, see that, that, That's
• 56:18
  Speaker 1: basically start of World War III. So I hope, I
• 56:23
  Speaker 1: hope this is just rhetoric. This is just all these
• 56:26
  Speaker 1: talks for the coming election, not something they seriously, you know,
• 56:31
  Speaker 1: plan for.
• 56:33
  Speaker 2: Yeah, look, a lot of it is for domestic political consumption,
• 56:37
  Speaker 2: of course. But I think it also speaks to a
• 56:41
  Speaker 2: state of mind at the moment, which reflects... a growing
• 56:47
  Speaker 2: and intensified sense of displacement anxiety that the American political
• 56:51
  Speaker 2: elite actually are very uncomfortable with how the world is
• 56:56
  Speaker 2: unfolding and where that leaves them and their custom and
• 57:02
  Speaker 2: practice in the world. And as a result of that,
• 57:06
  Speaker 2: you know, this doubling down mentality also leads to escalation.
• 57:13
  Speaker 2: and a growing willingness to pursue courses of action that under, quote, normal, unquote, circumstances,
• 57:25
  Speaker 2: sober minds would avoid. And that's the worry. The worry
• 57:30
  Speaker 2: is that a desperate Washington political elite will increasingly feel
• 57:39
  Speaker 2: compelled to pursue courses of action that are actually more
• 57:47
  Speaker 2: dangerous than the course of action that they pursue now,
• 57:50
  Speaker 2: dangerous to themselves and dangerous to others, that they will
• 57:57
  Speaker 2: intensify the grey zone violence that we have seen from
• 58:03
  Speaker 2: time to time. And I fear, and I've expressed this
• 58:08
  Speaker 2: to you before, that the next pandemic decade or so,
• 58:14
  Speaker 2: from my own sense, is more likely to see a
• 58:19
  Speaker 2: greater incidence of grey zone violence that the American state
• 58:25
  Speaker 2: proper can plausibly deny direct involvement in. But nonetheless, most
• 58:32
  Speaker 2: people will have a very clear sense that, in fact,
• 58:36
  Speaker 2: it was made possible by the American state. The fact
• 58:40
  Speaker 2: that Washington was willing to blow up Nord Stream, right,
• 58:47
  Speaker 2: tells us that it will go to great lengths. A
• 58:54
  Speaker 2: common saying in China is,, America does not have a
• 59:02
  Speaker 2: bottom line. And when people say these things, as crazy
• 59:11
  Speaker 2: as they kind of sound and as impractical as they
• 59:16
  Speaker 2: genuinely are that doesn't mean they won't end up becoming
• 59:21
  Speaker 2: part of the toolkit and if they don't fly bombers
• 59:26
  Speaker 2: or fire missiles from in the South China Sea, there
• 59:33
  Speaker 2: will be nonetheless attempts to destroy or damage China's information
• 59:42
  Speaker 2: and communications technology infrastructure. There will be attempts to do that.
• 59:49
  Speaker 2: It's not surprising that the CIA, for instance, has been
• 59:53
  Speaker 2: running campaigns to try to rebuild its network in China,
• 59:58
  Speaker 2: having complained that its entire network has been progressively destroyed
• 1:00:03
  Speaker 2: since 2010, 2011. Put aside America's official military capability, which
• 1:00:15
  Speaker 2: has been materially diminished substantially, as we've discussed before, but
• 1:00:19
  Speaker 2: focus on these other elements of American state violence. whether
• 1:00:26
  Speaker 2: it's information warfare, whether it's subterfuge, whether it's assassinations, sabotage,
• 1:00:36
  Speaker 2: et cetera, et cetera. At the moment, I would put
• 1:00:39
  Speaker 2: nothing past a group of people inside Washington who've made
• 1:00:45
  Speaker 2: massive political, personal, emotional and other commitments to this particular
• 1:00:51
  Speaker 2: worldview and the cause that they represent and prosecute. I
• 1:00:56
  Speaker 2: wouldn't put it past them to tacitly give green lights
• 1:01:01
  Speaker 2: to a growing array of these kinds of, these forms
• 1:01:06
  Speaker 2: of violence, which brings us to full circle to the SCO.
• 1:01:14
  Speaker 2: One of the reasons why I think the SCO has
• 1:01:17
  Speaker 2: been successful and one of the reasons why I think
• 1:01:20
  Speaker 2: more countries will want to join the SCO is because
• 1:01:26
  Speaker 2: without having to say so, because it would be diplomatically
• 1:01:30
  Speaker 2: unnecessary and provocative to say so, but countries actually have
• 1:01:37
  Speaker 2: or are beginning to reach the realisation that the unfolding
• 1:01:44
  Speaker 2: multi-polarity of the world, the complex, messy, multi-dimensional state of
• 1:01:51
  Speaker 2: the world, is causing a level of disruption to american
• 1:01:58
  Speaker 2: interests that the americans are likely to do anything to
• 1:02:03
  Speaker 2: hang on to what they've got and to forestall the
• 1:02:08
  Speaker 2: development of a more stabilized form of multi-polarity and um
• 1:02:15
  Speaker 2: and perhaps that's where we you know end today but
• 1:02:18
  Speaker 2: i think we are in for a rough time but
• 1:02:22
  Speaker 2: organizations like the SCO and the lessons that they give
• 1:02:25
  Speaker 2: to others in the world are actually incredibly important when
• 1:02:29
  Speaker 2: the probability of American sanctioned gray zone violence intensifies.
• 1:02:39
  Speaker 1: Very well said. Thank you again for making your time
• 1:02:44
  Speaker 1: to speak to us, Dr. Powell. If people want to
• 1:02:48
  Speaker 1: follow you and follow your work, where would they go?
• 1:02:52
  Speaker 2: So follow me on my Substack, warwickpowell.substack.com. And of course,
• 1:02:58
  Speaker 2: jump onto Amazon and buy a copy of my book,
• 1:03:03
  Speaker 2: Thermoeconomics in a Time of Monsters.
• 1:03:07
  Speaker 1: Well, there you have it. Make sure you go get Dr.
• 1:03:10
  Speaker 1: Powell's books and follow him on Substack. Thanks to everyone
• 1:03:15
  Speaker 1: for listening. Until next time.
• 1:03:17
  Speaker 2: Bye-bye.