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The US Just Lost Iran – And China Knows It | Silk and Steel · UK Column Radio

0:01
Speaker 1: Welcome to another episode of the Silken Steel Podcast. I'm
0:05
Speaker 1: your host Carlo Za. Today I have back on the
0:08
Speaker 1: show crowd's favorite doctor, Worrit Powell from Australia. Uh, Doctor
0:15
Speaker 1: Paul just came back from his trip in China. Last
0:18
Speaker 1: time I talked to you was when you were on
0:21
Speaker 1: a high speed train and and it's good to see
0:26
Speaker 1: I have you back because a lot had happened since
0:30
Speaker 1: last time we talked. I mean it's it's only been
0:32
Speaker 1: two weeks, but but you know, now we had a ceasefire,
0:37
Speaker 1: we had a uh, we had a blockade on a blockade,
0:42
Speaker 1: and now Trump just announced today that he's going to
0:45
Speaker 1: extend the ceasefire. So I'm sure we have a lot
0:51
Speaker 1: to talk about.
0:52
Speaker 2: What what what? Which topic would you like to start with?
0:57
Speaker 3: Well, look, before we dive into the situation in Iran,
1:02
Speaker 3: perhaps I just share a few reflections on my three
1:06
Speaker 3: and a half weeks in China. Actually, I think.
1:11
Speaker 4: So.
1:13
Speaker 3: The trip was partly a family trip to to visit
1:18
Speaker 3: family and friends who we haven't seen for a couple
1:21
Speaker 3: of years and to connect that and of course part
1:26
Speaker 3: of that, I squeezed in some work related meetings and
1:32
Speaker 3: traveled to one or two places that had perhaps some
1:36
Speaker 3: interest for the for the other members of the family,
1:41
Speaker 3: but also I think, well I found them interesting too.
1:44
Speaker 3: So there's there's one thing that I think is abundantly
1:48
Speaker 3: clear when you travel around the country, and that is
1:52
Speaker 3: that China remains in abroad. And so this is a
1:56
Speaker 3: generalization a country with a steely determination that comes from
2:05
Speaker 3: a continued desire to improve the quality of not only
2:11
Speaker 3: the lives of individuals and their families, but to improve
2:15
Speaker 3: the quality and conditions of the country itself, whether it's
2:18
Speaker 3: through infrastructure or through ecological repair and those sorts of things,
2:23
Speaker 3: and whether they were people in private enterprise, higher education,
2:29
Speaker 3: think tanks, public policy makers, analysts right across the industry spectrum,
2:37
Speaker 3: there was a steely determination clearly understand that the world
2:42
Speaker 3: at the moment is a pretty unstable place, and there
2:46
Speaker 3: are as a result, many challenges, but nonetheless the belief
2:51
Speaker 3: that the ingredients, if you will, that have served China
2:57
Speaker 3: well over the last eighty years and particularly since reforming
3:02
Speaker 3: and opening up will can continue to be foundational know
3:06
Speaker 3: the reserves of determination, hard work, a willingness to be
3:12
Speaker 3: open minded, to explore, to connect, and those sorts of things,
3:16
Speaker 3: So that was one. More specifically, the other impressions that
3:20
Speaker 3: I've got were really related to system transformations, and perhaps
3:27
Speaker 3: that relates to some of my own research interests and biases.
3:30
Speaker 3: But I think there are three things that are intertwining
3:33
Speaker 3: with each other. One is again a focus on industrial upgrading,
3:38
Speaker 3: but industrial upgrading in a very particular way, which is
3:42
Speaker 3: to embed systems that enable better and faster decision making
3:49
Speaker 3: so that there is greater efficiency both in production but
3:53
Speaker 3: also in the circulations of goods and people and things
3:57
Speaker 3: throughout the economic system. The second thing is a clear
4:02
Speaker 3: emergence I think of a service of sensibility, so the
4:10
Speaker 3: tourist economy, which I got to experience a little bit
4:12
Speaker 3: of when I went to really one of the cause
4:17
Speaker 3: of Chinese civilization in law Young, which was where I
4:19
Speaker 3: was heading tow on that fast train, was the weekend
4:23
Speaker 3: of the p and E festival. So the p and
4:26
Speaker 3: E is the national flower and it blooms basically in
4:34
Speaker 3: early April, and in the weekend that I was there
4:36
Speaker 3: was for the p and E Festival. It was probably
4:39
Speaker 3: the worst weekend to go, actually, Carl, because I got
4:42
Speaker 3: to experience both the joys and whatever the reverse of
4:45
Speaker 3: the joys are of Chinese tourism with Chinese large scale characteristics.
4:52
Speaker 3: So and I think, so that's a tourism sensibility. And
4:57
Speaker 3: I think the other thing is just the sense of
5:02
Speaker 3: the role of digitalization and information. And again this is
5:08
Speaker 3: a sort of a clumsy English way of describing it,
5:11
Speaker 3: but the intelligentrification of the system at large. So it's
5:17
Speaker 3: not about trying to be God with general intelligence. It's
5:24
Speaker 3: actually about a form of practical applied intelligence right across
5:29
Speaker 3: the system to be able to deliver things quicker, reduce
5:33
Speaker 3: the energetic costs of whatever it is that is involved,
5:37
Speaker 3: and to meet the needs of people in a more
5:42
Speaker 3: stable and an orderly way. So it was an interesting time.
5:47
Speaker 3: I've visited a couple of Tier one cities and three
5:52
Speaker 3: Tier three cities and a few smaller places in between.
5:56
Speaker 3: And the other thing that I noticed is that the
6:00
Speaker 3: the Tier three cities are actually growing a little bit.
6:04
Speaker 3: Well the qualitative responses, if you will, and I think
6:07
Speaker 3: it's backed up by the data as well, is that
6:09
Speaker 3: the dynamism in some of these smaller cities is arguably
6:15
Speaker 3: more intense than it is in say Shanghai and Beijing.
6:19
Speaker 3: Shanghai and Beijing are relatively mature urban systems, and whilst
6:23
Speaker 3: there is still work to be done in them, the
6:26
Speaker 3: real sort of URV of Chinese urbanization and industrial renewal
6:33
Speaker 3: and all those sorts of things is to be found
6:35
Speaker 3: away from these big cities. And that was certainly a
6:37
Speaker 3: case in Changdo, which is a relatively small place in Sudro,
6:48
Speaker 3: in a couple of places in Unplay, which most people
6:53
Speaker 3: probably wouldn't have heard of. But Unplay is eastern Inland province,
7:00
Speaker 3: about four hundred kilometers from Shanghai. And here's a couple
7:06
Speaker 3: of interesting things about Anhay. Anhui has a population that's
7:09
Speaker 3: bigger than France and an economy that's bigger than Argentina's,
7:13
Speaker 3: and and nobody's heard of it.
7:17
Speaker 1: And the remember I remember a Reuter's article introducing a
7:24
Speaker 1: former Chinese president, Hu Jintao. You know this is more
7:29
Speaker 1: than ten years ago. It says, requoted mister Hu Cam
7:33
Speaker 1: from Anghui, one of the poorest inland Chinese fathers.
7:36
Speaker 2: Is that's how Routers introduced Yeah.
7:40
Speaker 3: It was right. So Anhui was known as the land
7:43
Speaker 3: of fish and rice. It's a large part of well,
7:48
Speaker 3: the northern part is on the lowest plains of the
7:53
Speaker 3: the Yangsee River or the or the chung Jiang, and
7:58
Speaker 3: it has been in an incredibly important part of the
8:05
Speaker 3: agricultural and food producing regions of Chinese society at large.
8:11
Speaker 3: But of course areas that were heavily agriculturally oriented often
8:14
Speaker 3: ended up remaining somewhat less developed than others. You might
8:20
Speaker 3: recall to Kahlomen you're the history buff right, and Anhwei
8:25
Speaker 3: was one of the places where some of the very
8:27
Speaker 3: early agricultural reforms took place in the early nineteen eighties,
8:32
Speaker 3: experimenting with changes to the household responsibility system, which really
8:36
Speaker 3: led the way actually for wholesale policy changes across the country.
8:41
Speaker 3: So this very very poor province is now in a
8:45
Speaker 3: sense experiencing a period of catch up, and it's catching
8:49
Speaker 3: up through some industrialization. Earlier last year I actually visited
8:55
Speaker 3: the Cherry motor vehicle factory which is headquartered in acidic Wah,
9:00
Speaker 3: which is a third level or Tier three city, and
9:06
Speaker 3: that factory was producing a motor car every seventy five seconds.
9:11
Speaker 3: The city that's probably most well known in Anhui is
9:14
Speaker 3: its capital, which is her Fe, and her Fe became
9:18
Speaker 3: particularly well known as the focal point for Chinese research
9:23
Speaker 3: and development in quantum computing. At the university in her
9:29
Speaker 3: Fe established the National Quantum Computing Laboratory at the request
9:35
Speaker 3: of the head of the facility, who came back from
9:40
Speaker 3: the United States from Memory to set up the center.
9:44
Speaker 3: In fact, when he came back to China from Memory,
9:47
Speaker 3: he was offered the opportunity to have basically the best
9:52
Speaker 3: lab in the world set up in Beijing or Shanghai
9:57
Speaker 3: at one of the top tier universities. And he said, look,
10:00
Speaker 3: I do want to come back, but on one condition only.
10:04
Speaker 3: Of course, you're going to pay for all of these
10:06
Speaker 3: labs and equipment and stuff, he said, but the condition
10:08
Speaker 3: is is that it's set up in heal Fe because
10:11
Speaker 3: that's where my parents live and it's my hometown. So
10:16
Speaker 3: the inland provinces are in a sense experiencing, I think,
10:21
Speaker 3: a level of economic dynamism that many people going to
10:25
Speaker 3: the really mature cities unless they go to the sort
10:29
Speaker 3: of tech parks and the AI places and the robotics places.
10:33
Speaker 3: If you were just sort of wandering the streets of
10:35
Speaker 3: the urban economy, you would probably feel that sense of
10:41
Speaker 3: friissant and energy that you sort of felt fifteen years
10:45
Speaker 3: ago in some of these cities is no longer there.
10:47
Speaker 3: They're a little bit more mature. But when you go
10:51
Speaker 3: to these other places, there's still certainly a lot of
10:55
Speaker 3: a lot of focus. There was zero talk by the
10:58
Speaker 3: way of the war against Iran and the global oil crisis.
11:07
Speaker 3: China itself, talking to policymakers and researchers and think tankers,
11:13
Speaker 3: whilst sort of generally concerned about instabilities and disruptions, were
11:19
Speaker 3: moderately confident that many of the risk mitigations that have
11:23
Speaker 3: been taking place over the course in the last fifteen years,
11:26
Speaker 3: as well as the short term buffers that have been
11:30
Speaker 3: accumulated over the last eighteen months, would see sort of
11:35
Speaker 3: China through and so far that has proven to be
11:40
Speaker 3: the case.
11:43
Speaker 1: Cherry, which you mentioned, is one of these low key
11:47
Speaker 1: Chinese automakers that's actually going abroad. I have a friend
11:52
Speaker 1: in South Africa who just bought a Cheery car. Like
11:56
Speaker 1: everybody knows about vyd but you know, there's like batch
12:00
Speaker 1: of other Chinese brand like Cherry that's also like quite formidable,
12:05
Speaker 1: and and people are going to hear their name slot
12:08
Speaker 1: more in the coming years. And and I believe Cherry
12:11
Speaker 1: is like a joint venture between the the Hearth Bay
12:15
Speaker 1: government and and a local entrepreneur. Some of the success stories.
12:23
Speaker 3: Government actually and it's it's so it didn't even emerge
12:29
Speaker 3: in the capital city of the province. And it was actually,
12:33
Speaker 3: from again from memory, one of the first, if not
12:37
Speaker 3: the first, in effect privately owned or part privately owned
12:42
Speaker 3: automotive manufacturers to be set up in China itself. That
12:47
Speaker 3: was domestic, right, so that didn't involve a foreign joint
12:51
Speaker 3: venture partner. And of course when it was first established
12:55
Speaker 3: it was in the business of manufacturing internal combustion engine
12:59
Speaker 3: motor cars, but it has migrated into hybrids as well
13:05
Speaker 3: as pure ev plays. And the evs that I watched
13:09
Speaker 3: come off the line last year were a sort of
13:13
Speaker 3: a sporty jeep style four wheel drive EV one hundred
13:17
Speaker 3: percent electric and priced at ninety nine thousand RMB. So
13:30
Speaker 3: I can divide that by six point nine for US
13:33
Speaker 3: dollars or about four point seven for Australian dollars. Le
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Speaker 3: let's say roughly eighteen thousand US dollars for what is
13:43
Speaker 3: in effect a small suv off roader one hundred percent
13:47
Speaker 3: electric with great performance. So it's interesting too because the
13:53
Speaker 3: you know, many of the evs that people see and
13:57
Speaker 3: all the ads are very space age, right, And when
14:03
Speaker 3: the guys were designing this particular car, the market feedback
14:07
Speaker 3: that they got was that for an off road oriented vehicle,
14:12
Speaker 3: people actually wanted a more old fashioned tactile touch. So
14:18
Speaker 3: instead of a whole bunch of screens and touch buttons,
14:20
Speaker 3: they had to introduce knobs and buttons that actually pressed
14:25
Speaker 3: in and those sorts of things and door handles and
14:30
Speaker 3: stuff just to you know, because people wanted that analog
14:35
Speaker 3: experience that they kind of associated with a little bit
14:39
Speaker 3: of off road rugness. So again it goes to show
14:42
Speaker 3: the design sensibilities of these automakers. You know, they're not
14:46
Speaker 3: just mono dimensionally pursuing this idea of a space age
14:52
Speaker 3: style lounge room on wheels. You know, these guys designed
14:58
Speaker 3: something that was fit for per percent, very much oriented
15:02
Speaker 3: to a particular set of market sensibilities. Yeah, it's very cool.
15:10
Speaker 2: Wow.
15:11
Speaker 1: I was actually in China two months ago, you know,
15:15
Speaker 1: just right around Chinese New Year, and I remember one
15:18
Speaker 1: thing that really stuck out for me is how easy
15:22
Speaker 1: it is nowadays to navigate China. Of course I know
15:26
Speaker 1: Chinese that that helps. But I just downloaded a map
15:31
Speaker 1: in Chinese Gudodi too. It's a mapping app. I pretty
15:36
Speaker 1: much I can I can go anywhere, you know, without
15:39
Speaker 1: even knowing anything about a city. Just with the map,
15:43
Speaker 1: I can pretty much find anything I want, go anywhere
15:47
Speaker 1: I want using either public transportation or you know the
15:53
Speaker 1: d D that the Chinese virginal uber. So it's it's
15:58
Speaker 1: very very convenient.
16:00
Speaker 3: Yeah, you're right, you know, And this is really about
16:02
Speaker 3: how information has been harnessed and is integrated into not
16:09
Speaker 3: only a phone, which is how we consume the information,
16:13
Speaker 3: but or through the phone, through your smartphone, into how
16:19
Speaker 3: you connect with the physical world, right transport infrastructure, whether
16:23
Speaker 3: it's a DD, whether it's fast trains or what have you.
16:26
Speaker 3: Because once you've found the place that you want to
16:28
Speaker 3: go to, it's actually very very easy now to literally
16:32
Speaker 3: call a car that will take you to where you
16:36
Speaker 3: want to get to, or if you don't want to
16:38
Speaker 3: do that, it will actually literally guide you to where
16:41
Speaker 3: you need to go to catch the subways if the
16:43
Speaker 3: city runs a subway. So this practical sense of interfacing
16:50
Speaker 3: these different applications inside an ecosystem does make China increasingly
16:56
Speaker 3: a convenient place. And I guess again, if you think
17:00
Speaker 3: back five six years prior to the COVID pandemic, perhaps
17:06
Speaker 3: there was still a lot of integration challenges between these
17:11
Speaker 3: different things. And for people who don't speak Chinese, I'm
17:15
Speaker 3: like you, I speak Chinese so in a sense and
17:17
Speaker 3: read and write Chinese, so in a sense is sort
17:19
Speaker 3: of a bit more oblivious to the linguistic challenge.
17:23
Speaker 1: Right.
17:25
Speaker 3: But now that with the open visas and that sort
17:29
Speaker 3: of thing, there is and acute awareness that a good
17:34
Speaker 3: experience involves obviously a smooth interactions with these practical things,
17:39
Speaker 3: nothing worse than not being able to get to where
17:41
Speaker 3: you want to get to, can't get a car, can't
17:44
Speaker 3: find where you want to go, but also making it
17:48
Speaker 3: not a frustrating experience in terms of the language, right,
17:51
Speaker 3: and all of these apps, so if you had we
17:54
Speaker 3: Chat and you use DD, you know it's multi lingual now,
18:00
Speaker 3: so it's incredibly it is just an easy place to
18:04
Speaker 3: get around. I mean, the truth is, you know, fifty
18:07
Speaker 3: odd countries now have visa free arrangements from China. And look,
18:13
Speaker 3: this sounds like a little bit of a travel blog, right,
18:15
Speaker 3: but you know, go see if with your own eyes,
18:20
Speaker 3: and you know, there'll be things that you like, there'll
18:22
Speaker 3: be things that you find strange and unusual, perhaps interesting,
18:26
Speaker 3: and perhaps you don't like them. But there is nothing
18:29
Speaker 3: better than literally, you know, spending time walking the streets
18:34
Speaker 3: and getting on the trains and getting out amongst it.
18:38
Speaker 3: Because what I think people will discover is that and
18:42
Speaker 3: this might surprise some people but probably not so many
18:45
Speaker 3: of your viewers and listeners, Carl, is that China is
18:49
Speaker 3: made up of a whole bunch of ordinary people trying
18:52
Speaker 3: to pursue a good life and to improve the lot
18:56
Speaker 3: for themselves and their families and their communities. And that's
19:01
Speaker 3: largely about it, and and you know they're committed to
19:06
Speaker 3: doing that. I'm not sure that there's much that's disagreeable
19:10
Speaker 3: about it. And if more people sort of understood that
19:13
Speaker 3: that in and of itself is the is the common destiny,
19:17
Speaker 3: if you will, of people wherever they are, then we
19:20
Speaker 3: might actually find, you know, better ways of supporting each
19:25
Speaker 3: other in pursuing those games.
19:27
Speaker 4: Anyway.
19:27
Speaker 3: That's that's the China plug.
19:29
Speaker 1: Yeah, yeah, I mean, like China is almost what twenty
19:35
Speaker 1: like one fifth of humanity, and it's it's I think
19:42
Speaker 1: it's really odd for people in the West, particularly in US,
19:47
Speaker 1: to think that United States, with five percent of the
19:51
Speaker 1: world population, is going to forever be dominating the rest
19:56
Speaker 1: of the ninety five percent of the humanity. I mean,
20:00
Speaker 1: it's it, It doesn't make sense. And whatever effort they're
20:04
Speaker 1: going to put in to contain the rise of China
20:07
Speaker 1: will be futile because China has tremendous amount of human capital.
20:14
Speaker 1: And and this is just the beginning, because they're they're
20:17
Speaker 1: they are ramping up their educational system, like you know,
20:23
Speaker 1: the number of college grads still increasing, the number of
20:27
Speaker 1: STEM grads still increasing year by year. Uh. You know,
20:31
Speaker 1: China definitely has still have its best year ahead of it.
20:36
Speaker 2: And you know, all.
20:38
Speaker 1: These contrary to all these copium that's producing the West
20:42
Speaker 1: about China's coming collapse or China's uh uh economic slowdown,
20:49
Speaker 1: it's it's just not it's those It's just copium.
20:55
Speaker 4: It's just scopium, and I expect the copy go ahead, Well,
20:59
Speaker 4: just gonna psycho. You know, the copium sort of exists
21:02
Speaker 4: amongst a certain group of people, right, and if you
21:07
Speaker 4: spend too much time in social media, you'll tend to
21:10
Speaker 4: think that that is the dominant attitude. But when you
21:14
Speaker 4: start to look at some of the public opinion surveys
21:17
Speaker 4: from around the world, increasingly there is a view that
21:22
Speaker 4: China is a stabilizing force globally and that countries would
21:28
Speaker 4: be better off finding ways of actually working with and
21:32
Speaker 4: collaborating with China in the pursuit of you know, shared objectives.
21:36
Speaker 4: And we see these increasingly positive attitudes prevalent amongst younger people, right, so,
21:46
Speaker 4: you know, and this in part comes from travel and
21:49
Speaker 4: being open minded and those.
21:51
Speaker 3: Sorts of things. But I think it also speaks to
21:52
Speaker 3: something else, and.
21:56
Speaker 4: This is.
22:00
Speaker 3: Maybe sometimes you know, and I'm not known for this,
22:03
Speaker 3: by the way, but maybe this is a little bit
22:04
Speaker 3: glass half full, that there is a willingness to be
22:11
Speaker 3: actually far more empathetic to others amongst a younger cohort
22:17
Speaker 3: of people in the advanced countries, and particularly a sensibility
22:25
Speaker 3: and an empathy towards the challenges and aspirations of people
22:30
Speaker 3: from the developing world. And that ability to be empathetic,
22:35
Speaker 3: I think deeply transforms the political posture and the attitudes.
22:42
Speaker 3: Right so often we'll hear in international relations discourse and
22:48
Speaker 3: security discourse, and you know, in some of my work
22:51
Speaker 3: in a sense leans towards this is that you know,
22:54
Speaker 3: there are these powerful material forces at work that in
22:58
Speaker 3: many ways either dictate the terms or drive countries in
23:03
Speaker 3: certain directions. You know, people often say, oh, the conflict
23:06
Speaker 3: between China and America is a structural one. Well, China
23:11
Speaker 3: doesn't see it as a conflict. So the conflict in
23:14
Speaker 3: and of itself doesn't emerge from the relationship per se.
23:18
Speaker 3: It emerges from the nature of a relationship viewed through
23:21
Speaker 3: a particular set of framing lenses. And if you're framing
23:25
Speaker 3: lens is one that is formed through an attitude of exceptionalism,
23:34
Speaker 3: millenarian superiority, entitlement, a sense of paranoia, et cetera, et cetera.
23:42
Speaker 3: Then sure you will view the rise of others as
23:46
Speaker 3: being a threat. You will see the world in very
23:50
Speaker 3: zero some games terms right, that there's a given amount
23:53
Speaker 3: of resource and if I don't get it, you will.
23:56
Speaker 3: If you get it, it's my last et cetera, et cetera.
24:00
Speaker 3: But a more empathetic disposition will actually not frame the
24:03
Speaker 3: world at all that way. It will see two large countries,
24:06
Speaker 3: and of course there are many other countries in the world.
24:09
Speaker 3: In a totally different sense, we are still nonetheless talking
24:13
Speaker 3: about the same world, but it's framed through I guess,
24:17
Speaker 3: a lens that is firstly empathetic to the situation aspirations
24:23
Speaker 3: of others. But through that it actually does one other thing,
24:26
Speaker 3: and that is it realizes that the prospects of your
24:31
Speaker 3: own country and your own life is intrinsically and intimately
24:37
Speaker 3: intertwined with the prospects of the lives of others, but
24:43
Speaker 3: not in a zero some way. That in fact, the
24:46
Speaker 3: only way of trying to find mutual benefits and progress
24:55
Speaker 3: is to find alignments, right, And in my works, you know,
25:01
Speaker 3: I speak a lot about these issues around sort of
25:03
Speaker 3: energy surpluses, et cetera, et cetera. And what that really
25:07
Speaker 3: means is there is only so much energy in the world,
25:11
Speaker 3: or energy in nature, and the aim really is to
25:14
Speaker 3: enable societies across the globe to harness that energy in
25:19
Speaker 3: more efficient ways that enable them to harness, generate, and
25:24
Speaker 3: harness enough surpluses to build and sustain sophisticated you know,
25:30
Speaker 3: cultural superstructures, if you will. So, I think that there
25:34
Speaker 3: is a sum shift in attitudes and the copium stuff,
25:42
Speaker 3: in a sense is increasingly caught up in the Beltway
25:47
Speaker 3: number one, and in a much lesser sense in the
25:51
Speaker 3: United States in particular, it finds its way into the
25:55
Speaker 3: very narrow crevices of very hard and sort of mega constituency.
26:04
Speaker 3: But even within the mega constituency, there are aspects that
26:10
Speaker 3: I think that actually understand that their own aspirations for
26:17
Speaker 3: and improved American condition can actually be accomplished by not
26:26
Speaker 3: creating wars on everyone else. Right, And so I think
26:31
Speaker 3: that there is a perhaps there is something in the air,
26:35
Speaker 3: so to speak, that opens out some better possibilities, notwithstanding
26:43
Speaker 3: the conflicts that are happening, the wars that are happening
26:45
Speaker 3: at the moment, largely caused incidently by a much older
26:50
Speaker 3: generation of people.
26:54
Speaker 2: Well, let's hope, So let's talk about the war.
26:58
Speaker 1: Let's just talk about the war, because that the war
27:00
Speaker 1: is affecting everyone, everyone around the globe. The Straight of
27:06
Speaker 1: Hormuse remain mostly closed, you know, despite Trump's earlier tweets
27:13
Speaker 1: that it was open. And then there's still less than
27:18
Speaker 1: double digits of ships getting through UH. And there's now
27:22
Speaker 1: there's a double blockade. There's American blockade outside of the
27:26
Speaker 1: Iranian blockade. While the negotiation still goes out. You know,
27:31
Speaker 1: Trump just exinstended the ceasefire. What what's your take on
27:39
Speaker 1: all this? I mean, because we have talked about ramifications
27:43
Speaker 1: of this disruption to the global economy. The longer this
27:49
Speaker 1: straight o'h hormose is closed, the greater impact it will be.
27:56
Speaker 1: Because because I think the last ship that have left
28:00
Speaker 1: Persian Golf before the straight Horn Moves was closed have
28:04
Speaker 1: now arrived in their destination. That means the real impact
28:09
Speaker 1: is going to be shortly felt in many places. And
28:15
Speaker 1: even even even if they were to reach agreement today
28:21
Speaker 1: and try to reopen the street Horn Moves, it's going
28:24
Speaker 1: to take months, you know, maybe fifty days to restore
28:28
Speaker 1: to a pre war level, you know, both by restoring
28:32
Speaker 1: the energy production and also rerouting all the tanker traffic
28:37
Speaker 1: to make to continue the spyline. So we in any case,
28:43
Speaker 1: we're looking at very serious global disruption.
28:48
Speaker 2: What is your take on this?
28:49
Speaker 3: Let's look at Let's look at the economics first. As
28:53
Speaker 3: you say, tankers that left the golf prior to the
28:58
Speaker 3: war are now arriving at the destinations. Ever since then,
29:02
Speaker 3: there's been a trickle, so the stock of available crude
29:06
Speaker 3: oil around the world in refineries that use this particular
29:12
Speaker 3: kind of crude will begin to diminish significantly, and that
29:16
Speaker 3: will feed through into the economic systems, and it will
29:19
Speaker 3: feed through in large part through the processes of demand destruction.
29:25
Speaker 3: Activities will stop as prices rise, and those activities will
29:31
Speaker 3: take a long time to recover if they recover, and
29:33
Speaker 3: some of them won't recover it all, so there will
29:36
Speaker 3: be demand destruction. The second thing that it could catalyze
29:40
Speaker 3: is of course accelerated moves to reduce economic activities dependencies
29:47
Speaker 3: on the products of crude and the other things. Of course,
29:51
Speaker 3: we've discussed the chemistry and stuff that comes out of
29:55
Speaker 3: that region for the rest of the world. So that's
29:59
Speaker 3: just sort of main of short term economic impact. If
30:01
Speaker 3: this war keeps going on for months and global crude
30:07
Speaker 3: and LNG supplies are in many ways well the stock
30:13
Speaker 3: is just structurally collapsed by fifteen to twenty percent, this
30:17
Speaker 3: will lead to very significant demand destruction globally. There's no way,
30:21
Speaker 3: there's no two ways about it, and for a very
30:23
Speaker 3: simple reason that there simply is not enough hydrocarbon energy
30:29
Speaker 3: to go around. That's it. So that's that's the first thing.
30:33
Speaker 3: The second thing I think it's probably worth touching upon
30:38
Speaker 3: is that the recovery, even if things sort of stop today,
30:43
Speaker 3: will take more than fifty days, in part because and
30:46
Speaker 3: I've read some recent reports that look at the damage
30:49
Speaker 3: that's been caused to some of the refineries and other
30:52
Speaker 3: facilities in the Gulf, and the estimates is that it
30:55
Speaker 3: could be two to three years before some of that
30:57
Speaker 3: is rebuilt. So not all all of pre war capacity
31:02
Speaker 3: will become available again. Anyway, it's going to phase in,
31:07
Speaker 3: if you will, so it'll take two to three years
31:10
Speaker 3: before in theory, it all comes back on stream. The
31:13
Speaker 3: second thing I think it does is that, and again
31:17
Speaker 3: I'm just focusing on the logistics and the economics first
31:20
Speaker 3: and foremost before getting back to the war itself, is
31:23
Speaker 3: that it really shines a spotlight on the not only
31:29
Speaker 3: the risks associated with excessive exposure to hydrocarbons, but also
31:37
Speaker 3: the risks associated with maritime interdictions and blockades. Now, many
31:43
Speaker 3: people have gotten very excited in the last sort of
31:46
Speaker 3: week week and a half about not only America's blockade
31:50
Speaker 3: of the Iranian blockade, but you know, the visits of
31:57
Speaker 3: the Defense Minister from in an Anesia to the United
32:01
Speaker 3: States and the execution of a sort of a Defense
32:04
Speaker 3: Agreement between Indonesia and the US, claiming that the US
32:10
Speaker 3: by virtue of this has somehow stitched up the Straits
32:13
Speaker 3: of Malacca. And the sort of geopolitical commentary about all
32:18
Speaker 3: of this is that this is part of the long
32:20
Speaker 3: run strangulation of China. Right now, it may well be
32:25
Speaker 3: part of the sort of long run strategic planning of
32:27
Speaker 3: the United States are trying to accomplish this. And we
32:30
Speaker 3: know that going back twenty odd years, this has always
32:32
Speaker 3: been part of the global doctrine that blockades of the
32:38
Speaker 3: Straits of Malacca would be one way in which the
32:42
Speaker 3: United States would seek to contain China, and China was
32:44
Speaker 3: well and truly aware of that. Bull Jentaho you mentioned earlier,
32:49
Speaker 3: remarked back in two thousand and three from memory, you know,
32:52
Speaker 3: he coined the idea of the Malacca dilemma. Now, the
32:55
Speaker 3: result of the Malaca dilemma, China has actually embarked on
32:58
Speaker 3: a number of things. One is is that it has
33:02
Speaker 3: progressively transformed the structure, the energetic structure of its economy
33:06
Speaker 3: to be far less oil dependent than it once was.
33:10
Speaker 4: Number one.
33:11
Speaker 3: The second thing is that it's also transformed the way
33:14
Speaker 3: in which it receives its oil and gas, so that
33:19
Speaker 3: more of it now comes over land than historically did,
33:24
Speaker 3: again further reducing exposure to maritime interdictions. So much so
33:29
Speaker 3: that Sogo Lavarov last week, whilst he was visiting Beijing,
33:33
Speaker 3: offered and confirmed that Russia had the capacity to offset
33:38
Speaker 3: any losses that China may experience as a result of
33:42
Speaker 3: prolonged blockades of the Straits of full Moves, and that
33:46
Speaker 3: similarly would apply of course to any constraints around the
33:51
Speaker 3: Straits of Mica. So that's that piece. The third thing
33:55
Speaker 3: that I think is worth bearing in mind is that
33:59
Speaker 3: from a military point of view, interdictions or blockades and
34:04
Speaker 3: the Straits of Malacca is not as simple as people think.
34:08
Speaker 3: You know, so many people draw lines on maps and
34:11
Speaker 3: put dotted lines around the place and sort of suddenly
34:16
Speaker 3: materialize this sort of blockage. An effective blockade is obviously
34:23
Speaker 3: one that can be sustained either against challenges to it
34:27
Speaker 3: just simply by powering boats through and calling the bluff
34:32
Speaker 3: if you will, or and that this comes with it
34:37
Speaker 3: the possibilities of a counter threat, which is the ability
34:41
Speaker 3: to either cause some other kind of retaliatory pain, counter coersion,
34:48
Speaker 3: or in fact to respond in military terms itself, and
34:53
Speaker 3: on all of those fronts, China's capacity today compared to
34:58
Speaker 3: two thousand and three has actually rendered I think the
35:02
Speaker 3: so called Straits of Malacca dilemma as something of a
35:05
Speaker 3: bit of an anachronism. The capacity of the United States
35:09
Speaker 3: Navy to in a sense unilaterally close off those straits
35:15
Speaker 3: in the event that they may seek to, would be
35:18
Speaker 3: challenged in ways that I don't think the United States
35:22
Speaker 3: could easily withstand, and it would involve significant risks of
35:29
Speaker 3: direct escalation with China, which I would expect actually that
35:34
Speaker 3: the United States would prefer to not provoke, because neither
35:38
Speaker 3: country wants to necessarily activate what could be an escalation
35:45
Speaker 3: spiral towards a nuclear confrontation. So there are actually still
35:51
Speaker 3: significant limits around all of this stuff. So I think
35:56
Speaker 3: the excitement's probably a little bit misplaced. The last thing
35:59
Speaker 3: about this excitement that I think's worth bearing in mind
36:01
Speaker 3: is that it assumes that Indonesia rolled over, and I
36:05
Speaker 3: think that that is a misreading of Indonesia itself. Indonesia
36:11
Speaker 3: is the largest economy in Asian as you know, and
36:15
Speaker 3: on the same day that the Defense Minister was in
36:18
Speaker 3: the United States, meeting with the Secretary of War Pete Hexseth.
36:24
Speaker 3: The Indonesian president was in Moscow meeting with President Putin.
36:28
Speaker 3: So Indonesia was hedging quite obviously, but it's hedging in
36:34
Speaker 3: the context of a seventy year position of neutrality. So
36:42
Speaker 3: Indonesia has was one of the early It was a
36:45
Speaker 3: founding signatory to the vandal statements. It is an anchor
36:51
Speaker 3: nation within as Jan and neutrality has actually been pivotal
36:55
Speaker 3: to how these nation states have responded to the geopolitic
37:00
Speaker 3: pressures that have come and gone and impacted on the
37:03
Speaker 3: region from time to time. So I don't see that
37:08
Speaker 3: Indonesia will somehow make its shores available to support an
37:17
Speaker 3: American blockade effort, let alone make its waters available as well.
37:21
Speaker 3: And probably the last thing I should say is that
37:22
Speaker 3: the Chinese naval development capabilities, together with its missile capabilities
37:27
Speaker 3: and its ongoing enhancements in submarine identification and capabilities, I
37:33
Speaker 3: think radically transforms the material nature of what is at
37:38
Speaker 3: stake now. So again, you know, twenty odd years ago, well,
37:41
Speaker 3: going back to nineteen ninety six, the United States could
37:44
Speaker 3: take the take an aircraft carrier down through the straits
37:49
Speaker 3: of Taiwan with zero capacity for mainland China to respond.
37:55
Speaker 3: I don't think that that's the case anymore. And the
37:58
Speaker 3: last thing about all of this is, broadly speaking, American
38:02
Speaker 3: capacity in the region is underpinned historically by the fact
38:06
Speaker 3: that it has a lot of bases, so you know,
38:09
Speaker 3: naval things. Naval ships need to operate from somewhere because
38:14
Speaker 3: they need replenishment and supply chain support. And I think
38:18
Speaker 3: it is inconceivable that the United States has a capacity
38:23
Speaker 3: to defend its bass in the region. And I say
38:26
Speaker 3: that because the evidence of the destruction of American bases
38:31
Speaker 3: in the Middle East over the course of the last
38:33
Speaker 3: forty days tells us that it doesn't have the ability
38:37
Speaker 3: to defend its bass. So in terms of the war itself,
38:42
Speaker 3: what can we say, Carl. You know, there's a couple
38:46
Speaker 3: of ways of interpreting the event itself, And for those
38:51
Speaker 3: who follow this closely, a good way of thinking about
38:54
Speaker 3: this is an ongoing counterpositioning, if you will, of perspectives,
39:00
Speaker 3: one from Robert Pape. He's a professor at University of
39:06
Speaker 3: Chicago who describes this war as a classic example of
39:09
Speaker 3: his theory of the escalation trap theory. Basically, goes that
39:15
Speaker 3: every time one of the parties applies coercive pressure in
39:19
Speaker 3: the hopes of forcing the other side to give in,
39:22
Speaker 3: it leads to the other side to counter respond, leading
39:25
Speaker 3: to escalations and away you go. And the early phase
39:29
Speaker 3: of the war suggests that this was the case because
39:32
Speaker 3: as the Americans attacked Iran rapidly responded not only in kind,
39:38
Speaker 3: but also horizontally went into the attack the bases across
39:41
Speaker 3: the region, etc.
39:42
Speaker 2: Etc.
39:43
Speaker 3: And began escalation. That's one perspective. The other perspective really
39:47
Speaker 3: sees the ceasefire in armed bargaining terms, and it's a
39:53
Speaker 3: view that's been articulated by an analyst based in New
39:58
Speaker 3: York by the name of Anasa Faraki. I've spoken with
40:02
Speaker 3: Ansar on a couple of occasions, and he's known in
40:06
Speaker 3: social media terms by the handle policy Tensor.
40:10
Speaker 4: T n s R.
40:12
Speaker 3: And his argument is that, and in fact this is
40:18
Speaker 3: where it is of the same view broadly with papers,
40:21
Speaker 3: that the United States has actually lost this war strategically
40:25
Speaker 3: and instead of as a result of that being trapped
40:29
Speaker 3: in this escalation spiral because the United States is trying
40:33
Speaker 3: to in a sense, coerce its way out. Remember that
40:36
Speaker 3: idea of coersion to peace, right forcing peace, peace through strength,
40:40
Speaker 3: and all those sorts of ideas. The Anasa Fuki's argument
40:46
Speaker 3: is that the United States actually understands that its strategically
40:50
Speaker 3: lost this that the cost that it would have to
40:52
Speaker 3: incur in an attempt to arm wrestle the control over
40:56
Speaker 3: the strait offormers from Iran, which would of disarming of
41:01
Speaker 3: Iran is actually impossible, and that the costs are incredibly high,
41:05
Speaker 3: you know, ground troops, et cetera, et cetera, and costs
41:09
Speaker 3: of the global economy and the American economy would also
41:12
Speaker 3: be very high. So the United States was forced to
41:16
Speaker 3: the table. And what's happening at the moment is not
41:21
Speaker 3: a performance act to leading to escalation as paper would suggest,
41:27
Speaker 3: but is actually a case of armed bargaining where each
41:32
Speaker 3: side is now seeking to arm twist the other to
41:35
Speaker 3: get better terms. I think that there's a couple of
41:39
Speaker 3: other dynamics that overthrow onto these tubes sort of broad
41:42
Speaker 3: broad themes. One is that there is a longer term
41:47
Speaker 3: story here, and that is of course American and Israeli
41:51
Speaker 3: strategic ambitions, which is underpinned not only by politics and
41:58
Speaker 3: economics of oil, but also by a millenarian zelotry that
42:03
Speaker 3: comes with certain ideological and scriptural perspectives that drive attitudes
42:13
Speaker 3: and behaviors amongst some American political elite and Israeli political elite,
42:20
Speaker 3: and this zelotry in many ways overrides other considerations. The
42:29
Speaker 3: zelotry associated with Israel is of a very particular kind.
42:33
Speaker 3: But we often see this kind of zelotry amongst the
42:38
Speaker 3: American neo coms, who, no matter what the state of
42:42
Speaker 3: things are, take the view that they only look bad
42:46
Speaker 3: in the short term because America doesn't commit enough, which
42:51
Speaker 3: of course then leads to further escalations. So I think
42:54
Speaker 3: that there's a medium term backdrop here, if you will,
42:58
Speaker 3: of this kind of millenarian zelotry. And the last sort
43:03
Speaker 3: of dimension that I'd add to this is an issue
43:07
Speaker 3: that's described as at what I've described as the decent
43:13
Speaker 3: interval problem. Now, the decent interval problem was a problem
43:18
Speaker 3: that emerged into Vietnam War when those inside the Beltway,
43:23
Speaker 3: inside the Pentagon State Department, and others actually knew quite
43:27
Speaker 3: early on in the piece that the United States was
43:30
Speaker 3: not going to be able to prevail over the North Vietnamese.
43:34
Speaker 3: The problem was how to get out without looking like
43:38
Speaker 3: that they got defeated, and there needed to be a
43:42
Speaker 3: decent interval between the realization that they couldn't win and
43:47
Speaker 3: the exit. And that decent interval was a politically driven
43:52
Speaker 3: interval which was all about kicking the can of defeat
43:55
Speaker 3: down the road so that a future administration would have
43:59
Speaker 3: to deal with it. And what these dynamics when you
44:02
Speaker 3: throw them all into the mix, whether it's Papes escalation trap,
44:06
Speaker 3: whether it's Anasar's sense of strategic cohesive bargaining, mix it
44:12
Speaker 3: in with Zelotry and the politics of the decent interval problem.
44:19
Speaker 3: And the question now is whether or not Zelotry and
44:24
Speaker 3: the decent interval problem in a sense overrides the deep
44:31
Speaker 3: What I think in Washington is that there are sane
44:34
Speaker 3: people who realize that this is not winnable. Whether it
44:36
Speaker 3: can or not, whether it leads to America ultimately acceding
44:40
Speaker 3: to many Iranian terms, I guess we'll see. My own
44:43
Speaker 3: gut feeling is is that the Xelotry, the neocons, the millenarianism,
44:49
Speaker 3: the exceptionalism, the broader regional strategy concerning Greater Israel, the
44:54
Speaker 3: sort of obsessions around containing China, This fear of being
45:00
Speaker 3: seen to be a loser. Right, all of that is
45:04
Speaker 3: very powerful as a set of forces that you know,
45:09
Speaker 3: my own gut feeling is is that it will overrun
45:13
Speaker 3: any attempt to pull this, this military catastrophe to a
45:19
Speaker 3: to a close sooner rather than later. And so the
45:22
Speaker 3: United States is in some regards now trapped into a
45:27
Speaker 3: process by which it's going to have to commit more resources,
45:33
Speaker 3: and Iran quite clearly is determined to fight, which leads
45:38
Speaker 3: to a very dark economic prognosis for the next six
45:41
Speaker 3: to twelve months. How that we did today, You know,
45:52
Speaker 3: the first half of our chat was very yang and
45:57
Speaker 3: the second half was very in.
46:02
Speaker 2: Yes, we we always have to end uh a beat note,
46:08
Speaker 2: So let's keep going.
46:12
Speaker 1: So I just want to I just want I just
46:17
Speaker 1: want to add the I just want to add the
46:20
Speaker 1: part about the recent agreement between United States and Indonesia,
46:25
Speaker 1: because uh, you know, people are celebrating this as some
46:28
Speaker 1: sort of US UH got Indonesian to switch or to
46:33
Speaker 1: flip Indonesia. It's it's this is people who are quite
46:39
Speaker 1: ignorant of the Indonesian foreign policy as it's been practiced
46:46
Speaker 1: for the past few decades here in Southeast Asia. Indonesia, Malaysia,
46:51
Speaker 1: all these surrounding countries. The general policy is to be
46:56
Speaker 1: and to be enemy of non and to be friends
46:59
Speaker 1: to all look like they do not. Countries in Southeast
47:04
Speaker 1: Asia do not want to take a side, right, they
47:07
Speaker 1: want to just happily trade with everyone and and and
47:13
Speaker 1: what Indonesia is doing is always a balancing act because
47:16
Speaker 1: there's there's a United States always pressuring these countries to
47:20
Speaker 1: take a side.
47:21
Speaker 2: It's either it's either with US or against us.
47:25
Speaker 1: But at the same time, all these countries recognize their
47:28
Speaker 1: economic destiny lies with China, with a huge Chinese market
47:33
Speaker 1: next door. And they also needs a lot of capital
47:37
Speaker 1: goods which only come from China, a lot of investment
47:41
Speaker 1: that's only coming from China. So so this this again,
47:45
Speaker 1: this is just Indonesia doing its thing. It's it's a
47:49
Speaker 1: it's it's a balancing act. Just just because they're they
47:52
Speaker 1: sign this agreement, it does not mean any kind of
47:56
Speaker 1: new strategic alignment of the countries. This is what the
48:01
Speaker 1: countries in just reaching have been doing for the longest time.
48:05
Speaker 1: They don't want to choose a site. They just want
48:10
Speaker 1: to They just want to be left alone mostly and
48:13
Speaker 1: do development and they have to do occasionally throw some
48:17
Speaker 1: boons to the United States, you know, so it does
48:21
Speaker 1: not get too uh too crazy.
48:26
Speaker 3: That that's you know, people need to understand this right
48:31
Speaker 3: about Asian broadly speaking, and of course Indonesia home in
48:36
Speaker 3: some ways. And I don't mean this in a way
48:39
Speaker 3: that disparages the other members of at Yan, but you know,
48:42
Speaker 3: historically has been first amongst equals. It is the largest
48:47
Speaker 3: economy within the group, and of course has a significant
48:52
Speaker 3: amount of influence and and I think it takes that
48:56
Speaker 3: role actually very seriously. It understands that it is and
49:04
Speaker 3: has been historically a pillar of regional neutrality, and I
49:13
Speaker 3: see absolutely no reason to think that it is making
49:17
Speaker 3: any change to that approach at all. I think some
49:21
Speaker 3: of the consequences of the war in Iran and the
49:25
Speaker 3: war against Iran will eventually feed through into Asia because
49:31
Speaker 3: on the military dimension aspect, as I mentioned, it clearly
49:34
Speaker 3: shows that the United States actually doesn't have a capacity
49:38
Speaker 3: to defend itspaces, and because of that, it actually has
49:41
Speaker 3: lost any meaningful capacity to project deterrence in Asia. That's
49:47
Speaker 3: the big backdrop story. Excuse me. The second thing, though,
49:52
Speaker 3: is that Asian economies, to one extent or another have
49:58
Speaker 3: been exposed to hydrocarbon risks, and the response has clearly
50:06
Speaker 3: been to accelerate moves to mitigate those risks. Interestingly, some
50:12
Speaker 3: of that, particularly say Singapore in refineries, have been quietly
50:16
Speaker 3: bringing in Russian crewd Singapore is actually in a very
50:21
Speaker 3: very challenging position, even more so, I think than Indonesia.
50:25
Speaker 3: But the region at large is responding by looking to
50:35
Speaker 3: accelerate electrification and to put a very specific face to
50:42
Speaker 3: the capital goods you talk about. We're really talking about
50:47
Speaker 3: renewable energy, clean energy systems, micro grids, EV charging, electric tractors,
50:56
Speaker 3: electric motor scooters, electric bikes, solar power, you name it.
51:02
Speaker 3: More batteries. Did I say batteries, I should say batteries again,
51:05
Speaker 3: more storage, anything and everything that can as quickly as
51:10
Speaker 3: possible reduce the risks of the economy to future constraints
51:17
Speaker 3: in the supply of crude oil. And there is really
51:22
Speaker 3: only one player in town now. Of course, Vietnam has
51:28
Speaker 3: its own EV champion, which is great. Japan and Korea
51:35
Speaker 3: of course have some really leading technical capabilities in some areas.
51:40
Speaker 3: But broadly speaking, this process of electrification acceleration will only
51:49
Speaker 3: mean that the region becomes more integrated with China than less. Now,
51:55
Speaker 3: it will also creates a stresses card just very very quickly.
52:00
Speaker 3: You know, people will say getting the American bases and
52:05
Speaker 3: all those things out of the region is something that
52:10
Speaker 3: many would see as in a very positive light and
52:13
Speaker 3: for many good reasons. But we have a couple of
52:16
Speaker 3: other countervailing dimensions. Now, if the US retrenches in a
52:22
Speaker 3: formal sense a little bit too quickly, it will actually
52:26
Speaker 3: create a bigger window for the Japanese to step in.
52:29
Speaker 3: And NATO itself is looking to come into Asia via Japan.
52:36
Speaker 3: So there is a bit of a reorganization of some
52:38
Speaker 3: deck chairs, but ultimately in a way that would involve
52:44
Speaker 3: a remilitarized Japan. So the price it's paid for a
52:50
Speaker 3: reduction in American power projection in the region and a
52:56
Speaker 3: clear material reduction in its capacity to project the Terrance
53:01
Speaker 3: capability is a window of Japanese remilitarization which won't be
53:06
Speaker 3: well received.
53:06
Speaker 1: Right.
53:07
Speaker 3: So, you know, all of these dynamics have have rough
53:14
Speaker 3: edges as well.
53:17
Speaker 2: Well.
53:17
Speaker 1: Unfortunately, I think the remilitarization of Japan is kind of
53:23
Speaker 1: baking stone now because one United States itself actually has
53:29
Speaker 1: been actively pushing for it. They have been actively encourageding
53:33
Speaker 1: remlitarization of Japan because decision maker in Washington have now
53:37
Speaker 1: realized by itself, it's no longer able to contain China,
53:42
Speaker 1: so it needs to sign on.
53:46
Speaker 4: It.
53:46
Speaker 1: It's Asian quote unquote allies Japan Korea. They're trying to
53:51
Speaker 1: shift more responsibility to Japan, like how United States is
53:57
Speaker 1: trying to trying to shift the whole burden of Ukraine
54:02
Speaker 1: war on on U at this point. And UH, and
54:06
Speaker 1: and and and for Japanese part, the current Japanese Prime
54:09
Speaker 1: Minister Takaichi, which has sky high popularity, she has really
54:16
Speaker 1: been pushing uh, you know, for basically two, to make
54:21
Speaker 1: the Article nine of the Japan's Peace Constitution obsolete in
54:26
Speaker 1: you know, the article for people who don't know, the
54:28
Speaker 1: Article nine of Japan's Peace Constitution for bits Japan to
54:32
Speaker 1: deploy its military beyond its borders. And this is something
54:37
Speaker 1: this has always been seeing as a thorn by the
54:41
Speaker 1: right wing Japanese UH political factions because they saw this
54:46
Speaker 1: as a humiliation, an imposed condition on Japan. And they
54:51
Speaker 1: just want to return Japan quote unquote to a normal
54:54
Speaker 1: country status, by by which they mean to have a
54:59
Speaker 1: powerful military that they can deploy wherever they please. And
55:02
Speaker 1: this this is why recently Taka II just announced they're
55:07
Speaker 1: going to get rid of the ban export of heavy
55:10
Speaker 1: weaponry outside side of Japan. You know, they they understand
55:15
Speaker 1: to completely do away with Article nine of the Peace
55:20
Speaker 1: constitutions still remain unpopular. So what they do is they
55:25
Speaker 1: they find backdoor ways to you know, break the spirit
55:30
Speaker 1: of Article nine that to maybe to reinterpret it.
55:34
Speaker 4: Uh.
55:34
Speaker 1: You know, her predecessor Shinzo Abe already did that, to
55:38
Speaker 1: reinterpret the constitution to say, oh we we we we
55:42
Speaker 1: can deploy our military abroad in terms of emergencies that
55:47
Speaker 1: we have to support our ally like the United States.
55:50
Speaker 1: And then taka more recently said, you know, if something
55:53
Speaker 1: happened to Taiwan, that's an existential threat to Japan that
55:57
Speaker 1: will force Japan to deploy his MILI three. So I
56:01
Speaker 1: I think, yeah, Unfortunately, I don't. I don't think there's
56:07
Speaker 1: anything stopping to remilitarization of Japan at this point.
56:12
Speaker 3: No, not at the moment. And I think a way
56:15
Speaker 3: of understanding what's happened practically VISI VI the Constitution is
56:19
Speaker 3: that there's been a decade of salami slicing. So yeah,
56:24
Speaker 3: look the so and and in fact, the window for
56:29
Speaker 3: Japanese militarization will expand more as the United States takes
56:36
Speaker 3: a step back. The balancing act for the US is
56:40
Speaker 3: if the if Japan becomes too big for its boots,
56:43
Speaker 3: it starts to think of itself as a normal nation
56:46
Speaker 3: as opposed to being a foot soldier for the Americans,
56:48
Speaker 3: and that will create its own dilemmas for Washington as well,
56:53
Speaker 3: and of course for other countries within the region. So
56:57
Speaker 3: you know, many of these dynamics come with rough edges
57:01
Speaker 3: or double edged swords, and the mere fact that the
57:06
Speaker 3: United States is no longer capable of projecting the terrence
57:10
Speaker 3: in the region needs to be interpreted in I guess,
57:14
Speaker 3: multi dimensional ways, and there needs to always be sensibility
57:19
Speaker 3: to the fact that whilst you know, one thing happens
57:22
Speaker 3: that may contribute to a certain it may lead to
57:27
Speaker 3: the removal of a certain cause of instability within a region,
57:31
Speaker 3: does not necessarily mean that the region becomes stable. It
57:33
Speaker 3: might lead to new sources of instability emerging. The last
57:38
Speaker 3: thing that I've thought, I might just mention very quickly,
57:40
Speaker 3: and perhaps we can pick up on this over the
57:43
Speaker 3: next while is that as the United States experience these
57:46
Speaker 3: sorts of problems, my own sense is that it's likely
57:52
Speaker 3: to actually make more use of another one of its
57:57
Speaker 3: greatest assets, or two of its greatest assets, the informational space,
58:01
Speaker 3: of course, but it will be much more aligned with
58:06
Speaker 3: even more active mobilization of its network of agents and
58:13
Speaker 3: operatives right across the world. It's had seventy years to
58:17
Speaker 3: build up this incredible network, right, and many decades of
58:22
Speaker 3: practical experience in destabilizations, regime changes, sabotage, terror, and as
58:32
Speaker 3: its manufacturing system can't keep up with the depletion of
58:37
Speaker 3: weapons in Iran and other parts of the world, there's
58:40
Speaker 3: one thing that it does still have up at sleeve,
58:42
Speaker 3: and that is a vast network of state sanctioned terror
58:46
Speaker 3: operatives to call upon. And regions across the world I
58:50
Speaker 3: think need to be even more on watch for in
58:56
Speaker 3: America that goes rogue than they have ever been before.
59:00
Speaker 1: Well, I mean, that's essentially what you did in Hong
59:03
Speaker 1: Kong during the Hong Kong protests if they reactivated other
59:07
Speaker 1: code war assets.
59:09
Speaker 2: But but that that ended up.
59:11
Speaker 1: Being you know, most of that network has been uprooted
59:15
Speaker 1: from Hong Kong Guy exposed and uprooted, which, if you
59:21
Speaker 1: think about it, those those assets has been built up,
59:24
Speaker 1: took decades to build up throughout the Cold War, and
59:28
Speaker 1: now it was like it was thrown away in just
59:34
Speaker 1: one moment. You know what. It did cost a bit
59:38
Speaker 1: of a headache for for Beijing. But you know, now
59:43
Speaker 1: now now I think you know, there's there's I just
59:46
Speaker 1: don't see any possibility where they can seriously challenge the
59:52
Speaker 1: PRC authority in Hong Kong anymore.
59:55
Speaker 2: Yeah, I don't.
59:57
Speaker 3: Well, the lesson is is, of course all the other
1:00:00
Speaker 3: smaller countries. But you're that'd right. You know, there's a
1:00:02
Speaker 3: lot of lessons to be learned from Hong Kong for
1:00:05
Speaker 3: countries and even in other parts of the world. Right,
1:00:08
Speaker 3: you know, Georgia was a case last year. And this
1:00:14
Speaker 3: is where I think greater effort is going to be needed,
1:00:18
Speaker 3: because just because the conventional military is experiencing a certain
1:00:24
Speaker 3: kind of relative depletion doesn't mean that the United States
1:00:31
Speaker 3: and its current generation of political elites and the political
1:00:34
Speaker 3: culture that operates there will somehow sort of say, well, look,
1:00:38
Speaker 3: you know, I suppose you know that's how it is,
1:00:40
Speaker 3: and we're going to transform ourselves into a normal country
1:00:46
Speaker 3: as opposed to being a country that needs to be
1:00:50
Speaker 3: exceptional and entitled.
1:00:58
Speaker 2: Okay, well that's on that happy note.
1:01:05
Speaker 1: I guess we can wrap it up today, doctor Paul.
1:01:10
Speaker 1: If people want to follow your work, where would they go?
1:01:16
Speaker 3: I'll mention three things. I'm slowly getting better at this
1:01:19
Speaker 3: substack Worwick Pale dot substack dot com, my own little
1:01:24
Speaker 3: channel mainly academics talking about global self issues at Just
1:01:32
Speaker 3: look me up on YouTube and you'll probably find me,
1:01:34
Speaker 3: and I'll give a plug for a couple of books.
1:01:37
Speaker 3: So this is the main one, Economics in a Time
1:01:42
Speaker 3: of Monsters. It arrived while I was away, so I
1:01:45
Speaker 3: finally got to actually see it for the first time,
1:01:50
Speaker 3: and that's on Amazon. That's the heavier going one. But
1:01:54
Speaker 3: I also wrote a companion book, which is a little
1:01:56
Speaker 3: one called The Prominence Economy, which is a little thin
1:02:00
Speaker 3: handbook which is much more about how countries and readings
1:02:05
Speaker 3: and policymakers and enterprises and executives and others who are
1:02:09
Speaker 3: interested in the practical implementation issues they can also grab
1:02:15
Speaker 3: that little handbook in a sense, and that's probably more
1:02:19
Speaker 3: geared towards doers rather than talkers. And Thinkers, and both
1:02:24
Speaker 3: of those books are available on Amazon now.
1:02:28
Speaker 1: Lovely everyone, give doctor Warick power, follow check out his books,
1:02:34
Speaker 1: and thanks for listening. Until next time, Bye bye,