Latest / Sharp China Podcast / Sharp China: Wang Yi Visits South Korea; Remembering Zhu Rongji; US-China Ahead of Xi's Visit; How China Monitors Foreigners

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Sharp China: Wang Yi Visits South Korea; Remembering Zhu Rongji; US-China Ahead of Xi's Visit; How China Monitors Foreigners · Sharp China Podcast

• 0:04
  SPEAKER_00: Hello, and welcome back to another episode of Sharp China.
• 0:08
  SPEAKER_00: I'm Andrew Sharp, and on the other line, Bill Bishop.
• 0:12
  SPEAKER_00: Bill, it's great to
• 0:13
  SPEAKER_01: see you.
• 0:14
  SPEAKER_01: How you doing?
• 0:15
  SPEAKER_01: I'm doing well, Andrew.
• 0:16
  SPEAKER_01: It's good to see you.
• 0:17
  SPEAKER_01: It's good to be back.
• 0:17
  SPEAKER_01: It's been, what, three weeks, I think?
• 0:19
  SPEAKER_00: Three weeks.
• 0:20
  SPEAKER_00: The Bay Dai Hub break is over.
• 0:23
  SPEAKER_00: The party is back to work.
• 0:24
  SPEAKER_00: We're back to work.
• 0:26
  SPEAKER_00: It's great to be back on the podcast.
• 0:28
  SPEAKER_01: Yes, it is.
• 0:28
  SPEAKER_01: So, hi, everybody.
• 0:30
  SPEAKER_00: We have a lot to catch up on on this podcast,
• 0:33
  SPEAKER_00: including news that has been percolating all week long in Korea.
• 0:37
  SPEAKER_00: So that's where we're going to begin.
• 0:39
  SPEAKER_00: And I'll read from the Korea Herald.
• 0:41
  SPEAKER_00: The Korea Herald on Tuesday reported
• 0:43
  SPEAKER_00: the Chinese Foreign Minister Wang Yi We'll visit South Korea this week
• 0:47
  SPEAKER_00: for discussions centered on Seoul's renewed push for dialogue on
• 0:52
  SPEAKER_00: the Korean Peninsula and the broader direction of South Korea-China relations.
• 0:57
  SPEAKER_00: Wang will make a two-day visit beginning Wednesday at the invitation
• 1:01
  SPEAKER_00: of Foreign Minister Cho Hyun.
• 1:04
  SPEAKER_00: So, Bill, that meeting has now happened.
• 1:06
  SPEAKER_00: We have statements from the meeting.
• 1:09
  SPEAKER_00: Was this trip telegraphed in advance at all?
• 1:12
  SPEAKER_00: Because the timing is obviously notable in the shadow
• 1:16
  SPEAKER_00: of Trump's Sunday night reduction of joint military exercises between the US
• 1:22
  SPEAKER_00: and South Korea that were planned for this week.
• 1:24
  SPEAKER_00: So what do you think of the timing?
• 1:26
  SPEAKER_01: It certainly is coincidental,
• 1:28
  SPEAKER_01: and I think even if it is just a coincidence,
• 1:30
  SPEAKER_01: it's in some ways to Beijing's benefit.
• 1:33
  SPEAKER_01: I really don't know.
• 1:35
  SPEAKER_01: I think these kinds of trips,
• 1:36
  SPEAKER_01: it would be pretty shocking if the Chinese side and
• 1:39
  SPEAKER_01: the Korean side would put this together in basically 24 hours after a post
• 1:42
  SPEAKER_01: from President Trump.
• 1:45
  SPEAKER_01: But it is interesting, and we still don't really know.
• 1:48
  SPEAKER_01: I mean, President Trump also,
• 1:49
  SPEAKER_01: apparently,
• 1:50
  SPEAKER_01: I think the Wall Street Journal had a story that he really wants to have a meeting
• 1:53
  SPEAKER_01: with North Korea's Kim this fall.
• 1:55
  SPEAKER_01: He keeps trying to go back to what he was trying to do in the first term,
• 1:59
  SPEAKER_01: which was create some sort of breakthrough deal with North Korea.
• 2:03
  SPEAKER_01: So is something bigger going on in the background?
• 2:07
  SPEAKER_01: Very unclear what's going on right now.
• 2:09
  SPEAKER_01: I think the South Korean government is a bit more leaning towards China than
• 2:15
  SPEAKER_01: the predecessor,
• 2:15
  SPEAKER_01: the one who I think is now in jail for attempting a coup and attempting
• 2:18
  SPEAKER_01: to destroy democracy.
• 2:21
  SPEAKER_01: So I don't think it's not...
• 2:23
  SPEAKER_01: On the one hand,
• 2:24
  SPEAKER_01: South Korea doesn't want to be hung out to dry by the US,
• 2:27
  SPEAKER_01: but I don't think that's really what's going on.
• 2:28
  SPEAKER_01: On the other hand, I think in some ways that if...
• 2:32
  SPEAKER_01: There's more space for talks with North Korea.
• 2:34
  SPEAKER_01: That's something that the South Korean leadership probably welcomes.
• 2:37
  SPEAKER_01: That's certainly something that China welcomes.
• 2:39
  SPEAKER_01: China has had more diplomacy with North Korea this year.
• 2:43
  SPEAKER_01: Xi Jinping was in Pyongyang earlier.
• 2:46
  SPEAKER_01: Wall Hoon-in from the Standing Committee would then follow up and went in a subsequent visit.
• 2:52
  SPEAKER_01: The Chinese are, I think, they're trying to really re...
• 2:55
  SPEAKER_01: Yeah, we talked about that a month or
• 3:01
  SPEAKER_00: two back,
• 3:02
  SPEAKER_00: where they're not necessarily fighting the nuclear issue the way they had in
• 3:08
  SPEAKER_00: the past, and there's Increased trade with North Korea as well.
• 3:13
  SPEAKER_00: So that relationship, what I'm curious about is like the South Korea PRC relationship.
• 3:20
  SPEAKER_00: You mentioned that the South Korean government,
• 3:23
  SPEAKER_00: the sitting South Korean government is friendlier to Beijing
• 3:26
  SPEAKER_00: than past South Korean governments.
• 3:29
  SPEAKER_00: What does that relationship look like as a general matter?
• 3:32
  SPEAKER_00: Like how has that changed over the last year or two here?
• 3:36
  SPEAKER_01: I mean, it's, again, I think the changes are, you know, not, it's not like a sudden shift.
• 3:40
  SPEAKER_01: It's just more,
• 3:43
  SPEAKER_01: you know,
• 3:43
  SPEAKER_01: I think there's more of a desire for more talks with the North and trying to figure,
• 3:48
  SPEAKER_01: you know, that I think that the, you know, they're trying to renew dialogue.
• 3:55
  SPEAKER_01: The whole denuclearization of the Korean Peninsula issue is, North Korea is a nuclear power.
• 4:00
  SPEAKER_01: They're not going to give them up.
• 4:03
  SPEAKER_01: Anyone continuing to push for North Kim has to get rid of his nukes.
• 4:07
  SPEAKER_01: It's not going to happen.
• 4:09
  SPEAKER_01: He's got the lesson of Gaddafi in Libya.
• 4:10
  SPEAKER_01: He's got the lesson of Iran.
• 4:13
  SPEAKER_01: North Korea is a nuclear power.
• 4:14
  SPEAKER_00: And even China, they haven't explicitly accepted that.
• 4:17
  SPEAKER_00: But again, the rhetoric around the issue has quieted.
• 4:20
  SPEAKER_01: They now have pushed it to the hope at some point they can denuclearize.
• 4:24
  SPEAKER_01: Because one of their biggest concerns is that Does South Korea decide, well, we need nukes too?
• 4:30
  SPEAKER_01: And you're seeing that,
• 4:32
  SPEAKER_01: the talk in Japan,
• 4:33
  SPEAKER_01: the increasing talk in Japan
• 4:34
  SPEAKER_01: about getting nuclear weapons is driving Beijing absolutely insane.
• 4:39
  SPEAKER_01: And I think that from the perspective of South Korea,
• 4:43
  SPEAKER_01: the perspective of Japan,
• 4:44
  SPEAKER_01: especially if the US,
• 4:45
  SPEAKER_01: if the sense that the US alliances are,
• 4:47
  SPEAKER_01: US support is weakening,
• 4:50
  SPEAKER_01: then there will probably be more calls toward What would the concern be in
• 4:55
  SPEAKER_01: that respect?
• 5:17
  SPEAKER_01: I mean, you know,
• 5:17
  SPEAKER_01: North Korea has played a very good hand with Russia,
• 5:20
  SPEAKER_01: I think, which, again,
• 5:21
  SPEAKER_01: has gotten Beijing's attention and has forced,
• 5:23
  SPEAKER_01: I think, Beijing to accept some things they probably didn't want.
• 5:29
  SPEAKER_01: If North Korea were able to have a real relationship with the U.S.,
• 5:33
  SPEAKER_01: you know, North Korea has a border with China.
• 5:37
  SPEAKER_01: They want that border security.
• 5:38
  SPEAKER_01: They want to know what's happening.
• 5:39
  SPEAKER_01: They want to know there aren't going to be any risks or problems.
• 5:41
  SPEAKER_00: Right.
• 5:42
  SPEAKER_00: And they want North Korea to be dependent and not have leverage of its own in
• 5:47
  SPEAKER_00: that sort of bilateral relationship.
• 5:49
  SPEAKER_01: Right.
• 5:49
  SPEAKER_01: And Kim in North Korea has proven to be,
• 5:52
  SPEAKER_01: I think, quite genius at playing his hand, both playing off Russia.
• 5:56
  SPEAKER_01: No kidding.
• 5:58
  SPEAKER_00: He's pretty good.
• 5:59
  SPEAKER_01: Playing the U.S. And now, you know, we'll see how if he can play Trump.
• 6:02
  SPEAKER_00: Yeah.
• 6:02
  SPEAKER_00: Well, time will tell on that front.
• 6:05
  SPEAKER_00: You mentioned South Korea not necessarily feeling hung out to dry by the U.S.
• 6:09
  SPEAKER_00: in the midst of all this.
• 6:11
  SPEAKER_00: What do you mean by that?
• 6:12
  SPEAKER_01: I mean, it's unclear.
• 6:13
  SPEAKER_01: There's all these op-eds and people saying,
• 6:15
  SPEAKER_01: oh, my God, the U.S., you know, Trump's tweet is like, you know, a ban.
• 6:18
  SPEAKER_01: It's just I think we don't know what really what's going on yet.
• 6:20
  SPEAKER_01: I think you have to wait a little bit.
• 6:22
  SPEAKER_00: It's clear as mud trying to parse the various theories as
• 6:25
  SPEAKER_00: to what's actually motivating any of this.
• 6:28
  SPEAKER_01: I think especially with AI and just the velocity of hot takes and intensity
• 6:32
  SPEAKER_01: of hot takes is sort of out of control.
• 6:34
  SPEAKER_01: I'm more in the cold take mode.
• 6:37
  SPEAKER_01: So I just, again, I don't know.
• 6:38
  SPEAKER_01: We're all just speculating.
• 6:40
  SPEAKER_01: Things are shifting.
• 6:41
  SPEAKER_01: It'll be interesting to see where this all comes out.
• 6:43
  SPEAKER_01: But, you know, is this part of some grand strategy of the Trump administration?
• 6:48
  SPEAKER_01: No, because there is no grand strategy of the Trump administration.
• 6:51
  SPEAKER_00: I will say the most exhausting aspect of the truth social posts
• 6:56
  SPEAKER_00: from Trump are anytime that that happens,
• 7:00
  SPEAKER_00: there's a cascade of explainer posts on X that then break down how it's all
• 7:07
  SPEAKER_00: a five dimensional chess move.
• 7:09
  SPEAKER_00: And I fully agree or assume at least that there's more at play behind
• 7:15
  SPEAKER_00: the U.S.'s decision to downsize the exercises this week than what was Maybe the U.S.
• 7:23
  SPEAKER_01: just needs the troops and the munitions because they're all running out in
• 7:26
  SPEAKER_01: the Middle East.
• 7:26
  SPEAKER_00: Well, that could be part of it as well.
• 7:29
  SPEAKER_00: A little resource constrained right now, but it is just exhausting.
• 7:34
  SPEAKER_00: And as you say, not entirely clear right now.
• 7:37
  SPEAKER_00: So for now,
• 7:38
  SPEAKER_00: we do know that Wang Yi was in Seoul and he said this week,
• 7:43
  SPEAKER_00: We hope the two countries, Korea and North Korea, will graduate.
• 7:58
  SPEAKER_00: Yeah.
• 8:19
  SPEAKER_01: I don't think it's not something that's seriously under consideration in South Korea now.
• 8:24
  SPEAKER_01: I think the problem is if you end up in a situation
• 8:26
  SPEAKER_01: where North Korea keeps its nukes and the U.S.,
• 8:29
  SPEAKER_01: something happens where the U.S.-South Korea alliance really is weakened,
• 8:33
  SPEAKER_01: then I think there certainly are forces in Korean domestic politics who would push
• 8:39
  SPEAKER_01: for taking a more serious look.
• 8:43
  SPEAKER_00: I mean, there's been a lot of that conversation over the last several days.
• 8:46
  SPEAKER_00: Yeah.
• 8:46
  SPEAKER_01: Yeah.
• 8:46
  SPEAKER_01: So we're not I think that's not there yet, but there's lots of crosscurrents.
• 8:51
  SPEAKER_00: Well,
• 8:52
  SPEAKER_00: and to the extent that the symbolism of Trump's decision is a concerning signal
• 8:57
  SPEAKER_00: to South Koreans or other American partners in the region,
• 9:02
  SPEAKER_00: the PRC is happy to capitalize and look like the friendly and reasonable party in
• 9:06
  SPEAKER_00: the course of all this.
• 9:07
  SPEAKER_01: But, you know,
• 9:08
  SPEAKER_01: the thing is, is, again,
• 9:09
  SPEAKER_01: North Korea,
• 9:09
  SPEAKER_01: you know,
• 9:10
  SPEAKER_01: there's always been,
• 9:11
  SPEAKER_01: I think, this, this,
• 9:13
  SPEAKER_01: there's been sort of a facile view that,
• 9:14
  SPEAKER_01: you know,
• 9:15
  SPEAKER_01: you know,
• 9:15
  SPEAKER_01: for a long time,
• 9:16
  SPEAKER_01: people thought, well, North Korea just would do what China, you know, wanted, right?
• 9:19
  SPEAKER_00: They were seen as sort of a vassal state in the Axis.
• 9:23
  SPEAKER_01: There's a lot of dependence on China for certain things,
• 9:26
  SPEAKER_01: but North Korea has clearly driven Beijing nuts at times and has that capacity.
• 9:30
  SPEAKER_01: And I think with the improved ties with Russia and Putin,
• 9:35
  SPEAKER_01: specifically over the support that North Korea is giving to Russia for its war
• 9:40
  SPEAKER_01: in Ukraine,
• 9:41
  SPEAKER_01: especially now I think the reports are they're sending more troops
• 9:43
  SPEAKER_01: and more ballistic missiles to help Russia wage the largest land war in Europe
• 9:49
  SPEAKER_01: since World War II.
• 9:51
  SPEAKER_00: Right.
• 9:51
  SPEAKER_00: Russia is also buying a lot of ammunition from North Korea and helping them grow their economy.
• 9:56
  SPEAKER_01: I think it is a little problematic that the U.S.
• 9:59
  SPEAKER_01: president is like,
• 9:59
  SPEAKER_01: let's be friends,
• 10:00
  SPEAKER_01: you know, while North Korea is helping prosecute the war in Ukraine and Europe.
• 10:06
  SPEAKER_01: But, again,
• 10:07
  SPEAKER_01: China is,
• 10:09
  SPEAKER_01: you know,
• 10:09
  SPEAKER_01: there was a good article in Foreign Affairs,
• 10:12
  SPEAKER_01: this latest Foreign Affairs,
• 10:13
  SPEAKER_01: I think,
• 10:14
  SPEAKER_01: last week by a professor at,
• 10:17
  SPEAKER_01: the professor dean of the Institute of Regional Studies
• 10:20
  SPEAKER_01: at Tianjin Foreign Studies University named Zheng Jingyong about why China worries
• 10:25
  SPEAKER_01: about North Korea.
• 10:26
  SPEAKER_01: And it was a...
• 10:27
  SPEAKER_01: Just an interesting article.
• 10:28
  SPEAKER_01: We'll put it in the show notes about China's concerns about North Korea.
• 10:31
  SPEAKER_01: It is, you know,
• 10:32
  SPEAKER_01: it's obviously it's on the border and they want to make sure
• 10:34
  SPEAKER_01: that North Korea is stable.
• 10:36
  SPEAKER_01: You know,
• 10:36
  SPEAKER_01: it doesn't have a refugee problem,
• 10:38
  SPEAKER_01: doesn't have,
• 10:39
  SPEAKER_01: but it's also not proliferating,
• 10:40
  SPEAKER_01: you know,
• 10:41
  SPEAKER_01: causing more tensions in the Northeast Asia that lead to a bigger arms race or lead
• 10:46
  SPEAKER_01: to Japan and South Korea, say, wanting to get nuked.
• 10:48
  SPEAKER_01: So it's a very complicated issue.
• 10:51
  SPEAKER_01: And North Korea is a black box.
• 10:54
  SPEAKER_01: But I think the one thing I can say with any confidence is that the US policy
• 10:57
  SPEAKER_01: of North Korea has been a failure.
• 10:59
  SPEAKER_01: And at this point, the US needs a new approach.
• 11:01
  SPEAKER_00: Whether or not it's the approach Trump is taking,
• 11:04
  SPEAKER_01: I don't know.
• 11:05
  SPEAKER_01: But the idea that North Korea is going to denuclearize is fantasy at this point.
• 11:10
  SPEAKER_01: And if you are the North Koreans, why would you?
• 11:12
  SPEAKER_00: And part of what's disconcerting about the approach that Trump is taking and
• 11:17
  SPEAKER_00: the friendly tone that he adopts with Kim is to what end?
• 11:22
  SPEAKER_00: What is the goal and what credibility does he have after the failures of
• 11:26
  SPEAKER_00: the first administration?
• 11:29
  SPEAKER_00: I mean, it doesn't hurt to try as far as remaking some of that
• 11:32
  SPEAKER_00: and potentially getting some kind of agreement in place, but it is all...
• 11:36
  SPEAKER_00: Also, it looks fairly naive at this point.
• 11:39
  SPEAKER_00: So we'll see what materializes between the U.S. and North Korea.
• 11:44
  SPEAKER_00: On South Korea,
• 11:45
  SPEAKER_00: one question I had just reading about some of the warming relations over
• 11:50
  SPEAKER_00: the last year or two here with President Lee.
• 11:53
  SPEAKER_00: President Lee visited China, first president to visit China since 2019.
• 11:58
  SPEAKER_00: He said earlier this year that South Korea respects the one China principle.
• 12:04
  SPEAKER_00: So would they defend Taiwan?
• 12:06
  SPEAKER_01: Do we have any idea?
• 12:08
  SPEAKER_01: That's a great question.
• 12:09
  SPEAKER_01: We don't know.
• 12:09
  SPEAKER_01: I mean, the U.S. obviously has large troop presence, large basing in South Korea.
• 12:14
  SPEAKER_01: You know,
• 12:15
  SPEAKER_01: I don't think South Korea would want those to be used in the event of
• 12:17
  SPEAKER_01: a Taiwan contingency.
• 12:18
  SPEAKER_01: But I, you know.
• 12:22
  SPEAKER_00: Interesting.
• 12:23
  SPEAKER_00: Okay.
• 12:24
  SPEAKER_00: Well, final note here.
• 12:25
  SPEAKER_00: There's a theory that Trump's decision to downsize the joint exercises was actually
• 12:30
  SPEAKER_00: a concession to China ahead of Xi's visit.
• 12:33
  SPEAKER_00: That's one of several theories floating around.
• 12:36
  SPEAKER_00: Do you buy that at all?
• 12:38
  SPEAKER_01: I just don't know.
• 12:39
  SPEAKER_00: Fair enough.
• 12:41
  SPEAKER_00: I think that's the responsible answer in the course of all this.
• 12:45
  SPEAKER_00: Well, shifting gears, we can go back to the mainland now.
• 12:49
  SPEAKER_00: Former Premier Zhu Rongji died on August 11th at the age of 98.
• 12:55
  SPEAKER_00: That was one of the biggest stories of the break.
• 12:58
  SPEAKER_00: He was Chinese Premier from 1998 to 2003, which was obviously a pivotal period in PRC history.
• 13:07
  SPEAKER_00: Yeah.
• 13:18
  SPEAKER_00: There was talk at one point that he would be China's Gorbachev.
• 13:21
  SPEAKER_00: So what came to mind for you as he was being remembered this week?
• 13:27
  SPEAKER_01: According to People's Daily, he was 98.
• 13:29
  SPEAKER_01: Some Western media reports have him 97.
• 13:32
  SPEAKER_01: Anyway, he was old.
• 13:33
  SPEAKER_00: I noticed the discrepancy.
• 13:34
  SPEAKER_00: Is there any explanation for that discrepancy?
• 13:37
  SPEAKER_00: I think it's because
• 13:37
  SPEAKER_01: of the way the Chinese calculate the ages, but I'm not 100% sure.
• 13:42
  SPEAKER_01: I'm going with 98 because that's what the Chinese
• 13:44
  SPEAKER_00: media said.
• 13:45
  SPEAKER_00: Either way, a big, healthy number.
• 13:47
  SPEAKER_00: All of us should be so lucky.
• 13:49
  SPEAKER_01: There have been rumors of his health and his near death for several years.
• 13:52
  SPEAKER_01: And there were several rumors over the last few years that he'd already died.
• 13:55
  SPEAKER_01: And he is obviously old and infirm and was sick
• 13:59
  SPEAKER_01: and has not been politically relevant for a very, very long time.
• 14:03
  SPEAKER_01: But these kinds of deaths, he's the third premier to die in the last several years.
• 14:07
  SPEAKER_01: You had Li Peng dying.
• 14:09
  SPEAKER_01: He was the premier...
• 14:10
  SPEAKER_01: And he was, I think, also in his 90s.
• 14:11
  SPEAKER_01: Then you had Li Keqiang, who was the premier for the 10 years under Hu Jintao, who died
• 14:25
  SPEAKER_01: You know, 68 and lots of people, lots of conspiracy theories about how he really died.
• 14:29
  SPEAKER_01: He died at a swimming pool.
• 14:31
  SPEAKER_01: Right.
• 14:32
  SPEAKER_01: And then, you know, and they have great medical care and not a lot of stress in retirement.
• 14:36
  SPEAKER_01: So usually they live quite long.
• 14:38
  SPEAKER_01: And then the last of the last surviving retired premieres,
• 14:41
  SPEAKER_01: Wen Jiabao,
• 14:42
  SPEAKER_01: who showed up at the who was shown at the we can talk about a minute,
• 14:46
  SPEAKER_01: the 100th anniversary commemoration,
• 14:48
  SPEAKER_01: a birthday commemoration for Jiang Zemin on Monday.
• 14:50
  SPEAKER_01: And I think one is 83.
• 14:51
  SPEAKER_01: He looked pretty good.
• 14:54
  SPEAKER_01: But so Zhu Rongji, I mean, he was premier for five years.
• 14:56
  SPEAKER_01: He was known as a no BS guy, get stuff done.
• 15:00
  SPEAKER_01: He pushed through some very,
• 15:01
  SPEAKER_01: very difficult reforms,
• 15:02
  SPEAKER_01: specifically around state-owned enterprises and around the accession into the WTO.
• 15:08
  SPEAKER_01: On the one hand,
• 15:09
  SPEAKER_01: those reforms were needed in terms of really sort of breaking the iron rice ball
• 15:14
  SPEAKER_01: and helping improve the economy and the move towards a shift towards
• 15:18
  SPEAKER_01: a socialist market economy.
• 15:20
  SPEAKER_01: And certainly for WTO, it was using the...
• 15:23
  SPEAKER_01: Requirements of accession to the WTO to force the reforms inside China that made
• 15:27
  SPEAKER_01: the improved efficiency and made the economy better.
• 15:31
  SPEAKER_01: Those reforms led to a lot of layoffs,
• 15:33
  SPEAKER_01: a lot of displacement, a lot of people's livelihoods were gone.
• 15:39
  SPEAKER_01: You never recover.
• 15:41
  SPEAKER_01: Had policies that have a pretty negatively impacted some rural residents.
• 15:46
  SPEAKER_01: Had policies that reshaped the balance of that sort of fiscal local budgeting,
• 15:50
  SPEAKER_01: that central local budgeting that brought a lot of the money back to the center,
• 15:54
  SPEAKER_01: which made sense at the time,
• 15:56
  SPEAKER_01: but really did sow the seeds for the The reliance on land finance and selling land
• 16:01
  SPEAKER_01: by local governments,
• 16:02
  SPEAKER_01: which then sort of led to a lot of the issues and also
• 16:04
  SPEAKER_01: the local government debt financing problem.
• 16:06
  SPEAKER_01: So it's a mixed legacy.
• 16:09
  SPEAKER_01: You know,
• 16:09
  SPEAKER_01: one of the things you see, I mean, is,
• 16:11
  SPEAKER_01: you know,
• 16:11
  SPEAKER_01: every time a senior, a retired senior leader dies, there's nostalgia, right?
• 16:15
  SPEAKER_01: There's, I mean,
• 16:16
  SPEAKER_01: you're just going to feel that people,
• 16:17
  SPEAKER_01: you know,
• 16:17
  SPEAKER_01: some people had positive memories of the Jiang,
• 16:21
  SPEAKER_01: Zhu era and There certainly seemed like for certain classes and certain people,
• 16:26
  SPEAKER_01: and especially in certain urban areas, there was a lot more economic opportunity.
• 16:30
  SPEAKER_01: There was a lot more possibility in that era in terms of what you could do
• 16:34
  SPEAKER_01: and how your lives would improve.
• 16:38
  SPEAKER_01: I think there's always going to be nostalgia for that.
• 16:40
  SPEAKER_01: There were a lot of people who were angry about what happened, right?
• 16:43
  SPEAKER_01: And so it's a bit of a mixed bag.
• 16:45
  SPEAKER_01: A lot of the foreign media coverage was sort of all about the nostalgia
• 16:48
  SPEAKER_01: and You know,
• 16:50
  SPEAKER_01: there was concerns about,
• 16:51
  SPEAKER_01: you know,
• 16:52
  SPEAKER_01: will there people be,
• 16:53
  SPEAKER_01: you know,
• 16:53
  SPEAKER_01: any protests,
• 16:54
  SPEAKER_01: you know,
• 16:54
  SPEAKER_01: and China has a history of dead,
• 16:56
  SPEAKER_01: you know, dying, you know, protests for dead, dead premiers, dead leaders.
• 16:59
  SPEAKER_01: You had the big protests in 1976 when Zhou Enlai died that were,
• 17:05
  SPEAKER_01: you know,
• 17:05
  SPEAKER_01: really an outpouring of,
• 17:07
  SPEAKER_01: you know,
• 17:07
  SPEAKER_01: anger about the end,
• 17:08
  SPEAKER_01: the Cultural Revolution and just sort of the mess that China was in.
• 17:11
  SPEAKER_01: You had the protests that erupted after the death of Hu Yabang,
• 17:15
  SPEAKER_01: the former General Secretary in 1989.
• 17:17
  SPEAKER_01: There's a playbook now.
• 17:34
  SPEAKER_01: So, you know, you got people got to write these stories.
• 17:37
  SPEAKER_01: But at the end of the day, it's like, OK, it's going to happen.
• 17:39
  SPEAKER_01: I think they knew it was going to happen.
• 17:41
  SPEAKER_01: He was 97, 98 and clearly in bad health.
• 17:43
  SPEAKER_01: Not a surprise.
• 17:45
  SPEAKER_00: Now they've moved on.
• 17:46
  SPEAKER_00: So the nostalgia is taking root more so in Western media circles.
• 17:52
  SPEAKER_01: I think there is.
• 17:53
  SPEAKER_01: I think there is.
• 17:53
  SPEAKER_01: There is definitely some nostalgia in some quarters, but it doesn't.
• 17:57
  SPEAKER_00: It's like it's important within China is my assumption.
• 18:00
  SPEAKER_01: It's not going to mean anything.
• 18:02
  SPEAKER_01: In a sense, it's not going to mean anything in terms of causing any sort of changes.
• 18:06
  SPEAKER_01: And it is interesting that his death came just days before the,
• 18:10
  SPEAKER_01: again, scheduled because it was the 100th anniversary of Jiang Zemin's birth.
• 18:14
  SPEAKER_01: But Monday was this big commemoration event, which they have.
• 18:19
  SPEAKER_01: There's a whole protocol for senior leaders,
• 18:22
  SPEAKER_01: what you do on the 100th anniversary of their birth.
• 18:25
  SPEAKER_01: And Jiang Zemin,
• 18:26
  SPEAKER_01: having been the core of his generation of leadership and general secretary,
• 18:30
  SPEAKER_01: You know, he's at the highest level, right?
• 18:32
  SPEAKER_01: Like Hu Jintao will be when he hits 100 or when Hu Jintao dies, right?
• 18:35
  SPEAKER_01: And so it was just an interesting bookend to that era that sort of the Jiang,
• 18:41
  SPEAKER_00: Zhu era just happened in these few days.
• 18:43
  SPEAKER_00: Lots of remembrances of I mean,
• 18:46
  SPEAKER_01: that era, the era has long been over.
• 18:48
  SPEAKER_01: Right.
• 18:48
  SPEAKER_01: And, you know, by and she's being made very clear that era has long been over.
• 18:52
  SPEAKER_01: So there's a bit of nostalgia.
• 18:53
  SPEAKER_01: But again, it's not anything that this is all part of how the party processes these events.
• 18:59
  SPEAKER_01: And so it was just for me, it was, you know, it's it's just not that big a deal.
• 19:04
  SPEAKER_00: And when we say that era has long been over,
• 19:07
  SPEAKER_00: we look at that era as being defined by openness to markets in relative terms,
• 19:14
  SPEAKER_00: at least,
• 19:15
  SPEAKER_00: and more freedom and more optimism than China had seen in the past,
• 19:20
  SPEAKER_00: all of which has been sort of rolled back under Xi as more and more power.
• 19:24
  SPEAKER_00: Yeah, I think that's definitely part of it.
• 19:27
  SPEAKER_00: We're not there anymore.
• 19:28
  SPEAKER_01: But also,
• 19:29
  SPEAKER_01: you know,
• 19:29
  SPEAKER_01: when Jiang Zemin became Joe Secretary, when,
• 19:31
  SPEAKER_01: you know,
• 19:31
  SPEAKER_01: and then,
• 19:32
  SPEAKER_01: you know,
• 19:33
  SPEAKER_01: Zhu was his premier for his last five years,
• 19:37
  SPEAKER_01: China was still really poor, relatively.
• 19:40
  SPEAKER_01: And so there was just massive growth everywhere.
• 19:42
  SPEAKER_01: There was massive opportunity everywhere.
• 19:44
  SPEAKER_01: There was all sorts of low-hanging fruit.
• 19:47
  SPEAKER_01: And so it was just easier to believe,
• 19:49
  SPEAKER_01: you know, every day was going to get better for most people.
• 19:51
  SPEAKER_00: Because it was.
• 19:52
  SPEAKER_00: Well, and it is pretty incredible looking back.
• 19:55
  SPEAKER_00: Like Deng Xiaoping once said, the current leadership do not know economics.
• 20:00
  SPEAKER_00: Zhu Rongji is the only one who understands economics.
• 20:04
  SPEAKER_00: Maybe that's giving Zhu too much credit, but just reading a Yeah.
• 20:07
  SPEAKER_00: Yeah.
• 20:08
  SPEAKER_00: Yeah.
• 20:28
  SPEAKER_01: He was labeled a rightist in the 50s.
• 20:30
  SPEAKER_01: He was kicked out of the party.
• 20:31
  SPEAKER_01: He had a really hard time for a long time.
• 20:32
  SPEAKER_01: He was rehabilitated.
• 20:37
  SPEAKER_01: He's an amazing historical figure.
• 20:39
  SPEAKER_01: I think one of the things you see is some of the whole China's Gorbachev.
• 20:44
  SPEAKER_01: He hated being called that because he knew...
• 20:47
  SPEAKER_01: One, he really wasn't about political reforms.
• 20:49
  SPEAKER_01: He was about economic reforms.
• 20:50
  SPEAKER_01: Two, it was a toxic thing to be.
• 20:52
  SPEAKER_00: Not a helpful brand within the party system, sure.
• 20:54
  SPEAKER_01: There was also part of the nostalgia should be sort of the Western
• 20:58
  SPEAKER_01: and especially like some of the Wall Street folks.
• 21:01
  SPEAKER_01: You know, who sort of interacted with him and saw him as, oh my God, he talks like we do.
• 21:07
  SPEAKER_01: He's a reformer.
• 21:08
  SPEAKER_01: You know, this is the whole, like, they're not really communists.
• 21:11
  SPEAKER_01: They're all capitalists.
• 21:12
  SPEAKER_01: But, you know, this was part of the complete misreading of how that system works.
• 21:18
  SPEAKER_00: Yeah.
• 21:18
  SPEAKER_00: Yeah.
• 21:19
  SPEAKER_01: Yeah.
• 21:19
  SPEAKER_01: The party and how the party works.
• 21:21
  SPEAKER_00: Well, and you highlighted this post from Victor Xi, which I thought was poignant.
• 21:25
  SPEAKER_00: And he says,
• 21:26
  SPEAKER_00: many of us remember Zhu Rongji's time as premier fondly,
• 21:29
  SPEAKER_00: not because he was a genuine reformer,
• 21:32
  SPEAKER_00: but because he was eager to communicate with the outside world.
• 21:36
  SPEAKER_00: And to the extent he could,
• 21:37
  SPEAKER_00: shared with foreign leaders and thinkers his worries and hopes for China.
• 21:42
  SPEAKER_00: Such candor made it possible for the world to imagine genuine partnership with China
• 21:47
  SPEAKER_00: and even with its leaders.
• 21:49
  SPEAKER_00: So it was really a fantasy of the West that he helped fuel in terms of
• 21:55
  SPEAKER_00: the possibilities with China.
• 21:57
  SPEAKER_00: But even that would be an improvement over the relationships that we see today around the world.
• 22:04
  SPEAKER_01: No, I mean,
• 22:04
  SPEAKER_01: certainly in terms of the transparency and the way he interacted
• 22:08
  SPEAKER_01: with foreign executives, foreign leaders, again, it's a different era.
• 22:13
  SPEAKER_01: More constructive.
• 22:14
  SPEAKER_01: But like I said, I mean, again, we've been long been in the new era under Xi, right?
• 22:18
  SPEAKER_01: And if you look at the way the party slices it out,
• 22:21
  SPEAKER_01: it's basically you got the Mao era,
• 22:23
  SPEAKER_01: and then you have the Deng and the other guy's era,
• 22:25
  SPEAKER_01: the Deng and then really Jiang and Hu, and then you got the Xi era, the new era.
• 22:33
  SPEAKER_01: And so this is a, you know, Hu Jintao is still around.
• 22:37
  SPEAKER_01: Hu Jintao is, you know, he's been sick for a long time.
• 22:40
  SPEAKER_01: He did not make an appearance at the commemoration event on Monday for Jiang Zemin.
• 22:44
  SPEAKER_01: And he did send a wreath and it was reported on CCTV today.
• 22:50
  SPEAKER_01: He went to the funeral for Zhurongji on Tuesday, or the memorial at Baobashan Cemetery.
• 22:57
  SPEAKER_01: So he's still around.
• 22:58
  SPEAKER_01: But when he goes, that will really be kind of the end of the era.
• 23:03
  SPEAKER_01: And then it'll just be one job I was left.
• 23:05
  SPEAKER_01: It's the one from that era who really had real influence.
• 23:09
  SPEAKER_00: Well, reading all the nostalgia,
• 23:10
  SPEAKER_00: the other thing that this reminded me of was the Financial Times story that ran over
• 23:15
  SPEAKER_00: the break on the Linden Center, which you shared and I read last week.
• 23:21
  SPEAKER_00: And it was pretty poignant that the Linden Center being A hotel that was sort of
• 23:26
  SPEAKER_00: a cultural exchange center run by Americans.
• 23:30
  SPEAKER_01: It was accommodated with several, I think, hotels and it was a real exchange center.
• 23:35
  SPEAKER_01: Like our kids up until pandemic,
• 23:37
  SPEAKER_01: Sidwell Friends had a program where you could go for a semester and spend a semester
• 23:42
  SPEAKER_00: at the Linden Center.
• 23:43
  SPEAKER_01: And stay there.
• 23:44
  SPEAKER_01: Studying Chinese, studying Chinese, learning local crafts.
• 23:48
  SPEAKER_01: Multiple senior U.S. officials' kids went there.
• 23:51
  SPEAKER_01: One year,
• 23:51
  SPEAKER_01: I think one of the National Security Advisors' kids was there while he was
• 23:54
  SPEAKER_01: the National Security Advisor.
• 23:55
  SPEAKER_01: And so the director of the program said, yeah, the security is really good.
• 23:59
  SPEAKER_01: We had no problems.
• 24:01
  SPEAKER_01: That's fantastic.
• 24:02
  SPEAKER_01: Did you ever visit?
• 24:03
  SPEAKER_01: Have you ever seen it?
• 24:04
  SPEAKER_01: No, I was actually going to in 2015,
• 24:08
  SPEAKER_01: and then I got really bad food poisoning as far as I was going to leave,
• 24:10
  SPEAKER_01: and so I had to cancel.
• 24:11
  SPEAKER_01: Oh, boy.
• 24:11
  SPEAKER_01: Because I was going to go down and meet the head of the Chinese program who had
• 24:15
  SPEAKER_01: a group of high school students there.
• 24:17
  SPEAKER_01: And then originally, at least one of our kids was planning to go their junior year.
• 24:23
  SPEAKER_01: In high school, and then COVID hit.
• 24:25
  SPEAKER_01: And so they couldn't make it.
• 24:28
  SPEAKER_01: But so the story, it's a great story.
• 24:30
  SPEAKER_01: The guy's been in China.
• 24:32
  SPEAKER_01: Brian Linden's been in China's wife.
• 24:33
  SPEAKER_01: They've been in China for a long time.
• 24:35
  SPEAKER_01: They've done a lot for sort of cultural exchanges, people-to-people exchanges.
• 24:40
  SPEAKER_01: They did a lot for this exchange.
• 24:43
  SPEAKER_01: This little town was kind of not on the map and they got a great deal
• 24:47
  SPEAKER_01: to restore these properties.
• 24:50
  SPEAKER_01: The local government clearly needed money,
• 24:52
  SPEAKER_01: decided this was a good target, renegotiated the long-term contract they had.
• 24:56
  SPEAKER_01: And when the local government says we're going to renegotiate,
• 25:00
  SPEAKER_00: Not much negotiation.
• 25:01
  SPEAKER_00: You don't have
• 25:02
  SPEAKER_01: any recourse.
• 25:03
  SPEAKER_01: And I think it's gotten to the point where- It's just not tenable.
• 25:07
  SPEAKER_01: Yeah.
• 25:08
  SPEAKER_01: I heard from somebody who has some knowledge what's going on is it's not necessarily over yet.
• 25:15
  SPEAKER_01: There is still potentially a sliver of hope that maybe things can be reworked so
• 25:21
  SPEAKER_01: that it's workable, which I hope is the case.
• 25:23
  SPEAKER_01: I'm frankly surprised that Beijing, the
• 25:28
  SPEAKER_01: One would think.
• 25:29
  SPEAKER_01: That thought occurred to me throughout the piece, yeah.
• 25:49
  SPEAKER_01: Relations, people to people exchanges, cultural exchanges.
• 25:52
  SPEAKER_01: This is the absolute poster child.
• 25:53
  SPEAKER_01: It's a very positive program.
• 25:56
  SPEAKER_01: It's exactly what China would want.
• 25:58
  SPEAKER_01: It should be exactly what Beijing wants.
• 26:02
  SPEAKER_01: And so it would be quite sad if this were to really...
• 26:06
  SPEAKER_00: And it did make me sad.
• 26:07
  SPEAKER_00: Reading about it made me sad.
• 26:09
  SPEAKER_00: It's just sort of a wistful reflection on a version of U.S.-China relations
• 26:14
  SPEAKER_00: and possibilities that seems to be dying here.
• 26:17
  SPEAKER_01: And, you know, he was,
• 26:18
  SPEAKER_01: in the interview with the FT,
• 26:19
  SPEAKER_01: he was pretty guarded about how we talked about it,
• 26:22
  SPEAKER_01: but there clearly came through some frustrations with the changing views
• 26:25
  SPEAKER_01: of foreigners.
• 26:27
  SPEAKER_01: I think, though,
• 26:27
  SPEAKER_01: they have Chinese national leadership who can run the center if he and his wife have
• 26:32
  SPEAKER_01: to leave, but then it's not necessarily going to be the same thing.
• 26:35
  SPEAKER_00: Yeah, I wouldn't expect so.
• 26:37
  SPEAKER_00: Well, we can link it in the show notes because, again,
• 26:39
  SPEAKER_00: it was probably my favorite piece of China writing that I read over the break.
• 26:44
  SPEAKER_00: Worth checking out for anybody who's curious.
• 26:47
  SPEAKER_00: For now, we can move to the state of U.S.-China relations that does exist today.
• 26:52
  SPEAKER_00: Xi is visiting about a month from now.
• 26:57
  SPEAKER_00: What are you hearing and what are you watching as we wait for Xi's visit to Washington, D.C.?
• 27:02
  SPEAKER_01: We haven't been invited to any of the events yet.
• 27:05
  SPEAKER_01: I'm kind of surprised.
• 27:05
  SPEAKER_00: That's what we're watching and waiting for.
• 27:09
  SPEAKER_01: Um, so, uh, I guess it was, maybe it was Monday.
• 27:11
  SPEAKER_01: Politico had a story that she was,
• 27:13
  SPEAKER_01: was gonna skip the UN General Assembly,
• 27:17
  SPEAKER_01: uh, and only come to DC for, um, like less than two days.
• 27:22
  SPEAKER_01: And so, uh,
• 27:24
  SPEAKER_01: one is my understanding is they was never actually planning to speak at
• 27:29
  SPEAKER_01: the UN General Assembly.
• 27:30
  SPEAKER_01: That's not what she does.
• 27:31
  SPEAKER_01: She hasn't done it.
• 27:31
  SPEAKER_01: I think in a decade or so, it's usually Lee Chang if anyone comes.
• 27:35
  SPEAKER_01: And so, So that there had been speculation,
• 27:37
  SPEAKER_01: well, maybe he'd prepare the trip because he's going to be in the U.S.
• 27:40
  SPEAKER_01: It's a long way from Beijing.
• 27:43
  SPEAKER_01: What my understanding is, well, actually, this is really seen as reciprocal.
• 27:46
  SPEAKER_01: Trump was in Beijing for less than 48 hours, so he's going to be here for 36 hours plus.
• 27:50
  SPEAKER_01: Okay.
• 27:51
  SPEAKER_01: You know, quick in and out.
• 27:52
  SPEAKER_01: Will he stop in other places?
• 27:54
  SPEAKER_01: I mean, it'd be kind of funny if he then goes from here to go hang out in Ottawa
• 27:57
  SPEAKER_01: with his new friend, Carney, would be quite something.
• 28:01
  SPEAKER_00: Wouldn't make sense that he would stop And she does not travel outside
• 28:09
  SPEAKER_00: of China hardly at all these days.
• 28:10
  SPEAKER_00: Not much this year.
• 28:11
  SPEAKER_01: He did go to Pyongyang, but Pyongyang's a bit closer.
• 28:13
  SPEAKER_00: Yeah, that's true.
• 28:16
  SPEAKER_01: We'll see.
• 28:17
  SPEAKER_01: I mean, again, there's lots of tensions.
• 28:20
  SPEAKER_01: And since our last podcast,
• 28:21
  SPEAKER_01: there have been multiple actions around SEC bans on certain Chinese technology,
• 28:27
  SPEAKER_01: PRC responses,
• 28:30
  SPEAKER_01: lots of tit for tat sort of chipping away at whatever understanding there was
• 28:35
  SPEAKER_01: between the two sides.
• 28:36
  SPEAKER_01: The U.S. is still very unhappy with
• 28:38
  SPEAKER_00: Oh, yeah.
• 28:39
  SPEAKER_00: We have some U.S. items to hit here.
• 28:41
  SPEAKER_01: Rare Earth shipments.
• 28:43
  SPEAKER_01: But there still are new indications that the trip is in jeopardy at this point.
• 28:49
  SPEAKER_01: But we should remember, right, that, you know, President Trump did delay his trip.
• 28:54
  SPEAKER_01: There was really going to be in March.
• 28:55
  SPEAKER_01: And the reason was the Iran war.
• 28:58
  SPEAKER_01: You know, it's certainly possible in the spirit of reciprocity that...
• 29:02
  SPEAKER_01: She could do the same thing.
• 29:04
  SPEAKER_01: Fair enough.
• 29:04
  SPEAKER_01: He will be coming off of the fifth plenum, right?
• 29:08
  SPEAKER_01: Okay.
• 29:08
  SPEAKER_01: Which will be,
• 29:10
  SPEAKER_01: they have not given a specific date other than in October,
• 29:14
  SPEAKER_01: but will probably be somewhere in the late teens, early 20s of October.
• 29:20
  SPEAKER_01: Okay.
• 29:21
  SPEAKER_01: Would be my guess.
• 29:21
  SPEAKER_00: So not coming off the fifth plenum, but getting ready for the fifth plenum.
• 29:25
  SPEAKER_01: No, no, no, no.
• 29:26
  SPEAKER_01: Because he's coming, I think, on the, so right, he would be, I'm sorry, you're right.
• 29:30
  SPEAKER_01: This would be a few weeks before.
• 29:32
  SPEAKER_00: Yeah.
• 29:33
  SPEAKER_01: So if you were to delay it,
• 29:35
  SPEAKER_01: and again,
• 29:35
  SPEAKER_01: this is all speculation,
• 29:36
  SPEAKER_01: there's no indication to delay it,
• 29:37
  SPEAKER_01: it would then probably really have to be well into November.
• 29:40
  SPEAKER_01: That's
• 29:40
  SPEAKER_01: what I was trying to point.
• 29:41
  SPEAKER_01: Fair enough.
• 29:42
  SPEAKER_01: Okay.
• 29:43
  SPEAKER_00: Well, and I was amused by a note you had over the weekend.
• 29:48
  SPEAKER_00: The standard story before any Trump-China meeting is
• 29:52
  SPEAKER_00: the Chinese side Is concerned by the utter lack of preparation among
• 29:58
  SPEAKER_00: the American side and the lack of organization for what will actually be discussed
• 30:03
  SPEAKER_00: if she does come to D.C. in September.
• 30:06
  SPEAKER_01: Yeah, I mean,
• 30:06
  SPEAKER_01: people who've worked on these things for the US government that I've talked to,
• 30:10
  SPEAKER_01: I mean,
• 30:10
  SPEAKER_01: they're all just I mean, it is it is worse now under Trump, but this is not again.
• 30:15
  SPEAKER_01: The Chinese at this point, you know, they're just going to have to deal with it.
• 30:18
  SPEAKER_01: It is what it is.
• 30:19
  SPEAKER_01: It is what it is.
• 30:20
  SPEAKER_00: And it's just so funny because it's so anathema to the way
• 30:23
  SPEAKER_00: the PRC conducts its business and the way the party wants to handle any of this.
• 30:28
  SPEAKER_01: I highly doubt that the Chinese will agree to an open press spray in the Oval Office
• 30:33
  SPEAKER_01: with Xi Jinping sitting there while Trump's at the other side at his desk.
• 30:36
  SPEAKER_01: Just hanging out, holding court, his preferred method.
• 30:39
  SPEAKER_01: Yeah.
• 30:40
  SPEAKER_01: I mean, I think that might be the thing they're most worried about.
• 30:43
  SPEAKER_01: Yeah.
• 30:44
  SPEAKER_00: That is what he does with every other foreign leader.
• 30:47
  SPEAKER_00: But I doubt she will agree to that.
• 30:50
  SPEAKER_01: No.
• 30:50
  SPEAKER_01: And so it's obviously important.
• 30:54
  SPEAKER_01: It'll be very important when this meeting happens.
• 30:57
  SPEAKER_01: But at the same time, there will be a level...
• 31:01
  SPEAKER_01: If you can sort of remain detached,
• 31:03
  SPEAKER_01: a level of entertainment about how the Chinese side has to just deal with
• 31:07
  SPEAKER_01: the absolute chaos of the Trump administration.
• 31:12
  SPEAKER_00: Indeed, a fun subplot for all of us to track in the weeks.
• 31:17
  SPEAKER_00: You mentioned some of the potential points of friction between both sides as
• 31:23
  SPEAKER_00: that meeting looms.
• 31:24
  SPEAKER_00: Reuters last week had a story.
• 31:27
  SPEAKER_00: The US is preparing to tell dozens of countries they must pick sides in
• 31:31
  SPEAKER_00: the artificial intelligence race with China,
• 31:34
  SPEAKER_00: warning they will be excluded from a US-led AI coalition if they also sign up
• 31:40
  SPEAKER_00: for Beijing's competing framework.
• 31:42
  SPEAKER_00: According to a US official and an internal draft reviewed by Reuters,
• 31:47
  SPEAKER_00: Washington last year launched the Paxilica initiative aimed
• 31:51
  SPEAKER_00: at securing supply chains for AI models,
• 31:54
  SPEAKER_00: semiconductors and critical minerals amid a fierce technology rivalry with Beijing.
• 32:00
  SPEAKER_00: The draft letter has not been sent,
• 32:03
  SPEAKER_00: but I do wonder whether that sort of bifurcated future is where we'll end up on some
• 32:07
  SPEAKER_00: of these questions.
• 32:09
  SPEAKER_00: What do you think of that announcement?
• 32:11
  SPEAKER_01: I mean, so the Chinese are pitching this.
• 32:15
  SPEAKER_01: They had the World AI Conference back in July,
• 32:17
  SPEAKER_01: and then they're pitching the World AI Cooperation Organization,
• 32:20
  SPEAKER_01: which I think they want to actually have headquartered in Shanghai.
• 32:23
  SPEAKER_01: And I think at this point, they've got 30-something countries who've signed up for that.
• 32:29
  SPEAKER_01: So far, the only country that has signed up for that, and Paxilica, I think it's Kazakhstan.
• 32:35
  SPEAKER_00: Mm-hmm.
• 32:35
  SPEAKER_01: And what is Paxilica?
• 32:38
  SPEAKER_01: I think there has to be more details fleshed out.
• 32:40
  SPEAKER_01: What are the benefits of joining?
• 32:42
  SPEAKER_01: And one of the challenges for a lot of these countries is,
• 32:46
  SPEAKER_01: so if this really is what the U.S.
• 32:49
  SPEAKER_01: government is going to do, you're making us choose, well, what are we really...
• 32:53
  SPEAKER_01: What are we getting?
• 32:54
  SPEAKER_01: Obviously,
• 32:54
  SPEAKER_01: what are we getting and what are we getting that we know is going
• 32:57
  SPEAKER_01: to be consistent versus like we get it,
• 33:01
  SPEAKER_01: we agree to this,
• 33:01
  SPEAKER_01: and then a week later we get 100% tariffs because the president got mad at us
• 33:05
  SPEAKER_01: over something.
• 33:06
  SPEAKER_01: Right.
• 33:06
  SPEAKER_01: Yeah.
• 33:07
  SPEAKER_01: And so we'll see.
• 33:08
  SPEAKER_01: I think this was an interesting—nothing's been announced.
• 33:13
  SPEAKER_01: Yeah, I called it an announcement.
• 33:14
  SPEAKER_00: It's a draft.
• 33:15
  SPEAKER_00: It's really an idea,
• 33:17
  SPEAKER_00: and it reflects at least some thinking at the administration level of— I mean,
• 33:23
  SPEAKER_00: that's part of it is what the U.S. has.
• 33:27
  SPEAKER_00: Obviously, the U.S.
• 33:47
  SPEAKER_01: And its allies have the chips,
• 33:49
  SPEAKER_01: but the US and its allies need to have better open-weight, open-source models.
• 33:54
  SPEAKER_00: And maybe those are coming.
• 33:56
  SPEAKER_01: NVIDIA is certainly making a push.
• 33:57
  SPEAKER_01: But right now, most countries, the Chinese models are good enough.
• 34:02
  SPEAKER_00: Among American partners,
• 34:04
  SPEAKER_00: the only reliance on Chinese AI would be the AI models, at least as it stands today.
• 34:11
  SPEAKER_00: Maybe that will change.
• 34:13
  SPEAKER_01: It'll be a while before the Chinese chips,
• 34:15
  SPEAKER_01: the Chinese are making good enough chips in enough volume to actually have...
• 34:21
  SPEAKER_01: Excess beyond their domestic demands, beyond the domestic market.
• 34:27
  SPEAKER_01: And so in the near term,
• 34:29
  SPEAKER_01: I think there's not a huge risk of Chinese AI chips being the hardware standard in
• 34:35
  SPEAKER_01: a lot of these countries because they just don't have enough in their own country.
• 34:38
  SPEAKER_00: 100%.
• 34:38
  SPEAKER_01: And they're not going to for quite some time.
• 34:40
  SPEAKER_01: The models are a totally different story.
• 34:42
  SPEAKER_01: And, you know,
• 34:43
  SPEAKER_01: we last podcast,
• 34:44
  SPEAKER_01: I think we talked about,
• 34:44
  SPEAKER_01: there's still no clarity on what the U.S.
• 34:46
  SPEAKER_01: government is going to do about the Chinese models.
• 34:49
  SPEAKER_01: It's still just completely speaking about clear as mud and...
• 34:54
  SPEAKER_01: It's somewhat incoherent.
• 34:56
  SPEAKER_01: And so who knows?
• 34:59
  SPEAKER_01: They seem to have moved on.
• 35:00
  SPEAKER_00: And I will say that's a very consequential decision.
• 35:04
  SPEAKER_00: So I'm not sitting here tapping my foot saying you need to make a call right now.
• 35:10
  SPEAKER_00: But hopefully people are still taking the issue seriously.
• 35:14
  SPEAKER_01: And back to the chips.
• 35:15
  SPEAKER_01: So the Financial Times, we're recording on Wednesday.
• 35:18
  SPEAKER_01: It's almost noon Eastern time.
• 35:21
  SPEAKER_01: Financial Times today had a story that
• 35:22
  SPEAKER_01: the Chinese government is finally allowing some of their companies to buy
• 35:25
  SPEAKER_01: the NVIDIA H200 chips.
• 35:28
  SPEAKER_01: Okay.
• 35:29
  SPEAKER_01: The U.S. had approved and the Chinese government was slow walking.
• 35:31
  SPEAKER_01: And I think that is a...
• 35:34
  SPEAKER_01: Again, it's just a sign that they need these chips.
• 35:37
  SPEAKER_01: And the crackdown on smuggling has had some of an impact,
• 35:40
  SPEAKER_01: but the big Chinese model companies,
• 35:43
  SPEAKER_01: they still have access to NVIDIA chips offshore,
• 35:47
  SPEAKER_01: but they need more inside China too.
• 35:50
  SPEAKER_00: Another story that caught my attention over the break was a South China Morning Post headline.
• 35:55
  SPEAKER_00: China's top AI is still trained on NVIDIA chips.
• 35:59
  SPEAKER_00: What is delaying a switch to local tech was the headline.
• 36:03
  SPEAKER_00: And the story notes that one of the core hurdles lies in the software ecosystem.
• 36:09
  SPEAKER_00: NVIDIA's compute unified device architecture,
• 36:13
  SPEAKER_00: CUDA, The CUDA platform has long been the industry standard for AI development.
• 36:18
  SPEAKER_00: Huawei Technologies Alternative, Khan,
• 36:22
  SPEAKER_00: requires developers to rewrite and optimize large amounts of code,
• 36:26
  SPEAKER_00: according to an AI researcher involved in model development.
• 36:29
  SPEAKER_00: Which has always been NVIDIA's theory of the case is that our software is going
• 36:35
  SPEAKER_00: to be its own moat.
• 36:36
  SPEAKER_00: And clearly that moat is still effective among mainland companies.
• 36:41
  SPEAKER_01: Right.
• 36:42
  SPEAKER_01: And a lot of these developers don't want to become around Huawei.
• 36:45
  SPEAKER_01: Huawei is a nasty company.
• 36:46
  SPEAKER_01: And they don't,
• 36:47
  SPEAKER_01: you know,
• 36:48
  SPEAKER_01: Huawei's a very powerful company and they don't want to be,
• 36:51
  SPEAKER_01: you know,
• 36:51
  SPEAKER_01: Huawei's also a very powerful and very good lobbying the central government.
• 36:54
  SPEAKER_01: But I think,
• 36:55
  SPEAKER_01: you know,
• 36:56
  SPEAKER_00: this is why it's interesting that- But they all still need NVIDIA in the midst
• 36:59
  SPEAKER_00: of all this to train these models.
• 37:00
  SPEAKER_00: Right,
• 37:01
  SPEAKER_00: and what's
• 37:01
  SPEAKER_01: interesting- Assuming this Financial Times report today is correct,
• 37:06
  SPEAKER_01: it's interesting that Beijing relented and allowed some of these companies to start.
• 37:09
  SPEAKER_01: I think the number was like 10,000 of these H200 trips.
• 37:13
  SPEAKER_01: That is a sign that the domestic production, they're just lost.
• 37:17
  SPEAKER_01: They're all maxed out.
• 37:17
  SPEAKER_01: And the Chinese AI companies, they need more compute.
• 37:19
  SPEAKER_01: And so this is a sign that it doesn't mean they're not going to have a massive ramp.
• 37:22
  SPEAKER_01: They've been full speed ahead.
• 37:48
  SPEAKER_01: But it's still not enough for what they need domestically.
• 37:52
  SPEAKER_00: That's fascinating.
• 37:53
  SPEAKER_00: I had missed that Financial Times note.
• 37:54
  SPEAKER_00: But yeah, we were on H100 watch for months on end with no action from the Chinese government.
• 38:02
  SPEAKER_00: But now the party has changed course.
• 38:05
  SPEAKER_00: Shifting gears at other circumstances.
• 38:06
  SPEAKER_00: We'll see you next time.
• 38:21
  SPEAKER_00: That provides the most developed historical example of this conduct.
• 38:25
  SPEAKER_00: Chinese exporters increasingly route goods through third countries.
• 38:29
  SPEAKER_00: Products that previously moved directly from China to the United States were shipped
• 38:34
  SPEAKER_00: through jurisdictions where limited applications.
• 38:36
  SPEAKER_00: So I just wanted to note that release from the White House as a subplot to track in
• 38:40
  SPEAKER_00: the months to come.
• 39:05
  SPEAKER_01: No, and it's important.
• 39:06
  SPEAKER_01: A couple of things.
• 39:06
  SPEAKER_01: One, it's important.
• 39:08
  SPEAKER_01: The White House put out a document called the Global Transshipment Scam.
• 39:11
  SPEAKER_01: And again, primarily directed, primarily about China.
• 39:16
  SPEAKER_01: Peter Navarro was out talking it up.
• 39:18
  SPEAKER_01: Peter Navarro seems to have been kind of wild.
• 39:26
  SPEAKER_01: All of a sudden, he's out there front and center.
• 39:29
  SPEAKER_01: And that is six weeks before she gets here.
• 39:34
  SPEAKER_01: There's talk.
• 39:35
  SPEAKER_01: I think there's looking at the Section 301s on overcapacity.
• 39:38
  SPEAKER_01: I mean, this is, again,
• 39:42
  SPEAKER_01: the constructive strategic stability is built on a very, very tenuous foundation.
• 39:50
  SPEAKER_00: Right.
• 39:51
  SPEAKER_00: And for anybody who's not steeped in this,
• 39:53
  SPEAKER_00: with transshipment,
• 39:54
  SPEAKER_00: what we're talking about is China routing goods through third-party countries
• 39:59
  SPEAKER_00: in order to evade American tariffs.
• 40:02
  SPEAKER_00: And that's been a problem for quite some time,
• 40:04
  SPEAKER_00: dating back to the Obama administration with tariffs that were imposed.
• 40:08
  SPEAKER_01: And in the beginning of this Trump administration,
• 40:10
  SPEAKER_01: I think the USTR,
• 40:11
  SPEAKER_01: Jameson Greer,
• 40:13
  SPEAKER_01: they were more focused on a bit more of a comprehensive strategic approach
• 40:19
  SPEAKER_01: to working with other countries to deal with this issue around
• 40:24
  SPEAKER_01: the transshipment risks.
• 40:25
  SPEAKER_01: But that was overcome by the Liberation Day tariff announcement.
• 40:31
  SPEAKER_00: And now the White House says they're going to use AI to help identify
• 40:39
  SPEAKER_00: It escapes me as we record here.
• 40:41
  SPEAKER_01: I think it was AI Border Detective.
• 40:43
  SPEAKER_01: I'm guessing it won't be an open Chinese open source model.
• 40:46
  SPEAKER_01: You never know.
• 40:50
  SPEAKER_01: Probably won't be anthropic.
• 40:51
  SPEAKER_01: So maybe it'll be open AI.
• 40:54
  SPEAKER_01: We shall see.
• 40:55
  SPEAKER_01: It's clearly an issue.
• 40:56
  SPEAKER_01: And it's clearly an issue the Chinese are very concerned about where they're trying
• 40:59
  SPEAKER_01: to make clear to other countries that they don't want them entering
• 41:02
  SPEAKER_01: into any
• 41:03
  SPEAKER_00: agreement.
• 41:04
  SPEAKER_00: They've been signaling that for 18 months.
• 41:06
  SPEAKER_01: So if other countries agree to deal with this loophole, I mean,
• 41:11
  SPEAKER_01: the terrorists fight much harder if
• 41:14
  SPEAKER_00: some of these doors are closed to
• 41:16
  SPEAKER_00: the PRC exporters.
• 41:16
  SPEAKER_00: Yes.
• 41:17
  SPEAKER_01: It's a big issue.
• 41:18
  SPEAKER_01: And again,
• 41:18
  SPEAKER_01: if the U.S.
• 41:19
  SPEAKER_01: really does start doing things ahead of Xi's visit,
• 41:21
  SPEAKER_01: that will be, I think, one added layer of tension to Xi's visit.
• 41:26
  SPEAKER_01: And two, again,
• 41:28
  SPEAKER_01: interesting because on the one hand,
• 41:30
  SPEAKER_01: I think the U.S.
• 41:31
  SPEAKER_01: government and Besson and Greer are quite frustrated with progress
• 41:37
  SPEAKER_01: since their various understandings with the Chinese side.
• 41:40
  SPEAKER_01: On the other hand, the Chinese also still have a huge amount of leverage around rare earths.
• 41:45
  SPEAKER_01: Right.
• 41:47
  SPEAKER_01: And this rare earth deals needs to be renewed by November.
• 41:51
  SPEAKER_01: So again,
• 41:53
  SPEAKER_01: people shouldn't be sleeping on all of a sudden we're in this happy new era
• 41:56
  SPEAKER_01: of US-China constructive stability.
• 41:59
  SPEAKER_00: No kidding.
• 41:59
  SPEAKER_00: And the PRC side has seen a number of different actions over the last couple months
• 42:04
  SPEAKER_00: that could be argued as violations of the Busan truce and freeze.
• 42:11
  SPEAKER_01: Still haven't agreed to buy the Boeing planes that Trump made a big deal out of
• 42:15
  SPEAKER_01: after his Beijing visit.
• 42:17
  SPEAKER_00: That's not terribly surprising.
• 42:20
  SPEAKER_00: Well, another related note from Bloomberg,
• 42:22
  SPEAKER_00: Mexico is weighing plans to impose further trade restrictions on selected products
• 42:27
  SPEAKER_00: from China and other countries while raising existing import taxes
• 42:31
  SPEAKER_00: on other categories, according to four people familiar with.
• 42:35
  SPEAKER_00: So that too is consistent with the Trump administration strategy.
• 42:55
  SPEAKER_00: And will not be seen favorably in Beijing.
• 42:59
  SPEAKER_00: So all subtext to the meeting that is coming next month,
• 43:05
  SPEAKER_00: assuming that she actually shows up in D.C. One other note.
• 43:09
  SPEAKER_00: The Department of War on X said that the Department
• 43:13
  SPEAKER_00: of War has issued formal notifications to 30 domestic academic institutions,
• 43:20
  SPEAKER_00: directing them to initiate immediate and comprehensive reviews of their academic,
• 43:25
  SPEAKER_00: financial and research collaborations with foreign entities of concern.
• 43:30
  SPEAKER_00: These notifications address active institutional ties and collaborations
• 43:35
  SPEAKER_00: with foreign entities identified under Section 1286 of the FY19 NDAA,
• 43:40
  SPEAKER_00: as well as organizations associated with
• 43:45
  SPEAKER_00: Uh, yeah.
• 44:02
  SPEAKER_00: What questions come to mind when you see that announcement?
• 44:06
  SPEAKER_00: Can you put that in context for anybody who hasn't followed this space?
• 44:11
  SPEAKER_01: I mean, I think this is just a continuation of the policies,
• 44:14
  SPEAKER_01: but I think they gave them a two-week deadline.
• 44:16
  SPEAKER_01: So this is an escalation.
• 44:19
  SPEAKER_01: That will, I think, potentially be uncomfortable for some of these institutions.
• 44:24
  SPEAKER_01: The 30 institutions are not named,
• 44:27
  SPEAKER_01: but I think the Washington Post reported them out,
• 44:28
  SPEAKER_01: and they're big U.S. universities.
• 44:31
  SPEAKER_00: Georgetown, UNC, yeah.
• 44:34
  SPEAKER_01: You've also got,
• 44:35
  SPEAKER_01: I think,
• 44:35
  SPEAKER_01: the Select Committee last week released a report on Harvard's China ties
• 44:39
  SPEAKER_01: and China money.
• 44:40
  SPEAKER_00: Mm-hmm.
• 44:41
  SPEAKER_01: And so there is increasing pressure on these institutions for both funds,
• 44:46
  SPEAKER_01: but also some of these research collaborations and whether
• 44:49
  SPEAKER_01: or not they're flowing back into things that help PRC with military development.
• 44:53
  SPEAKER_01: And so it's one of those issues where I think there is real substance there.
• 44:58
  SPEAKER_01: It's also heavily politicized and it can be abused and it can lead to abuses.
• 45:04
  SPEAKER_01: And I don't think we should have any confidence that it will be politicized and abused.
• 45:11
  SPEAKER_01: Just given the state of things.
• 45:13
  SPEAKER_00: Politicized and abused in what respect?
• 45:16
  SPEAKER_00: What do you mean by that?
• 45:17
  SPEAKER_01: I mean, I think you could...
• 45:19
  SPEAKER_01: There's overreach?
• 45:20
  SPEAKER_01: Overreach, racism, but at the same time...
• 45:25
  SPEAKER_01: To do this,
• 45:28
  SPEAKER_01: you would really want to have a sober and set of good procedures to actually deal
• 45:34
  SPEAKER_01: with the substance of some of these problems because there are real problems here.
• 45:36
  SPEAKER_00: So a scalpel rather than a hammer as you're trying to address some of the issues.
• 45:42
  SPEAKER_01: But that's just not how things work in D.C., unfortunately.
• 45:46
  SPEAKER_00: Yeah.
• 45:46
  SPEAKER_00: Well, and what were the Confucius Institutes for anybody who's not familiar with that issue?
• 45:53
  SPEAKER_01: Those were programs where they would set up inside U.S.
• 45:57
  SPEAKER_01: schools and teach Chinese, teach Chinese culture.
• 46:01
  SPEAKER_01: And they were funded by the Chinese government.
• 46:04
  SPEAKER_01: And the Chinese government would send the teachers.
• 46:06
  SPEAKER_01: And there were...
• 46:09
  SPEAKER_01: Just documented problems in some cases
• 46:11
  SPEAKER_01: where you just couldn't have certain things talked about or on the agenda.
• 46:16
  SPEAKER_01: And people compare them with the French schools around the world,
• 46:21
  SPEAKER_01: but the French schools were in shopping malls.
• 46:23
  SPEAKER_01: The French government-backed schools, these were not embedded in educational institutions.
• 46:28
  SPEAKER_00: So it's essentially like the criticism would be that it's sort
• 46:33
  SPEAKER_00: of united front adjacent messaging and telling China's story well
• 46:38
  SPEAKER_00: and also policing speech around China.
• 46:41
  SPEAKER_01: But it's not, you know, Taiwan.
• 46:42
  SPEAKER_01: When I first studied Chinese,
• 46:43
  SPEAKER_01: our textbooks were basically funded by the then the KMT, the Taiwan government.
• 46:46
  SPEAKER_01: Right.
• 46:47
  SPEAKER_01: And that was accepted because Taiwan was a friend, but it's still propaganda.
• 46:52
  SPEAKER_01: And part of the challenge is just that most schools that want to teach Chinese
• 46:57
  SPEAKER_01: or have Chinese programs, they need funding.
• 46:59
  SPEAKER_01: And they don't have the funding.
• 47:01
  SPEAKER_01: It's not coming from the U.S. government.
• 47:03
  SPEAKER_01: And so in some ways,
• 47:05
  SPEAKER_01: if these were solely language schools that had actual independence
• 47:08
  SPEAKER_01: in what they could teach and then the textbooks they could choose in
• 47:11
  SPEAKER_01: the curriculum...
• 47:13
  SPEAKER_01: Nothing wrong with it.
• 47:13
  SPEAKER_01: Sure.
• 47:20
  SPEAKER_00: Yeah.
• 47:21
  SPEAKER_00: Well, and one of the problems now is that that funding has been there
• 47:25
  SPEAKER_00: for all these schools and removing- Some have already
• 47:28
  SPEAKER_01: closed because of the,
• 47:29
  SPEAKER_01: you know,
• 47:30
  SPEAKER_01: you can't,
• 47:30
  SPEAKER_01: I think the,
• 47:31
  SPEAKER_01: with that NDAA,
• 47:32
  SPEAKER_01: you know,
• 47:33
  SPEAKER_01: the schools that have contracts with- No,
• 47:35
  SPEAKER_00: I know with the Confucius Institute specifically,
• 47:39
  SPEAKER_00: that was a controversy several years ago.
• 47:41
  SPEAKER_00: And as the announcement here notes, some of them have been rebranded.
• 47:45
  SPEAKER_00: But I just think generally when you think about higher education and Chinese money
• 47:51
  SPEAKER_00: and influence,
• 47:52
  SPEAKER_00: like the Chinese money has become a source that all these schools
• 47:57
  SPEAKER_00: of many schools are heavily reliant on.
• 48:00
  SPEAKER_01: Yeah.
• 48:00
  SPEAKER_01: I mean, other countries are dealing with this and it's awesome.
• 48:03
  SPEAKER_01: I mean, the bigger the bigger budget issues come from the Chinese students
• 48:08
  SPEAKER_00: who are mostly full pay.
• 48:09
  SPEAKER_01: Although,
• 48:09
  SPEAKER_01: you know,
• 48:10
  SPEAKER_01: the Saatchi Underworld Post had an article a few days ago about how the applications
• 48:13
  SPEAKER_01: for U.S.
• 48:14
  SPEAKER_01: schools from Chinese students hasn't gone down in spite of all the reports you hear,
• 48:17
  SPEAKER_01: which is kind of interesting.
• 48:19
  SPEAKER_00: Interesting.
• 48:20
  SPEAKER_00: Yeah.
• 48:20
  SPEAKER_00: Well, and I also saw I saw a note.
• 48:22
  SPEAKER_00: Somebody tracked some data.
• 48:25
  SPEAKER_00: Graduates of graduate programs are staying in America more than one would think
• 48:31
  SPEAKER_00: if they are Chinese graduates.
• 48:33
  SPEAKER_01: If they have the opportunity, if we welcome them, because right now, I mean, again.
• 48:37
  SPEAKER_00: But that's what I'm saying is even in this environment,
• 48:39
  SPEAKER_00: they are choosing to stay more than you would think.
• 48:42
  SPEAKER_01: And that's great.
• 48:43
  SPEAKER_01: And we should have more of them stay in them.
• 48:44
  SPEAKER_01: The environment should be improved.
• 48:46
  SPEAKER_01: I mean, this again.
• 48:48
  SPEAKER_01: If you're looking at things from the perspective of US-China competition,
• 48:51
  SPEAKER_01: and you listen to what the Chinese talk about,
• 48:53
  SPEAKER_01: and one of the things they're most concerned about is talent development
• 48:55
  SPEAKER_01: and becoming a science and technology,
• 48:58
  SPEAKER_01: seizing the commanding heights of science and technology globally.
• 49:01
  SPEAKER_01: They can only do that with talent.
• 49:02
  SPEAKER_01: Talent matters, yeah.
• 49:04
  SPEAKER_01: And the US government should be doing much more to strategically attract and retain PRC talent.
• 49:12
  SPEAKER_01: But the politics aren't supporting that.
• 49:15
  SPEAKER_00: And look, it is also...
• 49:16
  SPEAKER_00: It's also a genuinely difficult issue because you don't want the party sending all
• 49:22
  SPEAKER_00: of its young people here and then bringing them back.
• 49:26
  SPEAKER_00: And I think it is more complicated than just bring everybody.
• 49:30
  SPEAKER_01: No, no.
• 49:31
  SPEAKER_01: Again, it's scalpel.
• 49:32
  SPEAKER_01: It's having like actual...
• 49:34
  SPEAKER_00: The scalpel issue.
• 49:35
  SPEAKER_01: It's actually having some... Can we do that?
• 49:37
  SPEAKER_00: Yeah.
• 49:38
  SPEAKER_01: Right.
• 49:38
  SPEAKER_01: Some thoughtfulness about how you structure these
• 49:41
  SPEAKER_00: things and how you do it.
• 49:42
  SPEAKER_00: How you vet.
• 49:42
  SPEAKER_00: As opposed to everything just becoming so politicized.
• 49:45
  SPEAKER_00: Indeed.
• 49:46
  SPEAKER_00: Well, speaking of everything becoming politicized,
• 49:50
  SPEAKER_00: there was a story in the New York Times about China keeping tabs
• 49:54
  SPEAKER_00: on foreigners visiting China.
• 49:55
  SPEAKER_00: And we got an email from John.
• 49:57
  SPEAKER_00: He says, Hello, Andrew and Bill.
• 50:00
  SPEAKER_00: The New York Times ran a story on August 2nd titled How China Keeps Tabs
• 50:05
  SPEAKER_00: on Foreigners about what was reported to be a leaked Chinese surveillance platform.
• 50:11
  SPEAKER_00: Bill, sinocism linked to the original reporting on Substack by Net Ascari back in
• 50:17
  SPEAKER_00: the May 19th newsletter,
• 50:19
  SPEAKER_00: and Sophia Yan covered it in The Telegraph around the same time.
• 50:23
  SPEAKER_00: That makes me ask myself, why is this suddenly such a Thank you.
• 50:43
  SPEAKER_00: We'll see you next time.
• 50:58
  SPEAKER_00: So I guess what I'm really asking is, what should we make of this leak?
• 51:02
  SPEAKER_00: What did we actually learn that we didn't already know?
• 51:05
  SPEAKER_00: Or am I thinking about the story entirely the wrong way?
• 51:08
  SPEAKER_00: Do you have any thoughts for John there?
• 51:22
  SPEAKER_01: Well, thank you, John, for being a loyal reader and getting the date right for the newsletter.
• 51:26
  SPEAKER_01: Very impressive.
• 51:27
  SPEAKER_01: Thank you.
• 51:30
  SPEAKER_01: No, it's the classic where the NESGAR,
• 51:33
  SPEAKER_01: it's a very interesting,
• 51:34
  SPEAKER_01: he's a former Dutch journalist who writes about China's cyber issues
• 51:39
  SPEAKER_01: and surveillance issues.
• 51:40
  SPEAKER_01: It's a very good substack.
• 51:41
  SPEAKER_01: We'll put a link into it.
• 51:41
  SPEAKER_01: I highly recommend if you're interested in these issues, people should subscribe to it.
• 51:45
  SPEAKER_01: I think it's a classic.
• 51:47
  SPEAKER_01: He wrote this good piece on it,
• 51:49
  SPEAKER_01: and then it then filters out into the mainstream media gatekeepers.
• 51:55
  SPEAKER_01: The New York Times was an interesting story.
• 51:56
  SPEAKER_01: It's an important story,
• 51:58
  SPEAKER_01: but I don't think it necessarily moved the needle in terms of
• 52:00
  SPEAKER_01: that much more information.
• 52:01
  SPEAKER_01: There were a few little details about Sort of so-and-so seeing themselves in there.
• 52:05
  SPEAKER_00: But to the broader point- It's just broadcasting the story to a broader audience.
• 52:10
  SPEAKER_01: There is a massive surveillance industrial complex in China.
• 52:15
  SPEAKER_01: There's huge amounts of money being spent.
• 52:17
  SPEAKER_01: There are lots of companies trying to get contracts for these things,
• 52:21
  SPEAKER_01: for various ways to plug into the surveillance budgets from the central government,
• 52:27
  SPEAKER_01: from local governments.
• 52:29
  SPEAKER_00: Just for the record,
• 52:30
  SPEAKER_00: that was one of the most interesting aspects of the times is it was a window into
• 52:34
  SPEAKER_00: that ecosystem where there are all kinds of private
• 52:38
  SPEAKER_01: businesses.
• 52:39
  SPEAKER_01: Look at the stuff going on with Flock cameras all over the US.
• 52:44
  SPEAKER_01: You're not going to see those kinds of protests in China
• 52:47
  SPEAKER_01: where people are defacing these cameras.
• 52:49
  SPEAKER_01: But again, it's a big business.
• 52:51
  SPEAKER_00: Sure.
• 52:52
  SPEAKER_01: And so I think, though,
• 52:53
  SPEAKER_01: to the question what this actually is,
• 52:57
  SPEAKER_01: is this a company that built a demo because they're trying to sell it?
• 53:00
  SPEAKER_01: They're trying to get a contract from... And I think this was for the...
• 53:07
  SPEAKER_01: For the Public Security Bureau in Zhang Jiakou in Hebei, right?
• 53:13
  SPEAKER_01: Was this somehow actually a production system that this was like a demo that was left on?
• 53:18
  SPEAKER_01: We just don't know.
• 53:19
  SPEAKER_01: The fact that they populated it with real data is interesting.
• 53:23
  SPEAKER_01: It means that somehow they're having some level of coordination with
• 53:26
  SPEAKER_01: the existing security services to begin with to be able to do this.
• 53:29
  SPEAKER_01: To John's point, you know, It's not really a surprise.
• 53:33
  SPEAKER_01: It's interesting to see how it works.
• 53:36
  SPEAKER_01: It's also, I think, trivial for them to do this kind of tracking.
• 53:41
  SPEAKER_01: We've seen plenty of people get tracked.
• 53:44
  SPEAKER_01: The idea that they wouldn't be tracking foreigners, I think, is pretty naive.
• 53:49
  SPEAKER_00: Yeah.
• 53:54
  SPEAKER_01: It was about East Germany by historian Timothy Garden Ash, who lived in East Germany.
• 54:00
  SPEAKER_01: And after East Germany fell, he went and got to see his Stasi file.
• 54:06
  SPEAKER_01: So he wrote this great book called The File,
• 54:08
  SPEAKER_01: which was basically all about what was in my file and who were my friends
• 54:12
  SPEAKER_01: who were actually informers.
• 54:14
  SPEAKER_01: Okay.
• 54:15
  SPEAKER_01: And I remember reading this a long time ago and thinking someday I would love to see
• 54:19
  SPEAKER_01: that from the Chinese side.
• 54:20
  SPEAKER_00: Oh my God, I would love to see your
• 54:22
  SPEAKER_01: file.
• 54:23
  SPEAKER_01: And I think one of the things is you've got,
• 54:26
  SPEAKER_01: as Xi Jinping has really revivified the entire surveillance complex,
• 54:32
  SPEAKER_01: both technologically but also physically and in terms of people, one,
• 54:39
  SPEAKER_01: no one should be surprised by this, two,
• 54:41
  SPEAKER_01: You know,
• 54:42
  SPEAKER_01: one of these we don't hear much about is what's going on with sort of
• 54:45
  SPEAKER_01: the whole informant network,
• 54:46
  SPEAKER_01: especially when it comes to foreigners and how much pressure Chinese citizens
• 54:52
  SPEAKER_01: who have lots of contact with foreigners,
• 54:54
  SPEAKER_01: how much pressure they may be under to actually keep tabs.
• 54:58
  SPEAKER_00: So it's just a sign of
• 55:00
  SPEAKER_01: the times.
• 55:00
  SPEAKER_01: No one should be surprised.
• 55:01
  SPEAKER_01: Yeah.
• 55:02
  SPEAKER_00: Well, and it's awful dystopian when you look at like the dashboard
• 55:06
  SPEAKER_00: that lists how long you've been there.
• 55:09
  SPEAKER_01: I mean, I certainly hear stories.
• 55:11
  SPEAKER_01: I mean, how nearly impossible it is for foreign spies to operate in China
• 55:15
  SPEAKER_01: and some crazy stories about, say,
• 55:17
  SPEAKER_01: people from the U.S.
• 55:18
  SPEAKER_01: intelligence services who spend all lots of time trying to evade cover.
• 55:24
  SPEAKER_01: And then suddenly someone just pops up and says, you know, oh, hi.
• 55:28
  SPEAKER_00: There you go.
• 55:31
  SPEAKER_01: I mean, it's not funny.
• 55:32
  SPEAKER_01: It's pervasive.
• 55:33
  SPEAKER_00: Yeah.
• 55:34
  SPEAKER_00: No, I mean, that's the thing.
• 55:36
  SPEAKER_00: It's not surprising.
• 55:37
  SPEAKER_01: And getting better.
• 55:37
  SPEAKER_01: And the technology in AI is only going to make it better from the perspective of
• 55:44
  SPEAKER_01: the government who wants to track people and things and contact and communications.
• 55:48
  SPEAKER_00: Right.
• 55:49
  SPEAKER_00: Well,
• 55:49
  SPEAKER_00: and I would say it is consistent with lots of what we have discussed on this podcast
• 55:56
  SPEAKER_00: over the last several years.
• 55:57
  SPEAKER_00: So I don't think anybody who listens to Sharp China would be surprised
• 56:00
  SPEAKER_00: that China has these capabilities to monitor not only foreigners who visit China,
• 56:06
  SPEAKER_00: but also, of course, their own citizens as well.
• 56:09
  SPEAKER_00: And the Times article was interesting.
• 56:11
  SPEAKER_00: I didn't see it until this email from John.
• 56:15
  SPEAKER_00: It's interesting if only to add graphics to what that actually looks like.
• 56:21
  SPEAKER_00: And obviously that dates to the researcher from the Netherlands as well.
• 56:25
  SPEAKER_00: Yeah.
• 56:26
  SPEAKER_00: But it just kind of is what it is at this point.
• 56:30
  SPEAKER_00: And anybody, if I go to China, I will assume that there will be a file opened on me.
• 56:35
  SPEAKER_00: But I'd still like to go to China.
• 56:36
  SPEAKER_01: I don't know.
• 56:37
  SPEAKER_01: I mean, maybe there already is.
• 56:39
  SPEAKER_01: I mean, I know.
• 56:40
  SPEAKER_01: I would.
• 56:40
  SPEAKER_01: I mean.
• 56:42
  SPEAKER_01: I would love to see my file.
• 56:43
  SPEAKER_01: I even have a self-criticism somewhere in my file
• 56:45
  SPEAKER_01: because I actually got- That's
• 56:46
  SPEAKER_01: really my chief request is let's get Bill's file.
• 56:49
  SPEAKER_01: A couple of weeks after June 4th in 1989,
• 56:53
  SPEAKER_01: we got detained outside at Sandman Square and as part of the interrogation,
• 57:00
  SPEAKER_01: I had to write a self-criticism about how we were violating martial law.
• 57:04
  SPEAKER_01: I really want to see it just because I want
• 57:05
  SPEAKER_01: to see what my handwriting looked like 30- Way back when?
• 57:08
  SPEAKER_01: Seven years ago, I think it was a lot more legible than it is now.
• 57:12
  SPEAKER_00: Yeah.
• 57:12
  SPEAKER_00: I love the CBS documentary on 1989 that was showing pictures of a young Bill Bishop.
• 57:19
  SPEAKER_00: Nice blast from the past there.
• 57:21
  SPEAKER_00: I'd love to see the handwriting as well.
• 57:23
  SPEAKER_00: Any cadres that are coming to D.C.
• 57:25
  SPEAKER_00: with Xi a month from now, feel free to drop the file off for us.
• 57:29
  SPEAKER_00: It'd be great to write.
• 57:31
  SPEAKER_01: Yeah, that would be a great gift if someone would at least hand me a copy of my self-criticism.
• 57:35
  SPEAKER_01: I would love to see that.
• 57:37
  SPEAKER_00: Oh, boy.
• 57:38
  SPEAKER_01: Well, on that note, Bill- It didn't cause me any problems going back in 91.
• 57:43
  SPEAKER_01: And I mean, it never, who knows what happened.
• 57:45
  SPEAKER_01: I mean, it just, who knows?
• 57:47
  SPEAKER_00: Yeah, no.
• 57:48
  SPEAKER_00: But look,
• 57:49
  SPEAKER_00: this is,
• 57:50
  SPEAKER_00: the article here makes clear,
• 57:53
  SPEAKER_00: anybody who's going to China,
• 57:55
  SPEAKER_00: just be aware that everything you're seeing,
• 57:57
  SPEAKER_00: the state wants you to see and everywhere you go,
• 58:00
  SPEAKER_00: You're probably going to be monitored in one way or
• 58:03
  SPEAKER_01: another.
• 58:04
  SPEAKER_01: Again, I think it's not a complete totalitarian panopticon,
• 58:08
  SPEAKER_01: but I think it's more like it's kind of in the background.
• 58:12
  SPEAKER_01: I think there's still lots of interactions and things that aren't like that.
• 58:14
  SPEAKER_01: Organic.
• 58:15
  SPEAKER_01: So I don't want to overstate things, but no one should be under any illusions that if they...
• 58:23
  SPEAKER_01: If they want to track you, they would have a problem.
• 58:26
  SPEAKER_01: They probably are doing so.
• 58:27
  SPEAKER_01: But that's sadly the state of a lot of countries.
• 58:29
  SPEAKER_01: China is just,
• 58:29
  SPEAKER_01: I think,
• 58:30
  SPEAKER_01: better at it just in terms of technology and also legal protections
• 58:35
  SPEAKER_01: and also
• 58:35
  SPEAKER_00: just lots of people who can do this work.
• 58:39
  SPEAKER_00: Indeed.
• 58:39
  SPEAKER_00: A vibrant industry trying to contract for that work.
• 58:42
  SPEAKER_01: I mean, again, look at the U.S.
• 58:44
  SPEAKER_01: There's a massive...
• 58:46
  SPEAKER_01: The flock cameras.
• 58:47
  SPEAKER_01: Look at all the money that's gone to Homeland Security and ICE.
• 58:49
  SPEAKER_01: I mean, this is not...
• 58:52
  SPEAKER_01: Surveillance industrial complex is a thing.
• 58:54
  SPEAKER_00: Sure.
• 58:55
  SPEAKER_00: No, honestly, for me,
• 58:57
  SPEAKER_00: it just is a reminder that where there's money in China,
• 59:00
  SPEAKER_00: there are immediately like thousands of competing firms in any sort
• 59:05
  SPEAKER_00: of growing industry.
• 59:07
  SPEAKER_00: That was the takeaway from the Times piece.
• 59:10
  SPEAKER_00: But in any event, Bill, it is great to see you again.
• 59:14
  SPEAKER_00: Please give Tashi my best and we will keep it rolling next week as we continue
• 59:21
  SPEAKER_00: through August here.
• 59:22
  SPEAKER_00: It's good to be back.
• 59:23
  SPEAKER_01: Thanks, everyone.
• 59:23
  SPEAKER_01: Thanks, Andrew.