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Sinica Podcast

A weekly discussion of current affairs in China with journalists, writers, academics, policy makers, business people and anyone with something compelling to say about the country that's reshaping the world. A SupChina production, hosted by Kaiser Kuo and Jeremy Goldkorn.
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Now displaying: May, 2019
May 30, 2019

This week on the Sinica Podcast, we are happy to share a live recording from the third annual SupChina Women’s Conference. Jeremy and Kaiser sat down with Ambassador Charlene Barshefsky, now a senior international partner at the law firm of WilmerHale, and a former United States Trade Representative under the Clinton administration. She came to New York for a candid discussion on her views regarding the recent deterioration of trade talks, her own experiences in the office of the United States Trade Representative, Huawei’s role in the dispute between the U.S. and China, and more possibilities in the trade war moving forward.

What to listen for on this week’s Sinica Podcast:

3:42: What caused the trade deal to go up in smoke? The tariff hikes? The executive order banning Huawei? Chinese negotiators reneging on previously agreed-upon wording? Charlene provides her opinion — noting a misjudgement on Trump’s negotiating style, among other factors: “First of all, a continued and persistent misapprehension on the part of Xi Jinping about Donald Trump…coupled with seeing a text in full. Which, when one sees constituent parts, might not seem too overbearing, but when one sees in full relief, looks exceptionally overbearing, making China look, perhaps, small. Coupled with a sense on the part of China that certain of the provisions, in total, either impinged on China’s sovereignty with respect to changes in laws, or were unrealistic with respect to the extent of purchases the U.S. wanted China to make, or were themselves not emblematic of the negotiations that took place.”

14:37: How can leaders preempt the common criticism of trade deals that the final agreement erodes the sovereignty of their country? Charlene suggests an interesting rhetorical strategy to take during the negotiating process: “Let’s suppose I say to you: I will never agree to a deal that puts in question the sovereignty of my country. Never. I will never do that. And then you do a deal. Which, actually, puts in question the sovereignty of your country. But because you’ve said, quite convincingly, you’d never do a deal that does that. Whatever it is you did over here, by definition, is not that. So, you’ve covered yourself.”

22:44: What is the Trump administration’s approach to macroeconomic policy, and how could this view affect the bilateral relationship with China and other U.S. trade partners? Charlene offers some perspective on the bigger picture: “I think the Trump administration is quite interested in managed trade. I think this is really the calling card — that is to say, ‘We want you to buy more from us. And if you don’t buy more from us in the following quantity over the following time frame, well, we’re just going to have to impose tariffs on you to even out the score.’ Whatever score is being kept in his mind.”

She continues: “One of the difficulties with these kinds of solutions is that they’re often very costly to consumers. They’re intended to divert trade from the existing suppliers to your suppliers…it just takes the hunk that was Brazil’s, or Argentina’s, or Europe’s, or South Africa’s, and gives it to the United States. Those countries, most assuredly, will not stand still for it as their industries, who are trading fairly, suffer from the repercussions of what is a managed trade approach.”

30:07: Attacks on Huawei via public denunciation and executive orders seem to have hit China in a way that tariffs and other escalatory measures have not. Jeremy asks, “How does this sledgehammer approach to Huawei complicate China’s negotiating position?” Charlene acknowledges national security concerns regarding the company but also underlines the importance of interchange in the 21st-century tech ecosystem: “Huawei is just stuck in the middle. There’s a security aspect, and a highly positive, innovative, and economic aspect. So, could there be a better way to protect the security aspect, or mitigate that aspect, while not losing this other very important part of the Huawei equation? I don’t think the administration was interested in trying to thread that course, at least not at the present time. But at some point, it will be necessary to thread that course, or we will see not just Huawei disadvantaged, but most of our major tech companies highly disadvantaged as well.”

May 23, 2019

This week's podcast was recorded at the Caixin "Talking China's Economy: 2019 Forecasts and Strategies" conference in Chengdu in April. Kaiser spoke with Professor Hé Fān 何帆 of the Antai College of Economics and Management at Shanghai Jiaotong University, and Michael Anti, CEO of Caixin Globus, which tracks Chinese global investment. They chat about how "globalization," which once meant "Americanization" to many Chinese, has taken on a much broader meaning as SAFE concerns over capital flight have reeled in the "gray rhinos" after an investment spree, and as a stricter CFIUS regime has made U.S. investments more difficult.

What to listen for on this week’s Sinica Podcast:

7:04: Professor He Fan explains the nature of the bilateral investment relationship between the United States and China in the 21st century: “Recently, the number [of Chinese investment in the United States] in 2017 is above six billion US dollars and accounts for four percent of China’s outbound foreign direct investment. And I haven’t seen — even when talking about [China’s investment in] other parts of the world, the Belt and Road, other countries — but I haven’t seen a dramatic decline of China’s investment in the United States. And if you look at the numbers, I think we tend to overestimate the importance of bilateral investment.”

14:13: How much scrutiny is being placed on Chinese investment in the United States, and what does the outbound investment landscape from China look like at the current moment? Michael: “Actually Chinese companies have two challenges to put the investment out: first, is the government ... But, in terms of the many Chinese internet companies — they have US dollar funds. Because they have US dollars in Hong Kong. Not all in Silicon Valley, not necessarily in Beijing. So that kind of money isn’t really controlled by the Chinese government. Then, they meet the second challenge. The American government, [or] CFIUS. CFIUS is now blocking, I would say 90 percent of Chinese tech investment in the United States.”

19:10: Are immigration and Chinese investment linked? Michael sees a link, and points out investment in southern Europe and Japan as examples - however Professor He Fan pushes back: “I think we can find this link between immigration and investment, but then, it would be very difficult to use this as a proxy to predict where Chinese money will go, because Chinese people are everywhere. I’ve traveled to more than fifty countries and there is only one country where I cannot find many Chinese people. It’s Cuba. Because it’s a planned economy and Chinese people are not allowed to do business there.”

He Fan continues, “People are talking about decoupling of China and the United States. For me, it’s very difficult to imagine the decoupling of the two largest economies in the world … to be frank, I think people in Washington D.C. and Beijing tend to overestimate their influence. And people in Chengdu are much better.”

28:13: Who is doing the overseas investment in areas outside of the United States, state-owned enterprises or privately owned enterprises? Professor He Fan introduces the Wenzhou index: “In other foreign markets, in Africa and Southeast Asia for example, my understanding is private companies discovered those new markets first and then [were] followed by some of the state-owned enterprises. So, private companies, like businessmen in Wenzhou and Yiwu, they always move faster than state-owned enterprises.”

42:14: He Fan give a prognosis for China’s relationship with its regional neighbors, Japan and Korea. Besides a notable warming of relations — could the downturn in U.S.-China relations rekindle the bilateral relationship in these countries? He Fan doesn’t think so, whose compass points southward: “I think this improvement of the bilateral relationship between China and Japan is a strategy …  there’s no place where China can close the gap, if there’s really decoupling between China and the United States. But, maybe a new market in China will increase their investment and trade in the near future — my guess is Southeast Asia.”

Recommendations:

Michael: Two TV shows: Billions and The Good Fight.

He Fan: His new book, 变量 biàn liàng by Hé Fān 何帆, and a French book, Le piège américain (“The American Trap” in English).

Kaiser: A Woman First: First Woman by Selina Meyer and Born a Crime: Stories from a South African Childhood by Trevor Noah.

May 16, 2019

This week on Sinica, Kaiser and Jeremy speak with Sulmaan Wasif Khan, assistant professor of international history and Chinese foreign relations at the Fletcher School at Tufts University, about his book, Haunted by Chaos: China’s Grand Strategy from Mao Zedong to Xi Jinping. He makes the case that China’s overriding concern is for maintaining the security and integrity of the state — something that, given China’s long history of foreign invasion, warlordism, civil war, and contested borders, hasn’t been easy.

What to listen for on this week’s Sinica Podcast:

4:55: Does grand strategy need to be articulated, or communicated clearly to the general population? Usually the answer is yes, where nation states unify diplomatic, economic, and military power to pursue broadscale goals. However, China’s case is different, according to Sulmaan: “There does seem to be this overarching national objective, there is a sense in which the different categories of power [diplomacy, economics, and military] were calibrated to achieve that overarching national objective, but you don’t get it articulated that often, if at all.”

14:44: How much useful insight on contemporary Chinese politics can be gleaned by looking to the past? Sulmaan breaks it down: “China’s imperial past [is] much less grand than it’s typically considered to be… China’s empires at different points had different security threats. At various points, it wasn’t an Asia-centric order. So, simply imposing one version of the imperial past on China’s millennia of history, and saying, ‘This is the way it’s always been,’ seems to be a little misguided.”

One feature from the imperial era that sticks out? Disorder. Sulmaan continues: “If you think about the Taiping Rebellion, for example, if you think about the Opium Wars — these are things that I think Chinese leaders still look to in the imperial past and worry about. The stories of the Opium Wars have never left the consciousness of the leadership, or Chinese people, for that matter. And that’s important to remember.”

30:07: “Hide your strength and bide your time” is a maxim spoken by Deng Xiaoping that has been used to define much of the era of reform and opening up. But is this truly an apt description of the time? Sulmaan states: “Hide and bide doesn’t really begin to sum up what [Deng] is up to. If you think about the sheer scale of economic change going on there, it’s kind of hard to keep that hidden — he’s almost like a kid when it comes to one country, two systems and joint development, how much he brags about those to anyone who will listen. That’s not hide and bide. If you’re sitting across the strait in Taiwan, you’re not seeing a lot of hiding and biding.

41:58: What are China’s future intentions on a grand strategic scale, and how do policymakers in the West feel about it? Sulmaan explains his view: “It says something about the way we typically think about China and other countries — that that kind of alarmism gains traction. There’s that old Atticus Finch line about walking around in someone else’s shoes and seeing how they feel, and I think much of the American foreign policy establishment is pretty bad at that. If the Chinese are doing something that we don’t like, it’s undemocratic or tyrannical. If the Russians are doing something we don’t like, ditto. If you’re not doing it our way, there’s something fundamentally wrong with you.”

Recommendations:

Jeremy: Nathan Hale — cartoonist, author, and illustrator of graphic novels for children.

Sulmaan: Watership Down, by Richard Adams. A useful vessel for understanding China and a source of grand strategic wisdom.

Kaiser: Everything You Love Will Burn: Inside the Rebirth of White Nationalism in America, by Vegas Tenold, and Bring the War Home: The White Power Movement and Paramilitary America, by Kathleen Belew.

May 9, 2019

On this week's show, recorded live in New York on April 3, Kaiser and Jeremy have a wide-ranging chat with former New York Times China correspondent Howard French, now a professor at Columbia University's School of Journalism. We talk about his book Everything Under the Heavens and China's ambitions and anxieties in the world today.

What to listen for on this week’s Sinica Podcast:

7:31: How do Chinese people react to Western reporting about China? Howard has noticed a shift in his students from the People’s Republic of China and suggests, “Because of the changing climate in China, [Chinese students] have a greater appreciation of some of the liberties that go into being able to express criticism about China or being able to think off the beaten path about China.”

23:48: The three discuss Howard’s book, Everything Under The Heavens, and some of the themes in it. Howard: “So the argument that runs through the book is that, if not DNA, then these two realities of [China’s] longevity and continuity on the one hand, and size on the other hand, have created habits of language and habits of mind and patterns of diplomacy that are fairly consistent, but we can see them repeating themselves in variations over a very, very long period of time.”

32:56: Is China a revisionist power or a status quo power? Before Jeremy can finish asking this question, Howard replies, “It’s both.” Howard explains how this could be possible: “There is an insistent notion in China that I admire. I don’t think it’s always to China’s benefit, but I admire the instinct, if instinct is the right world. ‘For every problem we should find a Chinese way to answer it.’ And so, if international relations can be construed as a problem…then finding a Chinese way alongside of accepting incumbent arrangements is a reflex that one is likely to continue to see in China.”

44:46: The relationship between the United States and China appears to have arrived at a critical juncture. In response to Kaiser’s request to provide a prognosis for U.S.-China relations, Howard contests that “most of the liability of the present moment is actually bound up in the present moment.” He continues, “There will be consequences to pay even if Trump goes [in 2020]…and that the United States, I think, no matter what happens in the succession year after Trump, in the best of scenarios, will still have surrendered some not inconsiderable part of its prestige and power in the world.”

Recommendations:

Jeremy: The Idle Parent: Why Laid-Back Parents Raise Happier and Healthy Kids, by Tom Hodgkinson, a case for laissez-faire parenting.

Howard: Empires of the Weak: The Real Story of European Expansion and the Creation of the New World Order, by J.C. Sharman, and River of Dark Dreams: Slavery and Empire in the Cotton Kingdom, by Walter Johnson.

Kaiser: An article in the London Review of Books, Is this the end of the American century?, by Adam Tooze.

May 2, 2019

This week on Sinica, Kaiser and Jeremy chat with Wendy Cutler, vice president at the Asia Society Policy Institute, about a new paper she has authored that calls for coordination between the U.S. and other countries in managing issues related to China trade. She makes the case for working through the WTO and other multilateral organizations, and explains why China is more apt to respond more positively to multilateral over bi- or unilateral approaches.

What to listen for on this week’s Sinica Podcast:

4:08: American and Chinese economic advisers Robert Lighthizer and Liu He are said to be inching toward finalizing an agreement on bilateral trade in the early weeks of May. To begin, Wendy offers some insight into what developments could come: “I think we’re going to see a pretty robust agreement between the United States and China. It’ll have up to 150 pages of commitments, including market access commitments, purchasing commitments, structural reform commitments, as well as an enforcement mechanism to make sure China lives up to its obligations under the commitments.”

16:11: Wendy suggests that the building of new coalitions may be necessary, given the difficulty in gathering the 164 votes from each World Trade Organization member country needed for a formal agreement, and urges openness on collaboration on different issues with a wider range of partners. “What we’re advocating is that the United States doesn’t get fixated on working with the same countries on certain issues…  If the United States has concerns, chances are other countries have concerns, too. So reach out to other countries and see if, at a minimum, you can share information, and maybe, at a maximum, coordinate responses or even send joint representations to China on what needs to be changed. There’s a range of options.”

25:28: What of investment restrictions on Chinese companies in the United States? Wendy elaborates on her suggested strategy: “We suggest that the United States work and coordinate with other countries to see what they’re doing in this area. Because, for the United States, we don’t want to see a situation where we put so many restrictions on Chinese access to our market, and then China just turns elsewhere. Our measures are then less effective.”

29:41: Could this approach lead to a less antagonistic relationship with China, at least regarding trade? Wendy explains: “My hope is that with a U.S.-China trade agreement in the offing, I think, once again, we’re in the endgame and we’ll see a trade agreement soon. We’ll see, at least on the trade front, a reduction in tensions in this area and hopefully this reduction will maybe spread to other areas. I do think we’re in a new world now — that there’s going to be tensions between the United States and China in all of these areas — but I’m hopeful that through the close contacts our negotiators have forged as a result of the U.S.-China trade talks, that this could help deescalate a lot of tensions as they are emerging…”

Recommendations:

Jeremy: A free bird identification app called Merlin Bird ID, produced by the Cornell Lab of Ornithology.

Wendy: Finding a few songs to help the Chinese and U.S. negotiators to get through the highs and lows of international trade talks.

Kaiser: Bad Blood: Secrets and Lies in a Silicon Valley Startup, by John Carreyrou.

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