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If the United States wants to contain China by through technological means, which is understandable, uh then I think they're pursuing very mistaken tactics. Um I mean I don't understand why I mean by just cuz by cutting off semiconductor for instance uh when Mr. Biden did. Um, and the Chinese were asleep at the wheel for a long time on the stuff. They woke up the Chinese and say, "Whoa, this is what they could do to us." And listen, we graduate more STEM students than the rest of the world combined. Okay? And we got research dollars than the more than the rest of the world combined. If you don't think we can lick semiconductor, you got to be out to lunch.
I think the most important event uh in recent years was when we transitioned from unipolarity to multipolarity. I think when one wants to assess international relations, the first question you want to ask yourself is what does the structure of the international system look like? I was born in 1947 during the cold war and we lived until 1989 in a bipolar world. There were two great powers on the planet, the United States and the Soviet Union. The cold war ended and then we moved into a unipolar world and I would imagine most people in the audience came of age during the unipolar moment when there was only one great power in the system and that was the United States of America. That world went away in roughly 2017 and we now live in a world where there are three great powers. The structure of the system has an enormous influence on how states interact with each other and it has an enormous impact on globalization.
During the cold war when I was young, there was really no globalization in large part because there were two different worlds, the communist world and the western world. And people in Hungary lived in a communist order or a [clears throat] Sovietled order. Hungary belonged to the Warsaw Pact. It didn't belong to NATO. What then happened is the Cold War ended in 1989 and you had a Unipole. And once you have a Unipole, you get globalization because the United States runs around the world running things. It creates a global economic order. It brings countries like Russia and Hungary, Russia for a while, Hungary up until this present day into this globalized order. But what's happened is we've left unipolarity and we moved into multiparity. And what you see happening is that that globalization, that global order, that liberal international order that existed during unipolarity has fallen apart. And what you're getting is a new order. You're seeing a country like China trying to influence the order by building its own institutions by shaping how states interact with each other through organizations like bricks and uh the belt and road initiative. So what I would say is that moving forward, you're not going to see anything like that globalization that you saw during the unipolar moment in large part because the foundation has changed. We've gone from unipolarity to multiparity.
Um I think the last round of globalization which has been about 30 years maybe 40 years um of course generated tremendous amount of economic prosperity and wealth and China certainly was one of the largest beneficiaries of this globalization and so has the United States been. Um both of our countries GDP went up significantly. China went up a lot more uh because we began at a lower base. Um but uh the problem with globalization as it stands is I think it's it cannot go on for two reasons. One is I think within the United States and the West somehow the economic benefits derived from globalization weren't distributed in a way that satisfied multiple segments of its population. Um so it's led to an internal revolt against globalization. So, so the architect of this first round of globalization is having internal resistance to it. Um, so that's of course leading to uh delobalization because the leader of the globalization was saying we don't want to do this anymore. Um, and the second uh issue is of course that the largest developing country that participated in globalization was China. And in the beginning I think they had designed it in a way that uh uh the US and western countries were at the core of globalization and there were countries developing countries at the periphery and the division of labor was clear. you know, the US and Western Europe, we're going to be in charge of R&D and and finance and military, and we're going to do cheap labor and and and and sell natural resources if we had them. China didn't have them, but other had them, and provide market. Um, but of course, as China grew, it said, "No, we didn't agree to that. We're [laughter] going to move up the value chain." And unfortunately the US and and certain western countries they thought this perceived as a threat. Uh so they didn't want to do that anymore. Um so we we're I think we're yeah globalization is in trouble.
Um but let me also comment on the liberal international order. Uh I'm not sure where that came from. Um certainly when China signed up to the WTO it wasn't told it was signing up to the liberal international order. It wasn't such thing. I mean, I think it got it was made up in retrospect. I mean, I I think when President Jang went to Washington, uh when China was trying to enter the WTO, President Bill Clinton didn't say, "Hey, President Jang, you're signing up to the liberal international order." It didn't happen. Um so, so was it was was never there. Um so that's my two cents.
Uh Eric made the point that both China and the United States got much richer during the unipolar moment uh when we had globalization. And he's of course correct. And the United States didn't care about that because the United States thought that uh once China got really rich and it got embedded in international institutions, it would become a responsible stakeholder uh to use Robert Zelik's term and then it would become a democracy and once it was a democracy we'd all live happily ever after. This would be the end of history. That was the basic idea. But it didn't turn out that way because once China got really powerful economically, it translated that economic might into military might and it began to throw its muscle around. And this of course scared the living be Jesus out of the Americans and the Americans have moved to counter China. We now care about relative gains. See, Eric was talking about absolute gains where we're both getting rich and we didn't care about relative gains then, but now that China's a great power, we care about relative gains. So, what we want to do is we want to maximize American growth and we want to minimize Chinese growth. Anything we can do to slow down the Chinese economy and refurbish the American economy, we will do. And you see this reflected in the competition over cutting edge technologies. We're extremely scared that China is going to beat us in terms of developing cutting edge technologies. Now where the tariffs come in? Tariffs are part of the story. What we're trying to do with tariffs is modernize, refurbish the American industrial base, make us much more competitive, and we're trying to weaken China at the same time because again, we care about relative power. And all of this is to say that I agree with you, Liz, that we made a fundamental mistake in the 1990s and in the first 20 years of the 21st century in helping China to become Godzilla. It's come back to haunt us and we're now trying to rectify that and again tariffs are part of that story.
>> Let me comment on that. [laughter] comment on this. >> Um I think you're well of course like I said both countries benefit tremendously. Um and but if the United certainly the US did not set up the system and ask China to join out of charity. I really don't think so. Um they they thought that they would benefit too. That's number one. Number two, uh if the US thought that that if China develops and eventually it will become a liberal country, they never told us that. Nobody told us that. It was a secret intent. It wasn't disclosed in the prospectus. Okay, we signed up. We went we signed up to WTO and there was a prospectus. There were a bunch of rules, a lot of texts, a lot of words, nothing in it that said, "Hey, if your economy develops, you must become a liberal society." It wasn't there. We didn't sign up to that, like I said. Um, so, so I think, well, look, if if the US is now changing its path, changing its direction, that's completely within its power to do. It's a sovereign nation. Uh, tariffs and all of that. If the the the globalization, if the United States wants to ditch globalization for its own needs, I think China will adapt. Everybody has to adapt. It's okay. Uh you I think China will do okay in this new era. Uh and it will adapt.
John. >> Yeah. If I can just say a word picking up on what you said. Uh I think the way to think about the world we're moving into is to separate the economic from the security competition. Uh and think about it in the context of the preWorld War I period, not the Cold War. Now you're probably saying to yourself, what is he talking about? Before World War I here in Europe, there was a huge amount of economic intercourse among all of the states. There was a huge amount of economic interdependence here in Europe. Nevertheless, at the same time, you had two powerful security blocks. One was the triple ant, which was France, Britain, and Russia, and the other was the triple alliance. Germany of course was the key player, Austria, Hungary, and Italy. And you had this intense security competition before World War I that of course of course in August led August 1914 led to World War I. But at the same time you had this intense security competition. You had all this economic interdependence. Fast forward to the Cold War when I grew up there was hardly any economic intercourse between the West and the East. So there was security competition but no economic intercourse. The situation moving forward is going to look like the preworld war I period. It's not going to look like the cold war. There's going to be a great deal of economic intercourse between India and China, the United States and China, Europe and China. The key issue inside the economic realm will have to do with high edge or cutting edge uh technologies. That's what the United States really cares about in terms of the competition with China. And just to take Europe and how this competition will affect Europe, there's no question given the economic state of Europe that European states will have a powerful incentive to want to trade with China. And the United States will tolerate that as long as Europeans don't trade cutting edge technologies to the Chinese. Because what the Americans are trying to do, as Eric knows very well, is the Americans are trying to throttle, slow down China's development of cutting edge technologies. And the United States is not going to be happy if Europe trades cutting edge technologies or technologies that feed into cutting edge technologies with China. But nevertheless, Europeans, Americans, Indians, we're going to trade with Chinese, the Chinese. But at the same time, you're going to have a wicked and very dangerous security competition in East Asia for many, many years moving forward.
Eric, >> um, I think if the United States wants to contain China by through technological means, which is understandable, uh, then I think they're pursuing very mistaken tactics. Um I mean I don't understand why I mean by just because by cutting off semiconductor for instance uh when Mr. Biden did. Um, and the Chinese were asleep at the wheel for a long time on the stuff. They woke up the Chinese and say, "Whoa, this is what they could do to us." And listen, we graduate more STEM students than the rest of the world combined. Okay? And we got research dollars than the more than the rest of the world combined. If you don't think we can lick semiconductor, you got to be out to lunch. I mean, so so I I just don't I mean I I just don't think that's the productive way to go about it. And I mean I, by the way, I totally understand. I think the Chinese understand the US wants to re-industrialize. If I were running the United States, I would want to re-industrialize, too. Um, I just wish there could be a friendlier way to go about it externally. Um, and I I actually think that's why I'm actually reasonably optimistic. I actually think the Chinese would be willing to cooperate and maybe contribute to that effort. Uh, certainly China is the largest industrial power in the world. uh there's something that there's some kind of accommodation that could be reached I believe if if we pursue a a friendlier atmosphere.