Transcription
President G's now been there for 10 years. He set out his approach very clearly 10 years ago and we accepted it. And it was set out in a statement he made in Mexico City. He was asked about what's your relationship going to be with the West. He said, "Look, we're not going to export revolution. We're not going to export Hungary refugees. We're not going to mess with you. Don't mess with us." And it's a bit crude, but it's very clear how to engage with China, which is to accept if you want to have a good relationship with them, you respect their principle of self of territorial integrity and non-inference. And that's the basis on which they've since conducted their foreign affairs.
But actually, Xiinping is being quite frank that he needs a third term, he says, which he may have within hours, third five-year term to complete the work he has to return China. It's a term that they use kind of like renaissance fushing jeru. But I have to say the Chinese always made it absolutely clear what the red lines were in Hong Kong. Uh but he said look there are certain parameters. You can say what you like free speech you can criticize the communist party but if there is violent disorder we will move in and stop it. And those people in Hong Kong who in the name of democracy and free speech started throwing Molotov cocktails at the police and vandalizing their legislature did their little bit to kill Hong Kong democracy because it was very clear what the rules of the game were. And the Chinese were not in any way dishonest or inco in unclear about what was permissible.
The person who put the boot into the rules-based system, the World Trade Organization, wasn't the Chinese. It was President Trump. We always thought it was us. The noble, magnanimous Americans seeking a program of globalization saw this angry, hostile, closed China and decided to open it up to join the world. That view is now obsolete. So that that principle of dealing with China, engaging with China, but recognizing the reality that they have a different system and they're not going to countenance interference with their internal politics. That has to be out of sheer realism the way we deal with them.
>> And at the time, a recently declassified document shows Henry Kissinger knew there were radicals in China. In July 1970, he received a highly classified report that said, "Chinese fighter aircraft have been launched and are flying out possibly to shoot down an American reconnaissance plane." One of the things he said to Nixon was, "There are some people here who didn't want you to come to China. You will find a chapter on Dang Xiaoing, the great Chinese leader now somewhat eclipsed by Xiinping and how we learned from his time in Russia. If we were so wrong, the last 20 to 40 years, what exactly is the nature of China's ambition? Is it Hitler and Nazi Germany taking over Poland and Czech?" No, absolutely not. No indication of that kind of conduct at all from China. Is it some sort of um um in his book uh Dr. Pulbury describes an episode where a Chinese defector uh comes to the United States and warns that there is a secret plan to make the Chinese economy as big as that of the United States by the year 2020. Fore speech. [Music] forch. Fore [Music] [Music] where it talks about China's secret strategy to replace America as the global superpower. I mean why why secret? Um in his book uh Dr. Pry describes an episode where a Chinese defector uh comes to the United States and warns that there is a secret plan to make the Chinese economy as big as that of the United States by the year 2020. It's a big shock, you know, big secret. Well, I mean, I have to tell him that 25 years ago, I was sitting in a multinational company in London, uh, armed with a few statistics, a calculator, and a bit of common sense. Uh, and you could work out, um, on the back of an envelope that China was almost certain to become the biggest economy in the world by 2020. It didn't require secrecy to understand that. And there's simple arithmetic actually. I mean there are four times as many people in China. You know when China gets to a quarter of American living standards by definition it's going to be equivalent in economic size. I mean why is that a problem? I mean it should be something we welcome actually and a lot of very poor people getting a decent living standards. And you know it's basic arithmetic that when China has continued to grow as it almost certainly will and it reaches half American living standards they will have an economy twice as big and they're going to have to get used to it and we are and actually it's not just China by the middle of this century India will also be a economic superpower with a bigger economy than the United States very probably so you know there is an issue about the the current hegimon you the superpower getting used to the idea that there is another country which will have comparable and potentially significantly more economic heft. I mean we you know Britain used to be number one 100 years ago. So we've had a century to get used to sliding down the league table. I think we're about now about number eight. We've just been overtaken by Indonesia. But you know we we get used to these things. And I I think the United States the core of the problem in many ways is an inability to get used to this basic fact and to adapt to it and to accept that China is going to have to be integrated within the the the rules of the world system which the United States has led and led well to our all to our benefit for the last 70 years. Now this whole idea of secrecy I think cuts across the idea that many of the features of modern China are hidden in plain sight. Now it's very clear what they're about. Um it's not hidden. Um the idea that the Chinese model which was developed the modern Chinese model under Deng Xiaoping uh it was very clear from the outset that there were two very basic principles. The first was the emphasis on stability and security. After a century of chaos, uh the revolution, the civil war, the war, Mount Satan's madness, um security under a authoritarian one party state was never hidden. Was always absolutely clear that this was the model that they were going to pursue. And the second aspect was raising Chinese living standards which was going to happen by importing capitalism into China which has happened state capitalism big private sector at the top end some state control but with very dynamic capitalist competive system and state enterprises with an element of market competition and the stat capitalist model has worked in China. It's been highly successful. uh it may now run into trouble. Um they've got a lot of economic problems associated with underconumption, corporate debt. Um well, of course, if they do run into trouble, um they'll become like Japan and we no longer worry about them. But actually the the issue which we now face is that if the Chinese model continues to be successful, this combination of rapid growth sustained by a successful capitalist system allied to an authoritarian one party state. What is the problem in our having to try and live with that? Now some of you will say um well democracy you know we believe in democracy why shouldn't China be a democracy well it is a different system and hitherto you know we've accepted that there is a different system um to take a particular issue which concerns the British which is our residual responsibilities in Hong Kong and people here are routly very upset worse angry that decent people are being bundled off to prison and newspaper editors are being shut down. But I have to say the Chinese always made it absolutely clear what the red lines were in Hong Kong. When Margaret Thatcher went to negotiate with Deng Xiaoping 40 years ago, uh he said, "Look, we could have dealt with Hong Kong the way the Indians dealt with colonial enclaves or Indonesia sent the army in, problem solved in 24 hours, but they didn't. They were more subtle. They saw advantages in keeping this independent entity." Uh but he said, "Look, there are certain parameters. you you can say what you like, free speech, you can criticize the Communist Party, but if there is violent disorder, we will move in and stop it. And those people in Hong Kong who in the name of democracy and free speech started throwing Molotov cocktails at the police and vandalizing their legislature did their little bit to kill Hong Kong democracy because it was very clear what the rules of the game were. And the Chinese were not in any way dishonest or inco in unclear about what was permissible. And I think we need to remember that. And similarly in terms of foreign policy, um, President G's now been there for 10 years. He set out his approach very clearly 10 years ago and we accepted it. And it was set out in a statement he made in Mexico City. He was asked about what's your relationship going to be with the West. He said, "Look, we're not going to export revolution. We're not going to export Hungary refugees. We're not going to mess with you. Don't mess with us." And it's a bit crude, but it's very clear how to engage with China, which is to accept if you want to have a good relationship with them, you respect their principle of self of territorial integrity and non-inference. And that's the basis on which they've since conducted their foreign affairs. It's why for example in the issue of Chin Jang um terrible human rights abuse I'm quite sure but and the west has taken up a strong position on it but it's very clear that a lot of other countries in the world by the Chinese argument every single Muslim country of importance including those that are democratically elected Indonesia, Malaysia, Pakistan, Bangladesh, Nigeria have lined up on the Chinese side so that that principle of dealing with China, engaging with China, but recognizing the reality that they have a different system and they're not going to countenance interference with their internal politics. That has to be out of sheer realism the way we deal with them.
So, let me just try and bring to a head where I think this leads. I mean I was part of a government that where we did try to engage with China and our primary motive was economic and we took the view and I I would still take the view that it was economically beneficial to Britain and other western countries to engage economically with China as a result of what we did. Uh we still have a British steel industry. Chinese company bought out Tarter steel and it was going to close. We will have an electric vehicle industry because the Chinese are going to invest heavily in batteries in the northeast of England. Jag Land Rover is a highly successful motor car industry in in the West Midlands because of the profits and sales in China. Astroenica which developed our vaccine did so on the back of profits and sales in China. British universities, including this one, depend very heavily on 120,000 Chinese students every year paying full commercial fees. You know, the British economy has benefited from our relations with China. And I don't apologize for having negotiated some of those things, but it isn't just parochial. There's a broader picture. Despite all the complaints about Chinese unfair practices, they've actually helped to keep the world monetary system stable. They hold $4 trillion worth of US assets. It was always going to be said that they would use it to sabotage the system and they would go in for currency warfare. Nothing of the kind has happened. They've kept the basic monetary system stable in implicit partnership with the United States. The person who put the boot into the rules-based system, the World Trade Organization, wasn't the Chinese. It was President Trump tried to cut it off at the knees uh withdrawing support for the WTO. And Michael referred quite fairly to some of the grievances which we have with the Chinese about intellectual property rights. I mean all countries coming up developing Korea, Taiwan, Japan and I have to say in its early stages the United States which based its development stealing um intellectual property from Britain. That was how they got going. I mean that's how countries start. Uh but they have now introduced intellectual property courts. Foreign companies are now winning cases. They're adapting to the demands of a globally responsible economic partner. uh we complain and we used to negotiate with the Chinese and say well you open your market show that you're willing to reciprocate free trade and the top of the western list and the British list was always financial services and it's worth noting that in the current flurry of uh activity that's taking place in China on policy that one of the things that the president has done is to open up China to financial services leading western companies Black Rockck JP Philippine organ are now operating fully owned subsidiaries in China uh buying up Chinese shares. You know, they've accepted the obligations of being part of an integrated economic system.
But I I conclude a remark with something that's more important than international trade, which is those common headaches you economists call international public goods where countries have to cooperate. You know, pandemics are one example. Um the other is in Glasgow at the moment is climate change and the Chinese are currently being portrayed as the bad guys and they have very large emissions of course but not in actually per capita terms or cumulatively but yeah we we're not going to solve the world the climate problem without Chinese cooperation and they do recognize there is a problem they've just introduced carbon pricing uh they've got the biggest renewable energy industry vehicle industry in the world. Um they tried to accelerate the phasing out of coal and then run into power shortages. So they've had to backtrack. But they understand the necessity. But the key point is we're not going to solve this problem unless we work with them on research common standards and so on. And you can't do that in a cold war environment. And and just my final point and I'll just take a minute over this is the proliferation of nuclear weapons. probably the biggest danger we face at the moment and there are rogue states North Korea Pakistan potentially Iran uh China has influence with all those countries we don't know how they exercise it but we could potentially minimize the risks associated that if we're willing to work with the Chinese and something even more serious because of the collapse of conversations with China a a sort of paranoia has now developed which is leading the Chinese to build up their stock of nuclear weapons. They had a minimum deterrence policy, no first use, was no threat to anybody. Now they fear they're going to be attacked by the United States. So they're building up their nuclear arsenal. I mean, you can argue about who's to blame, but it's got to be stopped. It's very, very dangerous. And you only stop it if you talk to them. And nobody is now talking to them. And we have to engage for our our own sakes as well as theirs. Thank you.
>> I'm going to spend some of my 12 minutes praising Sir Vince Cable. I can only hope he will do the same for me. While he was at Shell, he helped to pioneer scenariobased planning. This is a way of thinking which was unique at the time. It's a way of thinking about the unthinkable. Later on, the American Pentagon and the CIA stole this concept. I myself use it in my own book, the 100red-year marathon. The concept is devilishly simple. Try to think of different factors that will determine the future. Make a plan of where, let's say, four or five of them are so-called family of scenarios, and then change some of the variables to see what unthinkable things might happen. In the case of China, as far as I know, nobody in Washington DC did this in 1970 1971 as Kissinger and Nixon were preparing to open China. If there had been a Shell company scenario done at the time in 1970 and 71 and I had some input into the decision, so I blame myself in part although I blame Dr. Kissinger even more. The scenario could have been, are we being deceived? Is it not America opening up China, which we thought it was, is it China opening up America for all kinds of benefits to China? And at the time, a recently declassified document shows Henry Kissinger knew there were radicals in China. In July 1970, he received a highly classified report that said, "Chinese fighter aircraft have been launched and are flying out possibly to shoot down an American reconnaissance plane." By the way, this is not 1990. This is 1970. And Kissinger writes a memo to Nixon saying, "There are apparently radicals in the Chinese leadership who do not want an opening with America. Perhaps we should be sure our reconnaissance aircraft don't fly too close to the China coast coast." The point here is already the American side understood there's politics at the top in Beijing. There are radicals who are able to launch fighter aircraft. Later on, in a very famous comment chairman Mao made to Nixon, which Nixon's acknowledged he didn't fully understand at the time, Chairman Mao had a way of speaking almost like a poet, and he would say things sometimes his young translator couldn't accurately translate. One of the things he said to Nixon was, "There are some people here who didn't want you to come to China. Don't worry about it. The top 10 generals in China a few months earlier had been killed or placed under arrest and would be sentenced to life in prison or execution for opposing the opening to America. More recently, the Chinese have released a number of memoirs that show how it was their idea to open America. So, if you have a title like Mr. President Shia has selected, Dancing with the Dragon, you need to understand first who invited who to dance. We always thought it was us. The noble, magnanimous Americans seeking a program of globalization saw this angry, hostile, closed China and decided to open it up to join the world. That view is now obsolete. People recognize the new Chinese materials. Even Kissinger in his book on China, he says it took him 40 years to write this book. He now has abandoned the story that America opened China. He now in his new book on China, that's the title on China. You just all buy it. He now says there was a parallel effort inside the Chinese leadership to reach out to us. This changes the whole perception that the West has sought to bring China into the new world order. If I skip forward to just a c couple of years ago, you'd all know that many countries in the world have accused China of intellectual property violations. In Geneva, there's a organization. It's a big beautiful green and blue glass skyscraper. For short, among insiders, it's called WIPO. Doesn't sound very nice, does it? Wipo. Who knows what that stands for? Put your hands up. Oh boy. Five. WIPO is the World Intellectual Property Organization. It's part of the family of UN specialized agencies of which there are 16, which in turn go back to the League of Nations, which in turn go back even further. It's the idea of a world order and various functional issues like the protection of intellectual property will be managed in a way that some that involves pooling the sovereignty of a hundred or more nations. who ran to be the new director of the World Intellectual Property Organization. Put your hands up if you think it was an English person. How about an American? How about the winning vote was held by a Chinese citizen and party member? Takes a lot of gaul to be accused of the biggest intellectual property theft in the world in the history of mankind and then to run a candidate to head the UN specialized agencies. He was going to win. President Trump heard about this and said, "Wait a minute. This isn't right." And consulted with a lot of others. Suddenly a candidate from Singapore with a long history of the protection of intellectual property put his name in and won. So going back to 1970 all the way to 2020. Has the American plan to dance with the dragon and bring China in to the UN system, the world order, the world bank, IMF, has it worked? You bet. Is it what we planned for? No. And in Sir Vince Cable's book called Money and Power, you will find a chapter on Dang Xiaoing, the great Chinese leader now somewhat eclipsed by Xiinping, and how he learned from his time in Russia and later on from the World Bank and a Nobel laureate named James Tubin. He learned the plan for how to turn China into an economic powerhouse. The United States and the West and Japan all helped this again with the assumption Dancing with the Dragon is going to be a good date. No, it turned out that China with human rights practices, censorship practices, a permanent one party system, the use of terror against its own people. This China, the one Kissinger thought about in 1970 when he mentioned the radicals are sending the jet fighter out. This kind of China seems to be the winners in Beijing. And my book 100red-year marathon using the scenario techniques Sir Vince Cable pioneered says, "What does this mean? If we were so wrong the last 20 to 40 years, what exactly is the nature of China's ambition? Is it Hitler and Nazi Germany taking over Poland and Czech? No, absolutely not. No indication of that kind of conduct at all from China. Is it some sort of um Japan 1930s assassinating leaders trying to set up an East Asia co-rossperity sphere? No. No indication of that whatsoever. The Chinese ambition as they themselves explain it is just to return to how things used to be. And most Americans, some Oxford students of course know, but not all. Well, how did things used to be? And that's led to an exploration for me in my next book on what are the patterns of ancient Chinese politics that Xiinping is talking so much about in a kind of a code. He uses proverbs. He uses stories about ancient people that you think that's harmless. But actually Xiinping is being quite frank that he needs a third term. he says which he may have within hours third five-year term to complete the work he has to return China. It's a term that they use kind of like renaissance fushing jeru. How many of you here and this is my last few seconds. How many of you here think you have a good picture of the kind of world Xiinping has in mind when China is restored to its rightful place? Put your hand up. That means you have to buy my next book. Thank you very much. [Music] [Music] Fore! Foreign! Foreign! [Music] [Music] [Music]