Transcription
Some in this country may think that China's sole goal is to overtake the US. Gez, that's a lot of responsibilities in the world. No, thank you. Um, and no, not feasible.
Now, leaving aside what we think about China and their problems, their challenges, their challenges with the model, we're seeing the economy slow down at a significant pace today. Uh it is still a fact that it is the country that has been growing the fastest for the longest period of time in all of human history.
The Shanghai government actually gave money and cheap land to Tesla hoping that they would build factories and sell um cars there. Chinese local governments giving subsidizing American companies in China. People were fine with that. They liked it. They bought Tesla cars. They're all over the streets of China today.
Now, this is again a fact. Despite what's happening between the two countries, I don't know if you noticed, but four out of the five of the most downloaded apps today are actually Chinese. This is Professor Cu Jin from the London School of Economics. What she's about to share with you will definitely make you rethink how the West views China. And so I wanted to tell a different side of the story and there is always a different side of the story. And given how tense things have become between the two countries, US and China, I think it is important to tell that story. Uh so allow me to offer you a different perspective and lens to look through uh in the next hour.
So people ask me often what are the biggest misunderstandings about China? No, one of it is actually how the model works. Now, 30 million private companies sprung out from nowhere like mushrooms spring up from a desert in so little time, 20 years uh in the beginning stages and beginning ages of 1980s. It was China was a thoroughly anti- capitalistic uh uh economy and suddenly 30 million out of nowhere. And we tend to think of China's system as being extremely centralized, as if everything is decisions are made on the top by a few people, maybe even one person, but that's not quite accurate. Politically, it's very centralized, but economically it's extremely decentralized. Decisions, implementation um uh are all made on the ground decided by local officials who actually go about helping private entrepreneurs to succeed.
In my book, I call this the mayor economy, local provincial leaders. I mean, they could be mayors, they could be party uh uh secretaries in charge of turning backward fishing villages into global technology hubs like Shenzhen. And that's what they did. I don't know what we expect our mayors to do for us in this country, but in China, that was their mandate. It was to help growth. It was to implement these radical reforms. It was to help protect the environment to to really encourage the private entrepreneurs to build um uh something uh new. And so currently, even fast forward many years today, they're running around all over country uh over the country building many Silicon Valleys, helping private entrepreneurs find talent, coordinate financing, build a whole industrial clutter around key companies like EVs or semiconductors.
The Shanghai government actually gave money and cheap land to Tesla, hoping that they would build factories and sell um cars there. Chinese local governments giving subsidizing American companies in China. People were fine with that. They liked it. They bought Tesla cars. They're all over the streets of China today.
And so a lot of people don't understand what what are the incentives behind these mayors, you know, the decentralized economy that they would want to do this uh for the private entrepreneurs and help the economy. Well, that comes back to some pretty unique institutional features in China. So to be promoted to the higher runs of the political p hierarchy and everybody wanted to be promoted um you needed to do a good job for the local economy and on top of that by doing that you got more jobs filled your fiscal coffers um and the land you own which the local governments own are actually worth more and most of all you needed the private entrepreneurs to help you right we usually think about China as if the state kind of suppresses the private or surprises. No, actually it's quite the opposite. They need the private entrepreneurs because they're the most productive and they're the most innovative. So, there were huge incentives. And on top of that, there was a lot of competition across the regions in China. It was like a beauty contest, you know, contesting for the best and promising entrepreneurs. And you had to be friendly to them. You had to be nice to them. You had to be helpful. So in the data we see that the cleanest, friendliest uh local governments saw the fastest growth and the rise of the largest companies and those that were more corrupt, more extractive, they lost out. So there's an incentive to behave, to actually lend a helping hand rather than a grabbing hand, which some might expect in a country with a poor rule of law or too much political power concentrate in the hands of too few would have been uh very difficult. But that was uh what the mayors did. And you didn't need every mayor to be like that. You know, China's a big country. there tens of thousands of local governments and many of them were corrupt and money went into their pockets but the majority were incentivized and that was enough to lead to this seismic change at breakneck uh pace.
Now leaving aside what we think about China and their problems their challenges the challenges with the model we're seeing the economy slowed down at a significant pace today uh it is still a fact that it is the country that has been growing the fastest for the longest period of time in all of human history and that is a fact. So something has must have gone right.
Now this comes to a broader point and a more contested point which is what do we actually think about the role of the state? Now I'm a western trained economist. I can tell you in our models, in our intellectual thinking framework, there's very little room for the state except for maybe regulations, maybe stepping in when there are market failures. But I can also understand culturally and historically why we feel so uneasy about state interventions. And we've also seen the state overreaching and being too heavy-handed, of course, and these are problems. But sitting around many of these meetings with politicians, leaders, experts talking about development in developing countries, a perennial thing that comes up is not enough state capacity. Emerging markets need to double their infrastructure in the next few years. Not enough state coordination, not enough uh investment. That's a fact as well. And China didn't have that problem. China actually had the opposite problem. too much infrastructure which was also wasteful. It was inefficient. But it was still a better problem to have than to not have enough connectivity to unleash people's productivity on balance.
Now for all of its expedience, the model has serious challenges. It's being tested. It's much less effective now. Growth is slowing down. Huge amounts of debt. 140 million vacant homes to be filled in who knows how many years. There's too much capacity, too much supply, not enough demand. The financial system is really a living dinosaur. Too little credit for the small and medium-siz enterprises. And that's the other side of this high growth, highcost model. It was costly. There were waste. But to the Chinese on net, the benefits still outweighed the cost because a billion people were lifted out of poverty. And even today, it's the first time that you have a developing country being able to do things like cutting edge technology. And despite the problems, and I'm sure there'll be many questions about Chinese economies today, and I'll share with you my muse, I still think it's too early to write China off. This country, this very country, the US, we've had 12 recessions in the last century. It took more than 10 years to recover from the great recession of 2009. China is currently experienced its first serious economic recession uh in the last 40 years. The potential is still there. There's a vast majority of people undermployed, undereducated in the or rural areas and even just between China where China is today and its potential whether it's in terms of urban urbanization, tertiary education, the service sector, productivity, there's a big gap still yet to be filled. And again, even in this country, we've seen over time that poor states converged to the richer states. It's in the data and it's also going to happen to China. So there's still room for growth.
Now the second misunderstanding is about Chinese aspirations. Some in this country may think that China's sole goal is to overtake the US. Geez, that's a lot of responsibilities in the world. No thank you. Um and no, not feasible. The daily preoccupation of the vast majority of Chinese today is still about putting food on their table and keeping their kids in school. Not really having a dangerous obsession about America. Really, it doesn't believe that worrying about America is actually going to solve its own problems. And the government needs to keep its own house in order. There's a lot of domestic challenges. And by the way, talking about aspirations, and we have an ethical theme in this uh series of talks, we're going to have to accept that there will be similar aspirations from India, Indonesia, Vietnam, the entire African continent. They are rising. They have huge aspirations to pedal their way to prosperity. And we'll have to need to deal with that, too. They're going to start selling cheap goods to China, use its technology. And by the way, some of that is already happening as factories are moving to Southeast Asia on mass. The Chinese don't really have much time to talk about the Vietnamese stealing their jobs. We don't really hear about it in the newspapers. Instead, what they hear about is they should invest more in smart manufacturing, in uptooling, upskilling uh their workers, climbing up the value chain so they're not forever stuck and condemned to producing cheap goods. Climbing up the global value chain is what they're focused on.
And maybe it's also another cultural thing to do. And again, culture and history is something it's a theme in my book. I like to talk about it a little bit because I do think we kind of sometimes underestimate how important uh they are and that contributes to some of the misunderstandings. Um, but it's a cultural thing to do in China to turn a crisis into motivation. Now speaking of President Biden's export controls on uh semiconductors or you know kind of asking companies to break off uh ties with China to stop selling to them. Well, initially it didn't go down that well uh in in China. Um, but then they kind of just turned it into a positive attitude. It totally mobilized everybody. They whipped companies into shape. For the longest time they were actually comfortably importing American uh chips and now all of a sudden they have to start buying Chinese chips. and not because the Chinese government forced them to, but rather it's because of um these policies from America. So, and in fact, they said, well, thank you. Thank you for keeping us on our toes. There were huge accelerations in these domestic industries and there was almost a national euphoria when they made breakthroughs in the chip industry. Small victories, but still small triumphs. And the Chinese people were pretty happy. They turned this around and said, "Oh, this is pretty positive." And by the way, President Biden, would you mind also sanctioning our national men's soccer team, too? But thank you. Jokes aside, uh to look at to the rise of African India, does China want to see that as a threat or opportunity? I actually really think they see it as an opportunity. And that rest of the world is is coming. 90% of the people in the world still live in the developing countries and they too have that kind of aspirations.
Um, and third finally the Chinese people the misunderstandings and the new generation that's actually what I enjoy talking about the most. Uh it's what gives me the most hope that we are going to do much better with a new generation and that we're not actually headed on a collision course. The new generation born after the one child policy in the 1980s. I was among the first generation. I have lots of thoughts about it. I've done lots of research about it. Um, it's a fascinating topic. Uh, they are radically different from my parents age. You know, going through huge vicissitudes, economic, psychological hardships in China during these turbulent times. Um, the new generation, they love leisure, consuming, spending money on clothes. uh traveling, entertainment, all of that. They even like to borrow to spend. We used to think about China as a big saver, you know, saving so much and then flooding the world with capital and products. Well, this generation is different. They borrow, they spend. 85% of the consumer credit is actually accounted for by people under 35. One click on Alibaba's, you know, e-commerce website, you can borrow to buy lipstick. That's what college students do. I don't know who who pays them back. maybe their parents, but anyway, they they still love to to borrow that the mentality uh has totally shifted.
And despite what we think about the one child policy, the dark sides, there were also some unintended consequences. For one, it seriously raised the status of Chinese women. Why? Because you used to educate your sons first before your daughters. and everybody now with a daughter pour all the resource into her. The modern Mulans of every family, right? And we see in the data that the gender gap completely closed in my generation for uh attainment in higher education. And in the data among the business leaders, those born in the 1990s, 45% of the business leaders are women compared to only 6% of those born in the 1970s,60 sorry, or 10% for those born in the 1970s. So it really accelerated the closing of the gender gap for China, you know, this formerly very traditional confusion society, way above what economic growth would have predicted uh in uh uh in uh in other countries. And moreover, this is a really open-minded generation. I've looked at lots of international surveys about them. Uh they care about things like diversity, animal rights, um social inequity. they feel more confident. You know the the kind of factory workers that opted for three uh shifts a night back in those days, that's not in that generation. They're more relaxed, more chill, you know, it's not a bad thing. Um, they're not going to be working as hard as tenacious, but they have a broader, you know, perspective about life uh in general. And also they communicate better. Many of them have been educated in this country. A third of international students in this country are Chinese students and five million visitors before the pandemic come to this country. They are fluent with the western culture, the language uh and they would be great ambassadors uh for uh China and they connect much better with the zen jenzes around the world and they are that bridge. Um, and they're also very innovative.
Now, this is again a fact. Despite what's happening between the two countries, I don't know if you noticed, but four out of the five of the most downloaded apps today are actually Chinese. I don't know if it will stay the stay stay this way, but you know, the new generation, they have much more they have much less of a cultural divide and gap.
And so, let me leave with this thought. Our great leader Deng Xiaoping who really pushed the country for reforms and opening up and really was um the forefather of this miracle success used to say about intractable problems and we had many back in those days as well. Let's leave it to the smarter younger generation to figure it out. They're going to they're going to sort it out. But at the same time, we still need to hold the world together for them to actually give them that chance. Um, I don't think that on top of all the debt that we're going to throw at them or the dirtier planet that we really want to add a more dangerous world on the cusp of uh collapse uh to the mix. So it's where places like this forums like this to offer this exchange uh to get to know each better each other better to uh reduce these misgivings that I think is so so important and it's really in this kind of country that such curiosity and openness for different views can actually take place. So I really thank you uh for listening. Thank you for giving me this uh opportunity and thank you for giving me and so many other students from China, from India, from Africa to learn from this country. And we can also expect that when the next global financial crisis comes around the corner, and I'm certainly sure it will, the two central banks in US and China, they're going to have to call each other up, right? That if there's ever a hope of realizing the green transition, we are going to need the cheapest, cleanest energy and technology and a whole lot of investment and collaboration uh to make it happen. And everybody here is here to stay. Nobody's really going anywhere. Uh we're here. So let's keep the people-to-people connection, keep the dialogues open, have some goodwill and maybe even just start from small victories and I believe over time even more can be achieved. Thank you.
In the US, parties change but policies don't. Uh in China, it's the opposite. They are building many Silicon valleys all around China. And it's only useful if you help the good ones, the productive ones. And so they do that not they don't just help one or two, they help thousands there. So if you think about corruption and the lack of democratic democratic mechanisms, there are much more nuanced mechanisms of competition and checks and balances in China that we may not see from the outside. That's what happened to the EVs. Within 10 years, China became the largest producer and consumers of EVs. And it does help that the government can roll out 4 million EV charging stations around the country as opposed to 160,000 in the US. It critically does make that kind of difference. It's not just a centralized system. That's what we all think. It's politically centralized, but it's radically economically decentralized. And that lies in in there lies the fundamental success story of China's economy. It's all these mayors running around, the the lady that I mentioned um since the 1980s. They're entrepreneurial. They're often risktakers. They want to bring in the best technologies and investments and capital. And they help the private entrepreneurs. Why do they help the private entrepreneurs? Because they are the best. They want to help the best, not the worst or the most politically connected. Because by helping the good entrepreneurs, you're creating an entire ecosystem of success. They bring jobs. They bring fiscal revenue. And by the way, this this city, more than half of the fiscal revenues comes from taxes, okay? Not from real estate. They have very low GDP uh debt to GDP ratio. So again, uh I'll come back to to to what we should take out from this story. They want to help these private entrepreneurs because then they create the retail sector. Then even the real estate that they own is worth more.
They are building many Silicon Valleys all around China and it's only useful if you help the good ones, the productive ones. And so they do that not they don't just help one or two, they help thousands. And so if you look at a picture of the distribution of unicorns, unicorn companies in China, they're spread all over with exception of the western certain central province, but really not just in Beijing, Shanhan, Shanghai, and Shenzhen as you all know. Even in a a second tier second tier cities whether it's Wui, Wuhan, Sujo, Hu many places you've not heard of, there are global quantum avenues running through global companies. Uh there are 300 EV cars all in China and they're all backed by some local provincial party secretary and they compete. So they're spread all over. And I think that decentralized uh nature what I call the mayor economy is really important to understand not only to explain China's past growth also to realize today's challenges but also to look forward in the future. Why? Because it's the same model, same platform they're using to develop renewables, undertake the green transition and all of that. It's the same model because the central government needs the local governments to implement. And what do the local mayors get out of this? Why do they want to do the best thing for the economy? Obviously, they're not elected. They don't face reelection pressure because they have political ambitions to rise up the ranks. Uh the ones that deliver the best economic results coupled with a bunch of other things. Now, it's not as simple as GDP. In the past, it was just GDP. And that's why everyone was uh what we call GDP worshiping those days. And that's how you climbed up the ranks because then you can become the provincial city uh party secretary and then provincial party secretary. You become uh at the very top rank of the central government. Actually, President Xi's father was one of those successful political leaders that um implemented reforms, made an economic success and went straight straight to the top ranks of uh the leadership and they're all competing with each other. So if you think about corruption and the lack of democratic democratic mechanisms, there are much more nuanced mechanisms of competition and checks and balances in China that we may not see from the outside. And so these catars rotate 3 to 5 years. They compete with each other, right? Um and there's a lot of monitoring systems involved from the central top down. It's a it's a convoluted apparatus, but it's certainly not just a one-man show. that will be a very very naive understanding reading of what's actually going on uh in China and certainly for the economy it is um it is uh absolutely uh critical um so the mayor model.
Now let me tell you one another example solar panels right look China led the solar panel boom in the world and that really happened after the mid 2000s and um something that happened then was that uh the Chinese governments encouraged the local governments to implement a series of supportive measures for for the solar industries. I want to caveat the support by critically emphasizing that it's not just financial subsidies. there are now far and few between because first of all the local governments are pretty much um um a bankrupt right because of three years of PCR testing that cost you know 4 trillion R&B um so they don't have that financial muscle it's not just the financial subsidy it's everything else it's attracting talent, you know this uh provincial party secretary told me that she subsidizes 10% of the down payment of real estate your first purchase of house if you're a talented uh worker. It is coming back to what I was saying about the implicit discrimination in the financial system, helping them coordinate with local banks, local state banks, helping them coordinate financing. It is um other kinds of um overcoming business barriers which for any developing country uh amounts to insurmountable barriers if you don't have their support. But it's not just the financial subsidy, but the solar panel was very interesting because um ever since the 2005 government uh uh introduction of these government policies, support policies were introduced, they were implemented in different cities at different periods of time, different times and uh different geographical spaces and times. And I don't have this picture with me, but it is a phenomenal uh uh remarkable uh uh uh uh you know scene. Between 2005 and 2017, you saw the solar patents internationally reg recognized palance first of all just completely exploding and exactly in the way that is proportionate to the policy support policies that were introduced at the city levels. So before we want to hesitate about what state can do or should not do and I you know I I also have my own ambiguous feelings about that it's important to recognize that that model has worked in many areas and at many aspects in China and that's the mayor model but coupled with with that that um that central direction and it's the same thing now with renewables again the same model robotics okay same thing demographics we talk about demographics as one of the potential potentially um leading uh causes of or potential threats to the Chinese economy. Well, first of all, China exports 50% of the world's uh robots. If there was a policy in place to encourage factories to adopt robots, it would just be spread out very very quickly and that would lead to automation. very interesting uh recent broader study academically uh very important study showed that after 1990 the more aging countries are actually richer not poorer they're richer that was not the case before 1990 if you take the sample of these country they were poor and the reason is 1990 being so important because that's the rival automative technologies and these countries tended to adopt more robots and automative technologies and that tended to expand output in lots of various aspects. I'm not going to deliberate on this issue, but just trying to emphasize that huge mayor economy model can be very important in enacting systemicwide changes very shortly.
That's what happened to the EVs. Within 10 years, China became the largest producer and consumers of EVs. And it does help that the government can roll out 4 million EV charging stations around the country as opposed to 160,000 in the US. It critically does make that kind of difference.
You talked about the youth and in your book you tell us that this is a different generation in many ways and the lack of ability to exploit their knowledge and skills is a key problem. To what extent can that also be a problem for stability in China? First of all, I would say do watch out for the new generation. They're radically different from my parents' generation who went through the cultural revolution. Some went through the great famine. They've seen huge vicissitudes. They're very riskaverse. They're high savers. Um, and they're very, very, very hardworking that generation. I think that was a big part of the global problem when you had got a billion more people in the labor force in the world all taking three shifts per night. Um, that causes a global challenge. That's not the new generation. They like to travel. They like to they spend twice as much as you know people born after 1980s spend twice as much even compared to those born in 1970s on things like apparel and and food and entertainment. So with a bit of prosperity and that's the maturity of a country and economy over time is a more relaxed less ambitious less hardworking um more socially conscious. Why? Because they can afford to. It's no longer just about sustaining one's uh you know basic needs. It's about if you look at the surveys of this this new generation, they care about animal rights. They care care about the environment. They care about social equity. They like diversity. They care about you know minority rights. Things that previous generations never debated about. So I think it's the coming age of China with that new generation that is a potential you know source of hope. But the challenge as you mentioned now is that many of them are not finding jobs. There's 100 million more additional college graduates in the last 10 years because um the premier from many years ago decided to expand secondary education. Um the first thing is I think it's primarily still there are two things one is is an economic situation right now bad economy. The second is that um look there are a lot of jobs in China waiting to be filled but they're in manufacturing and China wants to be the smart manufacturer of the world right a larger smarter Germany if you will based on powered by AI and communications and and that's interesting you mentioned Germany not the US not the US I think there's actually very overlap very little overlap with the financialized knowledge economy of the US serviceoriented China wants Chinese government uh officials want China to be um a manufacturing a producer of stuff in its mind that is real, not property, not finance and all that. I not saying I agree with that view at all, but um Germany is a paragon of success. And so that's where the jobs are. There are 25 million missing jobs or jobs to be ready to be filled in the next three years in manufacturing. But these kids, they graduate from college. They don't want to take up these jobs. That's the mismatch. and and is that a potential source of instability in China? Look, the government watches it very closely. But I say that because of there are many challenges in China today, that's not the first order one. The first order one is real estate because that concerns every single family in China. If if they really let the real estate go or the prices drop, then look, that's going to be the real threat to social stability. But they're not going to do that.
So, and I I have to also congratulate you on your book because it has been named by Forbes as one of the 10 sort of must readads for board members. And uh in the book you you spent quite a lot of time busting myths. What do you see as the most harmful myth about China for investors? It's hard to say what's the most harmful. I think it's all pretty bad. um just mistrust lead feeds onto misunderstandings feeds on mistrust. um but I'd start with the Chinese people. As much as I'm an economist, I realize that a lot of this is social social and cultural differences. There's a presumption that somehow everybody in Chinese is utterly miserable is something that I just I find very hard to to you know I find it very ironic given how bad the situation is pretty much everywhere else. But the Chinese people don't think about think the same things. there's a huge difference a huge difference in preferences at the cultural level. You can see by international surveys. So um the Chinese people expects their government to do a lot. Some might see that as totally intolerable what the Chinese state is doing but they actually expect that in return they give some difference but not blind submission because they do revolt. And I think another thing to to to understand for investors is that Chinese policies or sentiment or or sorry government preferences do shift much more than you think. I always joke that um in the US parties change but policies don't. Uh in China it's the opposite and um you can see pendulum swings. If they think that they've really made a mistake they will they will radically change that there. Now there might be a time lag before they actually realize that or finally submit to it but they can change from left to right from one far end to the other and I think that's the spirit with which we should you know think about China to a few months ago or say um before the 20th party congress it was a lot of confidence it was a lot about ideology it was a lot about security today it's now the economy is back it's now about the economy.
Why why is the United States declaring essentially a new cold war against China? You just look at the map of the Pacific and you see American bases everywhere creating choke points for China. China has absolutely no interest in building military bases on the US Mexican border in taking you know naval power and projecting it to San Diego or Los Angeles or San Francisco. China doesn't want that. China wants to trade. So it's not that China is getting bigger. It is not that China is spying. It is not Taiwan. It is that China has built a digital cloud capital based super highway for payments which is a clear and present danger to the monopoly of the dollar payment system which is the only reason why the United States is hegemonic.
So, I'm going to cut to the chase because my topic I think is the most pressing issue for humanity at the moment. The new cold war that the United States unleashed against China. This is not a shared responsibility. It is a decision by Washington DC to unleash a cold war against China. It started with Donald Trump. It was already in the making from the Obama administration, but it has been reinforced exponentially under Joe Biden. And the reason why I'm saying that this is the most pressing issue for humanity is because we are being quick marched towards the precipice of a nuclear confrontation that the United States authorities knowingly are making a real possibility. And the question is why? The first question and once we go through the analysis then of course the second question and of equal importance is so what do we do about it? I enjoy very much placing American and British in particular journalists who are part of this propaganda machine, you know, Financial Times, Guardian, Washington Post, placing them in a difficult position with a very simple question. Why? Why is the United States declaring essentially a new cold war against China? And the first the first the first word that comes out of their mouth is Taiwan. And I said to them, "What about Taiwan?" Said, "Well, the Chinese want to take it over." Well, I said, "They always wanted to take it over. What's new?" I mean, it was always the position of Beijing that Taiwan is a province of China and at some point they will have to fall under the fault like Hong Kong did. Didn't Richard Nixon know that in 1971 when he was visiting Beijing, making friends with China? Didn't Clinton know that when he was inducting China into the World Trade Organization? Why wasn't Taiwan a problem then? What has changed now? They look at me. Oh, yeah. Well, China is spying on us. The NSA is spying on you. The CI have, and that is the truth. And the line knows this. We have a three-point NSA tap on me my phone. That is three points means that if I talk to you, you're spied on. If you talk to your wife, your wife is spied on. If your wife talks to your child, your spy your your child. So I I know that they've told me that. So I don't believe the Chinese are as good as the NSA at spying. I mean, the NSA was listening in to Chancellor Angela Merkel. This was revealed. And then you know when Angela Merkel was told that immediately she said okay do you want me to speak louder so you can hear hear me better so it wasn't a problem right now suddenly that China is developing surveillance and I hope China is developing surveillance methods because you know if if you're being spied on you need to spy back on them it's the only way my one of my great friends and I'm very proud of that that may shock some of you is Julian Assange of Wikileaks and Julian Assange a very brave and said to me once uh that what do you do with big big brother? How do you stop big brother? Well, what you do is you develop the technology so that you spy on him while he's spying on you. So counter surveillance is the only way of dealing with surveillance so that they know that you know that they know this is essential for maintaining any degree of autonomy. So, I hope China is developing its capacity to counter the surveillance of the NSA. Um, and it's a joke. I mean, the people in the NSA are laughing their heads off when they hear journalists from the Wall Street Journal saying that the reason for the new cold war is that China is spying on the on the Americans. And then I hear other idiotic answers like, you know, the the Chinese are building naval vessels. uh they are projecting naval power. Well, I will believe this. I mean, of course, you're building naval vessels. You're expanding your economy. You're expanding your capacity to um project your own power. That is essential. That's what every every country must do if it respects its own interests. But I'm going to be worried about Chinese imperialism when I see Chinese vessels outside San Diego and Los Angeles and Chinese army bases next to El Paso on the US Mexican border. Until we see that, it is ludicrous. You just look at the map of the Pacific and you see American bases everywhere creating choke points for China. And this is their official policy for 40 years. And they have the audacity to say that China is a threat because China is anyway enough time wasted on these nonexplanations of the new cold war.
Now you may have heard of um well I won't mention him yet. The more sophisticated analysts in the United States would invoke the so-called Thucydides trap or Thucydides curse that to put it in very um vulgar terms. If you live in an anarctic world, if you are a child, a boy, and you go to school with a rough, very rough school, and there are lots of bullies, you should be the biggest and nastiest bully. That is the cynical realist school of thought of American geopolitics that America in this anarctic world because they don't really believe in God. They don't believe that is a God that will help them. They think that they must be the nastiest, biggest bully in the world in order to defend themselves. Their survival as a nation and their prosperity will depend on their capacity to bully everybody else and from preventing anyone who is getting too big for their boots to become an equally sized bully. And they will say to you that they were bullies around the world like for instance Imperial Japan, Imperial Germany, the Soviet Union. And what the United States have succeeded in doing is effectively eliminating them, annihilating them, getting them out of the way. And that now China is rising, China is next, and therefore that explains a new cold war. Now there's no doubt that the deep state in the United States and make no mistake the United States is not a democracy. It's an oligarchy with elections that are providing the legitimacy for this one party state to continue to exist. And when I say a one party state, I mean one party state. Uh take for instance Victoria Nuland. You may be familiar with this diplomat of the Washington establishment. Victoria Luland worked for Bill Clinton. She worked for George W. Bush. She worked under Clinton. She worked under Trump. Victoria Nuland is an example of the single state deep state of the United States. Now that deep state single party establishment United States is split along the line of two different conflicting views neither w of which is good news for China. There is the the more intelligent nuanced line of thinking that which in academia is represented by that very intelligent man from the University of Chicago John Mishheimer. The view is this. They they are very critical of the inability of Washington to focus on what is necessary and they are overreach. They think that the United States is overreaching. So they are very critical of a war of the United States role in firstly through Victoria Nuland creating the circumstances through the coup d'état against Victor Yanukovich the then president of Ukraine 2014 they created the coup d'état in order ethnically to cleanse Russian speakers from the eastern side of Ukraine in order to provoke Putin into the first stage of war in 2014 against Ukraine so as to push for NATO expansion in uh Scandinavia and of course Georgia and Ukraine. And so this pragmatic viewpoint simply says that we shouldn't be doing this because that way we are pushing Russia into the arms of China.