Transcription
That's a good step. What's what's going to bridge the east west divide right now?
Nothing. When the number one country in the world, America, is not the strongest country in the world today. No. America is the strongest country ever mankind has ever seen. And when the United States wants to beat up on China and you try to make that relationship better, you're going against the US government. You think you will succeed? I don't think so.
You look at what they do. It is not what they say. They just instigated the the the the the the Canadians to leave uh to to to leave the AIB. Do you think that the Canadian decided it on its own? I was in Italy. I was with Mario Monty. We were talking about uh uh uh uh uh them leaving the Bel and Row initiative, right? And do you think that Italy made that decision on its own? You are either night if you believe so then you're either so.
You believe there's you believe I mean the United States has talked about economic coercion coming from China where China's come back and said it's diplomatic coercion from the United States. You've seen it with the French shoring with chip manufacturing going to Japan, going to Germany, going back to the United States. Do you think this is all being driven by coercion by various powers?
You, I'm going to ask you, Stephen.
I just asked the questions.
I'm asking my answer is Steve. What do you think?
I cannot say.
Okay. This is not a Steven Angel fireside.
I don't think I don't think you're that naive. Right, Stephen?
No, I'm not that naive.
Good. Thank you. You answer yourself and you answer my question.
So, if there is no answer to the east west divide, where are we going to be in 10 years?
I happen to not be that pessimistic about the US-China relations. First of all, I don't believe that it will get to a kinetic war. Kinetic war, a physical bang, bang, you're dead. Of course, today's war is not just with guns and gunpowders, right? It is very much uh cyber, it is space, it is uh currency, right? Of course, trade, many other things. So, from that perspective, short of just shooting at each other, the war is already ongoing. Anybody who doesn't know that the war has been ongoing for the last many years is frankly a very, very naive individual. So, you know, we are already in in the thick of it.
But can we be competitors without conflict?
Yes, we can. But not if one party wants to make the other side beat the other side down. I, I'll give you some numbers.
Sure.
When when Japan became 15-20% of the economy of the United States, America began to be worried. And so when it got to 30%. That was 1985 in Plaza Accord, right? Jim Baker pushed the uh the US dollar down and inflated the U uh the Japanese yen. The economy took another 10 years for it to begin to to to to wane in Japan. By 1995, 10 years after Plaza Accord, it was at 91, 71% of the United States GDP, but that's because of currency double, right? So if you take away the currency issue, then it is only 35. What is it today? 21.
So Jim Baker succeeded in 1985. Now let me give you the number of China's economy as a percentage of US economy in the years 1980, right after the economic opening, and then 90, 2000, 2010, 2020. Okay. I'll give you those numbers. They are 6 point some, 6 point some, 12. 2000, they were at 12%. They joined WTO. 10 years later, 2010, it was 40%. 2020, it was 71%. And then 2021, it was 76%. And last year, it was still at 76%. You think America will not try to beat you down? Read American history.
Well, sure. I remember in the 80s when the US auto industry came to Reagan and they said, "You need to slap tariffs on the Japanese imports uh because they're killing us." And Reagan turned around and said, "Build a better car."
Right.
Right.
I wish Reagan is around to say that. Now, then there's another set of events. 1992, 1993, there's a white paper on East Pacific Asia Pacific in the United States that says that China was America's number one enemy. That's 30 years ago. 1993. 1993. The same year, there was the Yinhe incident. You remember the boat, the ship Yinhe in Indian Ocean, right? And then 1996, it was one uh situation, uh Taiwan Strait situation where two aircraft carriers outgunned the entire PLA. You wonder how come The PLA has to develop a blue water navy, right? And there's 14 at that time. 14 car aircraft carriers and two outgunned the entire PLA. That's 1996. 1999, bombed the Belgrade uh embassy. 2001, there was the the EP3 spy plane, right? I asked Bob Gates uh a couple of months ago. I said, "How come all these things are happening on the coast of uh of of China? What if it's happening in the coasts of California and and Oregon, right? What will happen?" They say, "Oh, we abide by international law." Okay. Okay. So, if somebody else abides by the international law also, but they in the California codes, what would you do? Now, mind you, all those things are military actions. See 93, 96, 99, 2001, and then you have pivot to Asia, you have Donald Trump, right? Yeah. And and and and then the the break point came in 2021 uh March 18-19 in Alaska. I won't go into detail because time is up. The young lady is standing there already.
So, nobody wants us to end.
So, so, so the the China has given given up hope. The Alaska meeting. Let me tell you about this because they want to know if there's any chance to restore relationship and we all know what happened in Alaska. It was horrible.
Yeah. It was just they sat across the table from each other and lectured each other. Well, it started by blinking and so the Chinese know all thoughts, all hopes are gone in case there's something that happened um militarily or otherwise with the United States that is really undesirable. They were thinking for the worst. And so since 2021, two uh 2021 March 18-19, uh 28-29th, I think it was this le, no, before Biden was in the White House, in less than two months, they urgently wanted that meeting. And I believe that that was a the the straw that broke the camel's back, so to speak. And from that point on, all hopes are gone. Oh, do we have time for questions?
All right, I think we everyone wants to hear from there. I'm keeping you from the cocktails, but yes, there's their microphone for him. I have two children, grew up in Hong Kong, now graduating from US colleges. And if I want to tell them you should come back to Hong Kong, what should I tell them?
Well, I had lunch with one of my mentees, which is exactly in the same position as your two sons. And frankly, uh, I told my mentee, I'm her mentor. Okay. Um, I said, um, I really feel very comfortable in, uh, in developing economies. That's where the opportunities are. I was in Egypt. I was in Saudi Arabia. I was in Israel. And so the the problem, I think, is that it's very easy for young people to aspire to a more comfortable life, a certain style, a certain culture is very appealing to young people, and we all had that dream. Our age. Uh, if you have children who are now 22 uh and you know, uh, it's very appealing. But where are the economic opportunities? And in fact, nowadays, it is becoming unsafe to live in many parts of the world. I told you, I went around the world twice in the last six weeks, and I saw homeless people in tents all over the place in many cities, and anti-Asian sentiment. It is just not safe. I'm, I'm not talking about politics. I'm not talking about, you know, ideology. I'm talking about personal security. And so I, uh, you know, I'm very fortunate that my son, when they were young, I took them to developing economies. Uh, so my son loves India, for example. Uh, and he lived like a local in Beijing uh when he graduated from university. So I think that the the thought, uh, the the thinking of many people today still want to send their children to the West. I mean, I feel bad for these people. They have no idea what is there.
Hey, I did okay in the West.
You were born in 1966.
Yeah. And came to Asia 1990.
You're an old man now. But what about your sons? Uh, it is just not safe in many parts of the world. So I think that um uh, you know, for economic opportunities, I will go to developing economies, including China, but not exclusively.
Any other urgent? Okay, we'll give one more. Can we have time? We have time.
So the my question is, uh, US and China relationship sounds like we are not lost in translation, but lost in hope. So basically, we have to prepare for the worst. So what, what the worst situation could be, uh, in foreseeable future?
So you, you have to prepare for the worst, right? And the worst can be anything. But I am hopeful that the Chinese are very, um, rational. Consider the following fact. 10 years ago, it is unimaginable that a junior congressman in the United States can visit Taiwan. Unimaginable. Several months ago, Nancy Pelosi, as a speaker of the House, went there. What did China do? Nothing until she left. She left. You tighten the ring, so to speak. Right? Notice that there's no accusation from around the world for what Beijing did. And so people asked me the question. And I said, "Is what's happening in Taiwan Strait today hastening the return of Taiwan or delaying it?" I said, "Both." Hastening it in the sense that once there is opportunity for Ch for Beijing to do that, giving the cost, the international cost, just like that Nancy Pelosi, nobody criticized them, right? You bet Beijing will take it back next time possible. In the old days, Beijing may still think, well, in the long run, are there pos are there advantages to us if we wait another 10 years, 20 years, 30 years, right? No more thinking. No, not possible. Next time there's opportunity, they will take it. So, in that sense, it's hastening it. But is it delaying it? Possible because of what America is trying to do. Is trying to stir up trouble in China, and China is so, so far very cool-headed not to fall into that trap, and that is not reacting, not overreacting. But you can also not not react. If you're not re react, you will invite a lot more, you know, uh, scorpions and and mice and everything else that will come out of the closet. So they have to react, but they have to react in a wise way, like the way they handled the Nancy Pelosi visit. And so I think that, um, I personally am on balance, when you analyze all the factors that I know of, I came to the conclusion that we should be able to prevent an actual war. But it doesn't mean that econom and and I don't think that China needs to go to war. There's a lot of economic means, a lot of cultural means, and social means. There are many other ways to skin a cat. And so I think that u uh China hasn't really used any of those economic means yet. Right? So I think that I'm hopeful. And and there's another aspect, another side of it, and that is I do believe that America is forcing itself to withdraw from the global sea. I just came back from the Middle East. I went there three times in the last six weeks, and both the Egyptian, the Israeli, the Saudi Arabian, the UAE all tell me that America is no longer a force to contend with in that part of the world. I believe that I know that I'm very being very controversial, but I have my rationale. I don't have time to tell you that that in Europe, America will also sooner or later retreat from it. The Ukraine war delayed that process, but it cannot reverse that process. So I think that um uh America and and and I tell Beijing friends, I said, don't think that you the US is waning. It's a very dangerous assumption to make. Okay. America is not waning. America is one of only two countries that can choose to close the doors and live, and the other country will live miserably, and that's Russia. The country that can live relatively happily is the United States. Nobody has that right. China needs energy. China needs food sec food security, right? Whereas the United States has everything, and the technology, the universities, the the economic system, it, it is still the most strongest in the world. So if you think that the United States is waning just because they are retreating, you are make you may be m you are making a big mistake. And mind you, America was never founded on internationalism. America was founded in isolationism. Monroe Doctrine of 1823, exceptionalism of the 19th century, Roosevelt Corollary era of 1904, not joining the League of Nations, the trade uh retreating in the 1920s. America is a country that is rooted in isolationism. So if America, it was only forced out because of World War II. So if America were to retreat back to isolationism to some form or another, what's the what's so new? Read history.
I think another round of applause for Ronnie Chan.