Transcription
I will say that it's up to us to decide who can visit my house. I don't need someone else to tell me who I should must invite into my house, into my living room. I don't like that. I don't think you'll like that either. I don't care what reason you give, what rationale you give, what moral lessons and lectures you're going to give. In my house, I decide purely on my discretion who can sit in my living room.
Yeah. Fore! Foreign! Foreign! Fore speech. Foreign [Music]
Chinese leader Deng Xiaoping once said that, you know, China should kind of lay low and buy their time. Uh essentially implying that China still has a lot to to catch up. Now obviously this was decades ago. Uh in 2008 during the global financial crisis uh many of the leaders of the west were traveling to Beijing in hopes that the Beijing continues buying the uh government bonds of you know both the US as well as many European countries. Do you think China overplay their hand by by by by by being a little bit overconfident from the from interpreting the global financial crisis of '08 uh as a as a as a major decline uh of the west especially of the US. So uh in other words like what is the is is China now a little bit surprised with with all this backlash that's happening especially coming from the US.
I think it's the opposite. I think China was too timid. I think China didn't realize the tremendous earthquake of 2008 financial crisis. I think China didn't see how how fast the western political institutions were decaying. How much incredible dissatisfaction there is in in developed countries. How how rapidly the social contract in America has been being torn apart. Um, China didn't realize that. Um, so I think China underplayed its hand instead of overplayed it. I think China should have been more forward in proposing its ideas to the world how we should continue to interconnect.
Yeah. But from what you say, I I get a feeling that you know um uh the west is kind of uh has the the political system to blame for the for the fact that it completely uh made the middle classes of the west miss out on the benefits of the globalization. Uh now if that is the case then why are they so um angry at China and not at their own political?
Yeah, I think the anger is misplaced. Um like I say if you look at the numbers uh the US and western countries benefited just as much if not more than China. It's the the problems within those countries. The benefits only went to the very few and a large number of people came out worse off uh or stagnant. Uh and most people feel less secure. Uh most people feel they've lost control of their destiny uh to nameless, faceless global institutions like the EU, you know. Um I mean, I was talking to a friend of mine about the euro. Um and he was an economist. Um you're not in the euro, I guess.
No, not yet. Not yet.
Not yet. Um, and we, the globalists don't understand there's something more important than money. All the globalists could see is money, money, money, money. And the economist, you know, gave me a list of the benefits of the euro. Okay? Economic benefits. I said, well, look, that's all good, but but I I don't care. I would I would not want to be a citizen of a country in which I take out my wallet. I take out my currency and I don't see my hero, my national hero's picture on it.
Wow. Have you ever heard of venture capitalists talk this way about money? How do you get your investors to invest? I mean, with this kind of enlightened perspective.
No, I mean,
no, it was a joke.
So, so, so people are more complex than that. People, people need dignity. People need community. People need the sense of belonging. People need cultural integrity, civilizational integrity. Um, so I make a pitch. Don't join the Euro.
And but then what role do you think China has to play in in uh promoting uh uh the the alternative form of globalization? Because if I understand you correctly, I mean uh the main message of China's uh uh um let's say view of globalization is that you know the glob the value system cannot be exported and then every country should kind of
countries need to be able to de develop in their own ways. Um and and China wants to take its access capital and its capacity to build that the Chinese have have learned one thing, one lesson in the last 40 years. It went from a agrarian poor country into a behemoth. And there's one lesson they learned. It's called I heard it everywhere. I hear it, you know, people talk about in China. If you want to get rich, build a road.
Build a what?
A road.
A road.
Yes. Um so infrastructure-led development um and infrastruct meaning not just physical infrastructure but digital infrastructure as well right
um so so China is trying to take that idea and say that okay we're going to take our access capital access capacity to build infrastructure be it in physical or digital in countries that are connected to the Chinese economy. um so that we could increase interconnectivity this way between China's economy and their economies. Uh that's what the belt and road is about. I mean I remember five six years ago and started building I was in Chongqing and saw the terminals it was gigantic and now it's straight to Madrid to London. Okay. So along the route uh obviously it will in improve trade improve uh investment environments and and bring pro hopefully bring development and prosperities uh in those countries and hopefully it'll come back and benefit China. Okay. But it's up to those countries to decide how they want to do it and how they want to run their countries, how they want to run their politics and their economy. Um and they could for instance Malaysia know uh China had these big projects in Malaysia uh big financing big borrowing and they changed government. Uh President Prime Minister Mahhatia came to power and he he said that some of those deals uh were not good deals for Malaysia. So they but they re they ne renegotiated. China cut the price by a third and and changed certain aspects of the the transaction. Um and they're back on back on track. So So chi the Chinese are saying you decide how you want to run your country and you're a sovereign power. We're not going to impose our standards on you.
You've traveled to Africa a lot. You are on a on a board of uh China. Europe Business School and I think Ghana, right? and uh China has had quite a significant interaction with many African countries. What have you seen there from your experience?
Uh um well, I mean I think we've had a lot of successes there. We've also had a lot of problems. Um Chinese companies um did not have a lot of experience expanding internationally. So made they made mistakes uh hire didn't hire local people. So, so they're they're resolving solving some of those problems. They're getting getting used to it. Uh, but overall, I think um the um China's development projects in Africa have been successful. Uh uh I think the numbers I saw, don't quote me on it. You should you should double check that the the the the roads that we build in Africa in the last 20 years are more than all colonial powers in Africa combined did in the last 400 years.
Oh, that's impressive. uh number. Don't quote me on that.
Uh at this point, I'd like to get the point.
I get the point. Yeah. At this point, I'd like to open the floor again for for some uh questions from the audience. Uh there's one over there.
Hi. Uh thanks m Mr. Lee and your talk. Uh I'm Mat Churich and I come from one uh creation think tank center for renewal of culture and we as a free market and conservative think tank could agree on some points that you made about globalism. My question would go on this globalization part. What do you think why China doesn't allow still doesn't allow Facebook, Google, New York Times, Instagram, and Wikipedia for example to to to just be allowed there. Thank you.
Uh it's because we believe that each country should have the sovereignty to decide what kind of ideas dominate their society. I mean we respect countries who don't believe that you can let any ideas in if you wish but we don't. We believe speech is a form of act and just like any other acts need to be regulated. We respect countries who say speech should be completely free. You can say anything you want. That's okay if that's how you want to run your country. But we don't believe that. Yes.
Okay. My name is Steven Bartullika. I teach uh political philosophy at a Catholic university here in Zagreb. Um I enjoyed listening to your remarks and I would um agree with you on the euro for sure. I'm I'm very uh skeptical about the wisdom behind this uh project and uh it could lead to more fragmentation than unity uh among these countries as Milton Freriedman predicted uh before it was introduced. So I think there's much that we should uh learn from these uh countries that are in the Euro zone. But I wanted to go to a more philosophical question. So as you know in 1989 the countries in central and eastern Europe um rose up against communism. Uh you mentioned dignity and other things that you think should be respected and the people in these countries of course felt that their dignity was not respected under these regimes and they rose up and many of course have not found their way and of and many many of these places have maybe uh stagnated and the elites have not found the proper model how to advance since the collapse of communism. But it is true that uh someone I admire greatly, John Paul II, uh great gave the people of Poland and other u countries great encouragement to um metaphorically take off the the chains that were keeping them down and to rise up and and demand their freedom and dignity. And it's interesting that since China's rise, I think the communists there have learned very much from this experience. So, uh, John Paul II badly wanted to visit China. He wasn't allowed. As you know, uh, Pope Benedict as well, but Western capitalists, bankers, uh, JP Morgan, uh, Goldman Sachs, Apple, they're all welcome in China. So, what does that tell us about, you know, this divide on how we see human nature? Uh it seems that the communists in China have more in common with Western capitalists than they do with uh people running the Vatican. And I think that tells us a lot about what's at stake in this game that we're describing. So thank you very much.
Good question. Thank you. Um I think you're right. Um the uh the revolutions in 1989 and early 1990s uh were driven by genuine national aspirations for for the peoples of these countries to to to control their own destinies. Okay. And to use your quote of John Paul II to to to liberate themselves from the shackles. Uh unfortunately they put on new shackles the new shackles of liberalism. That was my point. The new shackles of globalism. um they went into a a new model without considering their own national conditions. Uh that's why they're still in the wilderness. I think um I think we want we we I mean I like to see a more pluralistic world where countries are able to say okay don't impose your values on me. Let us consider our own national conditions. let us consider our own cultural conditions and we're going to find a way that's suitable for us. Um and on the point of uh of capitalism and capitalists in China, of course that um um that's what we meant. We have a vibrant market economy. Uh and China has decided to engage global globalization in its own way on its own terms. Uh so we engage and let in what we believe benefit us. we keep out what we believe will harm us like the this other gentleman uh raised.
So do do the is is really the the holy father such a threat to the regime that if he would visit China they would feel that it could undermine their their authority like like it happened in Eastern Europe.
No, I'll be I think uh uh the the current holy father will be visiting China soon. Let's hope. Let's hope. Let's hope. But but
I will say that
it's up to us to decide who can visit my house.
I don't need someone else to tell me who I should must invite into my house, into my living room. I don't like that. I don't think you like that either. I don't care what reason you give, what rationale you give, what moral lessons and lectures you're going to give. In my house, I decide purely on my discretion who can sit in my living room.
Yeah. Well, and I can I want to follow up on that. Uh I can completely understand that point, but um over the last decade or so, I mean uh the the markets of US and Europe were as they are they're quite open, right? And they were also open to uh Chinese investments. And Chinese companies could easily go to Europe and buy one of the most significant food companies like Sententa. No problems, right? As long as you have the money and uh you uh conform to the laws, the similar cannot be
look at Exactly. But look at the those countries who did allow. Look at all the look at Russia. Look at Georgia. Look at all those country in the former Soviet Union. They lost all of their economy, okay? Their companies got bought up cheaply by foreign investors, uh, uh, by oligarchs. Uh, they lost their own entire economy. They they have nothing now. Thank god we didn't do that.
No, I I completely understand. Yeah. Uh, was there one question over there? Yes.
Hi, Eric. Thank you for coming again for your talk. Uh my name is Davra Tomich and I'm an entrepreneur. Um I have a question on the uh political system in terms of how does China ensure that capital doesn't affect the political system? Um and also what type of political systems do you see um developing in terms of um Europe and other western countries because clearly this this current political system uh I'm not sure we'll be able to deal with the globalism that you've discussed or dismantling it and there will be um a natural consequence of changing the political systems. So how do you see that developing?
I I think well in China obviously it's a it's a it's a fact of the system that private capitalists are not involved in political decision-m uh they allow the space to make money. Uh and they they they probably allow the space to have some influence over policies that affect their industries. Maybe maybe uh but not even that uh the the China's political system is completely independent. It's called political autonomy. Um independent of economic and capitalist interests. Um there's corruption of course. I give you that. Uh but that's illegal. Um and how I see uh political systems evolving western countries. Um I think we're going to see more and more um democratic movements against liberal liberalism. So liberal democracies breaking up inside the liberal and the democratic are increasingly at odds with each other as uh Hungarian uh Victor Albine said that he claimed that Hungary today is an illiberal democracy. Um so so we're going to see democratic forces saying that we want to take our country back from liberal orthodoxy. Um I think that's that's what we're going to see in in the de in developed countries including in America. to follow up on that uh note uh if we do go down that road right where you see more I mean and you kind of already see it I mean we have the European Parliament elections coming up here and uh in many countries in Europe you you see these uh populist movements uh rising and uh they just haven't completely uh aimed their crosshair at something and then uh what you have is you have somebody like Steve Bannon, former adviser to President Trump who comes to Europe and uh and uh tries to frame China as the problem that uh all these populist movements should focus on. The yellow west you mentioned the five-star movements in Italy. Um I mean, isn't it the danger? I
I think he's mistaken and I think the Europeans are too smart to buy that story. uh you know they're in Italy but Italy is the first developed country to sign up to Bel and Row initiative with the current uh current uh nationalist uh if you want to call it a populist government. Um I don't think Hungary is buying that story. Um you know so it's okay for for him to believe that but but I think he's mistaken. Like I said, they made the the US made just as much money, if not more, than China. So, it's it's the they didn't you it's how the money was distributed inside those countries that was the problem. You can't blame the poly the Chinese poly bureau how they divided up
their money, their profits. The Chinese poly bureau didn't have a say in that. And I think Europeans understand that and I think most Americans would understand that too.
Yeah. Yeah. Any other questions from the audience? Yes. Over there.
Can you just take the microphone?
Hi, my name is Ivanka. I teach here at Zash. So, uh maybe going back to uh the first presentation with those maps of 16 plus1 initiative and foreign direct investments of China to Europe. We saw that the countries of 16 plus1 initiative have very low level of FDIs. So you as a venture capitalist, how can you comment on that and uh what's the opportunity that you see both for Chinese entrepreneurs and uh those of the 16 plus1 initiative uh in that context?
I I think well I think the gap is the opportunity right uh certainly uh Chinese economic engagement with Europe has been broad and deep uh with big numbers uh but it's been mostly concentrated in western Europe um the the eastern Europe and central eastern Europe uh pink country had had had laid behind uh uh significantly but I think that's that's the opportunity uh I think obviously uh when Eastern East European Balkcon states when they joined the European project uh they their economies are geared towards integrating with Europe. Uh and that's natural. Um but I think we're we're in a new era where I think I I mean I personally think Europe is falling apart. Uh the European project has run ground uh and it's not it's not going to get fixed in any short period of time. So the economic gravity is going to shift. Uh I think you will be much better off developing alternatives instead of you know continue this headlong integration into a Titanic, a sinking Titanic. Uh you might want to find a few more boats. Uh and I think that's my pitch
to you. Any other questions? Yes, over there in the back.
Hello, my name is Amir. So, just briefly let me um give you a story about uh creation and creation economy. So in 194
but briefly
briefly in 1945 uh we embraced socialism uh like China today and uh our government decided to build roads and to build industries like China today and in next 30 years uh the the country began to grow. So like China our GDP grow like 10 times. This whole city actually grow like five times in this is this in 30 years from 1945 sorry to 1975 let's say but what happened after that time is actually uh that we began to stall and our economy began to stall because the current regime and socialism and the capital allocation didn't work anymore and for 10 15 years 20 years before the transition which is not which wasn't only about lot of people it was also about the economy because the economy could not find a way to grow further. What looking at the China today and looking at the Croatia back then the reason for the GDP growth was not only that we experienced uh great leadership in the socialist parties because the people came from the villages to the cities to the cities and most of them just increased productivity because they were living in the cities similar like we have in China today. So what what makes you copy that that China isn't just lagging what happened in creation 30 40 years ago because looking at China today you have 30 or 40 years of growth and an excellent growth as you said uh uh you you raised hundreds of millions of people from the poverty but what makes you confident that actually your the way that China is operating today won't hit a wall in 10 15 years especially when we look at the Chinese finances the grow But that's capital allocation and everything uh that we are thinking about today and actually when looking at the socialist party and reforming the country uh do you believe that China could do the same as Croatia did in the '90s to transition from socialism to democracy? It is something that would uh Chinese party do if they feel that this is best for Chinese people. Thank you.
Well, uh it's interesting to hear your uh recounting of Croatian experience over the past half century or more. Um you know, we had the similar experience. Um we in the first 30 years of the people's republic from 1949 to 1979. Uh we had a strict socialist system uh five-year plans, central central planned economy. Uh some people say it's a failure. I I disagree. uh we built tremendous basic industrial infrastructure. In 1949, our life expectancy was 41 years old. I've already lived past that. Okay? And in 1949, our literacy rate was less than 15%. And our child immunization rate was like below 1%. electricity coverage only covered maybe you know less than 5% of the country mostly in in in top few cities okay in 1949 we're much much much poorer than you much much poorer um and after 30 years of socialism total socialism what I mean we made a lot of mistakes like great leap forward cultural revolution but the successes are are are tremendous in 1979 and I um our life expectancy is already well in in the 60s. Our literacy rate was 85%. Which means 100% of the of of young people. Okay. Um and and our immunization rate was 100%. Electricity coverage, China is a huge country is above 80%. Okay. So I would argue without this socialist period we would have never taken off after the denial in the den shopping era with market reforms. Um you know an interesting thing that the people discovered was um when we started building these cities and building those uh highways uh uh in the last 40 years Chinese migrant workers who came from the countryside migrant workers who never finished you know just barely finished elementary school could read an engineering drawing uh how to build. So we had a highly educated population even at a very low GDP per capita. Uh in fact if you if you uh check the UNDP United Nations Development Program uh called human development index in 1978 at a very very low GDP per capita China's human development index was approaching those of developed countries. Okay. So but we had that yet our economy stalled. It it couldn't go further. We had this. So, we changed, we reformed, we said, "Okay, we're going to keep what was good about socialism." Uh, we still continue the five-year plan, but in a different format. Obviously, it's not totally command economy. And we brought in tremendous market elements, market characteristics. Uh, pricing was allowed to be determined on the margin by market forces and gradually opened up market um and trade. Um so so that's those the last 40 years. In the next phase in the next 30 years uh we faced a different set of challenges. Uh we've grown tremendously but our inequality has increased. Um so that's that is on top of our political agenda. Uh we're worried about productivity yes but we're more worried about sharing the prosperity. Uh we don't want to leave people behind like the liberal globalists did in the rich countries. uh we don't want to do that. So so the ID now idea is to to eradicate absolute poverty. Uh and we're well on our way in the next four years. We have I think 30 million people left living beneath uh the absolute poverty line defined by uh whether it was the World Bank or whatever the the organization is. Um and and and we in the next three four years we're going to take that to zero to zero. Okay. Even rich countries cannot do that. And we're still a developing country uh at only 10,000 maybe 11,000 US dollars GDP income per capita. We're going to take our absolute people under absolute poverty line to zero in the next three four years. Um we need to expand our healthc care coverage. Uh we need to redistribute the gains of the in the last 40 years from from economic uh uh uh growth. Uh so those are the priorities. Uh, and that's the new era. And and so I'm I'm predicting a shift away relatively away from capitalistic approaches to more socialism in China. So we've we've sworn from total socialism in the first 30 years to Den Shaing's, you know, market reform and more not capitalism, but capitalistic approaches. And I think in the next 30 years we are shifting back a bit to have more socialism.
There's one question over there and then
yes um I would like to I'm coming from one of the crashian banks. Uh at first thank you for very very dynamic and interesting speech. I think that we heard many interesting and useful information. Uh I personally agree with some of them. I don't agree with with all of them. Uh but my question was related uh to your opinion your opinion on EU. You said that it is falling apart. Uh so I would like to ask your opinion your opinion why do you think so? And secondly if this is going to be the case, how do you see and what could be alternative for a small country like Croatia is? And maybe just small comment at the end of the day, how do you comment this uh uh happenings regarding Huawei? Look from outsider. I'm not a European. Uh so I'm speaking out of outside my expertise and I'm just looking from the outside in. Okay, you tell me if that's true. Okay, why is Europe falling apart? I put the question back to you. Who are these people in Brussels? Do you know them? I I don't I can't even remember their names. They're taking these volumes and volumes of books and rules that they're looking at this and oh, number 17, number 18, you you do this this way. You you do it that way. Someone may not even be being into to your country. Okay. I think that's why Europe is falling apart. Uh it's too top down. um the the the people peoples of Europe of the European countries have given up given away too much power that they've lost control over their own destiny. I mean with the euro for instance, I mean countries like Greece and Italy cannot even re-engineer their economies uh when they face tremendous challenges uh because they're locked into into this currency that's not theirs that that's that's not connected to their economic realities. Um so I mean I think that's why Europe's falling apart.
One more question over there. Uh hello uh my name is Milian Koshimich u there's um one question I need to ask um regarding u well your idea of pluralism because uh um you have u mentioned pluralism uh several times but it seems to be a pluralism of nation states rather than pluralism of of of people inhabiting these uh nation states. So um uh if history has taught us um anything it's that as people uh get better off um economically they uh um increased demands for uh more uh political rights. So, um does China have a um a fail safe or some kind of a strategy to face um uh to face these um uh demands uh for democratization that are likely to um uh gain currency as people become better off other than other than say uh things such as increased control in terms of uh you know social credit system or some more violent measures. Thank you.
I I think you don't have to wait to be rich for people to demand um control over the destiny of their country. Uh rich and poor countries, people assert themselves and I think that's that's a good thing. Um and and people are doing that in America. People are doing that all over Europe. Uh the British people just did that in a referendum. Okay. The people in Poland are demanding their borders back. People in Hungary are demanding their borders back and their control over immigration. The people of Hungary and Poland are demanding their own control of their judicial system instead of following the dictas of Bruss foreigners in Brussels. Okay, this is what the people are demanding. uh and and and and and whether a government or political leadership can survive in the long term depends on whether they answer the will of the people. So the test is in history. So if the Chinese Communist Party is still in power in 2050, that will mean that they've answered the demands of the people. Otherwise, they'll be overthrown. Just like the liberals in Europe everywhere are being overthrown because they've refused the demands of the people. They only care about the capitalists. They only care about their their liberal values. Uh and they they they they refuse the cultural integrity of the lands of the people who live in them. Um so you mentioned pluralism. Yes, I do believe that pluralism among cultures of among civilizations is the is the preeminent thing because culture is the is the primary driver of human civilization. So culture is the fundamental entity of how we organize ourselves. Uh and within culture it's up to you. You want pluralistic within your culture that's okay. But it's okay for another country, another culture to say that we only want this kind. It's okay too. Um, and I see many movements inside European countries who who the the people in those European countries want to say no to Brussels who wants to impose liberal values in their own countries. They're rising up. Maybe one last question. Okay. Uh over there.
Hello, my name is Madin and at the moment I is the same student. Um I'd like to ask you Mr. Lee, what uh and how you see the cooperation and collaboration between China and Croatia in next 3 to 5 years?
Well, uh I hope uh although I know you have limited quantity, but I hope you sell more wines to us.
Me too.
Okay.
It's the best.
Only
it's amazing. I love the wines. Um and and I hope you have uh we I see more Chinese tourists in Croatia. I was in Dravnik yesterday and it's it's a beautiful beautiful place. Um
did you see the bridge?
Which bridge? the one that the Chinese company.
No, no, I haven't seen the bridge. I want to drive on the bridge. Um, so
it's not completed yet, but
yeah,
but when it's when it's completed, then you can come and drive.
Good. More Chinese tourists, more Chinese drinking Cian wines. Um, and and I hear, "Oh, oh, olive oil is the best. It's amazing. I didn't even know about this. Uh it's it's it's better than this Italian and Spanish olive oil. I'm telling you. Okay. And the Chinese don't know that. Okay. You need to tell the Chinese about your olive oil. Okay. Uh and minerals, amazing minerals. Uh we need that. Um um and you're you're in a strategic location along the trade route. Uh so you need to take advantage of that. Uh we have like I said, infrastructure is not only physical but also digital. uh I have this initiative to study what I call the digital belt and road. So smart inventory for instance digital management of of logistics uh mobile uh technology all of these things I think Croatia could play a role in in the larger cooperation larger co-development between China and and the European continent. And maybe one last question from my side since you mentioned the digital belt and road. I mean the digital belt and road took a significant hit uh just what yesterday when uh President Trump put Huawei on a on a blacklist uh a similar move to the that he has done to another Chinese company ZT. Do you think Huawei can
I think
it's ready for this. Can it survive?
I think Huawei could survive. It's invested a lot in R&D obviously or hurt it for in the short term. Um but it's okay. I mean uh China is a big country. America is a big country. Um Chinese companies are big boys. Uh they should be able to handle it. Uh some of them may get hurt. Some of them may even get better in the long term. Um it's it's it's an age of competition. uh but but China wants to increase interconnectivity uh especially with European countries and that's where I think you will have a constructive and profitable role to play. Fore! Foreign! Foreign! forchech. Fore! Foreign! Foreign!