Call Me Back - with Dan Senor - What Xi is learning from Putin's war - with Matt Pottinger

Episode Date: March 12, 2022

As Russia has become isolated globally, a senior Russian Foreign Ministry official was asked if Moscow has anyone left in its corner, anywhere in the world. Her response: “Of course, we have them. Look at the reaction of world giants. Those who do not pretend to be giants, but are real giants. For example, it is China. You can see this reaction, can’t you?” So what exactly is going on between Xi Xingping and Vladamir Putin as tensions escalate between Russia and the West over Russia’s invasion of Ukraine? How does this inform our thinking about whether we are, indeed, in a new Cold War -- and how we need to re-think our entire national security strategy, defense posture, and approach to global affairs? Russia’s experience in Ukraine – and the West’s response – is a laboratory for the Chinese Communist Party leadership to study as Beijing contemplates its next moves in this Cold War. To help us understand how China is interpreting events, Matt Pottinger returns to the podcast. Matt lived in and covered China as a journalist for Reuters and then The Wall Street Journal. Then, in his early 30s, he joined the US Marine Corps, and had multiple combat deployments in Iraq and Afghanistan. Later on Matt played an instrumental role in the geopolitical story of our time: reshaping the West’s relationship with China, when he served as the deputy National Security Advisor in the Trump administration, and was the architect of the administration’s strategy towards China. Today, he is regularly called upon by policymakers on both sides of the aisle, to consult on US policy towards China. Matt has been closely watching the evolving Moscow-Beijing relationship. He’s also just returned from Israel, where he gained fresh insights on what role the final negotiations over a new Iran nuclear deal factor into all of this. We discuss a lot in this episode – from Moscow and Beijing, to Tehran and Jerusalem, and even Caracas and Pyongyang, and how they are all tied together in Cold War II.

Vladimir Putin, if I'm Xi Jinping, I'm watching this engaging and saying, look, the Americans don't have the stomach for this. As soon as gas prices go high, they start to ease off on maximum pressure campaigns. And we're tough men. We talk a lot about struggle. Xi Jinping is always talking about how struggling against the world, struggling internally, makes the party, the Communist Party, stronger. It makes the Chinese people stronger in his very Stalinist worldview. And so, you know, a few years of really tough sanctions are something that can be weathered when it means expanding, you know, if that's the cost of expanding their spheres of influence

by invading their neighbors. As Russia has become increasingly isolated globally at a staggering speed, a senior foreign ministry official was asked if Moscow has anyone left in its corner anywhere in the world. Her response, and I quote, Of course we have them. Look at the reaction of world giants. Those who do not pretend to be giants, but are real giants. For example, it is China. You can see this reaction, can't you? Close quote. So what exactly is going on between Xi Jinping and Vladimir Putin

as tensions escalate between Russia and the West over Russia's invasion of Ukraine? How does it inform our thinking about whether we are indeed in a new Cold War and how we need to rethink our entire national security strategy, defense posture, and approach to global affairs. Russia's experience in Ukraine and the West's response is a laboratory for the Chinese Communist Party leadership to study as Beijing contemplates its next moves in this new Cold War. So to help us understand how China is interpreting events, Matt Pottinger returns to the podcast. Matt covered China and lived in China as a journalist for Reuters and then the Wall Street Journal. Then in his early 30s, he made quite a career change. Matt joined the U.S. Marine Corps and had multiple combat

deployments in Iraq and Afghanistan. Later on, Matt played an instrumental role in the geopolitical story of our time, reshaping the West's relationship with China when he served as the Deputy National Security Advisor in the Trump administration and was the architect of the administration's strategy towards China. Today, he is regularly called upon by policymakers and elected officials on both sides of the aisle to consult on U.S. policy towards China. But he's also been closely watching the evolving Moscow-Beijing relationship. He's also just returned from Israel, where he gained fresh insights on how the final negotiations over a

new Iran nuclear deal will factor into all of this. We discuss a lot in this episode, from Moscow and Beijing to Tehran and Jerusalem and even Caracas and Pyongyang, and how they're all tied together in Cold War II. This is Call Me Back. And I'm pleased to welcome back to this podcast my friend Matt Pottinger, who's a fan favorite. Lots of demand for Pottinger. We get a surge in downloads when Pottinger's on. So Matt, thanks for being here. Hey, Dan, it's great to be back with you. So Matt, we thought there was growing tension between China and the United States.

Now there's Russia and Ukraine and Russia versus the West and deepening ties between Russia and China. You said this was a kind of new Cold War world that we're in. Can you explain what you mean by that? Yeah. Just take a look at all the pivotal events of recent days, right? Obviously, Ukraine, but you've also got an emerging new Iran nuclear deal that's being midwifed incredibly by a Russian diplomat. You've got North Korea having just tested its longest range missile since 2017. out to the Venezuelan pariah, Nicolas Maduro, trying to get him to turn on his oil spigot in return for sanctions relief, reportedly. And you've got Saudi and Emirati leaders who were refusing phone calls from the president of the United States. So all these seemingly disparate developments, to me, reflect the new Cold War that we're

in. And it's going to shape politics, it's going to shape markets for a long time to come. And I know that a lot of people really long have resisted recognizing a new Cold War. But I'm confident that people who adapt that framework, and really its attendant approach to risk, commercial risk, strategic risks are going to be better equipped to weather the sorts of disruptions and difficulties that we're seeing. And there are going to be a lot more to come. The original Cold War was something that the American people had to warm up to, right? We remember the great speech that Winston Churchill gave in 1946 in Fulton, Missouri.

Yeah, when he talked about an iron curtain that's descended. If you reread that speech, you realize that he's really working to try to persuade an American public that might be skeptical of the idea of regarding Russia as an adversary, because we just fought two world wars with Russia on our side. And Churchill talks in that speech about Marshall, Joseph Stalin being his friend and a key ally. Nonetheless, he goes on to describe what's happening behind the Iron Curtain that he describes in that speech. And it's a totalitarian form of government. It's a threat to open societies. George Kennan writes his famous long telegram. But it really wasn't until a hot

war in the form of the Korean War that it really began to crystallize in the minds of a skeptical Western public. And I think that the Ukraine hot war is going to serve the same role in really inaugurating the second Cold War. So you're saying the Korean War in the 50s was necessary to, not necessary, but had the effect of focusing the West's mind that it was in this Cold War. It took a hot war to force us to settle into the reality of a Cold War and that Russia, Ukraine could have, the Russia-Ukrainian war could have the same, play the same role. That's right. And it, you know, and there are differences, right? No model is perfect, right? Of course, there are differences between a Cold War today and the original Cold War.

But if we get lost in the nuance of the differences, we're abandoning a framework that actually has an internal logic to it and an explanatory power that will actually help strategists in government as well as investors make better decisions. All right. Before Russia-Ukraine, I just want to get settled on where where we are right now so before russia russia's invasion of ukraine there were many china watchers that argued that xi would make a move against taiwan at some point in the next five years in the next decade others said he wouldn't do it for a while take a couple of decades and you know experts in in in one, you know, believe China was ascendant and would invade as soon as it, you know, concluded it had the military necessary for the task. Other experts argued that China was in decline and it may attack sooner for fear that its, you know, window of opportunity may be shrinking. And then, you know, and others, and there's all this back and forth, is China biding its time? Will it wait decades? And there were these debates happening,

you and I have been to a million conferences where these sorts of scenarios were being hashed out. And then Russia invades Ukraine late last month. Depending on where you stand in any one of these camps, how did Russia's invasion of Ukraine change how we think about China potentially invading Taiwan? Yeah, it's having all sorts of ricochet kinds of effects on the minds of people in Taiwan, certainly us in the West, and hopefully on the minds of war planners in Beijing as well. Because there's really no question that Vladimir Putin miscalculated about how easy his war in Ukraine would be. And this is a very common mistake that leaders make. Authoritarian leaders and democratically elected leaders alike often believe that a war will be more decisive and faster than it turns out to be, right? How many wars has the United States been in where our president says,

we'll have the troops home by Christmas? And it ends up being, you know, many, many Christmases later. And so that was clearly a miscalculation. And that has to at least penetrate some of the discussions in thinking of Chinese war planners, given how confident their external facing statements have been about how dominant they would be in a war against Taiwan, how they would be able to keep America at bay with these formidable capabilities that they've built, like anti-ship ballistic missiles, and that they would be able to dominate Taiwan. And there's a cockiness that comes through in conversations with PLA officers and in their internal facing as well as external facing propaganda. I wouldn't put too much faith in the idea that war planners are even going to have that great of an influence over the ultimate decision of whether or not to invade Taiwan, which rests with one man, just as the Ukraine decision rested with one man in Russia. In China, Xi Jinping is the one who's going to decide whether and when to use

force against Taiwan. And what's clear from the statements that he's been making before this Ukraine invasion, and I don't yet have reason to believe that he's changed his perspective, is that he's signaling a certain amount of intent. He's made clear that his domestic goals, the Chinese dream that Xi Jinping describes, cannot be achieved without effectively the annexation of Taiwan. So this is an expression of intent that should make us rather uneasy. And what, well, let me, I want to go back a little bit. February 25th, it was a Friday on the eve of the Russian invasion of Ukraine. Xi and Putin have a phone

call. What was the significance of that phone call as well as a meeting that Putin had had in Beijing a couple weeks before that? Yeah, so we'll start Beijing a couple weeks before that. Yeah, so we'll start with a couple weeks before that. On the 4th of February, the day that the Beijing Winter Olympics opened, Vladimir Putin met in person with Beijing. He brought a huge entourage with him. They had clearly been working for a long time to write this communique that they put out, this 5,000-word communique that declared that the two sides are now in some kind of an alliance, in essence. Now, this isn't really what we think of as an alliance in the Western sense of, you know, NATO type alliance where one is committing military defense to the other. But it is something quite powerful and meaningful nonetheless. It's something that is described as something that supersedes and goes

beyond Cold War style alliances. It talks about the fact that there are no forbidden areas of cooperation between the two sides. And that document, the majority of the drafting appears to have been done by the Chinese side because it's pregnant with all sorts of language and jargon that Xi Jinping is fond of using. It talks about this community of common destiny for all mankind, which is his sort of his slogan for remaking world governance to make it safe for authoritarianism. And Vladimir Putin, for the first time, signs on to these formulations. So was this the first time you have seen the relationship between the two of them articulated and presented to the world in this way, was it really an inflection point, a really new development, or was it just on a trajectory? It's an inflection point, but it's one that took 10 years to build and one that Xi Jinping very patiently built from his first days in office. The first overseas trip he took when he came into office a decade ago,

nearly a decade ago, was to go to Moscow. And so this was building for a long time. It was not a, it didn't just materialize out of nowhere. But nonetheless, it signals that Xi Jinping, it's sort of the culmination of all of this work that's been laid to tie two revanchist powers with imperial ambitions together. And for them to agree that they're going to, rather than be mistrustful enemies of one another, like they've been at so many points over recent centuries, including during the time that Mao Zedong was in power. Basically, they're going to

now go back to back and both face out into their respective directions in the world. What does Xi get out of this relationship? Well, we don't even know the full ramifications of how bad of a position Vladimir Putin has put his country. And it looks to me like he's mortgaged his country to China. He's now dependent upon China as the main customer for the gas that they're producing. Remember, they agreed to this 30-year gas deal as part of that February 4 communique. He's got Putin signing on to Xi Jinping's vision and his overarching jargon and slogans for advancing China's role in the world. of some kind that if and when he moves on Taiwan, the Russians will be there to provide support in international organizations, maybe also to provide some form of military distractions in the Western Pacific, where even though Russia is not the kind of player that it was during the Soviet days. It still has

bombers and interceptors and naval vessels that do ply those waters in ways that could complicate or distract a response by Taiwan and Japan and the United States to a crisis in the Taiwan Strait. So they've agreed to scratch each other's backs on their imperial ambitions. So they agree to scratch each other's backs on one another's imperial ambitions. What beyond that does Putin get out of it? And the reason I ask is because of the time at which these efforts to isolate really tighten the economic noose around Moscow is increasing, there is this concern in the West that Putin could have a safety valve in his relationship with China economically. Is that what Putin gets out of this? Yeah. You know, if the war had gone really quickly, as I think it's clear Putin must have expected, he may have calculated that the sanctions would have been less potent, that they might have been more reminiscent of the 2014, the sanctions from the West that followed his 2014 annexation

of Crimea, which were, you know, real, but nothing like the sorts of sanctions that have been stitched together this time. And I think that he would have been looking to China to be a a release valve you know to allow for some circum uh navigation of those uh of those sanctions g has interest in cooperating with russia to support as you say support one another's uh each other's imperial ambitions but it also seems that this is like a laboratory for Xi. He gets to watch Russia invade Ukraine, see how the West responds, which could inform Xi's own thinking about a possible move against Taiwan. So what do you think Xi, I mean, you're not inside his head, obviously, but you're talking to a lot of sources inside China. What, as an observer, do you think Xi is learning? What is Xi learning from Putin's experience invading Ukraine? Yeah, you know, Tom Tugendhat, who's a member of parliament in the United Kingdom, described Russia as China's tethered goat to sort of gauge the international response to a war of aggression.

And I think that that's right. I think China is very carefully watching all of the Western response. I think that the response has been belatedly, but nonetheless, importantly, very formidable. And that is registering on China's experiment clipboard here. But what they're really going to be looking for is staying power. And they're also going to be measuring the military response. Because these are hard men. Staying power of the Western response in terms of the economic sanctions?

Yeah, in every respect. And these men, Xi Jinping and Vladimir Putin, have ample reason to believe that the West is not going to have the staying power necessary to deter these kinds of actions. I mean, obviously, Putin judged that we weren't going to, that we were going to have a more feckless response than we've had. I think otherwise, it's probably unlikely that he would have rolled the dice. But look at some of the things that, some of the reasons why it would have been reasonable to expect them to see that we would not have much staying power. You know, 2008, Vladimir Putin attacked his neighbor, Georgia. And it was only, you know, a year later that we, the United States showed up again with a, literally with a reset button. 2014 sanctions, he was able to weather. Now, more recently, you've got Vladimir Putin's own diplomats are brokering these negotiations

between the Biden administration and the Ayatollah in Iran to return to, you know, some version of the JCPOA nuclear agreement of 2015, which President Trump left a few years later. And part of that agreement, if it is finalized, will certainly include massive sanctions relief for the Iranian regime. So that was what we were calling a maximum pressure campaign, financial pressure and sanctions campaign against Iran that we're now about to potentially end. Same thing with Nicolas Maduro. We had a sort of a maximum pressure campaign and sanctions on his regime after he obliterated democracy and obliterated the economy of Venezuela. Now it looks like we're offering sanctions relief there. So if I'm Vladimir Putin, if I'm Xi Jinping, I'm watching this engaging and saying, look, the Americans don't have the stomach for this. As soon as gas prices go high,

they start to ease off on maximum pressure campaigns. And we're tough men. We talk a lot about struggle. Xi Jinping is always talking about how struggling against the world, struggling internally, makes the party, the Communist Party, stronger. It makes the Chinese people stronger in his very Stalinist worldview. And so, you know, a few years of really tough sanctions are something that can be weathered when it means expanding, you know, if that's the cost of expanding their spheres of influence by invading their neighbors. So, you know, John McCain famously said Russia is basically a gas station masquerading as a country. While Russia's role in the energy sector is extraordinary, China's role in every aspect of the global economy is at a whole other level. Russia's economy is about the size of, you know, Spain's or Italy's. You can't compare it to

China's. So could Xi also be calculating whatever economic pressure they're putting on Russia, they'll never be able to put on us? Well, look, as you mentioned, I mean, China's economy is, you know, at least 10 times the size of Russia's. It's integrated into the supply chains of every country in the world in ways that Russia's certainly are not. Russia is not really a high-tech power. There are certain things they're good at, like jet engines for fighters and so forth, but they are not a broad-based tech player the way that the West has placed on Russia for its unprovoked war against Ukraine, we're going to come after your system as well, your banking system and so forth. So that's a warning shot. But will the threat of sanctions be sufficient to stay Xi Jinping's hand? I think that ultimately, he's going to be looking at military will on the part of the United States and our allies as really the most important indicator of whether or not to try to take advantage of what he sees as a window of opportunity to take Taiwan this decade. From a military perspective, Putin had been assembling forces along Ukraine's border for some time to the point that it peaked at something like 150,000, if not higher, in terms of troops

arrayed along the Russian-Ukraine border and even into parts of Ukraine before the formal invasion. And that took a long time, and we were watching it, and the famous Biden administration leaks about what Putin was about to do. There was a lot of pre-game show time, and it gave the West time to prepare in the in in the event that that putin actually did make the formal invasion do you think g's takeaway from that is don't allow a lot of build-up time if you're going to strike if he's going to strike taiwan do it quickly no build-up of forces no real kind of you know gradual escalation of of activities, just and not these endless diplomatic meetings,

just go? Yeah, well, the Chinese are very good at strategic surprise. It's part of their doctrine, you know, going back a really long time, going back centuries, the idea of strategic surprise and deception. And of course, strategic surprise is a much more powerful instrument than tactical surprises. permanently within proximity of the Taiwan Strait in ways that shorten the warning time that American intelligence and military planners sitting in Honolulu, sitting in Washington, D.C., you know, they're trying to shorten the amount of time of warning that we would have in advance of a fight. But all that being said, there would still need to be a buildup that I think that we would detect. It wouldn't be the slow weeks-long buildup that we saw monthslong, really, buildup on the Ukraine border. It would be quite a lot shorter than that. But we would, nonetheless, get some warning that something was afoot. And so, you know, I think that Xi Jinping is going to continue to try to compress those

time scales so that he can have the element of surprise if he chooses. And it's why we need to be planning yesterday and taking steps yesterday together with Taiwan to turn them into the proverbial porcupine that would be very difficult to swallow. I know you just returned from Israel and you talked a little bit already about the negotiations around the Iran return to the JCPOA or to the Iran nuclear deal. Do you tend to view these countries as some sort of access, Moscow, Tehran, Beijing? Yeah, you know, the, the, the, Iran has depended upon China in particular, uh, for economic relief amid the maximum pressure campaign that, uh, you know, the financial sanctions that we and the West have been pursuing against Iran, particularly over the last four years. It relies on Russia for some of the military support in the region. Both Iran and Russia are in Syria in a big way. That's not always a comfortable sort of alliance, if you will, there.

I think the Russians would be happy to see Iran find other patches to play in. But there's no question that Iran is dependent on its relationships with Beijing and Moscow to try to ameliorate the effects of our maximum pressure campaign. So look, if this deal does get done, I think it will be a significant mistake by the Iranian administration. If the Iran nuclear deal is completed, from what we're hearing, based on reports we're hearing from press accounts and leaks and foreign governments that are watching this, it looks like the terms would be much worse, not longer and stronger than the 2015 deal, but in fact, more problematic than even the 2015 deal, which had so many flaws. You know, that they would be allowed to keep advanced centrifuges that would give them a shorter timeline to a breakout. They'd be able to keep partially enriched nuclear material.

There might even be a poison pill that's being negotiated that would make it impossible for a future president to withdraw from the deal or that would give Iran significant benefits if, in fact, the U.S. were to withdraw. So I think this is a mistake. I think it actually makes a conflict more likely, not less likely. And that's because it is existential for Israel if the Ayatollah gets the bomb. And, you know, why does he want the bomb, right? If you read things that the Ayatollah has said over the years, his strategy is really to turn Israel into the equivalent of Seoul, Korea, right? has become less and less willing to incur risk, military risk, artillery and rocket fire, because they've grown more risk-averse in a time of real prosperity. And that's what the

Aitol is seeking to put Israel into that kind of a box as well, and to give himself a nuclear umbrella that would allow him to pursue conventional military action, as well as terrorist and proxy military actions on a much greater scale throughout the region, things that could put Israel at existential risk. Last question before we let you go. There's a tendency in some of these foreign policy debates to, and I see it increasingly now, while American public support is surprisingly quite high and unified in the need to somehow reverse Russian aggression and defend, help Ukraine defend itself, whatever that means, and people define what we should be doing differently. But you, on the other hand among some policy elites you hear this argument well

it's a distraction from china that we shouldn't be focused on what putin's doing in his own quote unquote backyard we should just be focused because because to do so is to distract what from the real threat which is china do you think these threats can be compartmentalized, whether it's Iran or Russia or China, and let's not focus on this one, we'll put this one in a box so we can focus on that one? Or do you think you have to have a holistic approach? The events of recent weeks have shown us that you cannot compartmentalize these different problems. They are linked to one another. Autocrats watch these signals and act in response to how much resolve they gauge the United States is having. And they coordinate with each other increasingly. The autocrats coordinate with each other. So that's why, again, to return to what we were talking about at the top, if you use sort of a Cold War approach, it forces you to confront the fact that we have to deal with all of these threats simultaneously.

You can't just get Iran out of your inbox by cutting a deal that, in fact, sends a signal, for example, to the North Koreans that now's the time to start popping off missiles. You know, the North Koreans are watching this deal that's getting negotiated with Iran. They know that Iran is on the verge of blackmailing its way out of a maximum pressure sanctions regime. And so what do you think North Korea is going to do? They're going to do exactly what they did the other day. They're going to start provoking us with long-range missile tests and potentially nuclear tests again. So these things are related. What that means is that we have to massively increase our defense spending. I think people forget how little we actually do spend on defense today in historical terms as a percentage of GDP. We're spending about half of what we spent in the 1980s. So what, we're about three and a

half percent now? Yeah, maybe 3.6 or so. In the 1980s, we were spending twice that. And the 1980s wasn't even the peak of our Cold War spending as a percentage of GDP. We need to significantly ramp up our spending. We need to spend the money a lot better than we're doing. But in the meantime, we've got to spend more. We need more capability so that we can, you know, credibly back up both our NATO allies as well as Taiwan. I, I don't disagree with those, uh, like my friend, Bridge Colby, who argue that, uh, you know, uh, you know, a Taiwan, uh, war would be even more devastating for our interests than what's happening in Ukraine. He's right about that. Uh, but, um, I, I, we, we just need to spend twice as much. We need to knuckle down in all of those areas. least before he invaded Ukraine, which was to play a weak hand strongly, the United States is not really good at that.

We need to have a strong hand to start with. And that means that at a minimum, we should be spending as much in increases each year as China does, right? They just announced, I think, a 7.7% increase in their defense spending. If they're the so-called pacing threat that we keep hearing about, why are we not keeping pace with their defense spending. If they're the so-called pacing threat that we keep hearing about, why are we not keeping pace with their defense spending? Yeah. I mean, just before we go, we had Fred Kagan on recently, and he pointed out that up until really the last couple of decades, the U.S. defense strategy, defense posture, defense budgeting was undergirded by

the need to be in a position for the U.S. to fight two wars simultaneously in two theaters. I mean, you know, simultaneously. And that, not that we wanted to be fighting two wars, but our adversaries needed to know we were able to, you know, walk and chew gum at the same time if we needed to. And right now our adversaries know that if they can just bog us down or get us distracted in one place, it really limits our abilities to operate in another theater.

That's right. We got to return to that idea of being able to fight two wars, call it one and two half wars, right? We've got to be able to deal with a crisis in the Middle East. You know, I think the odds that Israel will believe that it's, you know, that its hand has been forced and that it needs to take action to reduce the nuclear infrastructure in Iran, I think that the odds of that go up if this deal that we're hearing about gets signed between Iran and the United States. So we need to be able to be a major player and factor in that kind of a scenario, as well as in Europe, and to be able to fight a full-on war against China and the Western Pacific. That's our best shot at avoiding war, is the peace through

strength that would require us to be able to like, like Fred told you, you know, fight two wars. Right. It's a deterrent strategy. It's not saying we want to fight those wars or we should fight those wars, but our adversaries got to believe that we're capable of doing it. So we don't have to, Matt, we'll, we'll leave it there. Hopefully we'll have you back as always. Uh, thanks for taking the time. Uh, always lots to, uh, to learn from you. So, so it was really great of you to spend some time this morning with us. It's great to be with you and look forward to the next conversation. Great.

That's our show for today. If you want to follow Matt's work, he's a Distinguished Visiting fellow at the Hoover Institution, a think tank at Stanford University. You can check out his published work at hoover.org. Call Me Back is produced by Ilan Benatar. Until next time, I'm your host, Dan Senor.