Raging Moderates with Scott Galloway and Jessica Tarlov - Trump Rolls Out Red Carpet for Xi as China Has NEVER Been Stronger

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Starting point is 00:02:30 Thanks, Scott. Great to be on this side. So before we get started, make sure to subscribe to support the show. All right, let's bust into it. President Trump is hosting Chinese President Xi Jinping in Washington for Xi's first U.S. day visit in nearly a decade. The two leaders had a lot on the table, tariffs, AI, Taiwan, rare earths, and the broader question of whether the U.S. and China can actually manage their rivalry. Ahead of Xi's arrival, Treasury Secretary Scott Bassan said that the two countries have extended their trade truce until January. Trump personally welcomed Shiott Andrews, the first U.S. president since JFK, to receive a foreign counterpart there.

Starting point is 00:03:05 There's a literal red carpet rolled out, a state dinner, the full diplomatic spectacle. But underneath all the patch, tree are many more consequential questions. Alice, let's start with the summit itself. Give us your high-level thoughts on what you think she actually wanted to get out of this trip. And also, what do you think Trump is looking for? Well, firstly, thanks so much, Scott. It's great to be here. I want to put this in context. This is the second state visit that she has taken to America. The first was in 2015 when President Obama was in the White House. And he's the only child. Chinese president history to have two state visits under his leadership. This is, again, is to reiterate

Starting point is 00:03:48 how important symbolic this visit is. My sense, and I just actually watched his speech in the White House, is that he came with three main items on the agenda. Number one, he does want an extension, or rather a delay on the 14 billion arms sales that was originally intended for Taiwan. This has become, I think, a big issue in China, not spoken about as much in the U.S. context, but certainly in China, It's a prime issue. Number two is an extension, which he did get rather on rare earths and tariffs. Scott Besson just announced the other day. We're going to get a two-month extension on those issues.

Starting point is 00:04:25 And number three is the AI issue, which came up more in she speech than Trump's. She was talking about the fact that both countries are leaders in AI and that they have both the capabilities and responsibilities to work together, to put in controls in place for humanity. I think that is quite significant for Xi to come out and say that during his speech. Again, I think this is going to be one of the top issues for the Chinese. For Trump, it's a bit more simple. And here I really refer to the geopolitical impulse that Trump has.

Starting point is 00:04:55 He hasn't had a great year, as you know, Scott, on the foreign policy front. The Middle East is a mess. We've got Brent north of 100. Diesel prices are flaring, not just in the States, but globally for American allies. So he needs a win on China. and he needs to show that this bilateral relationship is good and stable and friendly under his leadership. That, I think, is his main modus operandi going into the summit. So she's position looks very different than in 2017.

Starting point is 00:05:23 China is now a major player in AI, EVs, renewables, robotics, advanced manufacturing, and even space. How much, it strikes me that the balance of power is dramatically different. Comment on that. Yeah, I mean, I around the. The numbers actually are from she's last visit, state visit in 2015 with Obama. The GDP, nominal GDP, has doubled from around 11 trillion to 20, north of 20 trillion today. And the defense budget spending has almost doubled. China is, as you mentioned, Scott, in a very different position economically, militarily,

Starting point is 00:06:00 geopolitically and technologically than it was in 2017 and even 2015. And that changes, I think, the balance of power in the relationship. means that right now compared to 2017, the relationship looks more like peer competitors, as opposed to the US being clearly the dominant figure. That, I think, is what is motivating she to again address the relationship very much in terms of these two leading partners, these two leading powers that decide the fate of the universe, of the planet. That is very different rhetoric from 2017 or even 2015. And one last thing that I will end on, which is that compared to 2017, China has found a way to achieve a degree of supply chain

Starting point is 00:06:45 resiliency and really a reroute trade so that it is not as asymmetrically exposed to U.S. sanctions, to U.S. technological export controls. That, I think, has been a big quantum shift in the relationship and means that China is less likely to make concessions than it did say in 2017. We have a tendency. One of the stats that I was think about is that in Europe, TV or BBC or whatever the local kind of iconic network is, spends about 70% of the show talking about international and 30% talking about domestic politics, and in the U.S. it's flipped. We have a tendency to look at everything through the lens of how Americans feel about it, what it means for America. So what I want to do is I want to go through

Starting point is 00:07:30 some kind of hot topics and have you talk, speak to these issues from a Chinese through a Chinese lens. First, let's talk about the war in Iran. It strikes me, well, one, what is China's position on it? And two, the thesis I would put forward to you is that the biggest winner in this war, it's not the IRGC, repelling a superpower. It's pretty easy to agree. It's probably not going to be America. It feels like the biggest winner, hands down, is China here. What is China's view on the war there, and what is it meant for them in terms of how it's played out? I would look at it across a number of domains. Firstly, China doesn't like geopolitical instability, especially affecting energy. It is an energy-dependent country, unlike the Americans. It imports a great deal, almost half of its net gas and oil from the Middle East, largely through the Strait of Hormuz, so it is quite exposed on that front.

Starting point is 00:08:25 But it's shown that it has enough buffer through strategic reserves and stockpiling to withstand that. So there's that energy piece where it is somewhat vulnerable, but it has found workarounds to protect itself. In that regard, it doesn't like the conflict. On the geopolitical front, I think in general, this is going to be great for China if we extend it to medium to long term, because it means that now not only do the Middle East potential partners in the region, here I'm talking about Saudi Arabia, I'm talking about the UAE, I'm talking about Qatar, they are going to be questioning whether or not they should put all their eggs in one basket

Starting point is 00:09:00 with regards to the America relationship. And here again, I suspect that there's going to to be more bilateral trade investment flows between China and Middle East Gulf partners, that Chinese technology companies will fare well, that Chinese AI stack will be preference to some extent by these partners. And that's going to be a big geopolitical, call it technological trade win for China. And the third issue, I think it will also be a good point in China's favor, which is the allies around the Middle East here, I think about the European Union, I think also about other energy dependent Asian allies to the Americans, South Korea, to some extent Japan, Australia.

Starting point is 00:09:40 They're going to be re-looking at their relationship with the Americans because they are rightly or wrongly blaming the oil supply shock on the Americans. And they will believe that now, more than ever, they need to find workarounds either by improving the relationship with China, as you've seen Kani's done that, the Australians have done that, or by setting up multilateral frameworks without the. Americans here. I point to EU plus Canada talks, for instance. So in general, I think if we zoom out beyond this year, we call it the next two years or more, geopolitically, trade-wise,

Starting point is 00:10:15 technology-wise, this is going to be great for China, and it's probably a negative point to the Americans. It's just staggering when you think about, it's a pretty short path to figuring out that every nation must be thinking about how they diversify away from fossil fuels into renewables, not only for economic reasons, but for defense reasons. And what are the stats now? 70% of global EVs, 80% of solar panels, 80% of windmills all produced in China. It just feels as if they are exactly in the right place at exactly the right moment. Yeah, I didn't even mention that.

Starting point is 00:10:47 You completely spot on correct, Scott. One of the big industrial sector winners of this conflict is a Chinese green tech. You're seeing in a number of countries, the UK, for instance, Australia, Chinese companies are coming at top three. I wouldn't be surprised that by next year, you know, China's dominating a lot of these countries in the G7 and beyond in the West as the biggest automobile exporter, which, who would have thought 10 years ago that that would happen? But here we are.

Starting point is 00:11:13 And with oil prices remaining elevated potentially for longer, this really incentivizes your consumer to shift towards cheaper Chinese EVs and hybrids. Do the same for the war in Ukraine now. What is China's view on it? What's their perspective and their role in it? So here I sense within China and the elite circles, there is a lot of consternation and conflict. Because, you know, again, this is based on, you know, regular travels to China talking to people close to policy. My sense is that President Xi Jinping has invested a lot personally in this relationship with Putin in Russia,

Starting point is 00:11:50 that some elites in China may not agree with the extent to which he has hitched himself to the Russia cart. But the Chinese also don't want to give up on what they consider to be a strategic partner in the region, mainly a partner that is distracting the West, Europe, call it, and America, from focusing or fixating too much on China as the threat. There has been a level, I do believe, of cooperation in some categories and aspects of dual-use technologies. Here I point to trucks to drone parts, even though the Chinese categorically deny it. But I do think that that relationship, you know, even you expand it to semiconductors to other technological devices, has been designed to help the Russians withstand some parts of the conflict or find workarounds

Starting point is 00:12:40 because, as you know, a lot of countries have put in export restrictions and sanctions on Russia. If I zoom out, I don't think the Chinese, even though they talk about wanting to be involved in, you know, multilateral peace deal or frameworking, that they want to be too involved in this. They have their own crosses to bear, so to speak. They're fixated on East Asia, mainly the Taiwan question, making sure that they have supply chain resilience, technological wherewithal and dominance in the arena militarily across the Taiwan Strait. So I don't suspect that China will invest more than it currently has.

Starting point is 00:13:16 I think we've reached the status quo. We won't see any more commitments from the Chinese. But I will again reiterate the fact that she and Putin, have a very close relationship. She's met with Putin more than any other foreign leader in his time in office. So that shows you the extent to which the two are committed partners. Let's talk a little bit about Taiwan.

Starting point is 00:13:39 My understanding is one of the informal agreements coming out of the summit is that the U.S. is going to delay arm shipments to Taiwan in exchange for an agreement on AI, which feels to me entirely asymmetric that we're, that we didn't ask China. I mean, my understanding is indirectly China or directly is China helping Iran in their war with the U.S. And meanwhile, we're cutting off defensive supplies or what I think would largely be used is defensive arms to Taiwan. One, give us a sense for how amenable or not amenable certain aspects of the population in Taiwan.

Starting point is 00:14:16 You know, what is their complexion towards China? And two, if and when you think there's some sort of. of invasion, you know, acquiescence joining at the hip, whatever it might be. I get the sense it's not going to be a hot war here. Give us some nuance that we lack around China's ambitions with respect to Taiwan. Yeah, I agree that swapping Taiwan for AI controls is a very asymmetric deal. I doubt that that happens. I think it is in the U.S.'s interest to some extent to delay. the 14 billion that they promised in arms sales to the Taiwanese, because remember, Scott, you know, were in this world in which many conflicts coexist and American munitions,

Starting point is 00:15:04 as well as arms are being depleted in the Middle East conflict. So my understanding is that there is a delay partially because of what's happening in Iran. I do think that on the Taiwan issue that people in the West are very fixated on the analogy of what's happening in Iran or what's happening in Ukraine. but you've got to understand China in the context of its own political and intellectual context. And the Chinese look to 97, 1997 as a success story of peaceful handover of Hong Kong to the mainland. If you recall, this was the British government handing over effectively through political means, Hong Kong as a special administrative region to the mainland.

Starting point is 00:15:44 And I do still believe that in elite circles in China, that is what they hope to do, that there is some kind of a political negotiation and deal whereby Taiwan becomes Hong Kong 2.0. The things change a little bit when we think about American power relative to China, especially if you buy the idea that America is in decline, and then American deterrence is in question, which is something that we are actively debating, as you know, Scott in the West. Even then, I don't think that Trump is the same kind of risk-taking profile as say of Putin, he in the short term will be incentivized to help or, you know, through political

Starting point is 00:16:26 interference or through a rhetorical sport, the KMT party, if you recall the KMT tends to be the more pro-mainland, pro-cross-Straight relations party. They haven't been party for quite a bit. There is an election early in 2008 and the Chinese in the short term, I think, are putting most of their eggs in the basket of trying to get them re-elected. The odds are not hard. are pretty slim. I think they're still in the favor of the opposing incumbent party, the DPP in Taiwan. But in the short term, that means that the Chinese are focused on political tactics as opposed to military ones. Beyond that, I think it really is an open-ended question and it will rest quite heavily on what Chinese perceived to be American military capabilities in the region and deterrence credibility.

Starting point is 00:17:13 And if Trump shows that he is willing to give over Taiwan for, say, something else, comes down the line. Maybe, and only maybe then, will I think, China act. The good thing about being president for life in his case is that you have the luxury of time. He's about, he's 72 this year. I believe that he will want to obviously renew the next five years at the next party Congress in October 2007. That gives him a bit more runway. The Taiwanese have understood for quite some time that they can't 100% rely on the Americans. And so they've been fined. And so they've been finding workarounds in terms of, you know, weapons from Europeans, for instance, from other partners, say South Korea and Japan, to try to bolster their defense capabilities. I think they've also

Starting point is 00:18:00 been quite smart to make sure that they are still a porcupine in the sense that, you know, 90% of high-end chips is still made by one company, largely TSMC in Taiwan. This is a high-end under three nanometer now chips. This means that if Taiwan falls, it's not just the U.S. falling, it's the global economy effectively. You look at the way that S&P has constructed, the AI CAPEX. It all is heavily reliant on TSM being able to continue to produce chips. So the Taiwanese are banking that that alone will help them ensure that there is some degree of deterrence from the West. It strikes me that America may not be the decider here. And that is even if even if Trump were to say, I don't care about Taiwan, I respect Yushi, green flag have at it, you don't need to worry

Starting point is 00:18:47 about us coming to Taiwan's rescue, that may not be enough because, or the link I would make, and I'm curious if you see the same link, is that every success on the battlefield by Ukraine sends a pretty strong signal to China that a sophisticated, motivated, small army that is technically deft can create a lot of havoc for an invading army.

Starting point is 00:19:12 And then I look at, you know, all my YouTube and TikTok videos of how an invasion might play out of Taiwan, it would be really ugly, at least all the scenarios I've seen for the invading force. Also, a fact I didn't fully appreciate, there isn't a single person in the two or three or whatever is five million strong Chinese military that has a single day of combat experience. That I just wonder if what's happened in Ukraine has really reduce the likelihood of a hot war, a military invasion?

Starting point is 00:19:47 My sense is yes, in the short term. They look to that and they look at the fact that short war is a fallacy. I mean, if we think about Ukraine, we think about Iran. The markets, as you know, Scott, people in business like to think this is going to be over and done

Starting point is 00:20:04 because it's way too costly for both sides to continue. But there is a, you know, you go back to Klaus of it, there is a center of gravity that leads towards conflicts going on for a longer period of time until either or both parties' political will dies. And my senses to your point, Scott, that an amphibious assault is going to be way harder, and you talk to anyone smart on this issue in the military or in military circles, it's way harder than a land invasion or incursion. Because here you've got to make sure that you've

Starting point is 00:20:32 got enough troops to land on what is quite a rocky promontory, the cliffside facing, from Taiwan facing the mainland, to make sure that they're entrenched enough. to allow for the safe convoy of ships and PLA onto Taiwanese soil. You've also got multiple actors in the region. Remember, you've got South Korea, you've got Japan. This may force Japan to nuclearize in terms of its defense capabilities fairly quickly. The smart people on the street are saying that the Japanese have reduced their lead times to get basically nuclear weapons to a couple of weeks, not a month.

Starting point is 00:21:06 So this, again, is something to take into consideration. it's not going to be an easy conflict. The Chinese haven't launched a major military conflict since the Vietnam War when the Americans left in the late 70s. There was a remember sign of Vietnamese border conflict. And they are getting rid of their top brass military officials through the latest purges. So all these signs point to the fact that I think in the short term,

Starting point is 00:21:32 the Chinese are banking more on the political move, political manipulations, interference as opposed to military moves. Now, they will continue to do the military exercises to, again, show the Taiwanese, they show their hand of force and to show the Americans and the Japanese and Koreans. But I just don't think, given what is happening all around the world, that the Chinese think this is a good time and that they have the ability to make this a swift victory. Isn't one of the lessons of China's success story is that war is just a bad idea? I mean, I think you could argue one of the best arguments against, to make a sense,

Starting point is 00:22:08 the case against ever going to war is China. Arguably the most successful society and economy of the last 50 years. And what is central to that? They just don't go to war. Yeah. They're not spending a lot of their treasure and blood on foreign conflicts. And that is, I think, one of the historical lessons that the Chinese have basically learned from the Americans and the British before that is any imperial overreach that costs you blood and treasure, it's probably not worth the squeeze. You go back to Chinese imperial history. Again, the Chinese don't tend to launch foreign conquests. They tend to have a tributary system in which countries come to them and offer them riches in exchange for Chinese trade.

Starting point is 00:22:56 In the case, it was silk and spices and porcelain. The only time China really had history of military conflict was the Mongols coming in and capturing China, becoming sinusized, effectively, becoming the UN dynasty. So to your point, Scott, the Chinese understand their history, they look to their own history in the West, and they just do not believe that, you know, conflict, unless it can be achieved, you know, intelligently, swiftly, is worth the squeeze.

Starting point is 00:23:24 Hong Kong is a great example of this. They did not send in PLA troops in 1997 to take over Hong Kong. They negotiated with the Brits to hand it over diplomatically. support for the show comes from Grooons. Holden flu season is approaching, which means it's more important than ever to make sure your body has all the nutritional ammunition it can get. Grins are a convenient, comprehensive formula, and one delicious daily pack of gummy bears. This isn't a multivitamin, a greens gummy or a prebiotic. It's all of those things, and then some at a fraction of the price. And bonus, it tastes great. Generic multivitamins only contain around seven to nine vitamins. Grunz has more than 20 vitamins and minerals, which, With 60 ingredients which include nutrient-dense whole foods that include 6 grams of prebiotic fiber, which supports digestive health, biotin, and niacinamide, which provides thicker hair, nails, and skin health, super mushrooms which promote brain and gut health, and the old standby vitamin C, which reduces immunity damage, stress-inducing free radicals.

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Starting point is 00:26:38 This week, Bernie Sanders, Senator Sanders, introduced a bill to ban artificial superintelligence and establish a cabinet-level agency to regulate AI. We also saw the FBI get hacked by an AI agent. The U.S. and China are competing intensely to lead in this space, but both governments are also increasingly worried about what the technology can do. Do you think there's an opportunity here? Can the two countries cooperate on AI safety while also continuing to be fierce competitors?

Starting point is 00:27:07 They can talk about cooperating while not cooperating. That is what I think will end up happening. that they will both say, hey, we're going to work towards humanity because we're the two main powers with pretty much, I would say, most of the AI capabilities at this point. And this will be great for world peace

Starting point is 00:27:23 and for our bilateral relationship. I do know for a fact that there are some members of the US administration. Here I point to Scott Bassett, the Treasury Secretary, who I think would want the legacy of being a Kissinger on AI arms controls in the way that Kissinger

Starting point is 00:27:38 and his successes war over the assaults nuclear talks between the Soviets and the Americans. But he is fighting an uphill battle because both Trump and certain key members around him still believe that AI regulations are bad thing. We should allow innovation at all costs. And as a result, we're unlikely to see the kind of regulations needed to even help a bilateral governance structure. And then I go to the Chinese side where it's almost kind of the polar opposite. The Chinese care a lot about regulation, especially domestically. We've seen them as a first mover on a lot of deep fake AI technologies.

Starting point is 00:28:14 Just recently they announced legislation that's put into law about regulating AI agents because they don't want them to be rogue or amorphous or anonymous agents. They need to have registration with the Chinese government. And there is concern of these sort of misalignment in AI. There's going to be draft regulation, I think, coming down the pipeline in the coming year or so. to mitigate those risks internally because now we've taken the, we've opened the Pandora box in terms of these rogue autonomous agents. We just saw this hack from Open AI into Australian Medicare healthcare records. That's probably the first major open AI hack into a foreign government.

Starting point is 00:28:56 So the Chinese are very concerned and want to regulate, and they want to say that they're working with the Americans, but neither side is willing to agree on a framework, even though I think the low-hanging fruit is for them to come together and talk about some level of arms controls or controls over what they call CBRN risks. Here I point at chemical, biological, radiological, and nuclear risks that may be attendant to the use of AI or AI agents. That would be a low-hanging fruit, but I don't think we get there until we have some major biological disaster or, you know, call it AI version of COVID, COVID-2.0. Only then will we see, I think, both sides forced to take a stance. But we're in this very difficult situation

Starting point is 00:29:40 where it's all rhetoric and no substance. So you're, I mean, I'm, and again, I might be naive here, but I thought maybe similar to the way we cooperate around nuclear weapons and bio-weapons, that this might be an opportunity to reconnect some tissue between China and the U.S. and there's a pretty strong vent overlap of interest around whether it's, you know, our teens getting depressed or a middle power rising to build a nuclear weapon much faster than we'd like, that there's a lot of areas for cooperation that not symbolically, but tangibly would make sense for us to report to one another, you know, accidents, coordinate, go after bad guys together, limit certain aspects of the technology. You think that's mostly going to be hand-waving. It's unlikely to result in anything tangible.

Starting point is 00:30:28 You understand human history and human psychology, Scott. Most of the people who were very passionate about nuclear arms controls had lived through experience World War II, had seen what nuclear weapons do. And again, call me a cynic or an old person. I just don't think we get there until we see some major accident. It could be biological. It could be chemical and nuclear. And then it will force the two main superpowers on AI to come together and issue some kind of governance structure. because the Chinese, none of them are incentivized to lead on global AI governance.

Starting point is 00:31:02 And then one party here talked about the Americans don't even care that much about AI regulation. Even if Bernie Sanders is calling for it, the key person, Trump, doesn't really believe in it. And we'll have to wait until we see a major incident, which is sad. So the big political story this week is Trump's fight with the press. A federal judge ordered the White House to restore access for CNN, MS Now and Politico, the ban likely unconstitutional. Major TV networks also declined to film Xi's arrival. Korea is how you think this is this press ban

Starting point is 00:31:33 is landing with the Chinese. Well, it hasn't really gotten that much coverage at mainland, to be honest. They've, in most of the mainland coverage is about how, you know, she is a strong leader coming to America. This is the second state visit he's had under his leadership that he's coming and the two countries will, you know, want to ensure AI peace and stability.

Starting point is 00:31:55 That has been the main sort of coverage of the issue, some discussion about Taiwan. I think it's kind of flown over the heads of most Chinese people. But I will say, and here I'm pointing to the midterms, that Chinese media and sort of call it the intellectual elite, understand that after the midterms, Trump's kind of in gridlock, especially if the dams take the house. There will be a lot of impeachment, you know, risks. maybe nothing really gets done legislatively. And the Chinese are hoping that that takes some oxygen or air out of any kind of attempt

Starting point is 00:32:31 to launch legislation against China. And there's some discussion going back to AI, I think quite in early day discussion about how do the Americans make sure that China isn't using offshore data centers training, basically its models on chips in Southeast Asia and the Middle East. that they get access to via those data centers. There's also discussion about whether or not they can legislate restrictions on American companies using open source models coming out of China.

Starting point is 00:33:03 I think the Chinese hope that if the midterms outcome isn't favorable to Trump, that the domestic issues will be so dominant that there won't be a lot of legislative actions against the Chinese. This week, AOC teased again that she's running. J.B. Prisker shares his weight loss journey, and Kamala Harris was campaigned, with Senate candidate Abdul al-Said. What is running or what do you think is running through the mind of the Chinese, thinking about elections in 2028 and the shift that might come from a new political era?

Starting point is 00:33:36 For at least a year, every time I go to China, people have said to me, hey, Trump might actually be good for China. And it might be a narrow period of time in which we get what we want. We continue to rise technologically, economically, militarily under his watch. Because, hey, anyone coming off, him, whether it's Rubio or J.D. Vance on the Republican side, or who knows, on the Democratic side, any candidate that comes out there, they're going to be harder on us than Trump has been. And I would agree with that assessment. I think we're in a narrow period of time until

Starting point is 00:34:08 2008, where generally speaking, Trump is the biggest dove that China could have asked for in a period in which American politics have largely swayed towards a hawkish position on both sides of the aisle towards China. So if you think about it from the Chinese policymaker's vantage point, you're going to try to make the most of that period, get the most you can in terms of concessions, you know, get the most you can done without American regulation and oversight. And then the hope that, you know, you don't get a super hawkish candidate come 2008. It's such an open field right now. But the Chinese, I think, top level understanding is that anyone taking over from Trump is going to be way more hawkish.

Starting point is 00:34:50 Yeah, it's interesting, though, because while Trump is, you know, I don't want to call him pro-China, but he's less anti-China, I've always found that in geopolitics and business, you think in business, when you want to deal with a dumb partner, I used to think that when I was saying, I can sell my company to a stupid big company or a stupid client will pay me more than, you know, than I should get for the strategy engagement. And what you find is the best partners or the best, not adversaries, but clients, people on the other side. side of the table are when they're really smart and consistent. That's how you get deals done. And while Trump is more, I guess, benign is the term toward China, I find his policy so sclerotic and difficult to understand that I would believe. And again, this is reflecting a bias against Trump, that the CCP looks at Trump and says, okay, maybe they like us, maybe they want to slap us on the back, but we can't get anything done with this guy because he doesn't, the counterpart party here is inconsistent. And I would argue not that intelligent. Can I push back on that, Scott? Because another way to look at that is, hey, we're not going to get anything done,

Starting point is 00:36:00 but he's not going to do anything stupid to, you know, reduce our technological, economic, military rise. He's not going to get the allies aligned to contain China, which was the real risk they actually saw growing under Biden. He's not going to put in huge or escalate the sanctions on a further sanctions on chips and technologies that will kneecap our domestic industry. They're playing for time, and they're just hoping that the promise of continued glad-handing and back-slapping will mean that Trump won't take the opposite direction of really going hard on China, exercising all of American power to do so and allied power. Because as you know, Scott, so many of these allies, you know, Carney, even to some extent,

Starting point is 00:36:46 the Europeans are just fed up with what Trump is doing in Europe, in the Middle East, globally. And like it's kind of crazy the way in which Germany is letting China eat its lunch with this massive, and Europe too, massive trade surplus. But that is because of the geopolitics of it all. They do not want to completely alienate Chinese because they can't trust the Americans either. I mean, isn't the biggest gift to China not Trump's relationship with them, but his fraying relationship with all these allies who would have never previously considered working with China.

Starting point is 00:37:19 Yeah, and the global South countries too, which China sees increasing. I don't think the West, people in the West, because there is a naval gazing bias, think too much about the global South, you know, the Southern Hemisphere countries. You've got pretty big, heavy-hitting players in the form of Brazil, South Africa, India.

Starting point is 00:37:35 They all have demography and GDP growth on their side. They are going to be, you know, they're 40% of GDP now, like 60 or 70% of population, they are pretty much the future of the planet because people in the West are just not having babies and growth is slowing down. And the Chinese are hoping that with the global South's rise, if they look to America being in decline, then, you know, hey, buying more Chinese EVs is not a bad thing or buying China's AI open source models or data centers or cloud companies is not a bad thing. That gives them a huge, even though the more.

Starting point is 00:38:15 market looks small now in the global south, there they have time and growth on their side. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow none of them talk to each other. That's where Odo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all-in-one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no spreadsheets. Stop managing software and start managing your business with one unified system. Try for free today at odu.com slash vox.

Starting point is 00:38:54 That's odio.o.com slash box. Sponsored by Deepgram, the leader in voice AI, so you can use voices like mine. Do you love the luxuriant flavors of fine dining? Then make a reservation at the most hands-off restaurant in town. U-de-Chef. Five-star chefs at U-To-Chef provide expert suggestions on how to prepare your meal. So you pay them, and then they say au revoir, while you try and figure out the difference between Esca Go and Escarol.

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Starting point is 00:39:48 but can't help them do it. That's like a restaurant that only tells you how to cook your own meal. Service Now doesn't stop its suggestions. It puts AI to work, connecting your AI, workflows, data, systems, and governance to take action and get the job done. That's why the world works with Service Now. Who do you think the Chinese least want to see get the nomination on other side of the oil? Oh, of the people, and here I defer to you who you think are the credible candidates on the Dem side. I'm not yet sure.

Starting point is 00:40:20 Although for the record, I'm a big fan. of Ossoff, don't ask me why. On the Republican side, on the Republican side. You like that Kennedy energy? You like Hotlanta? Yeah, a little bit. It's more JFK junior energy than JFK. Fair enough. Fair enough. Yeah, I think a lot of people feel that way. Yeah. And but on the Republican side, I think they worry about a Rubio who has a discipline and the focus and historically has been very anti-China, even before it was fashionable. that I think would be the most worrying one. J.D. Vance is also worrying, but to a different degree, because remember, he's also more of a protectionist.

Starting point is 00:41:01 He doesn't want to be involved in foreign campaigns. I think Rubio is probably their prime fear. But who do you think on the Dem side? Well, I need a giant asterisk here because the candidates I have supported an order. I had a Mondale poster in my fraternity room. Then I supported Dukakis. I went door to door for Hillary Clinton. I supported and through fundraisers for Michael Bennett.

Starting point is 00:41:26 I have the worst track record picking candidates. So what I defer to is the following. The Democratic primary process is this unbelievable, unpredictable process that produces a warrior. I think of it as like Navy SEALs training. You just don't know who's going to get through it. You don't know who's up for eating fried snickers at an Iowa fair and not looking ridiculous.

Starting point is 00:41:47 Who can hold their own with a hostile problem. press corps, who can get on stage and deflect gotcha moments from cable news networks looking to make them look stupid, who can raise a shit ton of money? I mean, just to give you a sense for some of the candidates who are polling number one on the Republican side, you're too young to remember these guys, but Fred Thompson from Law and Order was polling number one, Herman Kane, Rudy Giuliani, and two people who didn't even register weren't even in the polls at this point in the democratic process, Barack Obama and Bill Clinton. So the process, when we let it run,

Starting point is 00:42:25 not only surfaces the right person, but the right person for the moment. So, you know, I like, I think we're a highly-luxist in sexist country, so I think AOC and Newsom, in my mind, have a real shot because I think people just are drawn. Asov. I think people are really drawn to that uplift portrait camera profile.

Starting point is 00:42:45 Yeah. So I think that there's, but, and again, I'm biased here. I think that the Democratic, the one thing I will say, I think the Democratic bench is stronger than it's ever been. While no Michael Jordan has emerged, we have eight Scottie Pippins. We just have, I think eight or nine, whereas I think the Republican side is not nearly as deep. I don't think the bench is nearly as deep. I think you kind of, you go Vance, unlikable, Rubio qualified, and then like, who's third? It's like when you compare, we talk about London and New York, two best cities in the world, everything's fighting. Everything's a distant number

Starting point is 00:43:17 three in my view. I just don't, I don't think there is deep on the Republican side. Anyways, that's my, it's a long-winded way, Alice is saying, I don't know, and I've never been able to figure this one out. If you had to speculate where the relation were, U.S.-China relations are in 10 years, someone said, I thought the best description was, we're not in a cold war, we're in a cold peace. Do you think there's a thaw? Do you think things get worse, or do you think things mostly get sideways? If you had to say, all right, sitting here in 10 years, when I'm interviewing Alice Hanigan, hopefully,

Starting point is 00:43:53 where do you think we are? I think a lot of it, this is why 2028 matters, is predicated on who's in the White House after Trump, because that will set the course for call it the next five, maybe even 10 years if they get two terms. Then I would say that we end up with a kind of understanding between the two of my sense is co-optition, but there will be in certain areas more conflict. And here I'm pointing to supply chain areas, technology areas, even potentially military areas.

Starting point is 00:44:31 Generally, because China doesn't want to see major flare up in the relationship, it is happy, to some extent, with the status quo of this kind of managed piece or co-operative. because it allows them to continue growing their economy and their technology stack. The Americans, I think, are facing, you know, multiple conflicts around the world in Europe and the Middle East. I don't think it's in their incentive to flare up conflict in Asia. But who am I to say this? I'm not an American expert. I do think, however, and this is the sort of bare case call it, beyond co-opetition, there will be a center of gravity in Congress and the Senate, regardless of whose president,

Starting point is 00:45:21 to see China as this long-term strategic threat. And they may use legislation aimed at curtailing Chinese AI, Chinese robotics, in the same way that they have put tariffs on, like 100% tariffs on Chinese EVs to obstruct them, in the same way they put export restrictions on chips going to China. I think we're going into a new. call it Tech War 2.0, which is going to be launched by the Americans to try to contain China's technological rise. Beyond that, the big question mark is going to be Taiwan. In here, if I would have bet, I don't think we get a Taiwan invasion in 10 years' time, Scott, when we talk. But this will

Starting point is 00:46:05 be the Damocles sword that continues to hang over the relationship and create some degree of of disturbance and destabilization, but I do not think we end up with hot war proxy conflicts. We end up with this kind of, you know, somewhat stable cooperation framework, but with periods in which, you know, there's intense legislation and restrictions on technology, maybe some areas of trade and supply chain. Let's end on a funner note. Chinese cars. I'm a, I haven't owned a car in five years.

Starting point is 00:46:40 and I'm sort of jonesing for a car and so I'm getting served all these videos about cars. And you can't help, but watch these videos on some of the models coming out of China right now. And I believe

Starting point is 00:46:52 that there's a real non-zero probability that the U.S. is no longer a major automobile manufacturer in 10 years. I just look at the way I would describe it is I want to get an SUV. Right now China is producing the equivalent of a range rover that would cost $120,000 for $50,000.

Starting point is 00:47:10 And except it's faster and has longer range and it's better engineering and has more technology. I got into a B-YD when I was in Brazil and I thought, wow, I thought it was a Tesla model why? And I said, wow, this is nice. And I said, and then I realized I saw the logo on it. Cost him $16,000. I mean, this isn't incremental gains. And eventually, no matter how many tariffs you put up, eventually you have to face global competition,

Starting point is 00:47:36 Chinese cars, I am absolutely blown away by the price to quality ratio of these things. Any thoughts on advanced manufacturing and the Chinese automobile industry? Yeah. I just looked at the numbers for Chinese total auto sales in the first, call it, eight months of the year. And what people don't really understand is, yes, we've had record sales. exports of Chinese vehicles, but that over 50% of the sales actually have been in regular ICE cars. People have this, I think, still illusion that China is an EV superpower. But China's also, you know, exporting a shit ton of, forgive me, my French, ICE, so, you know, combustible

Starting point is 00:48:23 vehicles. Yeah, yeah. And that changes the game because now for the first time in countries like where I'm from in Australia, China's like the top two exporting countries and still now just behind. but very minorly so are the Japanese. It's not going to be long before China is the biggest car exported to most countries in the world, both EVs and hybrids and ICEs. So we're going to live in a world in which we are driving BYDs and cherries. Iran has made that, I think, a more palatable future for a lot of these countries in the West

Starting point is 00:49:00 because the price just speaks for itself. I was just so maybe this is what my feed is becoming. I was just seeing a video of an RV van, a Chinese version where it's sort of, you can basically live, sleep watch TV, do hot pot, do all kinds of things. And there's basically the equivalent of the size of a small RV or an SUV. Everything folds out so you can sleep on the top bunk. It's incredible, just the design and ingenuity. But we are living in a future where China is now an auto superpower. And that is not something we would have expected a decade ago.

Starting point is 00:49:34 So I wouldn't be surprised Scott of maybe Yuw or car or some of these other people end up driving some BYD in the not too distant future. Because that is the future that we're living in. And one flip side to that, which I don't think people understand, is that the cheap EVs are at a cost to the Chinese economy. Because remember, in order to get those cheap EVs, the country needs to massively subsidize the sector. you know, a lot of these companies are not making profits. They have to price cut to compete domestically. So, you know, we're hollowing out parts of the Chinese economy. We're making sure that it's less likely that it will successfully rebalance in the way that it wants to

Starting point is 00:50:14 at the cost of creating these huge cheap EV cars. And then the next thing to watch, maybe I think we'll be discussing this Scott in 10 years, is that robots will be the new EVs. China is going to just flood the world with not just human robots, but other parts of the robotic installation system. And that I think is going to be a trend that we're going to be talking about in a decade's time. Alice, we were talking about Democratic candidates and the term that's thrown around a lot is generational talent, Mamdani, AOC, AOSOF, because they're so talented for their age. I think you are a generational talent in geopolitics. I think our listeners would be frightened

Starting point is 00:50:57 to know how young you are. I just love listening to you. You are one of the fastest hours in podcasting. Really appreciate your time today. Thanks, Scott. I'm hoping that I'll keep disrupting the sector of old white men. So thanks for giving me the opportunity. Have that it. Running a business shouldn't feel like surviving a software group project. One app for accounting, another for inventory, another for sales, and somehow none of them talk to each other. That's where Odo comes in, an all-in-one business management software that brings every part of your business together. From sales and accounting to inventory and marketing, all in one powerful platform. No messy integrations, no bouncing between tabs, and best of all, no brush sheets.

Starting point is 00:51:54 Stop managing software and start managing your business with one unified system. Try for free today at odu.com slash vox. That's odio.o.com slash vox. Support for the show comes from Honest. Parents want the very best for life's most delicate skin. That's why Honest holds every product to their highest standard, the honest standard. From honest, clean, conscious wipes to bath and body essentials and diapers, everything honest makes is designed for the delicate details that matter most. Because when caring for a baby comes with so many little decisions, you need products you can trust. Your peace of mind starts with Honest. Shop Honest on Amazon, Walmart, and Target. Support for this show comes from Harvey A.I. The future of law is agentic, not

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Raging Moderates with Scott Galloway and Jessica Tarlov - Trump Rolls Out Red Carpet for Xi as China Has NEVER Been Stronger

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