The Daily - What the West Got Wrong About China, Part 2

Episode Date: December 5, 2018

When China first began experimenting with capitalism in the 1980s, the West was certain the experiment would fail. But two of its assumptions — that government controls stifle economic growth, and that the internet cannot be tamed — were quickly proven wrong.Nearly 40 years later, China rivals the United States as a global superpower. Its continued success is challenging not just the West’s assumptions about China, but the West’s assumptions about itself. Guest: Philip P. Pan, the Asia editor for The New York Times. For more information on today’s episode, visit nytimes.com/thedaily.

Oh. My daughter is playing piano in the background. I'm worried that's going to get picked up, so... Not ideal. Yeah, my wife will get her off the piano. I will. Okay. Okay.

From The New York Times, I'm Michael Barbaro. This is The Daily. Today. When China first began experimenting with capitalism in the 1980s, the West was certain it would fail. But two of its assumptions were quickly proven wrong, that government-controlled economies stifle growth, and that the internet cannot be tamed. Forty years later, as China rivals the U.S. as a global superpower, its continued success is challenging not just our

assumptions about China, but our assumptions about ourselves. It's Wednesday, December 5th. Assumption number three. The U.S. would influence China, not the other way around. What's going on? So there's this movie, Red Dawn. Phil Pan is the Asia editor for The Times.

It was released in 2012. It tells the story of an invasion of the United States in Spokane, Washington. Enemy planes are flying overhead. Soldiers are parachuting in. I think one of the planes crashes into a house and there's a big explosion. And there's like a sort of American resistance movement against this enemy. In the movie, the enemy is North Korea, but it wasn't always that way. Who was it? Originally, the enemy was China, but the script got leaked. This evil villain and his soldiers had Chinese nationality when the film was first shot.

The Chinese government objected very publicly. But a state-controlled newspaper ran articles with headlines like, American movie plants hostile seeds against China. And Hollywood completely retreated, spent more than a million dollars editing the movie, re-filming parts of it. There was visual effects work that we had to do to paint out propaganda posters and flags on uniforms and that type of thing. To make it North Korea as the invader. And why did Hollywood relent on this and change the enemy from China to North Korea in this film?

Well, China has developed extraordinary authority around the world over its own image, over how it's presented. Now China's box office is well on the road to becoming the world's largest. And it's been able to do that because of the size of its economy, essentially. Last year, China's box office hit a record

of about $1.5 billion in receipts. Huge strides being made by China in the world of entertainment here. New numbers show China's box office surpassing North America's for the very first time this week. It is now the biggest box office market in the world, even bigger than the United States. China's box office could be double the total box office of North America's by the year 2025. It is also a major source of financing for Hollywood films. It's sort of a funny story, sort of. The new Bridget Jones movie.

I'm not a master of it. Kung Fu Panda 3. I don't know if I'm a dragon warrior. I don't even know if I'm a panda. That movie with Amy Schumer, I Feel Pretty. Shut up forever. Wonder Woman, The New Mission Impossible. What? Actually, a few Tom Cruise movies.

I am not a hero. I'm a drifter with nothing to lose. I mean to beat you to death and drink your blood from a boot. Basically, eight or nine blockbuster movies every year. So basically, Hollywood's financial relationship with China comes with strings attached to it. That's right. They sort of get that their image around the world is not great,

and they've been trying to shape it. Three, two, one. For example, there was this movie a few years ago called Pixels. Emails leaked from Sony show that originally the movie called for a hole to be blasted in the Great Wall. But executives were concerned about how China would react. So instead, they rewrote the scene and had the Taj Mahal being blown up instead. They were very concerned about, A, getting access to the Chinese market, and B, how the film would do in China.

China has made it very plain. It just won't tolerate what it views as transgressive behavior by Hollywood. So essentially, Hollywood studios are afraid of offending China. They're afraid of offending China because China will punish them. We are all going to die. Just think, Michael, like what is the last movie that you've seen where China was the bad guy? I actually don't think I can recall one. I remember one, which was this movie with Richard Gere called Red Corner.

I mean, I wonder what year it was. Oh, my God, 1997. Yeah, it was a long time ago. Jack Moore is a brilliant attorney. It was about an American businessman who goes to China and gets mixed up in a conspiracy slash corruption slash murder mystery. Ling. Hong Ling.

So you do speak English. And it portrayed China in a very negative light, especially the Chinese police. But here, justice doesn't translate. As a result, Richard Gere was blacklisted. So, do we just say goodbye now? None of his movies are released there. I'll never be the same.

Neither will I. I don't think he's even allowed to go to China. We should go. Yeah. Brad Pitt has been punished because Brad Pitt was involved in a movie about Tibet. Brad Pitt banned from the country nearly 20 years ago. So it's just the market power that China has developed. And it's not just Hollywood.

China is forcing the world's most valuable company to bow to its censorship rules. Apple has been removing apps from the App store that China has objected to, including the New York Times. It's Beijing's latest move to suppress the newspaper's output in China as it cracks down on dissent. Apple has been giving in to a lot of Chinese government rules and regulations on all sorts of things. Google, which has its motto of don't be evil. Eight years ago, Google shut down its search engine in China because of censorship and hacking there. They famously withdrew from the Chinese market a few years ago. At the time, Google's co-founder said the following.

Our objection is to those forces of totalitarianism. Our hope is that there is progress and a more open internet in China. Well, since that quote was released, the times have changed. Now they are developing a search engine that will cater to the censors in China. According to multiple reports, Google is working on a censored search engine

just for China. So if the assumption was that China would bend to sort of the rest of the world's cultural and political expectations, in reality, many Western companies are bending to China's will instead. When you go into a country and participate in the market,

you are subject to the laws and regulations of that country. And so your choice is, do you participate? Or do you stand on the sideline and yell at how things should be? And my own view very strongly is is you show up and you participate, you get in the arena, because nothing ever changes from the sideline, you know, nothing ever changes from there. Assumption number four. As people get richer, political freedom will follow. From the beginning of our story to now,

we've gone through multiple generations of Chinese leaders. Ever since Deng Xiaoping, there's been this hope that this leader will be the one who does what Gorbachev did, that this leader will be the one who finally opens up the political system, allows elections, and makes China more like the United States, essentially. like the United States, essentially. So by the time Xi Jinping takes power as president and party secretary in 2012, China now is a completely different place than it was in the 1980s. My biggest dream is to buy a house, a car and to get married.

I have just graduated six months ago. The income here, I think I can realize my dream in two, maybe three years. As a university graduate, I run my own business. China is already a major economy. There's a great deal of prosperity. Much of the population has already been lifted out of poverty. And a lot of people are wondering what's next. The country being rich and strong. We the people are well off. That's my dream. Because people are richer, because there's this big middle class,

the demands on the party are far greater. They want a lot more than just economic growth. Now, China is paying a toxic price for its economic boom. Dense smog caused by coal fumes, vehicle exhaust and other pollutants has prompted thousands of Chinese to say enough is enough. If weather pollution cannot be improved fundamentally, we are still worried. They want clean air. They want safe food. They want better public services, especially better health care. I'm grateful to the government and also hope we can enjoy more beneficiary policies. That's a lot harder for the

party to deliver in theory as an authoritarian state than if they opened up politically. I have no problem with a rising, powerful China, this man tells me. But he adds, I hope one day we too can have democracy. You know, this would be the moment perhaps that they really begin to undergo some democratic reform to meet that popular demand and finally prove the Western assumptions to be right. China's leader Xi Jinping is promising unprecedented reforms. But instead, Xi has taken the country in a different direction. President Xi Jinping visited top state media outlets in February,

urging the press to pledge loyalty to the Communist Party. He's actually doubled down on authoritarianism. It's tighter now in China in many ways than it was a decade ago. A political mystery is being written in Hong Kong, where five people who either publish or sell books critical of China's Communist government have disappeared. Xi Jinping is trying to strengthen control over what people can see and say on the internet. Protesters carry photos of jailed Chinese journalist Gao Yu. Xi and others are arrested for criticizing their own government. 45 journalists in jail. I was reading that China is the leading jailer of journalists in the world. Is that correct? It's an indicator of just how far this government is ready to go in China. He's cracked down on civil society, on journalists, on religion. Evidence is growing that up to a million Muslim Uyghurs are being held by Chinese

authorities in so-called re-education camps under the pretext of security, encountering terrorism and extremism. You have no freedom at all. You must do everything according to the rules set by the Communist Party. Recite what they say. Sing red songs. Thank the party. Think like a robot. You do whatever you are told.

It calls for psychological counselling, behavioural correction and thought education. But in plain English, we might call it brainwashing. So he's really taken a much more conventional authoritarian posture as a leader than even his predecessors. So, how can Xi get away with this? I understand why he would crack down at this moment. But with all of these increased demands, how can it be that the Chinese people are letting it happen? You know, it's always difficult to measure public opinion in China because there's no way we can conduct surveys or anything like that. You know, I could say for sure that there has been a lot of criticism.

There has been some blow of criticism. There has been some blowback against Xi for doing this. But on the other hand, I think over the course of the last 40 years, what we've seen is that the party has managed to make a bargain with the people, which is the party delivers a better life for you as long as you stay out of politics. And so far, the people have been willing to take that. Please stand up. The party delivers as long as you leave the party alone. You leave the party alone. You let the party stay in charge.

And we will continue to give you economic growth, to give your children a better life. I swear that I will be faithful to the Constitution of the People's Republic of China, be loyal to the country and the people, and work hard to help build a great, modern, socialist country that is prosperous, strong, democratic, culturally advanced, harmonious and beautiful Xi Jinping. And the biggest blow to this idea that China was going to open up because of its new prosperity was when Xi Jinping decided earlier this year to eliminate term limits on the presidency. He basically now, if he wants to, can rule for the rest of his life.

Right, what could be a greater emblem of authoritarianism than a single figure ruling for life? Right. And Phil, what has it meant for the United States that we've been operating as if we knew how this story would end for China, but it hasn't actually happened that way? The assumption was that we could control how China rose, that we could change China, that we would always be in charge. The trade war between the United States and China has escalated.

It is the largest deficit of any country in the history of our world. It's out of control. President Trump set to announce new tariffs on China today, the move already triggering retaliation from Beijing. Chinese have imposed a raft of tariffs of up to 25% on more than 120 products. They've turned the tables on us. The Chinese know that the U.S. can't afford a trade war with China. China has grown so successful and so quickly and is so intertwined now with our economy.

The American Soybean Association estimates that more than $6 billion has been lost over the last month as a direct result of the trade feud. That we're no longer completely in charge. The decrease in prices we've seen in the last two or three weeks would amount to probably $150,000 for me. 110,000 jobs in rural America are directly tied to exports of pork. A trade war could put some of these at risk if U.S. pork gets too expensive for Chinese clients. Yeah, it is a significant hit. We have to come to grips with the idea that we're no longer the only superpower. I mean, we've been the only superpower since the fall of the Soviet Union. That's like 25 plus years.

And today, that's no longer the case. We have to learn now to live with and or compete against another superpower. But unlike the Soviet Union, this superpower is completely intertwined in our lives. For China to fail in the way the Soviet Union failed would be disastrous for the American economy. We are following developing news out of the G20 summit, where President Trump and China's president agreed to a truce in the trade war. President Trump says the U.S. will postpone raising tariffs on Chinese goods for 90 days. In return, China has reportedly agreed to purchase a substantial amount of U.S. products to reduce the trade imbalance between the two countries. At this point, if China failed, that would be more problematic in many ways for the American

economy than if China succeeded. So we're in a very difficult situation now because our relationship is basically bound together in a way that we never expected it to be. So with everything that you're laying out here, this is starting to feel like China's rise to power, its ability to square authoritarianism with capitalism. Something that the U.S. thought was such a contradiction is maybe not that much of a contradiction at all. That perhaps the U.S. has been wrong about what it means to be a superpower from the beginning. Yes, I think that's right. For 40 years, we've made these assumptions about how modernization works.

And China has completely charted its own path. They've taken a completely different direction than we thought they would go. They've shown the world a different way to achieve economic growth. And I think that's really challenging the United States and all over the world, because China has sort of presented itself as a different model now. And it comes at a time when there are serious questions about the American way all around the world, including in the United States. When democracy itself is under strain, China is saying, here's another way. And I think that's something that really rubs many Americans the wrong way.

On Tuesday, a temporary truce in the trade war between the U.S. and China, celebrated by both sides as a breakthrough, appeared to unravel. In a tweet, President Trump seemed to issue a new threat against China. President Xi and I want this deal to happen, and it probably will, he wrote. But if not, remember, I am a tariff man. When people or countries come in to raid the great wealth of our nation, I want them to pay for the privilege of doing so. Within hours, the U.S. stock market plunged, with the Dow Jones Industrial Average falling nearly 800 points.

We'll be right back. Here's what else you need to know today. I have zero question in my mind that the Crown Prince, MBS, ordered the killing, monitored the killing, knew exactly what was happening, planned it in advance. If he was in front of a jury, he would be convicted in 30 minutes guilty.

On Tuesday, after a briefing by the director of the CIA, a bipartisan group of senators said they were more confident than ever that Saudi Arabia's Crown Prince, Mohammed bin Salman, ordered the killing of the journalist Jamal Khashoggi. There's not a smoking gun, there's a smoking saw. You have to be willfully blind not to come to the conclusion that this was orchestrated and organized by people under the command of MBS. organized by people under the command of MBS. The senators, including Republicans Bob Corker of Tennessee and Lindsey Graham of South Carolina, rejected claims by senior Trump

administration officials that there is no evidence of Ben Salman's role in the assassination, saying that judgment is clouded by the president's desire to protect the crown prince. I would really question somebody's judgment if they couldn't figure this out. It is there to be figured out. And I think the reason they don't draw the conclusion that he's complicit is because the administration doesn't want to go down that road, not because there's not evidence to suggest he's complicit. The senators said they were determined to find ways to punish bin Salman, such as

ending arms sales to Saudi Arabia or withdrawing U.S. military support for the Saudi war in Yemen. I want to make sure that Saudi Arabia is put on notice, that business as usual has That's it for The Daily. I'm Michael Barbaro. See you tomorrow.