The Duran Podcast - The Unstoppable Rise of China - Nelson Wong, Alexander Mercouris & Glenn Diesen

Episode Date: January 22, 2025

The Unstoppable Rise of China - Nelson Wong, Alexander Mercouris & Glenn Diesen

Let China sleep for when she wakes, she will shake the world. This quote is attributed to Napoleon Bonaparte. It's contested, but what can't be disputed is that, yeah, the rise of China has rapidly brought hundreds of millions out of poverty, and it's also unprecedented in human history. So this also, I would say, shakes the foundation of the international system. But, yeah, to discuss the rise of China, what it means, and perhaps, what we don't understand about China. I'm joined today by Alexander Mercuris and Nelson Wong,

the chairman and director of ACN worldwide and president of Shanghai Center, RIMPAC, Strategic and International Studies. Welcome. It's great to see the both of you. A great pleasure to have Mr. Wong on our program. Thank you for having me. It's a pleasure and an honor for me to be on your program. So one of the things with this rapid shift in China, this rapid rise, is not only do we see China's industrial capacity, it's technological leadership, we see Belt and Road Initiative, all this new financial institutions, the diversification of currency. So I guess to start off with a very wide question, how can we understand this spectacular rise of China?

What are the secret ingredients? And also, what is it that people might misunderstand when they are presented of these topics? Well, it's a very interesting topic, actually, and very good questions. So let me start by saying that after all these years, I still... believe there is a huge misunderstanding about China. Because let's face it, I mean, for the last 500 years when China's doors were relatively closed to the outside world, Western dominers, and their interpretation of everything was taken for granted by many. even until today when, you know, the rise of China gets mentioned and talked about, every now and there, many people still don't really get what China is all about.

So I'm not saying this to blame the West only. I think China itself also has the responsibility to narrow the difference of opinions and perceptions and to promote a better understanding with each other. So it's always a two-way traffic. So there are a couple of things that I would, if I may, you know, to put it across the table for us to discuss, actually, the way I see that there is a big misunderstanding. So I'd like to kind of put three points to start with as food for thought. So point number one, I think we are who we are, and it's almost impossible for anybody to change China. Yes, we're forever interested to learn what is more advanced and, you know, in technology and what's better in terms of modernity.

But there has always been a strong inner drive to keep our own couches and values because we believe that, it is these roots and traditions that have allowed us to survive thousands of years as amazing. And yes, we respect and appreciate the achievements of others, but that doesn't mean we want to be like others. So this is something that people sometimes don't get it right. You know, people who live on this land are Chinese, and that won't change. So something that is worth mentioning is that we've come a long way and do teach our children to remember our history. And this tradition has been passed on from generation to generation. If I may say it, we are a culturally proud people.

And for that matter, we are perhaps culturally stubborn as well sometimes. So when looking at or discussing about what is happening in other countries or in global politics, Chinese politicians, scholars, would quite often make a reference to or compare with some anecdotes found in our own history. This happens quite often, particularly in discussions from writings domestically, and is something that the outside world is perhaps not aware of. So the point I'm trying to say here is that when people in the West may think that many Chinese want to be Americans or Europeans, they've got it wrong. And I're wide off the mark. So the second point I want to make, and this is something I think is quite important for people to understand.

If we are a weak nation that doesn't have a strong culture and are capable to fight for our survival, we wouldn't be here for so long occupying such a huge landmass. As Chinese, we are constantly reminded by our seniors and teachers that being backward, means being vulnerable and easy to be oppressed and destroyed. And that's why we must keep learning and working hard. And so we believe that to be humble, respectable and courteous is the way to learn from others. Glenn, you have heard me saying that we also celebrate restraint being a virtual

and consider hasty response and the act of blunt confrontation as being immature and unsophisticated. And that's why when China gets provoked sometimes, it does not react or fight back immediately.

If people take this as being weak or vulnerable of the Chinese, they get it wrong. Because in defending our national interest and sovereignty, we are deadly and uncompromising fighters. And there is another point I want to say. We Chinese are taught since early childhood

that man on earth good at birth, which means that we are of the belief that anything evil in us might be the result that we've been taught wrongly or picked up something bad by mistake as we grow up. And that's why we praise for self-reflection. And are patient and always want to try and bring out the good side of the human conscience.

And hope that other people will appreciate our good intentions. Meantime, we don't see things black and white. We recognize the diversity of cultures and civilizations understand that people are different. But that should not stop us from working to minimize our differences to achieve coexistence, because we believe that a real gentleman seeks to get along with others, while he does not necessarily have to agree with them. And that's from Confucius.

We all know this. So that's why the notion that you are either with me or against me, is usually browned upon in China. So I think these are the three points that I would like to make for anybody trying to understand better about China,

the Chinese, and about how this country behave. Well, first of all, thanks for, thank you very much for that. Just to say a few things as somebody who's not studied China but who takes a great interest

in the country. A few things. Firstly, China is the world's oldest continuous existing state. No other state has had a political history, a continuous political history, as old as China's. That has provided China with a distinctive and extremely highly developed statecraft. And no society, no culture anywhere has the historical knowledge, or the interest in its own history that China has. I mean, one of the most extraordinary things, and I speak now as a Greek,

is that Chinese records extend all the way back to the time of the early dynasties, and they're of a level of detail and accuracy, which is astonishing. And we've had this whole procession of dynastic histories and historical commentaries. And as you've just said, Mr. Wong, you get Chinese people, Chinese political leaders, they reference back events,

they learned from their own history, debate about history in China, is far more developed than I think in any other country that I'm aware of. And this has been true for a very, very long time. The second is it's been a very, very successful country. For most of its existence, it has been the most powerful economic, the most developed state economically. It continued to be so right up until at least the 18th century and perhaps until the early 19th century. Now, we in the West have been very remote from China for geographic reasons. until we basically started to become involved in China, in a very deep sense, in the 19th century. Now, the 19th century happened to be a time when our economies and our militaries were extremely highly developed,

when we had very aggressive foreign policies, when we were reshaping the international system in our own image, and when China itself was going through protracted crisis. I mean, there was a rebellion against the government at that time, the Taiping rebellion. There was all sorts of other things going on at that time. And the result was a very unhappy century for China, which lasted basically from the 1840s until the 1940s, when China finally came together and embarked with many problems,

some mistakes along the way on the process of modernisation that we have seen. Now, what has happened is that as a result of all of these events, the system has become global. We're now all in contact with each other. China has it risen back to its historic place. It is once again the single biggest economic entity. It is industrially developed, it is scientifically developed. Anybody who knows anything about Chinese history will know that this has always been a technologically minded and a very sophisticated society. So this has come surging back and dramatically so, to some extent since the 1940s, but especially since the 1980s.

and this has massively disrupted our own understanding of things within the Western-oriented system, which we've become so used to in the West. To us, it looks as if suddenly this enormously powerful outsider, which we don't understand very well, which we haven't really studied very well, has broken in to the system that we created. And that has made us very nervous, but it has also made us very concerned that the system which we created, the international system that we created, we're starting to lose control over. Because China, with its own civilization, its own history, its own culture, its own traditions of statecraft is now becoming a significant. significant mover in the system which we dominated before.

And for Westerners, that is disruptive. It changes what we have come to see as the natural order. And that is, I think, at the root of many of the tensions that we see now. So China's going to have to have to navigate. this process of trying to get Westerners to understand China and to relate to it. And it's going to have to work very, very hard to make sure that its own ideas and its concepts are understood and that the balance of things in the world remains stable. And of course, it does have this tradition of statecraft that lies behind it.

So these, again, I mean, you made some very, you know, broad statements. I've made equally broad statements of my own. I don't know whether you wanted to comment on any of this. Well, personally, I think, Alexander, you've made a very fair and irrational and accurate comment, actually. And I think as a Chinese, when I hear this, it makes people quite comfortable, quite comfortable, because it does bring out the real.

of what it is. And I think people in China should also understand why people in the West have this fear. Because it's something quite new. It's something quite new. And because the past 40, 30, 40 years of vast development just came all of a sudden to people. And out of the blue, China is now here as a big economic power. But having said that, I would still like to stress that in terms of GDP per capita, China is still not in the first league. it's only $13,000 per se.

So it's not, you know, in the richest class of countries. Yes, the coastal regions, the provinces along the coast, they are relatively affluent. But there is a huge, you know, majority of the people. Yes, they've been lifted out of poverty, but they are still. relatively poor. So, I mean, as a country, China's due has a long way to go and to catch up, actually. You mentioned this 500 years of China closing its doors and the West having dominance. I thought that was an interesting framework because we often do forget that China was the largest

power for much of human history. But it is true that the Europeans really began to take dominance. already 500 years ago. Again, somewhat argued 200 with the Industrial Revolution. But I think in reality, when the European maritime powers began to connect the world at the beginning of the 16th century, coupled with military new military technology. And then, of course, then also having a head start in the Industrial Revolution 200-plus years ago, this was the golden age, I guess.

But this also resulted in Britain, of course, defeating China in the Opium Wars in the Mid-Night, century. And this is when I think China's gone through interesting steps because first they had this one, yeah, that's they referred to as a century of humiliation from the mid-19th to the mid-20th century. Then we have the communist taking power in 1949, which are able then to restore the sovereignty and throw away some of the shackle of the colonial rule. Then over the next 30 years, we see yeah, this, yeah, from 49 to 79, yeah, establishing sovereignty, but having to the colonial rule, but having economic mismanagement. And then again, from 78, 79, we have another 30-year period with market reforms under

Deng Xiaoping, if I'm not slaughtering their name. And the so-called peaceful rise in China, which meant they had all the resources to develop itself and attempting to avoid attracting unwanted attention in the international system in terms of other countries fearing its rise. So again, the peaceful rise. And then I argue at least, I'm not sure if you agree, that a new period began, again, 30 years later, in 2008 and 9 with this global financial crisis, at least I would have said that China seems to have outgrown the US-led international economic system. So after this, the sustainability of the former system.

And again, I don't think we ever properly got over the global financial crisis. China began to pursue more ambitious industrial policy to pursue technological leadership. It launched a Belt and Road initiative with its trillions of dollars in infrastructure, even setting up all these new financial institutions with so the development banks, payment systems, the use of, of course, alternative currencies, digital currencies. And it seems as if this last period of 30 years, which began again in 2008 and 9, is more about restructuring a more multipolar, perhaps international economic infrastructure. And it's all happens so very fast.

And I think this is where it comes correct in, what Alexander also spoke to, which is that it shakes up the entire Western-centric order. And I think also some misunderstandings comes in, because we tend to assume perhaps that the Chinese will replace the Western hegemony. and China will dominate similarly as the US dominated since the 90s. But again, we often see that China doesn't express the claim that it's representing universalism. It's not trying to cut off economic ties between rivals to, again, make everyone excessively dependent only on China. So I guess that's my question.

Are Chinese pursuing a fundamentally different system, something that, breaks from the zero-sum block politics of the West, because we also see that if China would follow the European path, it should have been aligning in military blocks and start to try to defeat its adversary. But even with the Russians, which they're closest to now, China still doesn't want any official alliances. So it looks like it's a different state and what we're used to in the history of European power politics. But that being said as well, I think some of the other fear that comes along is through this whole process of modernization over the past few centuries,

because of the Western dominance, modernization always meant Westernization. This is something that created disruptions in China, Japan, Russia, I guess, most of the non-Western world. If you want to modernize, you have to become more Western. And now you see it flipped on his head, as you suggested, the Chinese conservatism, I would say, even though it's led by a communist government, because it does appear to be based on a lot of conservative principles. That is, instead of canceling its own history and starting from scratch, they're digging deep into this thousands-year-long, deep history and cultural roots

in order to create this new, yeah, great nation on a solid foundation. I just, yeah, and this is why in the West, I think people are confused. should we fight this China and go back to our hegemony or do we negotiate, accept this new reality? I think this is where the problem comes. But I was just wondering if you agree with that assessment, but also where do you see China going from here? Because you mentioned you have a low GDP per capita, but it looks to me, one of the great secrets of China is this huge population. when you have 1.4 billion people working handouts. Yeah, it becomes quite unstoppable.

Well, Glenn, once again, you have also summarized the misunderstanding quite well, actually. I think something that I have to repeat, that China doesn't want to become the U.S. So when people in the West are afraid that China might replace the US to be the next hegemon, they get it wrong. Because it's, again, you have to look into our history. You know, we're not an expanding power. So there isn't anything like colonialism in our genes. We don't go out to conquer other people's land because what we have has been acquired for thousands of years.

So we've always been here. We've always been that big. Sometimes a little smaller, sometimes bigger, but we are quite a big country in that respect. And also, the biggest majority of our population is ethnic hans. And we were peasants. We didn't have this culture of maritime power. And nowadays, yes, of course, in modern world,

in the modern world, we have to build a strong navy to protect our interests everywhere because our economy has expanded globally. But again, you were right in pointing out that even with this close partnership with Russia, China is still not going into any alliance with anybody because we believe in independence. We don't want to be partner with somebody as a military alliance.

and this is something I think the Chinese government has expressed again and again and I believe that reflects the opinion of the general public as well because it's not in our

genes to form a block to compete no this is not who we are so I think people do not really have to worry

about China becoming like the US. There is a timeline that I would like to bring out. It is actually the century when China was allowed to join the WTO. And that was a milestone, a big milestone. Because before that, yes, we opened the door after Deng Xiaoping, you know, came back into power. We started this open-door policy. And then, but it was not until the turn of the century when we entered the WTO. That's how the economy started to grow dramatically and drastically because all of a sudden, you know, markets in Western countries and particularly

the US as a huge market gets open to China. And then, you know, we quickly picked up this opportunity and to start manufacturing almost everything. And after 20, 25 years, China has now acquired almost more than 500 sectors of all industries. So basically we produce everything And that's the supply chain that we're talking about In every line of business Yes, the result Has been brought about

With a lot of sweat and hardworking Of the people And but bear in mind that Alexander has pointed out That China has this uninterrupted History for thousands of years So, yes, we do believe in state profit, you know, having our own state profit, and how to manage the country, how to position ourselves globally, and how to plan our economies, the future. So basically, it's just like running a company.

Where do you see your company five years from now, ten years from now? We have this long-term strategic planning, but it's not about how to conquer the world. No, it's about how to make the life of our people better and how to grow our economy better. And also how to develop the country's economy in a more balanced way. so that we don't have this big difference between the Wild West and the coastal regions. So there is a lot of challenges actually in our domestic economy, particularly these couple of years when the growth has slowed down a little bit, which is quite normal. You can't expect a country's economy to achieve double digit every year.

For more than 20 years, that's impossible. So, yes, there are ups and downs, but the trick is about how you manage the downturn. So, yeah, sorry. Many, many things. The first thing, I mean, you mentioned about China not wanting to replace the, you United States and China not having any fundamental interest in hegemonic policies. This is something I think that Westerners find very difficult to understand. Because Western history is all about hegemon's and leaders and power struggles and wars

and things of that kind. I would say this. I mean, I'm not, I want to stress again, I'm not a China expert, but I do know a bit about Chinese history. And I'm trying to remember a single period in Chinese history when China claimed some kind of hegemonic role. And I can't think of one. This is the longest history of any state, but I'm aware of. And I don't know of any time when it actually assumed a hegemonic role.

That's the one thing. But do you think possibly that one of the great difficulties is that not only do Westerners have, Hello, am I still here? Can people... Yes. Yes. Okay. Just another picture for us.

Not only do Westerners find it very difficult to conceptualize a policy on the part of China that is so completely different from their own historical experience, but that we have made this process more complicated for ourselves by using Western words to describe Chinese. things. So, for example, we talk about the Chinese Empire. We talk about the Chinese emperor, but anybody who is familiar with Chinese history would know that the person who fulfilled the role of what we call in the West the emperor, the Huangdi, is not actually anything like an emperor in the Western sense. A word, an emperor, it's different from Henry the 8th.

It's completely different. It is a completely different political concept. But we use these concepts to talk about China. We talk about the tributary system that China had with certain countries. And again, we assume that this is a system of subordination, and that is one that China controlled in order to control. But again, we're using Western language. When we talk about tributaries, we assume a position of superiority and subordination because that is normal for us.

But in fact, if you look at the tributary system, it's actually a mechanism for trade, basically. It was a way that China traded with other countries and traded with other countries in its neighborhood. So we have this difficulty. And a lot of the problem is that Chinese history, in my opinion, actually isn't explained very well to Westerners, partly because in the West, it is written by Westerners. I mean, I have the Cambridge History, China, just next to me, for example, which is overwhelmingly written by Westerners.

And that is something that we need to get away from and perhaps start to let the Chinese explain our history to us a bit better and to have perhaps Chinese academics having more contact with Western academics who teach China to have that more developed within the West also. It's just just saying so lots of things like this. Now, the other thing is you mentioned that GDP per capita in China is much lower than you find in the very richest countries.

But of course, what that means is that we're still probably at a relatively early stage in China's economic rise. And the whole concern, therefore, is because we have all of these accumulated misunderstandings about China and its history, that we are particularly anxious to keep it down, which is why we see all of these attempts to try and contain China and to suppress its economic growth.

And all of these complaints that China is not accepting the liberal economic system, which we created in the West, and which we think they should be grateful for, without again understanding that it is really very, strange to expect a country of China's size and history and level of economic development to allow itself to be subordinated to a Western trading and geopolitical system, which is shaped by the West in its own interests rather than China's.

So you can see where the points of tension are. That is, we don't understand very much about China itself. we read it in Western terms. We're nervous because at some level we understand that there's an awful lot more rising in China. It's going to continue rising for an awful lot further and we want to see whether we can stop that. And we still think that China should basically limit itself

to a subordinate position within a Western system which we created. and we're very, very worried about the fact that as China rises, that system that we created is going to start to fall apart. Well, Alexander, you've touched the very core of this worry, of the fear, of the West, actually, which I think China needs to understand. That's why the exchange of opinions

is so important. But I quite agree with you that China should also do something to make people in the West to understand why the rise of China is not a threat. I think the language barrier has a lot to do with that because people in China don't really communicate well in the English language. And so that's why we always, you can see our political leaders always going out of the country and tell people to come and come to China and see for yourself. To see for yourself. We haven't formed the kind of narrative that is easy, understandable to get rid of the worries of people in the West. Because I can fully understand that

I've been talking to France in America and they said it's quite simple because when you're number one, when you're the big brother, you don't want to be someone else. You want to keep being the big brother all the time and this is this is it. And what you have just said is that because you think that it's true that people in the West have created this liberal democracy system that people hope that China will become part of that. And it turned out, well, this is actually why the US adopted this engagement policy to engage China. And that's why I've watched some scholars debating. that the West is now regretting to have let China into the WTO

without putting in a more strict restrictions in the first place. So that echoes exactly to what you've just said, that it's better to keep China to the subordinate position. But that's not likely to happen because, you know, the rise of China is unstoppable. But again, when I said, yes, the GDP per capita is too low,

which means there is, you know, my argument, or China's argument, is that we still got a long time, a long way to go and a lot to catch up. So don't worry about us. And then you said, well, if you become even much bigger, then it means even bigger danger to us. But no, this is not the case.

Look at what China has done over the past 30, 40 years, with the lives of China's economy, because China was able to produce a great variety of all sorts of consumer goods at competitive price levels, which has helped the West to keep their inflation low. That's something that China would hope that people would appreciate. It's because we're able to produce things much cheaper, and it helps. It actually helps. And also, the Belt and Road Initiative, it's there not to conquer.

other places. It's there to help other countries to improve their infrastructure, but also something that I would like to explain is that if anyone that has been to China or lived in China or know enough about China, you can easily see that the whole country's highway system is extremely sophisticated. And then the fast train, the high-speed train system, it's all there, it's all built. But has anybody thought about

how many stew plants and cement plants there are to have supported the building of all of this? So now when everything is built, what are you going to do? You can't demolish that. and rebuilt again.

But if you don't have more jobs, what about these stew plants and cement plants? If you shut down even one stew plant, do you know how many people will get unemployed? 50,000 to 60,000 workers at least. So who can handle that? So of course people will have to find jobs elsewhere, but where?

Of course we're not coming to develop the countries like the UK or Norway to tell you that we can help you to build a new airport or build a highway. You said, well, we have that already. You don't need that. So where? Of course, it's the developing countries, that underdeveloped countries. So you go to Africa, you go to West Asia, you go to Central Asia, and now sometimes Latin America as well, to those places.

where they want airports, want new highways, want docks, ports, everything. But do they have the money? No, they don't have

the financial capacity to do that. So what's the solution? China doesn't have this endless money to lend out or to donate. You can't do this. So that's why

we have this Asia infrastructure investment bank, AIIIB. And we learned this. We didn't invent this. We learned this from the World Bank, the ADB, Asia Development Bank. We learned it from the European Reconstruction Bank. It's all being invented by you guys in the West. So China took the concept and started this Asia infrastructure. investment bank. And Britain, the UK, was the first to jump on board.

Because you guys know, this works. This concept works. So China took only 30% as a single majority, as the initiator of the bank. And the shares, the rest of the shares were taken by, I think more than 50 countries or even more. I don't know. So basically China is operating following what has been built already, the existing system.

So now you go to a country, go to an African country or Pakistan. We want to help you build a highway. Yes, you don't have the money. Okay, we lend you the money. Of course, it's not blind lending. Of course we have to look at, you know, it's investment. It's not donation. It's not only financial aid for aid's sake.

It's a business. So that's why we have to look at every project's feasibility studies to make an assessment of how many years of amortization that will be. So these are the things that I think China needs to tell, or the Chinese people or the companies or the, you know, the government needs to tell the general public in the West for them to understand. You know, the Belt and Road Initiative is not something that means that China has a global geographical and geopolitical ambition to conquer the world. the China a death trap. No, no, no.

It has nothing to do with that. You go to African countries and listen to what they say about that. So these are the things, so I quite agree with you, Alexander, that China needs to do a lot more things to convince it properly. I did want to ask about the economic rivalry now, though, between China and the United States, because it seems that some competition is almost unavoidable, much like the security competition. And with, for example, we should see with the rise of China, as you mentioned before, it obviously needs to safeguard its access to markets, it's a trading partner,

resources. And at the same time, of course, we see United States on its side, you know, being think tank military leaders, they write the reports, you know, if in the future, if we need to break China, we have all this maritime choke points, we can shut off their trade and we can suffocate them and we can collapse them. But again, almost like a reversed continental system. But so, of course, then it's in the interest also for China to have alternative transportation corridors, but it also needs, again, a powerful Navy, but once all these things, there will seem to be some security competition, which is unavoidable. And to some extent, we saw this also in the competition with financial instruments.

Again, as many pointed out, when China was rising, the whole peaceful rise, it did put requirements on both sides as not only China rise peacefully, but also the Americans as the hegemon, they also have to reform the existing international system if they want a peaceful rise. So for example, refusing to accept more Chinese voting power in the IMF, all of this, by refusing to change the existing institutions, it also incentivized China to build alternative institutions. And once this happens, you now have institutions which might be seen as being in competition with each other. Also, of course, as we've seen over the past years, especially America's approach to Russia when it shuts down its access to banks, dollars or simply

confiscate or steal now sovereign funds. This also creates a demand for alternatives. But it seems as if the biggest competition between the Americans and the Chinese have been, obviously, in the tech sector to have the dominant technologies, which has always been a key focus of geo-economics. And I remember on Google, it is a spend. the Android licenses to even arrested, the Canadians arrested the chief financial officer. You know, we can see things building up. But there's been apparently some miscalculations

because the former CEO of Google, Eric Schmidt, I think was him who argued that if we cut the Chinese off from semiconductors, that's it. We won the tech race that will break China. And it didn't, it seemed a bit shocking how easily or quickly, not just the Chinese were able to overcome this, but also catch up in the computer chip race and build its own chips. I think everyone was quite surprised. Perhaps if we knew more about Chasa China

and how they have all this cluster of tech companies, how disperse innovation, but either way, it has triggered more of a cluster of. competition because China, America was able to break the Chinese technologies and tech giants. But of course, China also now has the counter sanctions against the Americans, which often goes after the main, what I'm looking for here, the main resources required for it. Because we know China not only have access to a lot of rare earth metals, but also the refining process. So gallium, granium, antimony, a lot of these super hard materials no longer allowed to be exported in America, at least not to the same extent. Also, we see the tightening of the control on the access to graphite.

So I'm just curious, it seems this is where, because a lot of this began recently, and this beginning to dry up the access to US. And some of this even targets America's military, because a lot of this is used in his weaponry. So we can see America perhaps growing a bit more concerned and desperate over the months to come. As this problem builds up, where are we going from this? Because at least in the past, when the US put sanctions on China, they said, well, they tried to link it to human rights artificially. But now they're quite open. We can't really compete with China.

We have to throw a wrench into the system of China. and then, you know, so given the inability of America to compete with China and where these trade wars are taking us, how do you see any solution to this, given that, yeah, this could very quickly end in disaster for everyone? Well, I think when it comes to China-U.S. relations or the competition or the rivalry, I think we now can agree that it's not a rivalry of different systems, right? It has nothing to do with a competition between democracy and autocracy as being proclaimed. So it's basically economics and technology. So here is the point. I think there are three main pillars in China's relations with the US.

One is high-tech, second is aid, and the third is security. And you've all touched that. So let's do with that one by one. In terms of technology, as I said, since day one, when China looked at modernizing the country, technology is definitely on top of the list. You have to be technologically advanced in order to be able to build a better economy, to be more advanced. So China is already in some areas, as you know, that electric vehicles, solar energy, and, you know, space technology as well, not bad. But yes, there are also areas that China is still not ahead of everyone. No, not yet. But when it comes to semiconductor, the chips, China is still working on anything below 7 nanometer chips.

But don't forget, for these high-tech chips, their applications they use are quite limited, are in the phones. the biggest demand of chips the requirement of chips are actually those that are above 7 nanometer so that's where China already has China has that already

and China has been exporting chips big time and also the Dutch company that produces a semiconductor production machine was making a complaint a few days ago, I think, because China has been selling machines

to produce semiconductors, but not for the below 7 nanometer, but those that are less advanced. But the Chinese machines are being sold at substantial. financially low price as compared to the Dutch. So is this good? It is this bad? It depends on how you look at it.

For the consumers, of course, it's good news that China can sell these, you know, machines at a much competitive, much cheaper price. Why not? Why we always have to buy from that particular company that is, you know, selling so expensively. So this is, if you look at this as competition, yes, it's competition, but I think it's for the betterment of mankind. Right. And so in terms of competition with the US in technology, it won't lead to wars. This technological, you know, development in terms of competition. I think it's cooperation is the word that we should use instead of competition.

So in terms of trade, China has been buying a lot from the US because of our population, even though, you know, experts say that in another 20, 30 years, China's population is going to drop substantially. but regardless, we still have such a huge population. We have people to feed. And we need to import a lot of food, actually, from everywhere. And then energy. We need to buy energy resources from other countries. So not only from the Middle East, but also from Russia. and from elsewhere that has energy sources.

So China doesn't want to be dependent on one particular source, like everyone. You want to, you know, don't put everything in one basket, right? So you do a balance of import. So in terms of food, the US is the biggest exporter of food products. to China, wheat, grains, everything. China also sells a lot of things to the US as well. China sells tomato sauce to the US, I know. So, and this is how you look at it.

And of course there is a trade balance that bilateral ports will have to focus on. In terms of security, Glenn, you've mentioned very correctly that it's those think tanks that kept coming up with reports saying that choke points here, choke points there. And it's the concept of containing China's development, slow down the development. So if we can control that choke point in the Malacca, then all the ships coming from the Middle East or from the Indian Ocean is going to be stopped. If we want to stop China's vessels, we can. So it's this kind of containment mentality.

And if that's the case, if you put yourself in the shoes of the Chinese, do we want to sit here and be surrounded? by a country that wants only to contain us. No, we want to build our own navy as well. This is freedom of navigation, if I may call it. Why our ships, our vessels cannot navigate freely. So we need to protect our vessels as well.

And because the reason for China is quite easy, China is quite easy to understand because China needs to buy a lot of things from the rest of the world. Also China is selling a lot of things to other parts of the world. So as the trade volume grows, we reach out to so many different places around the world. And our interests need to be protected by whom? by a navy, of course, by our navy. But we're not there to conquer anybody. We're there to protect our own vessels, our own fleet, our cargo fleet.

And this is the reason why we need to build up a good navy and to build up our military power. Look at how many military bases the US has. surrounding China. And we are supposed to sit here and do nothing. No, we need to secure our own borders. We care about our own regional security. But we have the Navy here that has been built, or the Air Force is not there to conquer anybody.

No. It's for self-defense. And then when you say, oh, when you are big, you might consider conquering. No, look back into our history. Have we ever done that before? Alexander, you've pointed out we've never done that. So the argument, this is the argument that we can have, in fact. So just a few things.

First of all, I think that any idea that you can hold down Chinese living standards by hoarding technology in the West is not just immoral, it is unachievable. It is an absolutely absurd idea. It doesn't understand how technology works at all. The idea that the Chinese, with their enormous resources, would not be able in time and probably not very long time, to develop lithography machines comparable to the ones the Dutch make, even at the most advanced levels, is it's actually, ridiculous. The science behind these lithography machines is very well understood.

The technology is very, very well understood. The reason the Dutch are able to make them at the moment is because they're able to source components, specifically from places like Germany,

for example, advanced mirrors, which aren't produced in other places, but which sooner or later are going to be produced in those other places in China, in Russia, wherever. I mean, it's a ludicrous idea, and it is an extremely destructive one, and it is being done for a completely immoral purpose, which is, as I said, to try to keep China down

and to keep the West more advanced, and to assume that we can somehow create around ourselves a more advanced technological future indefinitely, which, as I said, is unachievable. All it will do is it will create tensions between the Western China, which are unnecessary. And as I say, it's an immoral idea anyway. I mean, trying to keep people down is, by definition, a completely immoral idea. But we do have points of conflict between us, and I would like to go to. the most difficult one, which is, it's going to be my last question.

But there is this issue of Taiwan. Now, it comes up constantly. Every day in the media here in Britain, you have articles about the Chinese threat to Taiwan, the fact that Taiwan is a democracy, that it is under pressure from China. There's an article today in the Daily Telegraph, which I've just been looking at by Ian Duncan Smith, former leader of the conservative party, he writes, he brings up all of the old tropes again and again. You have articles and comments about Taiwan in the United States. I don't like to ask leading questions.

I'm going to just state my own view. The situation with Taiwan was entirely stable just a few years ago. and what caused it to become unstable was first a color revolution that took place in Taiwan and then Western policy, which has in effect quietly assisted a process of what is called in the West Taiwanese independence, but which in China I think would be more historically, correctly seen as secession. if you stop this, I personally think that the problem of Taiwan would go away because I see no objective reason why China would want to overturn what had previously been a stable status quo. And it is not widely remembered, but that back in the 1970s, the United States made various commitments about Taiwan, including reducing. using arms deliveries to Taiwan as part of the whole process of establishing relations with the People's Republic.

So this is my own view, but there are many people who bring up the topic of Taiwan. Perhaps you could just comment on that. As I say, it's my last question for today. Okay. We'll be having your many programs. We'll be able to explore these. I mean, this has been an introductory program in some way, but we can discuss all of these various. public issues in other progress.

But I don't think it would be a complete program if we didn't at least say something about Taiwan, which is why I'm glad you mentioned this, actually, or you brought this up. It is an obvious topic, actually. The difference here, I've heard a lot of Western media think tank people talking about

Taiwan and the question has always been why why do you want to take over Taiwan? Why do you want to bother with that self-governing island? It's a democracy. It is this, it is that. Again, I would say please understand a little bit about the history behind Taiwan. Because there are two very important declarations that we have to remember. One is the Cairo Declaration in 1943. And the other one was the Potsdam Declaration in 1945. And both have confirmed that the island of Taiwan, which was taken by Japan, Japan, together with other places, would have to be given back to China.

And they were given back to China, the then China, the Republic of China. So it was given back to China already under these two agreements or declarations. But then there was a civil war between the nationalists and the communists in China, and then the nationalists were driven out of the mainland. They were defeated, basically. So they fled to the island of Taiwan. So the communist troops took over the whole mainland. And it was then,

that the United States came into play. They came into play because they believe that there is a strategic importance of this island of Taiwan because this island chain concept didn't evolve during the Second World War and it was way before that.

It was way before that. It was even during China's Qing Dynasty. In those days, the Americans and the British already had this concept of building up this island chain to contain China. So the importance of Taiwan was fully recognized by the U.S. And then the Korean War broke out. the People's Republic of China was actually ready to cross the Taiwan to move over and to liberate Taiwan. But then, of course, the mainland had a very poor navy in those days.

It was almost non-existent, actually. And then the Korean War broke out. So it became an unsubesely. soft issue. So what was more important for China instead of liberating Taiwan

is to look after what has already been acquired. So the People's Republic of China as a new, you know, republic needs to build itself. And then there was, you know, a big

cold year going on. And China was almost isolated from the rest of the world, basically, because it was part of the communist world. But then in the 60s, we had a big fallout with the Soviets. We were further isolated. It was until the Nixon days, then they wanted to engage China to counterfeit. to counter the Soviet Union. So that's how the diplomatic relations got built up.

And it was Jimmy Carter who signed this diplomatic relations with China. And at that time, Taiwan was again the issue. So first of all, what was more important for the People's Republic, of China was to find its own seat in the UN Security Council to replace the Republic of China in Taiwan, the Changkaishek government. So that was achieved and the Republic of Taiwan was kicked out, the Republic of China was kicked out and was replaced by the People's Republic of China. but in the meantime the US played a little with the Taiwan card it's more of a leverage basically

but as time goes by the issue of Taiwan is always on top of the agenda of every generation of Chinese leaders it's not about who wants to take over Taiwan I'll give you an example. I'm over 60 this year. I'm 63. All I remember when I grew up was that we have to liberate Taiwan.

That's the only thing I remember when I understood things. So it's been deep rooted in the Chinese mentality that we have to reunite with Taiwan. But bear in mind, you know, for every country that has established diplomatic relations with China, this is number one. Point number one, you have to recognize

that there is only one China, and Taiwan is part of China. Otherwise, there is no diplomatic relations with the PRC. So this is the fundamental things that China will have to insist on with every country that you have to recognize that there is one China. But why until this day it is still not united? The country is still not united. Well, first of all, for China, what China wants to tell the rest of the world is that of the five standing committee members of

the UN, the big five, China is the only country that is still, that still has one part of the country that is not being united. And to China, it's such a shame. So it's something that we have to accomplish. But by what? So it's always peaceful reunification. That's always the term. that China has been using until the separatist group that they change the textbooks, teach people that we have nothing to do with the mainland. But that's totally wrong. That's totally wrong. They don't even recognize they are Taiwanese.

They are Chinese. They think that they are Taiwanese. They have nothing to do with the mainland. England. But that's totally absurd. So that's why in recent years we've seen

Chinese leaders coming up with stronger and stronger statements that this is a red line that you cannot cross. And China has passed many years ago, China has

passed this anti-secession law, which basically laid out the three red lives. That until all efforts have been exhausted for a peaceful reunification, there is absolutely no way that peaceful reunification can be achieved. And the second is such a big social chaos and disaster

that becomes uncontrollable. And of course, the third point is interfering by foreign countries. The US has always been using this strategic ambiguity. Because, yes, they recognize one China, but in the meantime, we have this Taiwan Act that we must protect Taiwan, we can sell arms. But somehow there has to be a time where both parties will have to sit down and call it a stop. Because you cannot let this go on and on. Because under our agreement with all the declarations and agreements China has with the U.S.,

the United States is not supposed to have any old. official exchanges with Taiwan. But the US has been pushing the envelope, particularly during the Biden's administration, with Nancy Perruci, with all these officials visiting Taiwan, selling arms to Taiwan, and that has been pushing the envelope too far. Because for us Chinese, we believe, why should we kill our own people. Why should Chinese kill Chinese? We shouldn't do that. We are there to achieve

a peaceful reunification. China said one country, two systems. If you don't like the Hong Kong system, well, that's something else. Let's talk. But you cannot deny that you are not part of China. You cannot deny that. If you deny that, if you want to go for independence, that means war. So this, it has nothing to do with democracy, with this. Come on, it has nothing to do with that. China respects the mainland government, as far as I can remember, has always been stating that the life of the people on the island

we want them to prosper, we want them to live happily. And then over the last 20, 30 years, you look at the trade balance. It's total imbalance. Because China has been buying on purpose so much from Taiwan. It's basically a financial aid,

call it. Trying to make the people realize that the mainland has been showing a lot of sincerity, a lot of Taiwanese are having their businesses here on the mainland. So this is something I think it definitely needs explanation. And you have to look at China's history. And of course, these days, you've seen Chinese diplomats, some of the Chinese diplomats, you know, basically calling the regime is illegitimate because the civil war is not over. It's a left over issue by history.

So I think that's why Chinese are very happy if we are left low to deal with this issue among ourselves? It's interesting because often when one builds up the Chinese threat, the argument, it's usually the Taiwan is always forth and front and center. But it is interesting that the argument is, well, why is it a threat? Well, they demand that Taiwan be part of China, but they always consider Taiwan to be part of China. In the 90s, 70s, the one thing that has changed has been, yeah, the power dimensions.

That's the main thing that China has risen, and this is in the main source of change. In terms of the Taiwanese question, China's position never actually changed. It's, as you mentioned, the origin of this one China policy was the Americans, as President Carter specified, would limit themselves to cultural and economic ties with the island of Taiwan. And now, yeah, over the past few years, this push for political recognition, all American politicians, military, entering all the selling arms. This is the, yeah, what is breaking with it. But I was wondering, yeah, if we have time for one last question and then I'm done.

I just wanted to ask about Russia and China, because we tend to discuss a lot Russia on this channel. And this is really, yeah, become a question. quite remarkable how close the strategic partnership has formed and some even saying that this is spearheading this greater Eurasia initiative as well. And of course it's to a large extent, I guess the partnership is very complementary if you only look at trade, that is China has become the main tech partner of Russia and as you mentioned before, the Chinese they need food and energy. Russia has a superpower in both.

Furthermore, given you have a shared border, there's no transit. country. I mean, this is very problematic. I remember in 2004 when Ukraine had about responsible for about 80% of transit of gas between Russia and Europe, it was quite obvious

over time what would happen. If you can disrupt a transit country, you can disrupt the economic relationship. Anyways, I think what surprised many people are that how quickly Russia and China were able to harmonize their interest. Again, everyone thought they were going to clash, again, especially over

Central Asia. Instead, we see that, well, they're not allies, as China doesn't do alliances, but they say they're more than allies, as they're not dependent on a common enemy. But within this context, of course, in Europe we have war now. And I noticed lately the rhetoric has escalated against China, blaming essentially China for being a key contributor by supporting Russia. Of course, they leave out that we, that is NATO, pumping in all the weapon we have into the war and rejected diplomacy for three years, but nonetheless, it's, it's China's fault. But I also remember Macron coming. He asked if you could help end the Ukraine war.

However, even Macron didn't want to have actually any peace talks or even talk to Russia. Again, peace just meant she should put her on Russia so Russia would capitulate. So this was peace. And anyways, I agree that a lot of what's coming from the West is, this is nonsense. But how does the Chinese government view this war in Europe? How, yeah, and how can it end? And what is, what can China do about it, even in a possible negotiations, perhaps? Well, actually, I've commented on this in another event last year in the UAE, actually. I said, please understand who we are and where we come from

when it comes to incidents and conflicts that we are not a party. If we are not a party to, we don't take side. Again, for people who have lived in China, you're going to see a lot of guys quarrying, fighting in the street sometimes. very rarely you see people approaching approaching them and say you are right

and you are wrong all you hear is people coming to those guys that are fighting they're going to stop stop don't fight don't fight you have to stop fighting first before you can negotiate before you discuss what's the problem but you stop fighting.

So this is always the approach China takes whenever it comes to conflicts that China is not a party to. And because we do not go for alignment with countries, so that's why we don't take side. So that's why from day one about this conflict in Ukraine, China hasn't supported Russia.

China hasn't supported Ukraine. Instead, when people accuse China for supporting Russia, which means doing business with Russia, China has also been doing business with Ukraine at the same time, right? I heard some friends in Russia, not publicly criticizing, but quietly mumbling that China is also. Mumbling that China is also selling stuff to Ukraine. Because we still consider Russia and

Ukraine as business partners. Because before the war, China and Ukraine were very aggressive in terms of our bilateral trade. So we don't take side in that sense. But yes, this

conflict in Ukraine does provide an opportunity for China and Russia to come closely together, which we consider as Chinese is quite important. Because we have our issues in history with the Russians. But then over the last 20, 25 years, China has signed more than 100 contracts and agreements with Russia. to settle all of our border disputes. So there are no disputes whatsoever between China and Russia.

And now with our two countries bordering with each other, we don't want to see Russia becoming our enemy. And plus, Russia has so much oil and gas that we need. Why not? And they have a lot of grains. They have agricultural products we need. And then Russia since the collapse of the Soviet Union, they stopped.

They've forgotten about their former manufacturing and production capacity. They give them up. They've been buying everything from Europe. So China, of course, sees this as an opportunity. that China can come in and replace the Europeans and start selling consumer products to Russia. Why not? And there are so many companies in China, so many factories, that want to do business with Russia. And we still have a big problem in terms of settlement.

Because the Russian banks are being sanctioned and VTV Bank opened in Shanghai, but then got sanctioned. The bank got sanctioned. And none of the Chinese major banks can do settlement with Russia because almost all of these major Chinese banks, they have shareholders that are from the West. So that's why we have a problem actually right now. Yes, the big state and companies between the two countries, they use this SIP system, CIPS, the SIP system, which is Chinese Remingbee settlement system, but it's not

widely used. But between state to state, yes, that has no problem. But what about all the private companies, the small, medium-sized enterprises, particularly those from the private sector? If you go to the bank and ask, can I send money to Russia? They say, no, you can't. Can I receive money from Russia? No. So there are problems actually. And if these problems get sorted out, I believe the trade between our two countries is going to be skyrocketing.

Big time, big time. And it has nothing to do with the war in Ukraine. So, yes, I mean, in terms of strategic partnership, yes, China. Yes, China and Russia are founding members of BRICS, of Shanghai Cooperation Organization, and both are quite on the same page when it comes to, you know, de-dollarization process, hopefully, or a settlement with local currency, because it's all, some of these countries are forced to do that because the U.S. has weaponized its currency. We're pushed to do that. It's not that Remingby wants or China wants to replace the dollar by Remingby. No, it's not. It's when you feel

the threat that the U.S. dollar has been weaponized by the U.S. government and that's, you have to be prepared for the worst-case scenario. so it's always passive it's not aggressive so Nelson Wong I think we've taken a lot of your time unless you have any final comments you want to make Alexander no none at all just just also well one very quick one which is again going back to Chinese history and about relations between Russia and China it's perhaps worth bearing in mind that every single foreign policy crisis through Chinese history. Many of them, at least, maybe not all of them,

but many of them have come from the north. China has always had this problem with its northern borders. It's been invaded many times from the north. So having a stable, secure friend to the north is something that I think for China is useful. it's it's it's it's have you look at the ming dynasty and the sung dynasty and uh the han dynasty they all had those problems with the north with with the people in the north now that that's gone that does give china um a way to develop

and i don't think i i i don't know how far this is something that the chinese themselves i think about but i can i can see why that would also be a factor which we encourage the Chinese to maintain this relationship and develop it. But we can talk about these things for hours, probably, but definitely we can. I just wanted for my part to say thanks, thank you to Nelson Wong, and we'll be having many programs in future. We can explore all of these topics that we've discussed in much more detail in future programs. I'm sure we've been looking back at Taiwan. I saw that Xi Jinping had a telephone conversation with, Donald Trump. I read the Chinese foreign ministry readout. It seemed a warm and polite call,

which I thought was interesting. We'll see where all these things go, and no doubt we'll have many things to talk about in the future. Absolutely. Well, thank you. Thank you both, Glenn, Alexander. It's being a real pleasure talking to you and exchange your ideas, and I'm looking forward to chatting with you later. Thank you. Thank you. Thanks again.