The Munk Debates Podcast - Friday Focus: Putin-Xi Summit – Paris is Burning

Episode Date: March 24, 2023

Friday Focus provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving the news and current events. The show features Janice Gross Stein, the founding director of the Munk School of Global Affairs and bestselling author, in conversation with Rudyard Griffiths, Chair and moderator of the Munk Debates.  The following is a sample of the Munk Debates’ weekly current affairs podcast, Friday Focus. On this week’s edition of the Friday Focus podcast, Janice and Rudyard start the show with a discussion of this week’s summitry between Putin and Xi. What did we learn about these two autocratic leaders and how they plan to work together to thwart American hegemony? Friday Focus wraps up with a discussion of the growing protests in France over raising the retirement age. Is France on the brink of 1968-style unrest? What do the protests say about the government’s ability to reform entitlement programs as populations age and deficit spending soars?  To access full-length editions of the Friday Focus podcast, consider becoming a donor to the Munk Debates for as little as $25 annually, or $.50 per episode. Canadian donors receive a charitable tax receipt. This podcast is a project of the Munk Debates, a Canadian charitable organization dedicated to fostering civil and substantive public dialogue. More information at www.munkdebates.com.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

The following is a complimentary excerpt of this week's edition of the Friday Focus podcast by The Monk Debates. To access full-length editions of each and every episode, along with all kinds of great additional benefits and perks, become a donor to the Monk debates. You can do that for as little as $25 a year, and you'll receive each and every year 50 Friday Focus episodes at full length. It's all available right now on our website. in just a few simple clicks. Triple W. The Monk Debates.com. Look for the Friday Focus option in our navigation bar, the top right of the website. Make your donation, and we will send you each and every Friday a link to listen to the

full-length edition of this program. Thanks in advance for your generous contribution. Hello, Monk members. Rudyard Griffiths here, your host and moderator. Welcome to this, the Friday Focus podcast. This is our weekly program where we dive into the big. issues and ideas making news with the goal of leaving you with some new analysis and insights we do this each and every Friday with Janice Gross Stein the founding

director of the Mug School of Global Affairs and internationally renowned scholar and author Janice great to be in conversation with you this the third week of March wow March is going fast it feels like spring is just around the corner but you know that it actually is March the 12th 21st is spring and it's also Nauruze. So good things are happening, Rogers. Good things are happening.

I always want to remind ourselves of that because, you know, when we started this show two years ago now, I kind of thought to myself, what could we find to talk about every Friday, week in and week out? And would we really be struggling to come up with topics? And I just,

I look at a week like this, Janice. We have Israeli democracy seemingly on the brink. We have Putin, G, the bromance of authoritarian regimes kicking off in Moscow. We have France on Paris on fire, chat GPT4 rolling out and tormenting us with, you know, it just goes on and on and on and I just, I don't know, Jess, I always wonder, you don't want to fall victim to that mentality that, oh, wow, we are living in exceptional times. I'd call that presentism.

But boy, Janice, it does feel like the flow, the volume, the Fed this week, these bank failures. It's almost overwhelming. You know, I think it's fair to say that the pace is faster. You know, some interesting speculation, Roger, that even how quickly depositors were able to pull their money out the Silicon Valley Bank, that pace, you could do it on a phone on a weekend, which makes it so much tougher. So I think you're right. The pace of things has just accelerated as a result of all the technology we have around us. It's just relentless. So that's interesting. It's great because you have a multi-decade experience here as a political scientist, an observer of international affairs. So it's not just me.

I'm not engaging in presentism. You genuinely feel looking back over the course of your career and analysis of world affairs, you would characterize the pace, the frequency of change, the, I don't know, the cadence of major events has accelerated. There's no question. Firstly, because we know more because there's always somebody with a camera around now. There's always somebody taking a picture on their phone and sending it out. So we know much more. So much more is coming at us.

And then it gets distributed so fast. You know, let's talk for one more minute. let's imagine the run on the Silicon Valley Bank had taken place 20 years ago, Reddard. Saturday and Sunday, nobody could get their money out of a bank. The regulators would have had two fairly peaceful days behind close doors. What happened here? People were pulling money out on their phones.

They were circulating text message. You know, the depositors were all working themselves up. So you just think about this. amplifying volume. That's so much a part of real politics today. And just because this is fascinating, I've struggled with this the last little while. I mean, what is the consequence of all this, Janice? Is it more instability? Is it more fragility? Or is it more interconnectedness and ultimately a kind of robustness, if I can characterize as that? In other words, you've got all these layers, these networks of communication and supposedly, I guess, mutual obligation. You've got

lenders and borrowers. I don't know. I'm trying to understand how does this all net out? If we agree that the pace and the cadence of events has changed and it's part enabled by technology, by globalization, what's the consequence of it? I know that's a big $64 trillion question, but it's been bedeviling me of late. You know, we'll do a show on this. Roger, because it is such a big question, but there's two contradictory threads that are pulling in very different directions at the same time. One is, it's harder to hide. So if you think about all the things that benefit from transparency, we are getting transparency now. You can't really hide. There's always a camera somewhere, and it is very, very difficult to hide. The other side of the story, which I think about a lot,

But it has drastically shortened the time for decision making. At every level, whether it's in a nuclear crisis to a banking crisis, it doesn't matter. The time to make decisions, if you're a CEO or president is so much shorter, that's not good. Because most of the really well-managed crises gave leaders some time to step back. and step away and reflect and think out of the box, that's what's really gone. And over time, that will not serve us well. Fascinating. Well, let's revisit this subject in the future because I think it's one, it's really important for us to all try to understand and think through. And it's great to just to have your experience and insights on it. But I want to pivot to the first story

for the show this week, which has to be the meetings between Chairman G, the, titular head of China and Vladimir Putin, the president of Russia. How would you characterize this week? My quick hot take was that, unfortunately, this was a good week for both Xi and Putin. They projected seeming confidence. They projected a close alliance and coordination between their two countries. And they projected an argument that they could be the vanguard of a block against U.S. military, economic, and diplomatic pressure for the rest of the world, for Africa, for parts of Asia, going so far as to say that, you know, they're going to start trading between each other and encouraging trade between more countries in one, not U.S. dollar, but won, a kind of challenge

to the U.S. Global Reserve. What was your takeaway of this two-to-three-day confab in Moscow? fundamentally agree with you. Roger, let me put it this way. This is no bromance. These two guys are not Beth Pals, not even sure how much they like each other, frankly, by the expression on G's face sometimes. But there is cold, hard calculation of how their interests align at this moment.

And what brings them together, And let me use their words for a second, but bringing some together is their rejection of American, what they call hegemony, the sense that the rules are made in Washington and the rest of the world knuckles under to those rules. That is a predominant theme. And so they ignored all the areas in which they disagree to wrap themselves in this mantra that they are an alternative to American domination and American hedge pony. Now, that, as hard as it is for us to even think about this, that resonates.

It resonates in the Middle East. It resonates with Mohammed bin Salman, who has felt that very keenly. It resonates in Iran. It resonates in parts of Africa, large parts that have had, frankly, bitter, experiences with the West. India and Brazil, too. Major global economies. That's right.

So I think it's an important voice for leaders to hear in the West because what that really says, soften your own rhetoric, frankly, you know, the export of U.S. democracy is not a – it's not going to break democracy. market. Let me put it to you that way. There has to be a much greater humility among our leaders than I currently hear today. Because leaving aside our judgment of Russia, what it's done and our judgment of Shishy Ping, they are giving voice to something that's important for all of us to hear. Yeah. A few kind of shades on this, this, conference, especially towards the NG, coming out very explicitly, even in the sense, for the first

time labeling the U.S. strategy as one of containment. Containment, again, technologically, economically, and militarily. I don't know, Janice. Am I right to be a little bit worried about him being that explicit? Because we know from previous pronouncements by the Chinese that this is their greatest fear. The idea that their rise, their return, to global preeminence after a two-century hiatus in a 2000-year civilizational history, it just, in their view, it's unacceptable for the Americans to try to contain or interrupt what they see as an inevitable process, a mandate from heaven if you want to go that far. So are we right to cue into that language?

and then why is Xi saying this out in the open now and what potentially could that foreshadow? Well, he's not wrong. Let's just start there. He's not wrong. The United States started under Trump, but actually Biden doubled down on this, has put in place a series of export controls, particularly on advanced computer chips, which one American official. described as kneecapping the development of the Chinese economy, right, preventing the rise of arrival. That's the language that U.S. officials have used. So Xi is not wrong.

Now, what he's missing, of course, is why the United States got there. There were a series of decisions that the Chinese have made. There are massive investments in their military, the largest Navy in the world, all the things you know I've talked about before, militarizing islands in the South China Sea. Some of the stuff, we are seeing that they have done to interfere in domestic political processes. This is not a benign actor. But let's just get that out there. But she's not wrong, and it's because he feels that way, this way so keenly that the United States is leading a coalition, Japan, South Korea, Australia, European Union that are encircling China and preventing its rise, that he reaches over that to Russia and puts up with stuff from Putin that he's not really too excited about, but it doesn't matter. It's a strategic ally at this point.

All I can say here, Rudyard is Henry Kissinger must be sitting there. He's going to be 100. I mean, fully with it. He must be sitting there and saying, what a nightmare. How did U.S. decision makers allow this coalition to form? Yeah, and just to remind people that, you know, Henry Kissinger, in a sense, created this repression Shimon between China and America under the Nixon presidency that pulled China away from the Soviet orbit, at least into some form of long-term relationship with America, which created as the term

Neil Ferguson coin, Chimerica, this incredible exchange of Americans purchasing Chinese goods, rising hundreds of millions of Chinese out of poverty, and then the Chinese investing all that money in American debt, lowering the borrifice. costs of Americans to purchase all those. So there are a huge, you know, symbiotic relationship that really existed at the heart of globalization. You know what you're at spring. So let's let's wrap this with two pieces of good news, right? China is really dependent on the global economy. It cannot continue to develop. It is so integrated into the global economy. It is still an export economy. It's never made that shift yet because it's so hard to do to a consumption economy.

So there are some breaks here if what is key to Xi Jinping is to continue to lead a development China. That's important. Second one is something you said, and I'm so glad you drew attention to it. You talked about the growing trade between Russia and China in Renminbi, going around the dollar. Yes, and it's not only Russian China, it's Iran, it's others. There is African countries that are doing this. But again, let's look at the numbers. 90% of trade still today in euros and dollars. So we should be paying attention to this, but the euro and the dollar are the dominant currencies.

For reasons, you know well, they're convertible. There's regulation. investors feel safe in those currencies. Well, not in Silicon Valley Bank. And I guess, I mean, that would be just my final contribution to this. In some ways, look, it's not as severe, let's hope. And it doesn't look like it as the 08, 2009 financial crisis. But here's yet another American kind of shockwave, financial shockwave,

originating out of its U.S. banking system seemingly lacks poor regulation that then spills over into the rest of the world in a moment when governments are trying to cope with record high levels of inflation. It creates financial instability, which creates uncertainty about their ability to push forward with these interest rate hikes to bring inflation down. And I can't stress enough, you know, reading some of the global press, the extent to which the rest of the world is really tired of this. They're, they probably unfairly are blaming the Americans for, you know, this kind of financial chaos monkey that is its financial system and it's seeming inability to go a space of 10 or 15 years without something blowing up and having consequences for everybody else. And I just think

that again, you know, saps at American prestige empowered a moment that it is so important and so important, frankly, for Canada that we have a strong ally that is going to project on the world stage an international order of the type that, you know, Canada is going to thrive it. So true. Just let's add one quick footnote here. Credit Suisse, nothing to do with the American banking system. Shocking, you and I knew about this. This preceded even the rise in interest rates.

You could argue Silicon Valley Bank got caught in the rise in interest. It's terrible management and failure to hedge. But wow, Credit Suisse, reds. You're the heart of banking probity, Switzerland, not connected in to the United States. So do we have a banking problem here rather than an American problem? Some days I'm not sure. Well, it could be just a bigger problem with Western finance, you know, this endless reliance of the last decade on central bank balance sheets to load up on all

the crappy assets that don't really work primarily for the financial. system. So the central banks take them onto their balance sheets. And that was all fine through the last decade. It lowered borrowing costs. It goosed asset prices. It created, I think, a kind of chimera of wealth, a wealth effect. But the result was, as soon as inflation started rising, all those assets repriced at a much lower level. And that's across the Western world. And I think it's a verdict on this thing called quantitative easing, that strategy of central banks creating money to purchase assets to bring on to their balance sheets. It turned out that that was not cost-free, that it had some pretty serious repercussions, both for national treasuries, which now are going to have to, to varying

degrees, bail out their central banks, but also just to a vulnerable, fragile, overly complicated and at times shoddly regulated Western financial system. This is not what we need when we're facing off against China and Russia in a struggle for the future global world. order. We have to start seeing these things. I think I don't like this language, but I think it's the reality through a lens of national security. Financial systems are not just financial systems. They're projections of power and their reservoirs of strength. And we seem to have compartmentalized them thinking them as something completely separate. I think it's time to put them all together in one big basket and kind of pull up our socks. Well, let's take a quick break.

Here back on the other side, more than just baguettes and croissant being tossed around the Bastille and the streets of Paris. It's getting ugly in France. We're going to dig into it what's going on and why right after this break for our monk donors. Thanks for listening to this excerpt of the Friday Focus podcast. To get full-length editions of each and every episode of this program, simply go to our website www. The Monk Debates.com. Click on the Friday Focus tab in our navigation on the top right of the site. Make a donation as little as $25 a year or 50 cents an episode and we'll send you not only the full-length editions of each and every Friday Focus podcast, but all kinds of special offers, perks, access to events, and additional content.

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