The Munk Debates Podcast - Munk Members-Only Pod: Episode 27

Episode Date: July 9, 2021

This is a sample of the Munk Members-Only Podcast. The program provides listeners with a focused, half-hour masterclass on the big issues, events and trends driving 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. This week's Munk Members podcast digs into two big stories in the news this week: The Chinese ride hailing app DiDi finds itself in hot water with China's communist government after it lists on U.S. stock exchange – Why is the Chinese government cracking down on domestic tech companies bent on attracting foreign capital? What does DiDi's fate say about the future of big data in an era of growing great power competition been China and America?; On the heels of Biden-Putin summit which promised joint cooperation on ransomware attacks the US is hit twice in one week by cyber intrusions coming from Russia – How will the Biden administration respond? Are we on the verge of dangerous escalation of state originated cyber attacks?; and we conclude the program with a discussion of what these two stories say about the future of the Internet – Are we living through the disintegration of the World Wide Web as we know it? To access the full length episode consider becoming a Munk Member. Membership is free. Simply log on to www.munkdebates.com/membership to register. Under your membership profile page you will find a link to listen to the full length editions of Munk Members Podcast. If you like what the Munk Debates is all about consider becoming a Supporting Member. For as little as $9.99 monthly you receive unlimited access to our 10+ year library of great debates in HD video, a free Munk Debates book, monthly newsletter, ticketing privileges at our live and online events and a charitable tax receipt (for Canadian residents). To explore you Munk Membership options visit www.munkdebates.com/membership. 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.

Hi, Monk podcast listeners. The following is a sample of the Monk members-only podcast. To access the full-length edition of this episode and all of our regular Monk members-only podcasts, go to our website, www.wmunkdebates.com, and register for membership. Membership is free, and it's available for you right now at www.munkdebates.com. Hope you enjoy the program. Hello, Monk members. Roger Griffiths here. the host and moderator of this, our regular weekly monk members podcast. This is our program to provide you with a snapshot of the week that was, some ideas about the

week that might be, hopefully leaving you with some new analysis and insights into this incredible moment that we're all living through. As our guest, our guide on these programs, we're exceedingly fortunate to be joined each week by Janice Gross Stein. She's the founding director of the Monk School of Global Affairs and internationally renowned scholar, author, my former teacher, along with thousands of other kids. Well, I guess I'm not a kid anymore, but thousands of other people around Canada, the world everywhere, Janice. I know because they email me, many of your students are listening to this podcast for precisely that reason. So great to see that contribution you've made echoing down through the generations. And great to see how many

members, I have met in their earlier parts of their lives, actually, and getting great email conversations going with you. So thank you to all of you who have reminded me when I met you last. A little teaser alert, Janice and I've been talking in the last week or so about exploring, doing a live event, a live recording of this program, possibly in the first half of September, kind of ask me anything where hopefully a group of us could gather somewhere in Toronto, outdoors preferably, maybe over a drink, Janice, wouldn't that be nice? Great. And we could turn our monk membership, our monk membership podcast listeners, turn the program over to them

and have them pose questions to you that are top of mind. I think you're up for it, aren't you? I would love this. We would create a cafe for monk members where we could, come gather outside, have a drink, and we could talk about any issues that monk members want to talk about. Another great reason to get double vaccinated between now and early September. We'll be planning this over the next couple of weeks.

We'll be sending some details out to you by email and also obviously we'll keep you up to date via this podcast. Janice, a terrific week for us, maybe not for the world, but a terrific week for us in terms of really interesting topics to delve into you with. And the first I want to go to is the kind of strumen drang around DD. So if you haven't heard about DD, DD is a, I guess, the largest ride-hailing app in China. It's a multi, multi-billion dollar company hugely successful, hugely dominant in China, listed on, decided in the last week to list on an American exchange, the New York Stock Exchange, to raise capital. And guess what happened? The Chinese government

cracks down, effectively saying to D.D., whoa, wait a second. We're not sure if we want you to list on foreign exchanges and get this, we're going to shut down your app in China. People cannot book rides on your service. Janice, what's going on here? What is the Chinese government trying to accomplish with this kind of extraordinary move that, in my view, threatens this kind of, you know, world that we've been living in the last generation or more. You know, Neil Ferguson, a longtime monk debater, coined it Chimerica, this kind of symbiotic partnership of capital, savings, technology, integrating these two global economies to the benefit of each other and arguably humanity.

You know, this is a huge story. And for precisely the reason that you mentioned, this is the end, the beginning of the end of Shimerica. I would describe this. This is a big brick in the digital wall between people who depend on Chinese technology and people who depend, frankly, on U.S. technology. Because those are the two big innovators. and the top 20 digital companies in the world, 18 of them are in one of the other, either in China or in the United States. And it's a really stunning move by the Chinese government when you think about this, because this is a strong market signal to innovative Chinese tech companies do not list on U.S. stock exchanges, do not raise capital on U.S. stock exchanges. It's dressed up in language of digital security, but frankly, that's a phony issue since D.D. actually keeps the data of its Chinese users on servers that are located in China.

So this is not the issue. This is an issue in which China is responding to what's happened in the United States over the last two or three years under President Trump, preventing Chinese companies from, accessing state-of-the-art American technologies. We are having a similar kind of discussion in this country, which I think is deeply misguided. And that's another subject for discussion, but it is going on. And you were seeing, and, you know, 5G was the start of that conversation in the network world.

We are not going to allow China to build our fundamental infrastructure. for the next generation. So no Huawei networks in large parts of the developed world. But now it's moved much beyond that. Our big companies, says the Chinese government, will be located within Chinese digital space. And we will not allow you to raise capital. One of the astounding things, right?

I just kind of sat back and said, OMG here is the founder of Diti is the daughter of the founder of Lenovo. I am working on a Lenovo think pad as we talk. And the social media in China, one billion people reused on Wable, you know, functionally a tweet that just criticized her and her father for being unpatriotic and selling out to U.S.

capitalist capitalism. So this divide between global commerce and global politics done. That was a strategy for Chinese companies for 20 years. That's over. And every Chinese entrepreneur has to think now about the reach of the Chinese government. We are in a new world. Yeah, I think this is actually, I hate to say it, but I think it's very smart for the Chinese government to do this. By 2025, China will have one-third of the world's data by virtue of its own domestic populations. The applications are using their own rollout of increasingly high-tech systems. So China, I think, here is making a smart play. They're creating a closed ecosystem of data. They're going to attach their own AI to that data. And in a way that America has it,

they have a view. Now, again, we'll have to see how it plays out. They have a view, though, that this data should enrich Chinese society, not just the select few billionaires la Mark Zuckerberg, the Google Brothers, you know, we can go through the entire, Eric Schmitz, the entire list. They have a much more, again, kind of egalitarian view. The devil will be in the details. I admit that. But it, at least there's an intent here on China to say, we are not going to allow a few select individuals to capture this data, to frankly exploit users' privacy, users' data for their own personal enrichment to drive acute economic inequality and massive political imbalances of power within societies, as we're seeing right now in the United States, where, you know, Facebook,

Google and others just seem to be running roughshod over these attempts that the U.S. government and state governments have tried to rein these companies in through antitrust. So I think the Chinese government is understanding that big tech is a threat. It's a threat internally to the coherence and structure of their own societies. And somebody, in this case, the state is going to step in and exert its authority and muscle. I think hats off to the Chinese. or at least trying to rein in big tech before it gets too big. So that's a benign interpretation of Chinese motives. Let me give you a less benign interpretation.

What's going on, Richard? Chinese big tech, of course, has had inequality creating consequences. And you're seeing it. But much more important as far as Xi Jinping and the leadership of the Communist Party are concerned in CCP. It is a threat to the party because it is concentrating and amassing power and wealth. And this is a move now to bring these companies to heal and put them in a box. So my point is that America didn't.

But not because of equality issues, but because of political issues. That's number one. I'll give you that. But I'll just say that America didn't do that. It allowed these companies this vast. unregulated space to expand into with with really hardly any state controls or oversight. The result is not simply that they amassed economic power. They amassed immense political power now in the United States.

They can literally take a president off their platforms the day after he loses an election. And the Chinese just aren't going down that route. The Europeans in their own way are also trying not to go down that route. Canada, unfortunately, we'll see in this election that's coming. Maybe there will finally be some discussion of these issues. We seem to be kind of, I don't know, stuck with our thumbs in our mouths, not picking a lane. Are we going to try this American kind of laissez-faire big tech capitalism? Or my preference would be, you know, look to Europe, possibly look to China for a more assertive state role in curbing not just the economic power of these giant companies,

but they're political, they're pernicious political tentacles that are reaching into all aspects of our society. So, so let's understand this is a enormous political story beyond, it's not an economic, but here's a second set of risks. Yeah. Which we haven't talked about, which is more thinking about, which is China, I think, is making a big mistake here because it is going to force in between countries. to choose which side of the wall we're going to be on. Do you want to be in Chinese digital space or do you want to be in U.S. quote, Western digital space? Now, for some countries, that's not a choice at all. We live that story in the United States. For Europe, what you hear out of Europe over and over is don't make us choose. Now, move out to the rest of Asia and Africa.

this is precisely the choice that most of these governments do not want to make. And here's where the Biden administration and GCP are on the same page. Paradoxically, they're saying one or the other of us, but not both. Because if I'm right that this is a big brick in the digital wall, it is going to be much harder to move across these networks. We're at the almost at the end of one big global. digital network that you and I move around seamlessly on. There is going to be a lot of resistance.

And now instead of being coerced, let's be honest, by the United States, many governments in the world are going to find their coerced by China who say, you want access to Didi? Okay. Out with the others. Because we are putting a, this is the new divide in the world. It is a digital divide, and people are governments and people are going to be forced to pick sides here. Now, which side would you pick, Roger? Yeah, it's not an automatic answer.

I mean, the knee-jerk is obviously to say, well, we're going to allie ourselves with our sister democracy, the United States, because our political culture, our economic interests, our security interests reside with them. I think that the challenge to, especially a lot of these African and other countries, you're right, because they're really the ones whose future is going to be most profoundly affected by this new digital divide is where's the growth? The growth is not in Europe. The growth looks pretty middling, frankly, in the United States over the longer term. The growth is in China. So if you start seeing the Chinese tying soft digital access to hard economic access, the Belt and Road as a physical networking with a electronic digital networking layered over.

over the top of it, I think it becomes very hard for these countries in Asia, in Africa, to say, well, guess what, we're not going to opt into that system, that higher growth, higher dynamism system. We're instead going to go to the Sclerotic West that has allowed these billionaire plutocrat, techno, you know, techno wizards to not only take over their privacy rights and the technological infrastructure of their societies, Again, Jeff Bezos, Elon Musk, combined wealth of the bottom 50% of all Americans held by two individuals. I mean, that is not a healthy economy. That is not a healthy future that you want to be part of. I hear you, but let's think about this another way.

And let's talk about the in the middle. And so the fact that we have taken so long to develop any kind of strategy, we're still not there, tells you how agonizing these choices are. Yes, the data at scale and the markets at scale will be on the Chinese side. But the innovation will likely be on the U.S. side. That's getting challenged, though. You know, we all know that. The Chinese are doing a much better job at innovating.

Well, but, you know, just saw an interesting audit. Quantum. The Chinese are amazing at quantum. They've had some of the biggest breakthroughs. in terms of quantum computing in the last five years. The big scientific studies have come out of China in terms of quantum. But if you look at cyber, for example, there is a big gap between China and the United States with the United States. About a decade in lead was the latest audit.

So this gets to be a much more segmented kind of decision for people. And obviously the optimal thing is, don't make me choose. Don't make me choose. Your optionality. I don't know how long you're going to have it for it. That's the biggest question for everybody else in the world. How long do I get to sit on the fence here? And that's why that D-D-D-D-D, what they did to D-D-D.

Wow, is that a canary in the cold mine, Roger? They are saying, no more choice here. Didi, Wibo, Ant Financial, which is Jack Maas Group. You know, it's all been happening. the last six months. You've been listening to a sample of the Monk members-only podcast. To access the rest of the episode, consider becoming a member. Membership is free and available at www. monkdebates.com. Once you've joined as a member, go to your membership profile to access the rest of this episode and all of our Monk members podcast. Thanks for listening.