Rivalry Redefined: US-China Strategy in a Shifting World with Matthew Turpin

Episode Transcript
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(00:00):
[MUSIC]

>> Elizabeth Economy (00:08):
Welcome to China Considered, a podcast that brings fresh
insights and informed discussion to one ofthe most consequential issues of our time,
how China's changing andchanging the world.
I'm Liz Economy, Hargrove Senior Fellowand co director of the U.S.
China and the World Program at the HooverInstitution at Stanford University.
Today I have with me, Matt Turpin.
Matt is currently a senior advisor atPalantir and a visiting fellow at Hoover,

(00:32):
where he produces one of the bestsubstacks on China that you will
find China articles.
But he spent most of his career inservice of our country, first in the U.S.
army and then in a number ofsenior positions at the Pentagon,
followed by the Commerce Department andNational Security Council.
Matt, it's great to have you with us.

>> Matthew Turpin (00:47):
Well, Liz, it's a real pleasure to be here.
Thank you.

So, Matt, I want to take you back to the beginning,
you graduated fromWest Point in the mid-1990s.
It was a time in the US China relationshipthat was relatively good until it wasn't.
Secretary of Defense Bill Perrywas all about opening up mill to
mill relations at the time.
I think there was a lot of positiveenergy in the relationship.

(01:12):
And then, boom,we had the Taiwan Strait Crisis, 95, 96,
where China was lopping missiles,you know,
into the Taiwan Strait,trying to deter the Taiwanese and
meddle in their first ever actuallydirectly elected presidential election.
So how did all of thatinfluence your thinking?

(01:34):
So when you came out of West Point,what was your orientation on China?

So, to be honest, it was absolutely zero orientation on China.
I came out of the academy havingbeen a European history major.
I had no conception that I'd reallyspend time thinking about things
at the sort of strategic level.
I was focused on beingan armor second lieutenant.

(02:03):
And I went out to Fort Irwin, California,
where I played laser tag on tanks foralmost four years.
So from like January of 1996 through 19,you know,
the end of 1999, yeah,I was focused on doing war games for
the US army at the very tactical level.

(02:26):
I lived outside on a tank in the deserttwo weeks out of every month for
nearly four years.
I had almost no conception of whatwas happening in the broader world.
I felt very, you know, very focusedon what I was doing then and there.
And it just kind of goes toshow that you're, you know,
like folks that are in the army reallyoftentimes are not really tracking what's

(02:48):
happening at the geopolitical level.
You're really focused on the dayto day of how do you have Your
units well trained andfocus on sort of learning your job.

And so even, even at West Point itself,
there wasn't a kind of education aroundone of the major emerging great powers
of our time that sort of shaped.

Yeah, it would have been nice.
I didn't, I am absolutely,we certainly had folks that took Chinese.
I did not take Chinese.
You know, I, I originally took,took Arabic because if you'll remember,
I, I, I, I came to west point in, in 1991.
And so if you're, like,looking at the world,

(03:28):
then Arabic seems like a reallyinteresting language to learn.
I did really poorly at Arabic,and my advisors and
counselors at West Point advised thatI move back to a more simple language.
And so I took French.

Like English?
>> [LAUGH]>> Matthew Turpin: Well, and
English as well.
And I often joke that, you know,
I graduated in the top 5% ofthe bottom half of my class.
There you go.

And so I was not particularly focused on the academic side
of this.
And to be perfectly honest,I was, I was, yeah,
I felt that I wasa European history major.
I spent a lot of time thinkingabout sort of the history and
politics of Europe in the 19th and20th centuries,
that's what I spent my time sort ofworking on from an academic perspective.

(04:14):
I ended up going back tograduate school after my time as
a lieutenant as a captain.
I focused on Americanhistory at UNC Chapel Hill.
I went back to West Point andtaught in the history department.
So I sort of did all of that through about2006 before I went back out to the Army.

(04:35):
And I didn't actually start reallyworking on China or even Asia issues
until I chose to take an assignmentat Pacific Command in Hawaii in 2010.
So up until that point,I mean, to be perfectly honest,
my focus was on other parts of the worldand was really focused on my sort

(04:56):
of career as an army officer andhow to lead America's sons and
daughters at a variety ofdifferent places around the world.
And so China was always inthe back of my mind, but
it was not particularly forefront,at least for me.
And so when I moved to Indo Paycom,essentially,
that was the same time that you haveSecretary of State Hillary Clinton,

(05:19):
you know, writing a piece in Foreignaffairs about a pivot to Asia.
And so it, it was opportune,but it was not planned by me.
I only picked Hawaii because it seemedlike a much better assignment than
the other ones that were available.

Right, right.
And it turned out to be prescient.
But I take.

Yeah, not an effort by me.
But purely by chance.

It was serendipitous.

Serendipitous, yeah.

Okay, so you land in Hawaii.
Let's just spend another minute on thisbecause I really am interested in,
in how if, if all that time, you know,was spent not thinking about China.
Surely you get to Indopacom andChina is present.

Yep.

How are you thinking about it then?
What is, what is that sort of you know,>> Matthew Turpin: I mean, so, so
obviously as a, as a sort.
I was a military officerat Pacific Command.
My job is primarily be sort of a, I was,my title was as a crisis action planner.
My job was to plan for those kinds ofthings that would be considered crises for

(06:21):
at the time, Pacific Command, which isobviously now called Indo Pacific Command.
But my job was primarily to provide for
both the rear admiral that wasthe operations officer, but
also the commander, the four staradmiral that commands Pacific Command.
My job was to be essentially the personthat plans for how to respond to crises.

(06:45):
And so a number of those thingslike the sinking of the Chonan by
the North Koreans.
I helped plan the entire sortof US Military response for
the earthquake, tsunami andnuclear accident in Japan.
I spent quite a bit of time onNorth Korean interdiction planning,

(07:05):
but also about the kindsof things we were seeing,
whether it was actions against Japan andthe Senkakus by China.
Yeah. >> Matthew Turpin
the other things that we were watchingChina begin to do during those years.
I then to get a sort of a broadappreciation of what was happening and
really got introduced tosort of the national level.
So as a, as a planner at Pacific Command,I began to interact with my counterparts

(07:29):
in the State Department, you know,at the Office of the Secretary of Defense,
you know, the Treasury Department andother places.
As we started to see sort of likethe holistic picture of what
our relationship was.
But I was looking at it throughthe lens of sort of what is
the US Military's rolein that relationship.

(07:50):
And so I got to see both the sort ofthe cooperation that we were doing,
sort of the mill to mill cooperation,but also got to see all the planning and
other things that we were.
That we had to do to prepare forsort of worst case scenarios.
Because obviously for Pacific Command,
the third Taiwan trade crisis was notthat far removed from their memories.

(08:11):
Right.For many of those, you know,
many of the folks that servedin that command, you know,
Certainly they remember 1995, 1996, andcould see that those are things that could
pop up again as well as the EP3 crisisthat had happened in, in April of 2001.
Those were all very real things forthat command.
And I got exposed to it really forthe first time as someone who had been

(08:33):
serving in Europe andthe Middle east before that.
Right, and
it would seem that sort of alwaysdealing with crises, right?
You're always trying to think ahead aboutwhat could emerge that would be bad.
That also would give you somesort of a certain kind of lens.
But as you say,you also had some engagement element and
sort of the mill to mill relationship andhelping that know, develop.

(08:56):
So you mentioned the pivot andHillary Clinton and the pivot to Asia,
I think was an important inflectionpoint in US Policy toward China.
Really.
It was a recognition that Asia matteredand we weren't spending enough time in
the fastest growing, you know,most dynamic part of the world.
But it was also, I think, you know, therewas an element of it that was clearly

(09:17):
designed to ensure that, you know,we remained present and, you know,
China didn't somehow becomethe dominant power in the region,
which it looked like it wasincreasingly interested in doing.
So looking, you are one of the fewpeople I know that actually had quite
senior positions in both the Obama andTrump administrations.

(09:38):
If you were to look back to thosetwo administrations and say,
now what would you take away from eitheron the positive side or the negative side,
either operationally or substantivelyfrom those administrations that
you would like to bring forwardto the current administration?
What should they like,take away from history,

(10:00):
as you are an historian from the recenthistory, what would be most important,
do you think, forthem to be thinking about?

Yeah, yeah, so I mean, little context.
So I went from that time out at PacificCommand, which, I'm a relatively junior to
mid level officer, but I then moved backto the Pentagon right after that and
essentially take over a position onthe Joint Staff that that sort of runs
China's strategy for the Joint Staff,for the chairman and the Vice Chairman.

(10:27):
And then working for Deputy Secretary BobWork and others on defense innovation.
And defense innovation is obviouslyalso directed at the fact that you have
a technologically advanced China that isbeginning to challenge US in a number of
different domains.
And so that, that whole process.
And so I got to see for sort of the secondterm of the Obama administration

(10:47):
from the Pentagon working with theNational Security Council and that team.
I got to see how at a national level,we were beginning to wrestle with that.
And so I saw that entire sort of secondhalf, the Obama administration, and
then went into the Trump administrationand really helped run those sets of
policies from the NationalSecurity Council around China.

(11:09):
And I guess my big takeaway isthat from a sort of a policy wise,
we had had a strategy of how wewanted to deal with Beijing.
You know, we had had that strategy sortof in place, at least in my opinion,
from sort of like May of 1994,when President Clinton's speech,

(11:31):
I think it did at, at John Hopkins sort ofannounces sort of a, an idea that we're
going to pursue a policy of economichelping the Chinese economy develop.
And the expectation is we'llsee sort of economic and
political liberalization over time.
That was sort of our approach.
And so our economic departments andagencies had, I think, a very clear

(11:53):
mandate from that point in time throughthe Clinton administration, the George W.
Bush administration,
the Obama administration clear mandateto help the Chinese economy develop,
become more enmeshed and, and, andbind it to the international system.
And the Department of Defense and
the intelligence community hada job to hedge against risk, right.

(12:14):
That fundamentally therewas an understanding that,
that obviously things might not go rightand there could be real tensions and
dangers inside the relationship.
And so the Defense Department andthe intelligence community and
the State Department are directed to,to hedge against that risk.
Right.And so that,
that sort of balanced approach.
But by the end of the Obamaadministration, and

(12:36):
then as the Trump administration comes in,a realization that we're not seeing.
I mean, certainly our strategy aroundhelping the Chinese economy develop had
worked extremely well, right?
But we were not seeingthe kinds of liberalizations.
In fact, we're seeing the backsliding.
This is four years into.

(12:57):
So the last year of the Obamaadministration is essentially three or
four years into Xi Jinping's rule.
And we're beginning to see, I think,
a very clear outline of the kindof ruler that Xi Jinping would be.
And it's not the liberalizing reformerthat that many of us, I think,
had hoped, right,that we'd had an expectation to see.
And what we see is a reallya deep backsliding, and

(13:21):
sort of refusal to carry outthe kinds of changes that somebody
like Robert Zoellick had announced andsort of laid out in his
responsible stakeholderspeech back in 2005, right?
So you have this.
This on this, I think, a deep realizationinside the Obama administration
that things are not headingin the right direction.

(13:43):
We're going to have tostart to recalibrate.
And then when the Trumpadministration comes in,
there's an agreement with that and animplementation of a strategy that had its
roots in the Obama administration and waslikely to be the kind of strategy that.
That.
That President Clintonwould have put in place.
Right.This is.
And her people,>> Elizabeth Economy: Parts
of it, I think.

(14:03):
Yeah, people like Kurt Campbell and Jake Sullivan and and
Laura Rosenberger.
All of those folks would havebeen in those positions.

Right.

And it ends up being that.
That the Trump administrationimplements a more, you know,
a competitive strategy, one of viewingBeijing as a rival and a competitor,
not as a partner, and that's that shift.
My opinion is that, you know,when it became clear, I think,
across the U.S. government that, that thatwas the case, really by the end of 2015,

(14:36):
the US government moved relativelyquickly in changing its strategy.
Right.Certainly by the end of 2017,
you have a national security strategythat very clearly lays out that we view
China as a competitor andtherefore we should treat them that way.
And that, I think, has gone on.
I mean, so that's within the China sortof watching community that has remained

(14:58):
up for debate, but I think withinthe broader sort of policy community,
that became fairly clear early on.
And then the problem is,then how do you implement that?
And I think that's what boththe Trump administration and
then the Biden administration really had,you know, challenges of not dealing,
you know, not only the.
So I think the national security side,the defense side,

(15:21):
understood their job was tocontinue to hedge against risk.
But really the economic departments andagencies,
really tough time adjusting to a shiftfrom helping the Chinese economy
develop to one that is not helping them,right?
And that.That's been a difficult transition,
I think, for, forfolks on the economic side and
then all the constituenciesthat fall underneath that.

Yeah. I mean,
I might take a littlebit of issue with that.
Having served in the Commerce Departmentduring the Biden administration for
a few years, I think it wasn't thatthe administration was looking to
help the Chinese economy develop anymore.
It was, how do we balance our economic andour security interests or
how do we integrate them most effectively?

(16:05):
Where do we draw the line aroundwhat constitutes national security?
Or you know, is Starbucks, is it okay forStarbucks to sell lattes and
Nike to sell sneakers?
And so I okay for->> Matthew Turpin: India to sell
chips, right?
I mean, all those, those debates, those.
Are, those are the, those are the big debates.
But I guess what I'm asking you is withall of that history right behind us now,

(16:26):
is there something in particularthat you think the trumpet,
this Trump 2 administration shouldbe maybe taking away that it isn't?

Yeah, I mean, I felt that the sort of,
the most important thing, the thing likesort of the starting point is you had
to be have a declaratory policy that couldallow for those sorts of shifts to happen.
And, and you know, we've now,I think had that, you know,
we had that from the early portionof the Trump administration.

(16:56):
It was very clear that the Bidenadministration came in and
had a declaratory policy that,that it would,
that would see Beijing as a competitor, asa rival and they would treat it as such.
And, and so those, that's extremelynecessary because it sets the baseline
then for departments andagencies to figure out how and
what they're supposed todo on a day to day basis.
Right.If you don't have that,

(17:17):
those discussions that,that you just discussed.
Yeah, obviously, the Trump administrationhad those same challenges internally of
trying to figure out wherethe right balance is.
But without that declaratory policy tostart with, really hard to get that sort
of moving because then yousort of re litigate whether or
not they're a competitor or not, right?
And sothat's where you sort of find yourself,

(17:38):
I think from a policy side,it's a really tough thing.
And so for the Trump administration,
I think they need to be able to continueto press that forward, have a clear
understanding of what they're tryingto do, and then enable departments and
agencies to come up with those thingsthat fit with the overall policy.
Rather than a sort ofa micromanagement of what it is, but
allow those departments and agencies touse their authorities to figure out how

(18:02):
best they accomplish those goals.
And I think we see some of that going onwithin the departments and agencies now.
You know, both the America first tradepolicy and the America first investment
policy have laid out some clearguidelines of what departments and
agencies are supposed to doto come back with things for
the administration tobe able to execute on.

Right. So I guess to that end we'll see more
perhaps of A coherent andcohesive strategy after April 1st,
I think is the date they'resupposed to come back with that.
But, but one of the things that Ireally admired in your substack,
which, as I said, is really,I think one of the best out there,

(18:45):
is that you are neither a Trump critic ora Trump supporter.
I think you have become, in my mind,a little bit of the explainer in chief.
Because I think forthose of us on the outside,
it's often difficult to make sense ofwhere the administration might be going.
You know, what we've seen, I think,

(19:08):
of China policy to date has beenprimarily through the lens of tariffs.
So the first one set of tariffs inFebruary, another set of tariffs in March.
But you make the case, and I think quiteconvincingly in one of your recent pieces,
that of course, President Trump wants adeal and that is what he's driving toward.

(19:32):
And then the question I think becomes,well,
what are the parameters of that deal?
What do you think thatdeal actually looks like?
What are we looking for?
What do the Chinese want?
Where could we meet in the middle?
How does that happen?
So maybe you could lay outa little bit of, of that,
because I do think that,I think you have a,

(19:56):
a really important perspective thatbrings some coherence to, I think,
what is for most of us,just a completely incoherent policy now.

Yeah, I mean, obviously, I don't speak for
the administration.
I mean,>> Elizabeth Economy: Of course, and
that's why I said at the outset, youare not, you, you come across as neither
a defender, supporter,>> Matthew Turpin: Nor a cheerleader.
Right.I mean, I'm trying to,
I'm trying to lay out exactly happeningand then we can make judgments about,
you know, success or failure andthose sorts of things.

Right.

But I think you, I think it's, it's, it's clear to me that,
that President Trump and
his administration don't see thispurely as a China only sort of thing.
Right.There is a global set of players, and
the US has to,has to deal with a global set.
You're never going to be able tosort of set aside that this is just

(20:49):
a US China deal.
It's always within the context ofeverything else that is happening in
the world.
And therefore, it has to be sort of, ithas to be sort of thought about that way.
And so I think it's,there's a tendency for
those of us that sort of spend time onone country or one region to try and
distill things down to just your area,and then hold everything else constant.

(21:11):
But, you know, I,I've always felt that, you know,
someone who was sort ofan advisor on one area,
I had to appreciate that the folks that Iwas working for had global portfolios, and
those global portfolios pulled inall kinds of different directions.
And so I think that's incredibly importantto keep in mind that this is a multiplayer

(21:32):
game and that there are simultaneouslypositive sum games happening,
zero-sum games happening andnon zero sum games happening, right?
So it isn't as if we get to choose one orthe other,
it's those are allhappening simultaneously.
And so I think, you know, from,from my, my reading of sort of

(21:52):
the administration's, you know,efforts so far in this first
sort of 50 days is that they havecertainly learned from their first term.
You know,it isn't as if they're coming in.
This isn't, this isn't spring of 2017.
This is, this is with all ofthe accumulated experience from that

(22:14):
period of time, andthey've come in with a game plan.
And I think that game plan is wewould like to have a situation in
which the trade balance between theUnited States and the PRC was balanced.
But there's a deep skepticismthat that's gonna be achievable.

(22:34):
I think the administration spent enormousamounts of energy trying to do that
in the first term and found that theyhad counterparts on the other side of
the table who either were not negotiatingin good faith or were simply unable
to accomplish the kinds of outcomes thatthe United States would find acceptable.

(22:55):
And that sets us up forreally a difficult.
Again, I think President Trumpactually is committed and
would like to have a fair dealbetween the United States and the PRC.
But I suspect that he's deeply skepticalthat the Chinese could actually do that.
And therefore he'll probablyspend much more time with others,

(23:18):
much more time negotiating with othersin ways to improve the US Position over
time with the understanding that,that Beijing is likely the biggest
disruptor to global trade and economicsystem and that the United States is,
is probably best off settlingthings with other countries.
And I think that's what we seein the style of negotiation.

Okay, so let me, let me push you a little bit on that because,
I mean, if the argument is thatwe're better off, you know,
working with others before we, you know,work on China, it seems that nowhere,
in fact, do we actually havea positive sum game going, right.
Not with our closest allies either in,you know, North America,

(24:04):
certainly not in Europe.
Asia is a little bit uneven,a little bit, you know, teetering.
It's not quite clear where we're goingwith our Asian allies at this point.
So I'm, I'm wondering,with the exception of Russia.
Right.And we can talk about this idea of
a reverse Kissinger, right, in whichthe United States is ostensibly trying to,

(24:25):
instead of, you know,pulling China away from Russia,
we're pulling Russia awayfrom China to our advantage.
We can talk about whether that's,
you know, even feasible orif that is what's going on.
But I'm, I'm curious how you see allof these moves actually leading to
greater leverage for the United Statesin its negotiations with China.

So I think, you know, I mean,
I think we should look very closely at,at the set of meetings that the president
held with Prime Minister Modi asan example of what this looks like.
Right.
So, I mean,in terms of sort of trade barriers and,
and sort of unfair trade practices,
certainly India falls in the samecategory as the prc, Right.

(25:11):
But very early.
I mean, within the first four weeks,
Prime Minister Modi isinvited to the Oval Office.
They appear to have a very friendly and,and, and
it appears to be a very sort of warmrelationship between the two of them that
they've clearly communicated whilePresident Trump was out of office.
They had a close relationship during hisfirst term and they came to a set of

(25:33):
agreements, it would appear, based uponthe press conference and everything that
was announced is that they would work onaddressing sort of key trade issues that,
that are of deep interest to both sidesand that, that's what the trade team.
Right, and that trade team of Treasury,Commerce, USTR, Peter Navarro and

(25:54):
Kevin Haset that they're gonnawork on developing things and
resolving things between the U.S Indiarelationship in that way.
Right.I think that's pretty clear.
I think we saw with Prime Minister Ishibacoming to Washington and
meeting in the Oval, a similar sort ofset of dynamics that are happening.

(26:15):
I think this idea of resolving thingswith others doesn't necessarily mean
that the United States accepts the,the current situation and
is simply friendly on all those things.
I mean, obviously what I thinkwe're seeing with both Canada and
Mexico is really a demand upon those twocountries to take actions to prevent
the Chinese from being able to use theirmarkets as ways to get around the things

(26:39):
that the United States has in place.
I mean, this is, this is the,this is the aluminum and
Steel tariffs that have gone in place.
Right.
Both Canada and Mexico.
I mean Canadian aluminum is the biggestimports coming into the United States.
It's not because Canada hasa gigantic aluminum industry.
It's because it's all transshipment fromthe world's greatest overproducer of steel

(26:59):
and aluminum, which is China.
Those things are highly tariff cominginto the United States and unfortunately
the Canadian government has allowed thosethings to bypass and come through their,
their kind, their market intothe United States underneath that.
Right.And that's something that,
that they're seeking to resolve.
It's the exact same set of dynamics forthe Europeans.

(27:21):
I mean this is not new.
The Biden administration has been raising,the Obama administration raised these
issues with the Europeans andthe Canadians, right?
The massive overcapacity in China forsteel and aluminum,
the way that was doingharms to the United States.
We would ask those countriesto collaborate with us.
They have chosen to this point not tocollaborate with us because they fear

(27:43):
retaliation from China.
Right, that's the dynamic thatI think is happening here.
And they're going to continue to press,I think, to see those things and
we'll see how that comes out.
But fundamentally it'sabout to resolve those
things which ultimately isolateBeijing in the long run, right?
That if the United States is able toresolve those issues, then that actually

(28:07):
strengthens the U.S's position isnegotiating with China in the long run.

Yeah, I mean, I think if we expand it out a little bit and
we talk about President Trump'sdiscussions of withdrawing from NATO
though, and pulling ourselves out ofvarious international institutions and
arrangements, it seems to me know we'releaving the field open for China.

(28:33):
We're not actually finding ourway to constrain it because we're
basically picking up our marbles andgoing home.
And so, you know,what you're describing, I think may fit,
may fit narrowly in the trade space andI'm not sure it does because I
think China's also moved and is movingpretty aggressively to, you know,

(28:54):
develop other markets, you know,in Africa, in Latin America,
Southeast Asia, you know, soit isn't as dependent on the eu, us.
So I'm just,>> Matthew Turpin: Are unlikely.
I mean, I mean we should be very clear.
There is no America-sizedeconomy replacing.
True.
Absolutely.

There's no substitution within foreseeable future.
Africa will never replaceeven a fraction of what
the United States consumes from China.
There isn't really a Chinese economythat can operate really without
access to Europe and the United States.
Right, it just doesn't work.
There's not enough wealth acrossLatin America, Africa, Southeast Asia, to

(29:34):
be able to consume the products that Chinaproduces and exports out into the world.
So I think we should be veryclear that you're right.
They are absolutely tryingto develop those things, but
those things cannot be replacementsto what the economic situation
is between the US And China right now.
And I think the Presidentunderstands that.

(29:55):
I think he views the US market,that selling into the world's largest
wealthiest consumer market shouldbe seen as a privilege, and
that fundamentally that's the positionwe should be operating on,
rather than the US Asa market of last resort, and
that it's an obligation that Americansopen up their markets to everyone.

(30:16):
That's just a different entireworldview of how to view trade.
I suspect that he believes that a numberof those international institutions have
been unable to enforce the rules andnorms that folks say that they enforce.
And that becomes, I think,a deep frustration, is that we talk about
these rules working, butthey're only observed in the breach.

(30:41):
And this is, I think, the fundamentalfrustration is that it doesn't,
it isn't actually working.
So therefore,
the U.S is sort of forced to move indirections that take these actions.

So is that Matt as explainer in chief, or
is that Matt as defender in chief?
I'm curious only in thinkingabout something like
the World Health Organization, whereremoving ourselves actually removes us
from access to a lot of information,a lot of scientific sharing around things
like pandemics that ultimatelyundermine our own human security.

(31:14):
I would argue same true withthe Paris Climate Accord,
where if it's not workingthe way that we want it to work,
one could argue that it's better to stayin and push for some form of reform.

Yeah, I think for the WHO, after SARS,
we tried to institute a seriesof really transparency
initiatives that would allow forthe kind of knowledge and
information trading thatwe had all hoped for.
And we watched, I think, an utter collapseof that at the start of COVID largely

(31:51):
because the Chinese government absolutelyrefused to follow through on the rules
that we had all set up andin a set of institutions.
And so I guess there's sort of theEinstein definition of insanity, right?
I mean, if you keep trying todo the same thing over and
over again, accept a different result,there's, I think I have a little bit of.
And you know, so I don't think that thatmeans that every international institution

(32:14):
has not been able toaccomplish this thing.
But I think on the who, I think we have toask very serious questions of whether or
not this system actually works.
I'm deeply skeptical of,
of the agreement that we made in 2015over the Paris Climate Agreement.
I am personally deeply skeptical,
given the fact that we now havethe Chinese economy in 2024,

(32:37):
produced more coal fired power plants,brought more coal fire power plants
online than essentially the entireexisting infrastructure of Europe.
If that's what the Paris Climate Agreementmeans, is that China,
China is in compliance while it continuesto exponentially increase its carbon,

(32:57):
its CO2 output.
My personal thing is that thatprobably isn't a very good deal.
So I'm deeply skeptical of it.
But obviously I don't thinkthe United States is going to leave from
being a permanent memberof the UN Security Council.
So if you looked at sort of theinstitutions that have some power and some

(33:18):
things to be able to do, I think there arethings that the US Is absolutely going to
stay in, but there are other things thatare no longer sort of fit for purpose.
And so I'm sympathetic to thosepositions and I think I understand
why the administration ispushing back on those things.
And I think that it does require us to doa bit of a introspection about whether or

(33:42):
not these international institutionscan achieve the outcomes that we had
laid out for them to do.
Or is it that actually it's a bilateral,like fundamentally, if you want to achieve
these outcomes, you're actually goingto have to negotiate bilateral things.
And I think for the Biden administration,
this is where we found ourselves ondual use export controls, right?
So we have an international institutioncalled the Wassenar arrangement.

(34:05):
Unfortunately, we allowedthe Russians into that.
It requires unanimity tobe able to pass rules.
So therefore we can't use the Vasanararrangement in order to do dual use export
controls against the Russiansover their war in Ukraine.
And so we had to negotiate bilateral,multilateral,
minilateral arrangements outsideof that international institution

(34:25):
in order to deal withthe problems that we had.
Now, I completely agree with the Bidenadministration's approach on doing that.
You had to do that.
The existing institution simply failsto accomplish the thing, right?
And I also think that it'sprobably appropriate for
the Trump administration to dosome of those things as well.

So I'll be watching and waiting, Matt,
to see whether in fact the Trumpadministration makes new and
bold efforts on the issue of climatechange outside the Paris climate accord.

I would be surprised, >> Elizabeth Economy
the same true on the global health front.
So if that in fact is the case, thatwe're withdrawing from these institutions
because they're not effective or
they're not realizing their objectivesas quickly as we would like.
And I think it's important to note that.
Well,
I think Trump administration's,>> Elizabeth Economy: Agreement is that by

(35:18):
2030, right.
Its emissions peak and then it goes down.
I'm not, and I agree that that was a poorbargain to strike at the outset, but
I think the real issue is I don't believethat they're actually withdrawing from
these institutions because theythink they're not fair enough.
Obviously,
reducing CO2 emissions is notthe administration's priority.

(35:39):
Right.It obviously isn't that, that then.
And of course, you know,when administrations are elected,
they get to choose what prior, whatthey prioritize or what they focus on.
Right.>> Elizabeth Economy: That's right.
I think it's very clear.
I mean, it's not like they're sayingthat's what they're trying to do.
We can see like they actually are notsaying that's what they're prioritizing.
So I think,>> Elizabeth Economy: Drill, baby, drill,

(35:59):
if I recall, right?
Right, right.
Because they think that energy securityis an extremely important thing for
the United States.
And fundamentally that's what is goingto help, you know, maintain, you know,
a set of allies to be able to provide forthat rather than becoming deeply dependent
upon, you know, various authoritarianregimes that are providing energy.

Yes. Well, we could have a much bigger and
broader discussion.
I was just at, Sarah,the big energy conference down in Houston.
We get a big discussion aboutthe role of renewables and
what more we could bedoing in that space too.
But let's, let's, let's pivot.
I do want to talk a little bit aboutTaiwan and I want to finish up on,
on the whole Russia issue and China.
So the president, President Trump has beennon committal on Taiwan, you know, in,

(36:43):
you know, obviously sort of opposite from,from President Biden who four times said,
I think to the dismay of many, that hewould come to the defense of Taiwan with,
without any sort ofcaveats attached to that.
People thought that was maybenot the most appropriate thing.
Some people liked it, some peopledidn't but, but President Trump,
you know, his statements onTaiwan have been, you know,

(37:04):
to the effect of they stoleour semiconductor technology.
They should be contributing10% of their GDP to defense.
They should be paying us for defense.
It's very hard to have a good sense forhow he's looking at Taiwan.
And he did get TSMC to do a big investmentbeyond what a Taiwan semiconductor
manufacturing company had agreed todo under the Chips and Science Act.

(37:29):
So what's your sense for
where the administration's headis at when it comes to Taiwan?

Yeah, my suspicion is that, I think it's all true that, that
what you've laid out of what the presidenthas, has talked about in terms of Taiwan.
I think, I think we should also add inthat I think the president's been very
clear that he does not.
Does not want or, you know, wouldcertainly deeply object to, you know,

(37:55):
any use of military forceto change the status quo.
He deeply objects to that andhas made it, I think, that pretty,
pretty clear to Xi Jinping thatwe certainly do not expect or
would allow forthat kind of military force to be used.

Has he said that?
I mean, I know that Secretary ofState Marco Rubio has said that.

I mean, I see that within the broad context of ensuring that
there is peace and these kinds of attackswouldn't happen under his rule, and
he'll continue to push for that.
Right.
So I think that, like, if we look sort oflook at it from that perspective, right.
This is not Xi Jinping.
If you want to launch a war,that's good on me.
Right.
No, I don't expect there to be any war.

(38:38):
You know, he's also continuously pushingnot only Taiwan to spend more on defense,
but Japan to spend more on defense andAustralia to spend more on defense and
the Philippines to spend more on defense.
Right.
One could conclude similar to the waysin which President Trump pushed
European allies to spend more moneyon their defense, that that is not

(39:00):
exactly a very friendly and beneficialoutcome to the Russians of the Chinese.
Right.
So I think we should,we should place it in that context that,
that he is probably someone who wantsto maintain sort of the status quo.
Right.Which strangely,
is sort of a little bit sort of pre.

(39:21):
The four statements that President Bidenhad made about that sort of getting
back to.
We're certainly not going to encouragethe Taiwanese to do anything,
but we also do not want to encourageBeijing to do anything, right?
That we are okay with the status quo.
And if you're looking at thatthrough to Taiwan's lens, well,
the status quo is, I think,a not a bad outcome.

(39:44):
Right.I mean,
the status quo right now is thatTaiwan has de facto in defendants.
It's able to operate andrun its own blockchain economy.
And those are the outcomes that Ithink the United States would welcome.
I think President Trump understands that,has an understanding of that
certainly Xi Jinping absolutely wants toaffect what he would call reunification.

(40:10):
Right.And what I would call annexation, and
that he is not interested in givingXi Jinping the thing he most wants.
So I suspect that that's the,that's the dynamic.
But, you know, as,as he has said, you know, we'll.
We'll see what happens.
But I think that's the way it is,I mean, it certainly.

So return to strategic ambiguity, basically.

Yeah, I think so, I mean,
I think that is probably his sortof default position on this,
is that that's probably the way toapproach this, while encouraging, right?
So, I mean, if the Taiwanesechose to increase their defense
spending from about 2.5,2.7% of GDP to 3 or 4% of GDP,

(40:58):
I suspect that President Trumpwould absolutely welcome that and
would open up US Defense salesto provide for those increases,
would welcome those actions.
That's probably not what Xi Jinpingwould like to hear from President Trump.

So let me just take you back then, one step, you know,
in terms of that sort of comprehensivedeal of some form that you
think President Trump might wantto strike with the Chinese.
You know, my sense from reading somethings about what the Chinese side has
been thinking about is they would loveto structure a deal that would include

(41:38):
basically, President Trump saying,you know, US Hands off on Taiwan.
You saw that however you see fit.
So they are trying, you know,
to figure out what would it take toget President Trump to that point.
You're saying you don't think PresidentTrump would ever get to that point?

I think it'd be really difficult.
I think.I think President Trump understands,
you know, it's not like he hasn'theard that from the Chinese before.
Right.I mean, it's not like between 2017 and,
you know, January 2021,Xi Jinping never brought up Taiwan.

No, never brought it up, but did they start to try to put
things on the table that they thoughtwould be so appealing to President Trump
in some space or another that hewould forsake Taiwan in some way?

I suspect that, yeah, his position will be,
you couldn't even do the phaseone trade deal we made.
You couldn't even follow through on that,right?
How can I, how can I trust youas a counterparty if you can't
even follow through on the thingsthat we agreed to in 2020?

(42:44):
Why would I expect that,you would follow through on a bunch of
commitments to us if we compromisedon this right now, right?
And so I suspect from hisperspective it would be,
once China can show the United States and
the rest of the world that it canfollow through on its commitments and
really fulfill the things that it is saidit's gonna do well, that at some point in

(43:08):
time in the future we could havea discussion about other things, right?
And I suspect that he's deeplyskeptical that Beijing could ever
do that within the time framethat would be meaningful for
a deal that the two ofthem could get done.
Hence the concentration on everybody else,right?
Hence.
That's why spend timenegotiating with the Indians.

(43:31):
That's why you spend timenegotiating with the Russians.
That's why you spend timeon all those other things,
because,>> Elizabeth Economy: But
the Russians are so, so easy and so good.
So let's move to the Russian.
He feels that he spent a lot of time really getting
nowhere during his firstterm with Xi Jinping, right?
Yeah, I mean, we were on the cusp ofwhat he thought was a fairly good

(43:56):
deal in May of 2019 where fundamentallyhad the Chinese sort of pursued that deal.
That deal was essentially that Chinaconduct the reforms that the Chinese had
announced in November of 2013 atthe Third Plan 18th Party Congress, right?
The reason why that wasthose were Leo he's reforms.

(44:17):
Xi Jinping rejected those, those wereAmerican changes, the United States
wanted China to fulfill its commitmentsthat it made to the world years before.

Yeah, it was the last gasp effort by Liu.
He was a kind of a type effort to getthe international community to help
the reformers put pressure onthe leaders to do the right thing.

I suspect that on the American side that hasn't been forgotten.
Right.Like that would be like the absolute
minimum to start a period for us to beable to feel that there's enough trust for
us to be able to haveany other discussions.

Well, we know that's not going anywhere.

Exactly.

So that, that just sounds like one long four year stalemate
to me, but.
Okay, let's talk,>> Matthew Turpin: Which is what
I think is happening.
Okay.

That's my prediction is that fundamentally this is a stalemate.

Okay, well, I guess that's good news for
Taiwan because underneath everything yousaid, it sounded to me like you're not
100% certain that we couldn'ttrade away Taiwan in the future.
If President Trump believed thatChina would adhere to its agreements.
But I'm not gonna pushyou anymore on that.
I'm just the subtextof what you're saying.
So Russia, you know, big play with Russia.

(45:29):
This whole idea ofa reverse case Kissinger,
do you think that is what theadministration is trying to accomplish?
Do you think it's feasible thathe could split Russia from China?

So, I mean, I think it is.
It's certainly something that,you know, folks like Steve Bannon and
others coming into the administrationback in 2017 had in mind, right.
That fundamentally,that if you allowed Beijing and
Moscow to become closer andcloser partners and
the United States had relatively weak anddivided European partners,

(46:04):
and you had other countries that weren'treally capable of standing up and
being a partner with the United States,that if you're talking about a great
power triangle, it's a really badposition for the United States to be in.
Is the odd man out that fundamentally youneed to sort of work your way out of that.

(46:24):
And sothat leaves you with sort of two options.
Do you pull the Chineseaway from the Russians or
do you pull the Russians awayfrom the Chinese, right?
Obviously, the approach that Nixon and
Kissinger took is that you focus onthe weaker of the two because then you can
offer them things in terms of compromiseswhich then sets them against the other.

(46:46):
Now, of course, when Nixon andKissinger did this,
you already had had a Sino Soviet split,right.

You had an interested party [LAUGH], yeah.

Right, and so the Adam interested part.
But, but again, I mean,you know, you know,
it is not a given that withinthe sort of communist bloc that
they would necessarily turn on eachother to side with the United States.
Right.So, I mean, it was a, it was a bit of a,
there was a bit of a challenge there tofigure out how to, how to bring, you know,
so Kissinger and Nixon deserve some creditthere to figure out how to get that done.

(47:16):
And so I think, I think I've written that.
I think the likelihood of itssuccess is relatively low, but
it is sort of the best ofthe worst options, right?
So right now, I think for the UnitedStates, we don't have many good options,
geopolitical options, Right.
So we don't like this situation wherethe war in Ukraine continues on and

(47:40):
we continue to have the threats ofexpansion and both horizontal and
vertically in terms ofgeographic expansion.
Anybody watching what's been happening inthe Baltic Sea over the last six months
should be deeply concerned, right,that fundamentally we could see
an expansion geographically ofthat conflict against NATO.

(48:02):
And also a vertical escalation in termsof, you know, up to higher weapons and
things like that.
Right.So that there's a danger as that
conflict goes on.
So I suspect that just as Ilaid out Penn Kissinger's,
remarks back in May of 2022 thatfundamentally, at some point in time,
we're going to have to try and figureout to bring this conflict to an end.
We don't want this to continue on.

(48:23):
And that at that point in time,it is not as if Beijing and
Moscow are permanent and perfectly alignedallies that have identical interests.
They have differences.
There are things you can pull on.
And so it is certainly not impossible forthat to happen.

(48:44):
It is going to be difficult.
It will require real effort tobe able to make that happen.
But my sense is that they're reallyaren't too many other better options.
Some things that could havehappened that maybe would have
gotten us to a better position is, I mean,
had our European allies taken Februaryof 2022 much more seriously and

(49:07):
actually had gotten themselves intoa much better defensive position today
than where they were, than where they are,this might be a little bit easier.
Like, there might be a.
There might be some other optionsto this that, that isn't.
That didn't happen.
Right.And it's unclear whether that will.
Maybe Chancellor soon to be ChancellorMertz will be able to do that in Germany.

(49:33):
But I think there's a lot of questionmarks about whether or not the Germans can
actually make that happen, andwhether or not the Europeans can bring
themselves together in a united fashion tobe able to sort of strengthen themselves.
So I'm, I'm deeply concerned about that.
And then on the other side,you know, unfortunately,
we don't have particularlystrong allies in other places.

(49:57):
Right.
Yeah, certainly, I think we're deeplyaligned with the Japanese, but
they don't have kind of the scale.
And we should be very honest.
We've got real politicaluncertainty in Tokyo.
Prime Minister Ishiba is not ina particularly strong position.
You know, once Prime Minister Abewas assassinated in the summer of,

(50:20):
what, 2322, it's.
It's been hard forthe Japanese to put together, really,
a leadership team that can reallysort of lead on that side.
And so the United States,I think, is, is a bit stuck, and
it has to figure out whatare the other options.
And so again, I, I don't think it'sthis is not the first, this is not
the option I would choose, but it'sprobably an option that is plausible and

(50:43):
it really has to do then with whatcan actually get negotiated, right?
So it remains to be seen.
The one thing I would say is that,you know, if, if the outcome is,
is that the United States is going todo a degree of a compromise on Ukraine.
That's something that the United Statescan negotiate with Moscow in ways that

(51:04):
Moscow can't get that from Beijing.
Right.So if that's what Putin really wants,
that is somethingthe United States can negotiate on.
And I mean, it's unfortunate,but that is sort of the,
that's the reality of how it looks.
And that could create a situation wherethe United States is able to do some
things and that would be reallyproblematic for Beijing.
And I think that it's fun.
It's one of their fundamental fearsis being sort of isolated in this,

(51:28):
which may bring us to a position wherewe can have a, a real negotiation with
Beijing about, you know, how much dothey push on countries around them and
act in ways that are disruptiveto a global system.

Okay, I put the odds of that happening.
I don't know if there's a numberless than zero in an odd.
I'd put it there.
But let's reconvene in a few months,Matt, because in fact I didn't
get to ask you most of the questionsaround economic security and
technology that you are sofluent and so good in.

(52:04):
So I want to have you back forthat whole second discussion.

I look forward to it.

And we can then assess, you know, what's,
what's transpired.

It deserves a close watch.
I think there is, there is,there is no guarantee, but
it appears that that is whatthe administration is trying to do.

Agreed.
That is what they are trying to do.
Okay.I always finish up with a couple of quick
questions questions justto get your take first.
What would be your must read book orarticle on China that you would recommend?

I really like Xi Jinping thought
Stephen Zhang and,>> Elizabeth Economy: Love that book.
Yes, >> Elizabeth Economy
I think, I think they did a really good job with.
Yeah, they've sourced it really well andI'm really impressed.

(53:03):
I have on my deskKevin Rudd's book on it too.
I suspect that one is equally good.
I just have not made it through it yet,unfortunately.

Yeah, you can read my review of it in the next issue of 4.

Excellent.

It is a great book.
But as I say, it's not forthe faint of heart.

Yeah, well,
I am a bit of geek on these things, so,>> Elizabeth Economy: You can definitely
make it through.
Yeah.

Okay, so Steve John's book, 100% agree.
What China issue.
Do you think we don't know enoughabout what's studied in our field?

Yeah, you know, yeah, my sense is that,
that, you know, there is a lot that
said that we don't understand.
I actually think we do understandChina relatively well.
I think we have an understanding of their,of their system.

(54:00):
I think we have to lookat it through a lens of,
of sort of a Leninist political system and
sort of get back to this knowledgeof how do Leninist systems operate.
Right.You know, and
this goes back to the book theOrganizational Weapon, sort of written in
the 1950s that sort of examines howLeninist political systems operate.

(54:20):
Like what is the way,how do they use organization,
how do they use party structuresto get things accomplished?
And I think that would provideus a lot more insight into,
into how Xi Jinping issetting up the party.
Now that, that wasn't the case.
15 years ago.
Right.
Because we were living in,under sort of a different China.

(54:41):
But I think Xi Jinping has definitelymoved the party in that direction.
Right.He's moved it to a much more sort of
political Leninism than,than what it was before.
And those are, that's, that's terminologythat many of us thought we should have
flushed out, you know, four decades agoand we didn't have to worry about anymore.

Okay, last one.
On a scale of 1 to 10,with 10 being the highest likelihood,
what are the odds not ofa reverse Kissinger, but
of a Nixon Mao moment in the US Chinarelationship within the next decade?

I think it's so one being the least likely.

One being the least likely.

Yeah, it's, it's probably a one or two, and I think it's,
it's the d, it's just sort ofthe dynamics of, of sort of the, the,
the sort of the geopolitical landscape.
Again, we made that agreement becausethey were the lesser of the rivals.
And so, you know,

(55:45):
you don't make those kinds ofagreements with your primary rival.
So I, I, I think it's, I think it'sunlikely because I think from both
the United States and, and the prc,each thinks that it needs to get itself
in a position, you know, to,to gain an advantage over the other.
And so it's unlikely that we're goingto come to some sort of grand bargain.

Maybe we'll have a Massive shift in leadership in the PRC.
That will surprise us maybe.

I mean, obviously Xi Jinping will not live forever.
Right.

That we can count, yes.

That's right.
And in leadership transitions,
there are always opportunitiesto figure out what can be done.
And I think certainly the PRC understandsthat about the United States.
It starts off each, in many ways,
it starts each new administration offwith looking for ways to change things.
And we should look at it the same way.
We just haven't had that now forwhat, a dozen years?

Right, right.
And we are probably not going tohave it for another seven or so.
So.>> Matthew Turpin: Right.
So no, I mean, he's in his early 70s.
Right.
Statistically, we're getting intothose ranges where, you know, there,
there is, there is a non zero chance that,that this, you know,
he passes away naturallyin the next few years.

(57:02):
I don't, I don't know, Matt.
You know, he'll be, he'll be, you know,
78 at the end of his,of a fourth five year term.
And you know, that's like, that's young.
For, you know, for today's leaders.

That's young.

Spring chicken.

But again, he's loved in a society where there's
probably a lot of smoking and,you can imagine.
I mean, it, it is certainly possible.
I mean, look,it just happened to his old premiere.

That was very sad.
Actually, there were one person I wouldhave liked to have seen lead the country
instead of Xi Jinping,it would have been Li Keqiang.
On that note, let me thank you so much fortaking the time to speak with us.
I think it was a really rich andsubstantive discussion,
gave an enormous amount of food forthought.

(57:53):
So thank you and I hope you'llcome back on in another four or
five months to do an assessment ofwhat we got right, what we got wrong.

Yep. And
I could certainly be wrong in all of this,so thank you, Liz.
I really appreciate it.

If you enjoyed this podcast and want to hear more reasoned
discourse and debate on China, I encourageyou to subscribe to China Considered via
The Hoover Institution YouTube channel orpodcast platform of your choice.

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