US Secretary of Defence Pete Hegseth has headed to Asia after fallout from war plans conversations being leaked through the Signal app.
The visit comes at a difficult time in US-Japanese relations after his boss, President Donald Trump, imposed tariffs on Japan.
Asia Business Correspondent Peter Lewis talks to Ryan Bridge about the trip, BYD overtaking Tesla, and subsidies in China.
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Speaker 1 (00:00):
Praying Bridge, Peter Lewis, who's that Asia Business correspondent, Peter Good, Evening.
Speaker 2 (00:06):
These things are either good evening.
Speaker 1 (00:09):
Peter Good to have you on the show. Let's start
with BYD because anywhere you go in New Zealand you
will see one of these cars and their sales have
now reached a bit of a milestone one hundred billion
dollars for the first time.
Speaker 2 (00:23):
Yes, exactually sales top to one hundred billion dollars. Not
only is that a nice round number, but it's also
significant because they've now leaped frog Tesla, which is suffering
a bit of a backlash at the moment because of
Elon Musk's role in the in the Trump administration. Now,
the Tesla only makes the electric cars. But you know,
(00:44):
if you take BYD's evs, they're about the same number
now as Tesla. If you include China, by BYD's hybrid cars,
which are very popular in China, It's sold a record
four point three million vehicles globally in twenty twenty four. Now,
the reason for this, a lot of people will say, well,
(01:04):
there's a lot of shenanigans going on, lots of state
support for Chinese EV manufacturers, which has been true. But nevertheless,
the BYD car product and Chinese eb makers in general,
their product is absolutely superb. If you ever sit in
aside one of these cars, sometimes you feel like you're
not in the motor vehicle, you're in a time machine.
(01:25):
They've got all the latest gadgets in it, and in fact,
you know BYD is putting in its latest models all
its latest features, like for example, that tree that charges
in five minutes and gives you about five hundred kilometer range,
so almost as quick as just filling up your car
with petrol. It's got all the latest AI features. It's
(01:48):
got a feature called Godzi, which is like a sort
of a semi automated driving system. And this car, the
latest model that it's just released at the weekend, only
costs sixteen and a half thousand US dollars. So when
you hear of Donald Trump putting tariffs on cars into
(02:10):
the US, you can only think that, actually, all it's
going to do is make it worse for the US
car industry. Not only is it going to push up prices,
but you know, the US has lost the battle already
with the Chinese makers for electric vehicles. It lost the
battle a long time ago for smaller vehicles because they're
imported films like South Korea's Kia Motors and key On Dai.
(02:36):
Really where it makes its money is in large gas
guzzlers and pickup trucks, which are hardly the future of
the auto industry.
Speaker 1 (02:45):
Yeah, and these terrorifts, I mean, I know that some
think that they're going to be the savior, but also
many people, including some working for those very companies, don't. Now,
let's talk about these subsidies in China. This is fascinating.
So they already we have quite a large subsidy program
over in China, but they're looking at extending these to
some leisure areas, that's right.
Speaker 2 (03:09):
I mean they're trading program, which they introduced about a
year or so ago, was to try and boost spending,
to get the consumers to open their wallets and spend
and boost the economy. So you could trade in mobile phones, cars,
other gadgets for a new product at a good price
within a certain period of time, So trading your old
(03:30):
fe and you. They're now talking about including services in that.
They're talking about travel, tourism, sports again to try and
get people to spend because consumption is still nowhere near
the level it needs to be, and there's certainly nowhere
near consumer spending the sort of levels that you see
(03:51):
in other economies. In the US, for example, it's about
seventy five percent of GDP. In China, it's only about
forty percent, so lots of room to expand consumer spending.
The problem and the reason why they're struggling, it's just
a lack of confidence in the economy at the moment
amongst Chinese households, they're worried about losing their jobs. You've
(04:15):
had employment is close to a record high, over twenty percent.
There's no real social support scheme if you lose your
job or if you get sick, so people rather save
their money than spend it. So this is the ongoing
battle that China has to try and get households to
spend more, not just on goods now, but also on
(04:37):
services as well.
Speaker 1 (04:38):
Fascinating now, Pete Hinseth, he'd be happy to be out
of the States at the moment after the whole signal scandal,
and he's hitting to your neck of the woods. He's
hitting to the Indo Pacific as they call it, but
we would probably refer to it as Asia and Tokyo
is on the list.
Speaker 2 (04:55):
That's right, is in the Philippines at the moments. He's
going to Tokyo this weekend. This is coming at a
very difficult time in US Japanese relations. Firstly because the
US has slapped tariffs on Japan on its auto vehicles,
and it was hoping to get some exemptions from that,
(05:15):
because actually Japanese tariffs are lower than US tariffs when
it comes to auto's but they haven't obviously succeeded. They
spend a lot of time trying to lobby Donald Trump,
Prime Minister Shiga Wins over to Washington. None of that
appears to have worked. And now this visit by Pete
hege Haig said is coming when Donald Trump has questioned
(05:40):
the security arrangement between the US and Japan. Now he
says that the US is obliged to support Japan and
defend Japan, but Japan's not obliged to defend it back.
And he says, you know who on Earth makes these deals?
What the answer is, It's the US that makes those deals,
because it was the US who imposed the pacifist Clause
(06:05):
in the Constitution after the Second World War. Dwight the
Eisenhower further expanded that in the nineteen sixties. So Japan
traditionally has had a very pacifist approach. It doesn't spend
much money on defense, doesn't have nuclear weapons. But you know,
(06:25):
it sounds like Donald Trump is going to shake up
all of this, just like he's shaking up the relationship
with the EU and with Canada and expecting some sort
of trade deal and some sort of deal that's going
to get Japan to spend more money on its own defense.
Speaker 1 (06:39):
I suppose that was an inevitable thing to happen. Let's
just hope he doesn't shake until it breaks, you know,
like he hasn't some other areas of the world. Appreciate
your time as always, Peter Lewis, who's our Asia business correspondent.
Speaker 2 (06:53):
For more from Hither Duplessy Allen Drive, listen live to
news talks. It'd be from four pm weekdays of the
podcast on iHeartRadio.
Praying Bridge, Peter Lewis, who's that Asia Business correspondent, Peter Good, Evening.
Speaker 2 (00:06):
These things are either good evening.
Speaker 1 (00:09):
Peter Good to have you on the show. Let's start
with BYD because anywhere you go in New Zealand you
will see one of these cars and their sales have
now reached a bit of a milestone one hundred billion
dollars for the first time.
Speaker 2 (00:23):
Yes, exactually sales top to one hundred billion dollars. Not
only is that a nice round number, but it's also
significant because they've now leaped frog Tesla, which is suffering
a bit of a backlash at the moment because of
Elon Musk's role in the in the Trump administration. Now,
the Tesla only makes the electric cars. But you know,
(00:44):
if you take BYD's evs, they're about the same number
now as Tesla. If you include China, by BYD's hybrid cars,
which are very popular in China, It's sold a record
four point three million vehicles globally in twenty twenty four. Now,
the reason for this, a lot of people will say, well,
(01:04):
there's a lot of shenanigans going on, lots of state
support for Chinese EV manufacturers, which has been true. But nevertheless,
the BYD car product and Chinese eb makers in general,
their product is absolutely superb. If you ever sit in
aside one of these cars, sometimes you feel like you're
not in the motor vehicle, you're in a time machine.
(01:25):
They've got all the latest gadgets in it, and in fact,
you know BYD is putting in its latest models all
its latest features, like for example, that tree that charges
in five minutes and gives you about five hundred kilometer range,
so almost as quick as just filling up your car
with petrol. It's got all the latest AI features. It's
(01:48):
got a feature called Godzi, which is like a sort
of a semi automated driving system. And this car, the
latest model that it's just released at the weekend, only
costs sixteen and a half thousand US dollars. So when
you hear of Donald Trump putting tariffs on cars into
(02:10):
the US, you can only think that, actually, all it's
going to do is make it worse for the US
car industry. Not only is it going to push up prices,
but you know, the US has lost the battle already
with the Chinese makers for electric vehicles. It lost the
battle a long time ago for smaller vehicles because they're
imported films like South Korea's Kia Motors and key On Dai.
(02:36):
Really where it makes its money is in large gas
guzzlers and pickup trucks, which are hardly the future of
the auto industry.
Speaker 1 (02:45):
Yeah, and these terrorifts, I mean, I know that some
think that they're going to be the savior, but also
many people, including some working for those very companies, don't. Now,
let's talk about these subsidies in China. This is fascinating.
So they already we have quite a large subsidy program
over in China, but they're looking at extending these to
some leisure areas, that's right.
Speaker 2 (03:09):
I mean they're trading program, which they introduced about a
year or so ago, was to try and boost spending,
to get the consumers to open their wallets and spend
and boost the economy. So you could trade in mobile phones, cars,
other gadgets for a new product at a good price
within a certain period of time, So trading your old
(03:30):
fe and you. They're now talking about including services in that.
They're talking about travel, tourism, sports again to try and
get people to spend because consumption is still nowhere near
the level it needs to be, and there's certainly nowhere
near consumer spending the sort of levels that you see
(03:51):
in other economies. In the US, for example, it's about
seventy five percent of GDP. In China, it's only about
forty percent, so lots of room to expand consumer spending.
The problem and the reason why they're struggling, it's just
a lack of confidence in the economy at the moment
amongst Chinese households, they're worried about losing their jobs. You've
(04:15):
had employment is close to a record high, over twenty percent.
There's no real social support scheme if you lose your
job or if you get sick, so people rather save
their money than spend it. So this is the ongoing
battle that China has to try and get households to
spend more, not just on goods now, but also on
(04:37):
services as well.
Speaker 1 (04:38):
Fascinating now, Pete Hinseth, he'd be happy to be out
of the States at the moment after the whole signal scandal,
and he's hitting to your neck of the woods. He's
hitting to the Indo Pacific as they call it, but
we would probably refer to it as Asia and Tokyo
is on the list.
Speaker 2 (04:55):
That's right, is in the Philippines at the moments. He's
going to Tokyo this weekend. This is coming at a
very difficult time in US Japanese relations. Firstly because the
US has slapped tariffs on Japan on its auto vehicles,
and it was hoping to get some exemptions from that,
(05:15):
because actually Japanese tariffs are lower than US tariffs when
it comes to auto's but they haven't obviously succeeded. They
spend a lot of time trying to lobby Donald Trump,
Prime Minister Shiga Wins over to Washington. None of that
appears to have worked. And now this visit by Pete
hege Haig said is coming when Donald Trump has questioned
(05:40):
the security arrangement between the US and Japan. Now he
says that the US is obliged to support Japan and
defend Japan, but Japan's not obliged to defend it back.
And he says, you know who on Earth makes these deals?
What the answer is, It's the US that makes those deals,
because it was the US who imposed the pacifist Clause
(06:05):
in the Constitution after the Second World War. Dwight the
Eisenhower further expanded that in the nineteen sixties. So Japan
traditionally has had a very pacifist approach. It doesn't spend
much money on defense, doesn't have nuclear weapons. But you know,
(06:25):
it sounds like Donald Trump is going to shake up
all of this, just like he's shaking up the relationship
with the EU and with Canada and expecting some sort
of trade deal and some sort of deal that's going
to get Japan to spend more money on its own defense.
Speaker 1 (06:39):
I suppose that was an inevitable thing to happen. Let's
just hope he doesn't shake until it breaks, you know,
like he hasn't some other areas of the world. Appreciate
your time as always, Peter Lewis, who's our Asia business correspondent.
Speaker 2 (06:53):
For more from Hither Duplessy Allen Drive, listen live to
news talks. It'd be from four pm weekdays of the
podcast on iHeartRadio.
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