U.S.-China Relations Forum (Full Recording)

hello welcome to the folks center for international business in our fall forum i am karen broshes executive director of the center and we so appreciate your participation in today’s wonderful event the folk center is the hub for global business education research and leadership at the darla moore school of business here at the university of south carolina we pursue the center’s mission with a passion to advance leadership and pioneer ideas to help businesses and communities thrive in a complex interconnected world internationally the moore school partners with 80 of the top business schools in the world to provide our students with unmatched global learning experiences we are the place for innovation and leadership in international business a place for thinking doers and doing thinkers we create connect and collaborate thanks to our partners throughout business government economic development and academia we share ideas and singular insights to address some of the toughest international business challenges and help shape our students to become the next generation of future world-class leaders we have a great audience today of more than 450 participants for what i am sure will be a scintillating presentation and conversation by david feierstein we welcome him not only as our keynote speaker but also as an honor professor who spoke to a class of international business majors and journalism students this morning his experiences gave our students new ways of thinking about globalization that can help shape their future paths and perspectives our deep appreciation to governor and rachel hodges for their generous support of our forum series our partners at ufsc’s school of journalism who share our international commitment my more school colleagues for their expertise and time and to members of our folk center global advisory board who have joined us here today it is my pleasure to introduce you to the dean of the moore school pete bruce to greet you all and welcome our university president bob caslen thank you so much karen for that wonderful introduction and i am so excited to be welcoming over 450 people to this event the moore school is very proud of international business standing and its rankings in both undergraduate and graduate international business education 20 countries as well as the united states involved in this event it’s just the epitome of what we are trying to do in international business and international education i am so looking forward to our speaker who is the sixth in the series of this type that has been introduced by default center and he follows people like a former president of tunisia and bill grouder the founder and ceo of hermitage capital who was involved in the magninsky act to punish russian human rights violators and david just to say that we i think we’ve had russia covered in the last couple of sessions and now we’re getting china covered and thank you so much for joining us this afternoon to tell us about u.s chinese relations it would also be important for me to thank dean tom reichert who i think is on this meeting i know that he was registered but tom thank you so much for introducing us to david and i know that david you spoke to some of our students this morning and little birds have told me that your presentation ran really well and i suspect that this one is going to be even better so thank you so much for joining us may i also thank governor hodges for his incredible support for this event and the six other events that have happened at the fault center at this level uh since 2017 i do want everybody to know that we have almost 200 students attending this event which is really in an alignment with our teaching mission we have four parents which is equally important to know because we want our community to know that parents have access to this sort of event we have 155 organizations represented we have 16 public sector employees we have 12 presidents 12 ceos 33 directors and we also have five deans attending this particular event and when you hear about that you think wow this is an amazing group that have come together equally we have representatives from top corporations in the united states and

elsewhere including boeing volvo google jp morgan chase a range of consulting firms and of course there’s always a risk when you mention names that you miss people but if your name has not been mentioned forgive me karen is already on my back to get out the way and stop talking i did want to say that we have a representatives from the oman investment authority we have members of the chinese mission to the un we have representatives from the sc department of commerce and we even have one representative from the state of connecticut judicial department and one final special guest from the chinese embassy that president bob caslin is going to welcome as soon as i’ve introduced him it’s my delight now to introduce our president bob caslin president kazan is the 29th president of the university of south carolina and he’s been with us for just over a year he is a retired lieutenant general with a long and distinguished military career and he retired from his army responsibilities as the superintendent and president of the u.s military academy at west point and during the time that he was the superintendent the academy was recognized as the number one public college by u.s news and world report and by the forbes magazine along with his degrees from west for his degree from west point he is a graduate of west point he holds a degree in an mba in finance and a masters in industrial engineering i must say that this last year has been challenging for us all but i don’t think it could be more challenging for anybody at this university than president casler and mr president as i said to you when you came and met with our army group a couple of weeks ago you have provided us and are continuing to provide us with a master class in crisis management in the way that you have led our university through these very very difficult times thank you so much sir for being with us tonight this afternoon and uh thank you for being here that’s from me thank you very much peter i appreciate it very much uh what what a incredible dean that we have and i’m going to brag about them just for a second uh thank you very much karen barcias for inviting me to be with all of you today at the folk center forum and thank you to everybody who’s participating in this incredible event today i also want to give special thanks to several special guests uh mr neil bush the founder and chair of the george h.w bush foundation for u.s china relations the first secretary of the chinese embassy to the united states in washington d.c sir please forgive me for my pronunciation it’s the best i’ve rehearsed but thank you so much for being here and it’s an honor to have you with us also today’s guest speaker david feierstein the presidency of the george h.w bush foundation for us and china relations and it’s always a pleasure to welcome governor jim hodges the chair of the folk center sir honored to have you with us this afternoon with the number one undergraduate international business program in the nation and the number one graduate international program international business degree program in the nation it’s always a pleasure and quite frankly very easy to brag about the darling more school of business of which dean peter bruce is the dean of so uh if they’re an incredible school the more school students and the faculty are literally changing the world the folk center support their incredible work through important perspectives programs and we very much enjoy the partnership with you all the poke center forum provides an important opportunity for sharing conversation about the world and the intersection of education and the global marketplace and with that again welcome to the university of south carolina everyone thank you for having me and enjoy this excellent dialogue thank you very much thank you president caslin and we are delighted you could join us today please now welcome governor jim hodges who is chair of our global advisory board of the folk center for international business and former governor of south carolina jim karen how are you good to be with you today and uh certainly thanks to peter bruce and to bob caslen to great ambassadors for our university and karen to you as well for putting this event together really excited to hear uh david feierstein today i he he is well regarded as a china scholar a very thoughtful person someone who has much to tell us today and we’re very pleased to have him from austin texas joining us virtually in this program a couple of words i do want to say if i could first i do chair the folk center board

really excited to do that for a couple of reasons one is it gives me a chance to be engaged with my alma mater i’m both a business school and a law school graduate and also happened to know randy folks he and i are from the same hometown and a big admirer of the work that he has done that continues on with people like jeremy dermot and kendall rolfe and the whole team the international program at the university is is unique in business education i think it’s part of what makes our our alma mater such a special place is the focus on on international edu business education in addition to that as many of you know south carolina is an international state where we have a large percentage of jobs that are the result of foreign direct investment by companies from across the world including china and we’re very excited about that because i think it is a blueprint for how south carolina continues to grow and develop the folk center is involved in talking about that and how we can better ensure that we have outstanding students who can serve international companies across the world and in addition to that how we as a board can be engaged in trying to improve the educational experience that these students have part of that experience for the south carolina business community for the greater south carolina community and for our university is providing stimulating speakers who talk about business and world affairs my wife rachel who i think is somewhere out there in the ethersphere today listening to this but rachel and i began talking a couple years ago about ways that we could uniquely give back to the business school that were consistent with our values and experiences that we had had and and rachel and i agreed that one of the things that we felt was lacking in universities was bringing public affairs people who have been involved in public and civic affairs who have done a diplomacy and who are involved in a number of issues of that level bringing them to campus and having business students who focus on business issues understand the importance of public uh public affairs and of government entities and impacting many of those issues before them and that’s how this program began the rachel and jim hodges forum was trying to bring great speakers onto the campus that we think would be provocative and stimulating and we have such a speaker here today he is speaking on a topic of interest to me i did work for about a five year period in and out of china for a series of clients fascinating area of the world and rachel and i happen to believe as i think the university believes that engaging on issues and having real conversations about important global events is an important part of our education and to not have dialogue and discussion and not to talk about our differences and talk about the future diminishes the educational experiences of our students that is why we’re here today we have an exciting speaker that we’re going to hear from karen gracias will tell you a little bit more about him uh and i look forward to the program karen thank you governor it’s my pleasure to turn the program now to jerry mcdermott professor in the sunoco international business department at the moore school and the faculty director of the folk center jerry thank you karen and thanks to everybody here today uh before i introduce our speaker i would just like to say a few things as you may have already remember heard the ground rules basically on zoom are that we ask you to keep your audio muted and your video muted and if you have any questions or comments please send them via the chat to only to me the moderator okay and that was easy enough to find there i will then channel your questions and comments to our speaker as they come in uh our speaker will uh present for about 45 minutes and then we’ll have an open q and a session i also want to give a shout out of course as we mentioned before to our wonderful partners at the school of journalism and mass communications who really without them this would never have happened so we’re infinitely uh grateful to them to i see a many members of our folk center board out there my mib class some wonderful undergraduates and of course my colleagues but now for the main event you know the folk center of international business the ib department in general have built their reputation as leaders in international business really through a interdisciplinary approach to analyzing business around the world

and as you all know any good strategy cannot begin without a careful understanding of the business environment you are in or you’re entering the knowledge that david firestein brings to us essentially sets the foundation upon which one would assess future risks and opportunities in broader asia especially china and also for us industries abroad david feierstein is the inaugural president and ceo of the george h w bush foundation for u.s china relations and founding member of the board of directors he has served our country as a long-time decorated us diplomat international leader and advisor expert in russian affairs asian geopolitics and of course in china we are deeply honored to have him here today he’s a native of austin texas where he’s based indeed he has previously played large roles at his alma mater the university of texas austin where he was the founding executive director of the china public policy center and was a member of the university faculty of particular note he is one of the few americans who is concurrently affiliated with two u.s presidential legacy entities the bush china foundation of course and the lbj school of public affairs where he serves on the dean’s advisory council among the honors he garnered during his diplomatic career were the secretary of state’s award for public outreach and that linguist of the year award he’s been recognized as quote one of the world’s best non-native speakers of mandarin chinese and early in his career he interpreted for dozens of top-level us and chinese officials not to mention that he also speaks fluent russia in the years since he left the state department mr firestein has produced influential capitol hill testimony thought leadership and scholarship on a wide range of international issues please welcome david firesty david the floor is yours so to speak jerry thank you so much for the very gracious introduction i don’t think it could have been any more gracious if i had written it myself i’m so grateful for your warm welcome i want to thank karen of course for her instrumental role in making this possible dean bruce president caslin governor hodges mrs hodges it is such an honor for me to be with all of you virtually via zoom and to be able to speak about a topic that is so important for our country and i think in one way or another for all of us i only wish that i could be there with you in person i very much hope uh to be able to do that in the future uh but for now it is really a delight to be with all of you via zoom let me just say at the outset that today is october 1st for those of you who are from china and who celebrate the chinese national day which is today i want to extend my warm wishes and greetings for a happy national day for the people’s republic of china today is china’s 71st birthday so i want to extend those greetings to our friends from china and as well i would like to extend warm greetings on the occasion of the mid-autumn festival which happens to coincide this year uh with china’s national day to my friends at the university of south carolina i want to extend a different type of greeting and i want to say something as we are here in presidential season in this country with about 34 days to go before the presidential election i want to say something that no candidate for president in his or her right mind would ever say and that’s the following words go south carolina beat florida when you play number three ranking florida this saturday that is going to be a tough game i have to say i am a fan of uh gamecock football i follow the gamecocks i looked at your schedule for this season and i noted that in the 10 game season that you have you’re playing 10 teams in the top 23 and you know you have a tough season when lsu is the fourth ranking team that you’re playing out of those 10 uh it is incredible i wish you the best uh on saturday against a very tough florida team and i wish you the best in a very

difficult season that you’ve got ahead of you and let me just say spurs up y’all let’s get this done on saturday and best wishes to coach muschamp and gamecock nation now let me um get into uh the subject matter at hand and i see some thumbs up on the screen here which is the next best thing to seeing actual real life smiling faces uh but i know that the spirit is there um before i get into the topic matter at hand and i want to be cognizant of the time because i want to leave plenty of time for your questions and comments and for a good discussion starting at the top of the hour before that let me just say a few words about the george h.w bush foundation for u.s china relations the george h.w bush foundation for u.s general relations has a very simple mission to advance the u.s china relationship in ways that reflect the ethos spirit and values of president george h.w bush no u.s president ever came into office with a deeper understanding of china than president bush just unquestionably he had lived there for about 15 months as our u.s envoy to china prior to normalization and he brought with him to the oval office a very deep and textured understanding of china if i were to summarize president bush’s vision and thinking on china in just two sentences i would say this president bush believed that the u.s china relationship is the single most consequential relationship uh bilateral relationship in the world and number two that virtually no global challenge can be solved in the absence of constructive collaboration between the united states and china and it’s with those values in mind that we carry forward very proudly and frankly very humbly the extraordinary legacy of president george h.w bush one of our greatest sons as a nation one of our greatest public servants one of our truly great presidents one of our great visionaries and we’re very proud to carry forward president bush’s vision for the u.s china relationship um with that said let me uh map out what i’d like to do in my remarks today uh first i just want to say uh that i’d like to share a little bit about the u.s china relationship uh to kind of lay uh the backdrop for where things are now and then i want to spend most of the time talking about why things are where they are and what the key issues are and the key areas of contention in the relationship are today certainly from a u.s vantage let’s also recognize right at the outset that one could look at the u.s china relationship from a chinese perspective and probably hear a very different set of remarks and i’m cognizant of that that said i will come at this from an american perspective and share with you my assessment of where we are in the relationship and why we are where we are after that i’ll offer a brief assessment personal or subjective judgment on my part as to um how effective the trump administration policies have been thus far with respect to china and then i’ll offer a few concluding thoughts referencing the 2020 campaign the way china figures into our politics and uh then some some final thoughts before going into q a so uh that’s what i hope to do between uh now and the top of the hour and i’ll try to keep my eye on the clock so that we don’t uh shortchange uh the questions and answers that i very much look forward to at the end of this session um let me just start by talking about the u.s china relationship uh just at a very broad level um the united states china relationship today uh is not what it was a few years ago it is probably at a low point in the modern era relative to uh recent years and decades i think we probably are at the lowest point overall in the relationship since normalization on january 1st 1979 and i think there are a lot of different data points that we could point to to substantiate that assertion uh i just want to mention one of them now because i think it really does make very clear just how dramatically the u.s china relationship has deteriorated in recent years and indeed in recent months and that is that just a couple of months ago the united states saw fit to shut down the chinese consulate general in houston texas and as a tit-for-tat measure china saw fit to shut down the u.s consulate general

in chengdu in the province of sichuan in china also in the southwestern part of china just as the houston consulate general is in the southwestern part of our nation so both consulates have been closed down this is something that i think first of all is illustrative of the degree to which things have deteriorated the closure of consulates is an unprecedented occurrence in the modern history of u.s china relations we have not seen anything like it since the two countries normalized diplomatic relations in 1979 and in fact it is virtually an unprecedented occurrence anywhere in the world and in any time in history when you have two countries that are not at war with each other it is a very unusual thing and it is a very dramatic symbol of the degree to which the relationship and frankly the level of trust between the united states and china has really deteriorated so there are other things that i could say but i think that gives a sense for just how tough things are right now in the relationship what i’d like to do now is to talk about at least from an american perspective the issues that really are front and center in the u.s china relationship at this time and the way that they have affected generally negatively the relationship between the united states and china uh any one of these topics and there’s seven things that i’ll mention briefly probably for about three to four minutes per topic um any one of them could be virtually a graduate course unto itself any one of them could be alone a one hour or five hour lecture but i’ll just try to hit the high points and lay out where i think the sources of friction and tension are in the relationship between the united states and china today let’s start with the big one and also the most recent one and that is coveted 19. covet 19 has had a profound and negative impact on washington’s views of china covet 19 has had a profound and negative impact on how the u.s public views china and i’ll talk a little bit more about that later and kova 19 overall has had a very serious and negative impact on the u.s china relationship itself um there are a lot of things that one could say but since covet 19 reached our shores in late february early march and really became a major issue for the american people in the first or second week of march of this year just over six months ago this issue has done more to take the u.s china relationship to a fundamentally different and worse place than any issue in the modern history of the u.s china relationship the reason for that is because the united states president president trump and advisers around him members of the cabinet and also members of the united states congress disproportionately on the republican side of the aisle have made covet 19 a major talking point as they communicate with america in the world about covet 19 and about china the basic message has been by president trump his advisors and members certain members of congress that china willfully unleashed this quote plague unquote on the united states in an effort to kill americans and in an effort to damage our society and our economy i i don’t accept that interpretation of events i don’t think most americans do either but that is a narrative and an interpretation that has been laid out by the president those close to him and certain members of the united states congress and it has resulted in a stark deterioration in how many americans view china let me know just to be very current that just a couple of nights ago we saw a u.s presidential debate and in that debate president trump stated and used use the words when talking about covet 19 when that topic was raised by the moderator he referred to covet 19 as quote the china plague the china plague unquote those were the words that president trump used to describe what most of us refer to as covid19 um it just gives you a sense for the degree to which uh covet 19 has become a major talking point politically for those seeking to criticize china and to uh make china the culprit in the tragic loss of over 200 000 american lives and of course the devastating hit to the u.s economy that all of us have seen and experienced over the last six months um so

covet 19 has been a game changer in the u.s china relationship and it continues to resonate and i’ll come back to the ways that uh that this game-changing impact has been manifested but before i do i want to make just one more point about covet 19 before i turn to the other topics briefly and that is this covet 19 was in my judgment not well handled in its earliest stages by the chinese government i think china botched and bungled its early response to covet 19 and i have said that publicly and on the record in english and in chinese and in the chinese media in the chinese language so i’m on record saying i think china badly mishandled or made significant mistakes in handling the kovid 19 crisis at the outset mainly by not revealing as quickly as they could or should have the deadliness of the disease and not doing so nearly as quickly and expeditiously as they could as they could and should have to warn others both in china and outside china i’m on the record having said that i do want to point out that the trump administration and other critics in this country have said largely the same things for the most part in somewhat harsher terms and with harsher language in many cases unscientific language such as by referencing quote the china plague or quote the china virus but i also want to say and i think it needs to be said uh just in the interest of being speaking factually that the u.s criticism of china that china knew that this was a deadly virus and didn’t tell anyone about that didn’t share that um is rendered that criticism is rendered is neutralized i would say by the revelation that president trump himself is on audiotape stating to bob woodward that he knew the virus was deadly and he chose not to share that information with the american people as he put it so as to not panic the american people i don’t want to sit in judgment of that statement for any other reason than to make this point it is very difficult to criticize another country for a behavior that the president of your own country has admitted on tape that he has engaged in and so whatever credibility the united states generally has had in critiquing china’s early response to covet 19 has taken a very devastating hit by that revelation let me talk a little bit about the hong kong issue for a number of years now on and off and especially over the last year and a half or so there have been very significant street demonstrations in the city of hong kong there have been hundreds and hundreds of thousands of people on the streets at various points protesting one thing or another expressing uh dissatisfaction discontent about various issues in hong kong everything from housing prices and the economy to political issues issues of jurisprudence and the law and there has certainly been uh an outpouring of popular protests in hong kong in recent years and especially over the last year plus almost a year and a half in response to that china has china which of which hong kong is a part albeit in a very special status as a as a kind of special administrative region uh hong kong now has had put in place a law called the national security law that basically criminalizes among other things certain types of statements that individuals might make that relate to the concepts of treason sedition uh sabotaging the social system or the political order or other types of related activities including for example terrorist uh incitement to terrorism and various other uh issues what the law does is it makes uh it it turns into a criminal offense certain types of speech among other types of activity and speech that in our country in the united states would be protected by the first amendment and here we are not talking about incitements to violence or yelling fire in a crowded movie theater but other essentially political statements that would be protected in our country under the first amendment are now subject to criminal prosecution in hong kong i have said a number of times publicly that i think there are major problems with this law and the main problem is that most of the definitions are very unclear they’re very vague and thus what it is that one might say that could trigger prosecution criminal prosecution under

the terms of the law is unclear in many cases and that obviously has a chilling effect in terms of free speech in hong kong which has generally been protected over the years under hong kong’s special system the other major problem that i see with the law and that i think any person outside of china or outside of hong kong would see with it is that china is seeking to extend extra territorial jurisdictional reach to the entire world so that if somebody in the great state of south carolina stood up in the city of colombia or charleston and made a statement about hong kong that the chinese legal authorities judged to be criminal and a violation of the national security law that technically china is reserving the right and it states this explicitly in the law to issue an arrest warrant for an american citizen speaking in colombia south carolina i think that is immensely problematic that’s something that even we don’t do uh let alone most other countries in the world uh to say that something that you say overseas could subject you to criminal liability and i think that’s an audacious uh overreach in my opinion with respect to the attempted jurisdictional reach and so there are problems with the law as a result the united states has sanctioned those that it judges were involved in creating and crafting and implementing the law and has also taken other measures uh relative to hong kong some of which i think may have the unintended consequence of hurting the good people of hong kong who are not the ones responsible for this law going on the books but nevertheless there has been a series of actions that the united states has taken in response and so hong kong has become a significant flashpoint in the u.s china relationship let me move on to the topic of trade i’ll try to be brief on these again much could be said all of us know that uh the trade issue u.s china trade has be has been a major league issue in the u.s china relationship uh for a long time but particularly dating back to the spring of 2018 when donald trump initiated what is now generally referred to as the trade war with china by adopting and levying tariffs on an increasingly large swath of chinese imports into the united states i’ll come back to the topic of tariffs and how effective or ineffective those policies have been later but here what i want to say is that the trump administration has seen fit to levy tariffs which are taxes by the way uh on american importers of uh chinese goods basically across the board so hundreds of billions of dollars worth of chinese imports have been subjected to tariffs and the idea on the part of the trump administration is to try to put pressure on china to make the playing field more level to generate greater symmetry in the u.s china trade and investment relationship and business relationship and basically to create a fairer operating environment i think all of those are very good goals i think all of those are very legitimate goals for the united states but what i would say and i’ll come back to this later is that i think the trump administration has correctly diagnosed the problem as did previous administrations but i think that the trump administration for reasons that i’ll explain shortly has issued a prescription for the wrong medicine to resolve the problem and i’ll elaborate on that shortly but suffice it to say for purposes here that the trade relationship is front and center in the u.s china relationship and is a major major issue that continues to be contentious let me also note that in january of this year the united states and china theoretically made met and came to an agreement an agreement referred to as the trade as the phase one trade deal between the united states and china many people myself included were skeptical that that phase one trade deal was going to really have any discernible impact on the the major issues that were laid out and many of those issues are real and by the way china has played unfairly with respect to trade in its dealings with the united states no question about that but uh many were skeptical that that deal would resolve those issues that being said covid19 essentially blew the deal out of the water uh and now it’s uh kind of in a in stagnation uh until such time as probably covet 19 is worked through and until such time in all likelihood that we get past the u.s election so that there is a political environment in this country one way or the other that meaningful discussions on trade can

continue and can resume but trade remains a very serious issue in the relationship i’ll come back to that in a minute to cite some data that talks about looking at the effectiveness of trump policies the fourth area i want to mention having talked about covet 19 hong kong and trade is technology i’ll just be brief when we talk about u.s china competition i think what most people really are talking about in the most immediate sense is the competition around technology both the united states and china are seeking to become or in the case of the united states to remain the preeminent technology superpower that the world has ever known china seeks to become a technology superpower and so there is a tension between the united states and and china and the two countries ambitions when it comes to exerting primacy or attaining primacy in the technological sphere there is a real competition there let me also say at this juncture that both with respect to technology but also with respect to a set of issues that’s broader than technology china is the most formidable national competitor that the united states will ever face in the lifetime of every american who is living and breathing today including an infant born in colombia today as we speak in that infant’s lifetime uh china will be the most formidable national competitor to our nation uh bar none and that is absolutely true technology is one of the spheres where that is playing out and there’s a very intense competition between the united states and china to get to the top and to be essentially the technology superpower of the world this revolves around issues like artificial intelligence quantum physics advanced robotics 5g and telecommunications infrastructure and a host of other issues this issue remains very contentious and again much more we could say about it but it is one of the trust drainers in the u.s china relationship let me speak briefly about military and security issues military and security issues remain an ongoing source of friction in the u.s china dialogue or the u.s china relationship the united states and china simply have very different views on a set of issues around military and security issues particularly in in asia in east asia in the east asian pacific region and i could give you a couple of salient examples one is obviously the south china sea where china does things that the u.s certainly regards and i think rightly regards as very problematic and where from a chinese perspective it should be noted the united states does things that china believes is problematic that being said i believe that china’s positioning on the issue of the disputed uh merit merit the maritime and territorial disputes in the south china sea is indefensible uh and it’s been judged to be so by the international legal community that being said those issues are outstanding and those issues continue to play out likewise the topic of taiwan remains a very sensitive topic in the in the context of u.s china relations the u.s continues to sell arms to taiwan something that greatly angers the leadership of china which considers taiwan to be a kind of renegade province of china and china takes great issue with u.s sales of arms to taiwan i support u.s arms sales to taiwan i’ve been on capitol hill on that issue and written and spoken about it extensively but it is a trust drainer from the chinese vantage in the u.s china relationship that being said uh for the most part i would say that the military and security issues between the united states and china today are actually relatively i say relatively quiet not that there’s nothing going on but compared to covet 19 compared to hong kong which is an issue the law that i mentioned came on the books in early july so it’s a very current issue and obviously the issues of trade and technology i think all of those outpace um the military set of issues as being uh most sensitive at this particular moment that said those military and security issues remain the last couple of things i want to mention is that a couple of issues that are problematic in the u.s china relationship certainly from a u.s vantage are the notion of china’s so-called quote influence operations unquote in the united states by which people are referring to china’s efforts to inform and influence u.s public opinion

in support of their foreign policies another term for influence operations is public diplomacy every nation in the world engages in public diplomacy including ours i know because i used to do public diplomacy for the u.s department of state when i was a u.s diplomat in every country of any size and with any budget does public diplomacy activities designed to inform and influence public opinion foreign public opinion in support of your foreign policy objectives there are a lot of people in washington that have taken great issue with what they regard as china’s somehow somehow nefarious or inappropriate uh or illegitimate efforts to influence discourse in this country the topic of confucius institutes often comes up in this context but there are other topics that come up as well this is one of the few areas where we look at where i look at the kind of the list the laundry list that the united states have of issues the united states has of issues that are sore points in the relationship and i think this is the area where there is the least evidentiary basis to have the kind of concern that the united states government has expressed whereas with the other areas whether they are with respect to mishandling of covet 19 trade technology and so on there are very legitimate areas where the united states has leveled i think justified criticism of china but i will say with respect to the notion of china’s so-called influence operations the fact is every country seeks to influence foreign public discourse china is no different it uses some different methodologies no one has alleged that china has done anything illegal for one reason they haven’t and the things that china does are basically protected by the united states constitution and probably fall into the category of issues where the solution to the problem would be far worse than the problem we could say more about that but i want to note that the issue of what some regard is china’s quote influence operations otherwise known as public diplomacy in our country is seen as something that is somehow nefarious and problematic though no one in the administration has ever ever put one scintilla of evidence on the public record documenting anything actually improper um so that uh that’s that issue the final issue i want to mention i leave it last for a particular reason kind of to make a point is the issue of human rights and the issue of human rights remains a contentious issue in the u.s china relationship um china’s human rights record is very poor the united states has historically often made critical comments of certain human rights practices in china and human rights as a general issue remains an issue in the relationship and often an area of contention around this issue i want to make a couple of quick points before i transition to kind of start wrapping up and as i try to keep an eye on the time here with respect to human rights one thing i would observe about the trump administration is that the trump administration has actually been very mute on human rights in china specifically it’s probably been the quietest administration on the topic of human rights abuses in china of any u.s administration in history i think that can certainly at the presidential level that is to say all previous presidents spoke more themselves the presidents spoke more about human rights than this president has i don’t think that is even remotely in dispute and i think it’s probably fair to say that this administration and one can judge it rightly or wrongly without making a judgment here this administration has said less about human rights than any other u.s administration probably in history one of the things that i think is is an issue that has come up in recent years since the spring of 2017 shortly after the election of donald trump is the much reported issue of the abuses that are being perpetrated on the uyghur minority the uyghur minority in xinjiang china in the northwest part of the country basically people who are uyghurs who are who are muslims a muslim minority in china an ethnic minority in china are in large numbers being placed in camps that china refers to as vocational training camps but that are often surrounded by barbed wire etc and they’re basically being placed in these camps on a massive scale a scale that we’ve never seen in the modern era in china one thing that i think is not often noted but that perhaps should be noted is that this action on china’s part did not begin until donald trump took

office as president of the united states and i think that’s just a very interesting data point that’s a factual data point that’s not an expression of an opinion this didn’t start until the spring of 2017 and i think as americans we might want to ask ourselves why why did this start very shortly after donald trump became president and i think it points to two things one the d emphasis on human rights in this particular administration and number two that the notion that somehow we’re talking tough to china or being tough on china the notion that that’s making any difference in how they do things i think is emphatically disproven by the empirical fact that this very egregious um violation of rights in western china did not occur until this president came to power didn’t occur under president obama or previous presidents of either party uh though other abuses have occurred all along so i think that we just have to recognize that while some in this country may say they are talking tough the bottom line results are really the things that matter and i think that it’s remarkably telling that this is playing out on this president’s watch let me also just make a couple of other points on the issue of human rights and these are really important points i think for our nation and that is number one um i think it’s really important that when the united when the united states speaks out on human rights as i believe we should and i think as almost all americans believe we should whether it’s in china or anywhere else and by the way let’s make no mistake we have done some terrible things to our own people in this country and let us be humbled by that fact we shouldn’t be sitting in judgment of everyone else as if our own record is perfect i think there are millions and hundreds of millions of americans that have come to the realization that we do we are not a we have not always been angels in this country to our own people and we’re seeing protests play out across this country that are giving voice and expression to that to one facet of that issue so that being said i think that we are most effective when we speak out on human rights about other countries actions when we can bring a certain level of moral credibility to those uh critiques i have to say uh and i think it needs to be said that one of the things that has disappointed me as an american is that we have really lost a lot of ground in terms of our moral credibility on human rights candidly under this president uh and by that let me let me point to two specific things because i i will admit i am old-fashioned i i do believe that when one makes a statement that individual ought to have facts to back up that statement so i’m old-fashioned in that regard but let me offer two data points to substantiate what i just said number one when you have a u.s president who characterizes the united states media as quote enemies of the people unquote enemies of the people unquote how in the world does that president that u.s president then go to china and say we have concerns about media freedom in china it shatters it shatters and destroys our nation’s credibility uh in this regard and it’s been saddening to see the degree to which our credibility on these issues uh has deteriorated in the last three and a half years let me make one other point that’s even more current in the debate a couple of nights ago president trump when offered the opportunity to condemn white supremacy in this country didn’t do it how do you not condemn white supremacy in the united states of america or anywhere that it rears its ugly and despicable head and then go on to criticize china for how it treats its ethnic minorities in western china that level of hypocrisy is devastating for our nation and again and again we’ve seen that play out it is something that i think we need to talk more about in this country because i think our nation should speak out on human rights issues all nations that feel the need to should do so but we need to realize that we can only be effective speaking out on these issues if we have some modicum of credibility on human rights and while we do have some modicum of credibility it is not the same level of credibility that we have had in years past i think that needs to be said let me just make a point now turning uh toward the conclusion of my remarks uh and i may go probably five minutes

longer than i wanted to go i’ll try to be brief here but again there’s a lot that could be said i just want to ask the question how effective have the trump administration policies toward china been for our nation for the united states of america i’m not worried about the impact on china i’m worried about the impact and i’m asking about the impact on the united states well the answer to that question is the policies have done very poorly under let me use the trade area as an example since this is the incredible moore school of business one of the great business schools in this country and the number one international business mba in the world in my in my book um let me focus on business for that reason to because we’re at the moore school um in business and trade here’s the facts here’s the actual empirical facts these facts come from the trump administration this is data that’s publicly available from the trump administration under these policies the tariff policies of this administration the u.s merchandise deficit with china is greater than it’s ever been the average u.s merchandise deficit with china over this presidency is greater than it has ever been in all previous presidencies so it’s not just a one-year phenomenon the average amount of the deficit is in is in excess of all previous presidencies not just year to year the two greatest u.s deficits with the world have been registered by this administration the number one and the number two largest u.s merchandise deficits with the world have occurred on president trump’s watch because of president trump’s policies manufacturing jobs in this country have been lost not gained 230 000 manufacturing jobs are gone relative to january 20th 2017 237 000 fewer jobs in manufacturing in south carolina and across the country today than there were on january 20th 2017. farmers are having a devil of a time selling their commodities to china instead the trump administration has offered them a government handout that they don’t want or need to partially displace the income they’ve lost by not being able to sell soybeans and other things to china in other words we’re giving farmers an income they don’t want or need with money that the national treasury doesn’t have pretty good definition of socialism in my book and farmers are up in arms saying we’ve got to have these tariffs in because we are losing the family farm and the list goes on and i might i add another factual data point from this administration from the trump administration is that for the first time in the modern history of america and the first time since normalization in 1979 we now as we sit here have a have an agricultural goods deficit with china when before president trump we had an agricultural goods surplus with china that’s from the trump administration finally all consumers all of us here all of us on this call are paying between 800 and 1500 more per year at walmart and target than we were two years ago it is not a good record for america not a good record for south carolina which exports about 35 billion dollars a year guess who your number one export destination is yes it’s china um i see jerry on i’ll be done during just about two minutes uh i’ll i’ll i’m cognizant of the time uh trade matters to south carolina that’s why the chamber the president of the chamber of commerce of south carolina stood up and said these tariffs are killing us not his exact words but his exact sentiment that’s why chambers all across the country and republic conservative republican governors all across the country have written those same words in open letters to president trump so that so the policies aren’t working and i think the reason i’m cutting parts out here for time the reason they’re not working is because of two things they’re predicated on the wrong assumptions and they’re predicated on falsehoods not facts and i could drill down on that but we are somehow surprised that the policies are not doing what they’re supposed to do i’m not surprised they’re doing exactly what many of us predicted including myself two and a half years ago they are killing american jobs and they are hurting our economy and that’s why we’ve been uh we and outspoken critics of the tariffs per se let me conclude there’s more i could say there’s a major partisan divide around china 20 to 40 points depending on the question with republicans always more harsher on china than democrats i could drill down on that but i won’t hear i just want to conclude by saying i think things are going to get worse before they get better china is going to be a key theme in this presidential election things may or may not change after the election depending on what happens on november 3rd and in the weeks and

months that it may take to sort out what happens on november 3rd but let me say this in conclusion china is as i said earlier the most formidable national competitor that our nation will ever have in the lifetimes of every living breathing american alive today however it is not our enemy it is not our enemy and the grandest strategic blunder that the united states could ever make would be to turn china into an enemy it did not have to be and one of the things that we’re very focused on at the george h w bush foundation for u.s china relations carrying forward the vision of president george h.w bush is doing everything in our power to ensure that the nation that our nation does not see an outcome in which china becomes an enemy that it didn’t have to be with that i want to thank jerry and everyone for this opportunity and i very much look forward to your questions and comments and thank you so much again for this opportunity all right david uh thank you so much this has been a great great talk you covered so many issues with respect to china and china and the us and i am inundated it’s like a hose a fire hose coming at me with questions and comments and let me um let me start with trade where you left off because we’ve got as many questions on trade and i guess the basic and i understand this too i um the basic question that we’re getting here is what would you clearly there’s a problem with the way us and china have developed their trade over the past say 20 to 30 years and the u.s needed to pivot something else and there were different ideas on the table there was the p tpp approach uh there’s the trade war approach there are other things how do you see a potential approach that would work where the you know you’re not block shutting this whole thing down but the us is gaining a a better foothold in that relationship uh jerry it’s a great question uh let me say a couple of things one uh i think the first the first rule of public policy and you know i studied public policy at the master’s level the first rule of public policy is come up with solutions that aren’t worse than the problem what we’ve seen over the last three and a half years failed that test because the solution to the problem has now generated a status quo that is inferior to the status quo ante uh as measured in deficits as measured in jobs as measured in manufacturing in farm data and the list goes on it’s it’s not working well so the first thing that i would say is uh kind of a version of the hippocratic oath but for public policymakers and that is do no further harm and undo the harm that we’ve done to ourselves by making a bad situation uh worse through our own policy choices so getting you know getting rid of the tariffs is not a republican or democratic concept it is an idea that is rooted in the idea that in order for our economy to succeed we need to tax our importers and our consumers less and tariffs are taxes tariffs distort trade tariffs kill jobs and tariffs make things more expensive for all of us so that’s the first thing i would say just to your broader point i would say that um a couple of other things number one let’s sit down and and i could give you a much more detailed answer but i can’t do it right here because of time constraints but let me give you the contours of it jerry and all friends here number one let’s have discrete negotiations that don’t play out over twitter because just stylistically it’s not very effective it boxes people into a corner from the standpoint of their political context and their public opinion context and it ends up being counterproductive for us uh and uh not necessarily conducive to getting better outcomes in negotiations number two let’s not alienate and pick fights with our allies and our trade partners our closest trade partners we ought to be working with japan with south korea with europe and many other nations around the world to collectively put pressure on china in a more discreet way to rectify some of the real asymmetries that do exist there and the practices that in fact are problematic look there are problematic practices there’s no question about it the question is how do you get at those and i think you have to get at them in greater numbers and you ha not rather than unilaterally and i have to i think you have to get at the more surgically

um so those are two of the points that i would make uh three really get rid of the tariffs undo the self-inflicted damage and then work with others in these different ways to actually get at the real issues and i think there is a way to do that but i want to come back to a very key point just to conclude this point i don’t want to go on too long because i want there to be plenty time for questions and that is um we can’t be emotional about these matters of public policy we have to actually look at what the second and third order effects of our policies are and it may feel good to some to say let’s get them let’s put tariffs on them it reminds me of that i think it was a verizon commercial where the rich corporate ceo was sitting behind the desk and his assistant was saying you know talking to him and the guy has the phone and he says i have this great plan from verizon or i guess it was sprint and it’s a great plan and this is my way the corporate ceo this is my way of sticking it to the man and the assistant says but you are the man and the corporate ceo says well yes and the assistant says so you’re sticking it to yourself and the corporate ceo says maybe well that is probably the single best encapsulation of what we’ve done we’ve stuck it to ourselves which is why i call it hurt america first hurt america worst we have to stop doing that as the first step to getting back on track with trade okay so i think you are right one thing we know from international political economy and 70 years of history is that a coalition approach is usually much more stable much more effective when dealing with transnational problems like a trade um many questions of course then for instance about covet and trade how do you understand how do you see this idea of so-called supply chain retrenchment china’s japan has taken active moves other countries taking active booths to rethink their international supply chains what’s going on in china how are china chinese firms going to react are we going to see a decrease in chinese business opportunities or are they going to come up with another counter uh a policy to deal with that well uh it’s a great question let me say a couple of things um i come from a school of thought jury and i would guess that you probably do as well and probably the university of south carolina darla moore’s school of business probably does generally that i accept the concept of comparative advantage i just accept that that is in fact a valid uh economic international economic theory that when you operate on the principle of comparative advantage the pie gets larger we now have a an official washington let’s say the u.s administration plus congress and it’s across party lines to a large degree to be fair that is saying uh but it’s more republican than democrat but it is bipartisan that’s saying let’s now reject the very construct of comparative advantage and let’s try to go back to an autarkic system meaning uh let’s kind of fend for ourselves and not rely on china or others you know a virus could come from anywhere uh and has this one came out of evidently came out of wuhan originally it certainly was first discovered there but it could come out of any number of places and has historically over the history of the world that being said are we going to truly try to shield our supply chains from any exposure to the international world to other markets to other producers to other economic partners be they china or be they allies of the united states or others i don’t think it is a realistic path forward i don’t think it is a a path forward to pro continued prosperity for our country international trade makes the pie bigger for everyone how countries distribute the benefits of that trade in terms of income equality or inequality is an important domestic policy issue that countries need to look at from through the domestic policy prison but the science the the if you will economic science or social science of the matter that i think is uncontested is that the notion of comparative advantage works it creates bigger pies we now have an official washington including the president but also congress that is actually saying to the american people we want the pie to be smaller and secondly we want to distribute the pie more equally even as we rail against quote wall street fat cats

and by the way in the same breath as one is lauding the record-breaking stock market performance but that’s a different irony um well i’ve heard people talk about decreasing the pie and being poor but more equally distributed in terms of wealth that’s from karl marx that’s not what we’ve ever stood for in this country we’ve always stood for increasing the pie and generating efficiency and hopefully through domestic policy making sure that everyone has a stake in that success and that prosperity so i think that um any long-term notion of really fundamentally doing away with global supply chains whether they’re from china in china or anywhere else is a misguided notion but again let me just say what is clear i am a pro business pro growth pro market pro trade uh pro globalization person i’m also pro shareholder pro worker pro farmer pro rancher and pro consumer all of those positions put me at odds with the trump administration right okay so let’s pivot now to a couple of questions about the chinese security policy in the region you already brought this up in the beginning with hong kong so i have a cluster of questions first and they all go together and you could take them as you see you know is the one country two systems viable approach okay that’s one thing you know are we going to see uh basically you know in 10 years hong kong will have been fundamentally changed or do you see some sort of new other path um how long people are asking will taiwan be an independent country if you want to call it that and lastly who is going to stop china on this encroachment on these islands around the south china sea you know we have the spratly island precedence um most people i’m getting lots of lots of feed here that there’s no end in sight so on that order hong kong taiwan and the islands uh thanks jerry again thanks to the the folks that are raising these questions um on hong kong um just to be fairly brief because i want to get to all these questions and more um the national security law episode that has played out over the summer and beca it became law as i mentioned in early july um really dealt a blow uh to uh the notion of one country two systems for anyone that thought before that that one country two systems was going to be palatable either to the people of hong kong or kind of through the hong kong example to the people of taiwan which we’ll talk about that in a second those hopes were dashed by the advent of this law and the implementation of this law which really essentially if i may say makes a mockery of the concept of one country two systems um i don’t think that one country two systems is a viable model in the minds of people in taiwan for taiwan in other words it’s not a viable model for taiwan in the minds of the 23 million people in taiwan and i will just note that historically what i’ve seen is that people in the mainland look at hong kong and they say rhetorically see look how well this works isn’t this what you would like to see our compatriots in taiwan and the people in taiwan look at hong kong and see the same thing and come away with the judgment that is never ever something that we would want to have and that i don’t i think historically my good friends in the mainland have not fully understood how that is seen by the people in taiwan but i am telling you there is no appetite in taiwan for what what exists now in terms of one country two systems with hong kong going to taiwan the topic of taiwan i think taiwan will exist will continue to exist in its current status indefinitely uh and you know i i won’t say permanently but let me just say indefinitely because i think the one thing that is absolutely true is that it would take the mainland uh having to use force to uh militarily subjugate and take over taiwan for taiwan ever to be brought back into the fold in my judgment and i’ve said this publicly i’ve said it in testimony on capitol hill i’ve written about it and i’ve been i’ve spoken about this issue a lot over many years in my judgment the people of taiwan do not want reunification they have a very independent sense of

identity that is quite distinct in a number of very important regards from the sense of identity on the mainland and barring military takeover which i don’t see happening it’s not that there’s not tension around in the cross straight military kind of context but i don’t see it happening certainly anytime in the near future and i don’t think it will happen because the cost of doing it would be very very great probably unacceptable to china barring military takeover i i think taiwan stays as it is for the indefinite future and for decades to come this has been incredibly fascinating discussion with you uh we have a million more questions but it’s like i think we got to do another one when when the covid thing ends we’re going to have you back uh and in person uh it looks like you’re going to have throngs of people interested in meeting you and talking to you but once again really we’re so grateful for your time and your thoughts uh it’s been a wonderful learning experience with you and we hope to see you again and thanks to everybody who has been here and i want to remind our audience to in about a month we’re coming to with uh we’ll have some news out soon we’ll have preston key the head of sovereign risk of ubs talking about the on the upcoming global risks for 2021 so david thanks a lot and you take care thank you spurs up y’all good luck saturday thanks jerry see you all soon