On GZERO World, Ian Bremmer explores the escalating tension between the world's two biggest geopolitical and economic players—the US and China. With guest Zanny Minton Beddoes, Editor-in-Chief of The Economist, Bremmer discusses the modern history of China after the fall of the Soviet Union and why another Cold War might be inevitable.
On the GZERO World Podcast, Ian Bremmer explores the escalating tension between the world's two biggest geopolitical and economic players—the US and China. With guest Zanny Minton Beddoes, Editor-in-Chief of The Economist, Bremmer discusses the modern history of China after the fall of the Soviet Union and why another Cold War might be inevitable.
On the latest episode of GZERO World with Ian Bremmer, Zanny Minton Beddoes, Editor-in-Chief of The Economist, explains why, in her view, Cold War analogies fall short as tensions between the US and China rise. Unlike the former Soviet Union, China is an economic powerhouse and a trade partner and technology provider to nations around the world. Simply cutting off ties with China seems untenable, but, as she asks, "How can you safely continue that integration, continue that interaction, with a country whose ideology you absolutely don't share, and that you fundamentally don't trust." The full episode of GZERO World begins airing on US public television on Friday, July 31, 2020. Check local listings.
Ian Bremmer's Quick Take:
Today, you got to talk about US-China because so much is going on.
The latest headlines, you've got the fire department showing up at the Chinese consulate in Houston because they're burning all of their papers in containers outside. This is following the United States government telling them they have a few days to close their consulate, claiming that Chinese officials have been involved in espionage out of that consulate facility. The Chinese response is that this is unacceptable, a sudden escalation from the US side. They're almost certainly going to close an American consulate in return. Tit for tat. It sounds like the consulate in Wuhan. There are five US consulates in China. There is also Hong Kong, but it's very hard to believe that they'll cut out Hong Kong. That would be a much more significant escalation.
And, you know, most of the direct escalation on things like tariffs, on things like diplomatic hits and the rest, those are coming from the United States. But pretty much everything is getting worse in the US-China relationship. No matter what you look at, the Uighurs, Hong Kong, Taiwan, South China Sea, technology, Huawei, economic trade, investment, intellectual property, openness to media and journalists, student visas, blame for the coronavirus, and of course, the borders between the two countries are closed. Now, some of that is because the Trump administration has taken a tougher line on preexisting and continuing Chinese behavior that no one's much happy about. I mean, the behavior, not the Chinese, the American response. And some of it is because the Chinese have themselves taken escalatory policy steps. Like ramping up suppression with these million plus Uighurs in forced reeducation camps in the country. Or the unilateral decision to implement a new national security law in Hong Kong, ending Hong Kong government autonomy as had been committed to and provided by the Chinese government.
Now, the interesting thing is that the response to China is broadly supported. When I say broadly supported, I mean, first of all, that the massive backlash against China is not just about Trump. I mean, I've been talking to most of Biden's senior advisers on the foreign policy, national security side, and the economic side, and they don't like Trump, obviously, and they don't like his mode of diplomacy, they don't think he executes well, but when you ask them about the actual content of policies on all of the issues I just raised, they don't really have significant disagreements. So, that is between Biden and Trump. And their foreign policy teams, they're pretty aligned. Between Democrats and Republicans in Congress, on China, on almost all of these issues, they're quite aligned. Between the American corporate special interests with a lot of influence, of course, over the US regulatory and foreign policies and the government, they were much less aligned five, 10 years ago, not wanting to say bad things about China because they were trying to get more business themselves, many of those companies now feel like their own businesses in China are less sustainable. They are much more willing publicly to come out against China and ask for government help. That's particularly true with the tech firms. And as you know, the tech firms in the US are economically dominant. They've got a lot more influence. They're critical to national security. And so, that really matters.
And then you've got other countries. I mean, if this is just a US-China fight then you would expect that other countries, many of whom are not happy with President Trump at all, would be trying to stay on the fence. That's not happening. You know, I mean, the response to the Hong Kong decision led to a very sharp reaction from the United Kingdom. In fact, sharper than the American reaction. The coronavirus coverup in China led to stronger calls for an independent investigation from Australia than it did from the United States. And that wasn't coordinated. The Indian government has decided to ban Tik-Tok and 58 other Chinese apps. That had nothing to do with the US. That was a response to the Chinese sending troops to contested territory in the Himalayas and responsible for killing some 20 plus Indian soldiers in that border region.
So, I mean, the fact that so many countries around the world, most of which are American allies but not all, are engaged in backlash against Chinese policies, implies that Xi Jinping is doing a lot that's wrong at this point, that he, you know, either his policies or bad or he's implementing ineffectively. And I would argue that both of these cases have been problematic for him. Now, there's a question, can we fix it? And certainly, that's going to be challenging because it's President Xi that's largely been moving in this direction. I mean, if you ask where the broader changes are in the world, are they in the US foreign policy in reality or China? Most of the changes have been from China, the consolidation of power under a single leader, the anti-corruption campaign, which was partially about anti-corruption, partially about stronger authoritarian rule, the unwillingness to engage in in continued economic and political reform inside China, the buildup of Belt and Road, the decision that they want to be global leaders in artificial intelligence by 2030, the Asian Infrastructure Investment Bank.
Now, look, the fact that China, it's just the reality China's gotten bigger and they're not aligning with American or Western values. No one should be surprised that there is backlash against that. And that is not all China's fault, at all. But a lot of the assertive, heavy handed use of Chinese political, economic, and in some cases military and technological influence over countries that need them a lot, that has certainly led to a lot of backlash. That has nothing to do with the Chinese versus the American system. It has to do with a country throwing its weight around. The United States has been on the wrong side of that on many occasions historically.
Secondly, not only is Xi Jinping moving in this direction, but the United States is not prepared to compromise. I mean, again, the fact that this is broadly bipartisan, that the US, you know, is looking for scapegoats and not just President Trump, but lot of people are saying, "why are things not going the way we'd like them to go?" A lot of people are blaming China for that. Coronavirus makes it worse, but it's not just about that.
And then third, even if there was a willingness to engage in a climbdown between the two countries and again, both sides are not moving in that direction right now, you'd have to be able to convince them that the US was sincere and was really prepared to engage with the Chinese, really prepared to compromise. And it's hard to see that given how badly the trust is broken on both sides. I mean, for example, when the Chinese, I mean the big moment when China turned to the West was when they joined the World Trade Organization under President Clinton. And that was basically the Chinese government saying, OK, if we accept Western based trade rules, we're going to do a lot better ourselves. And that meant they also believed that they would be truly allowed to join the WTO. And if they did align with Western trade values, they would be able to benefit. And indeed, it did work out that way. They did open their markets to a much greater degree. And China's growth, self-evident over the course of the decades, just rocket ship since they joined that Western led organization. Now, could that happen for data, for technology, if the Chinese government was willing to adapt to a Western rules set in terms of the treatment of data and surveillance and allow the private sector companies to actually run with rule of law and not be controlled by the government? Would it be credible that there would be an organization, a regime that the Chinese could join and align with? And would they actually see benefits? Would they be allowed to? I mean, number one that doesn't exist in the West right now, such an organization. Number two, President Xi is moving in the opposite direction. I would argue you would need a change of leadership. And number three, the United States is driving a lot of this unilaterally through its dominant tech firms. So, I think for that to happen, two things would have to occur, one is you'd have to see much more alignment on multilateral values and standards between the Americans and the Europeans. That's not happening right now. But it could happen, could happen.
Certainly Biden, much more pro-Europe if he were to win in November elections. And the Europeans were able to continue in a stronger pro-European track with Merkel, Macron, but also with strong technocrats running Brussels, as we've seen now on climate, on tech. That's possible. But the other piece of this is Xi Jinping would probably need to go. And that's interesting, right? Because if he's seen as failing over the next year, you know, he's was supposed to only get two terms. He forced through the end of term limits, just like Putin just did in Russia. And could potentially be president for life, but that doesn't mean it's a slam dunk. And if there's a belief among Chinese elites that Xi Jinping is actually driving the country in the wrong direction and you got rid of him, you actually moved him aside for a more technocratic, a more pragmatic, a less overtly nationalist Chinese leader, you know, you could see a pathway for a WTO type moment between the Chinese and the West on technology and data. That would be a really big thing. But we are, none of those issues heading in that direction right now. We're heading in the opposite.
In the interim, since we're not heading in that direction, what could we do? Well, we need to try to guard against mistakes and overreach, and we still do need to work together. Let's keep in mind that, you know, we do a lot of trade with China. We buy a lot of goods from China. We don't want that to stop anytime soon because it will cost Americans and others dearly in our pocketbooks at a time when massive unemployment and the economy is contracting. We, our universities get lots of money from Chinese international students that pay full freight. We don't want to kick them out. And it's one thing, them coming at M.I.T. and studying artificial intelligence, we probably don't want them to do that as long as tech is on this path. But we probably do want them coming to second and third tier universities, paid for by wealthy parents, so these universities can keep running and don't have to fall apart, right? That's a useful thing and benefits the United States.
And certainly, in the context of a pandemic, in the context of climate change, you know, do you want the world's largest emitter of carbon to be working cooperatively with the United States and Europe? Of course you do. The alternative is much worse for everyone. Do you want the country that has the greatest amount of data on coronavirus and is driving ahead in some of the vaccine and treatment developments and is also producing the lion's share of the world's personal protective equipment for frontline health care workers, do you want them working on supply chain with the West? Of course you do. So, if those things break, we're all going to get hurt. So, we have to recognize this is not like a cold war with the Soviets where we wanted them to lose. And there really was very little interdependence between the United States and the Soviets, between the West and the East Bloc. In the case of the US and China, Europe and China, Japan and China, there's actually a lot of integration. These are the world's two largest economies and breaking that would be a real problem for all of us.
Ian Bremmer shares his insights on this week's World In (More Than) 60 Seconds:
Number one, Trump vs Fauci. What's going on here?
Well, I mean, you know, it's a health leader who is quite popular across Dems and Republicans in the United States and an environment where President Trump is looking for folks to blame. And, you know, it's hard. China's been a big piece of this but hasn't been adequate in explaining why the red states are now doing so badly, for example. And why it continues to persist beyond Europe. And so, he's looking for others. And Fauci has been the most coherent, the most credible in the Trump administration, but has made mistakes. And certainly, also has been willing to come out and speak independently of the Trump administration, including criticizing the Trump administration in a way that Dr. Birx, for example, or the head of the CDC has not. And that's why you're starting to see anonymous opposition against Fauci. You're seeing some of the campaign proactively say they think Fauci has been a cold shower on the economy and has been Dr. Doom, Mr. No. It's funny, Larry Summers, my friend, was called Dr. Kevorkian by Obama when he was secretary there, because he was always providing the negative outlook. I can't imagine how Larry Summers would survive in the Trump administration right now.
But clearly, at the same time, Trump understands that getting rid of Fauci would be a huge mistake. So the question is, if the opposition gets significant, if it starts looking like they're taking serious shots at the guy, will he stay? And he's been around for a long time. He's worked under Republican and Democratic administrations. You go to Fauci's office, you see photos of him with all the presidents, and all the House speakers, and all the accolades he's gotten. He can handle it, right? So, I think he's willing to stay a lot longer than a lot of others would, and I don't see Trump forcing Fauci out the way Bolsonaro has basically forced out two health ministers that were both popular and scientifically credible the way that Fauci is.
So, first of all, the United States is handling this better than Brazil and, you know, thank goodness for small benefits. But also, it is showing that Trump understands that his popularity on handling the coronavirus is in the toilet. It's about 30 percent compared to 40 percent overall support. And he needs to show a better result, especially in terms of a core red states and purple states, some of which are where you're seeing the biggest explosion of cases right now. I mean, Texas, Florida, Arizona, Georgia, not California. That's on the blue side. But those others are all a lot of solid Trump supporters that are taking it on the chin now directly from coronavirus. That's not where he was even a month ago.
Why did the UK, United Kingdom, reverse course and ban Huawei and where does that leave China?
Well, the interesting thing is that the United Kingdom had decided to include Huawei in 5G. That was Boris Johnson. The Americans were very angry about it. You may remember that's when the Trump administration said, well, maybe we're not going to share Intel with you if you decide that you're going to work with China on 5G and on Huawei, their most important tech company. Now the UK has completely reversed their decision. And there's a few reasons for it. First, it's the United States. I mean, we've got new foreign product rules that not only will sanction those that work directly with Huawei, but also makes Huawei's own future much less certain. Are they going to be able to get the inputs, the semiconductors, the other critical pieces of their supply chain that would allow them to roll out 5G effectively? It's a much worse bet than it was even six months ago.
There's also the fact that the Chinese are not seen to be transparent around coronavirus. I've talked about this quite a bit before, the original cover up for the first month while this disease was exploding inside China. They weren't being in any way forthcoming about human to human transmission with their own people or internationally. That's angered not just the US, but a lot of allies, too. And, of course, China's actions in Hong Kong. So, there's been a lot of backlash against the Chinese and that is hurting them ultimately. And that's what's behind the UK decision. It's a big hit on China. They had major plans for the United Kingdom, including growing the connections between stock exchanges and London and Shanghai, crafting a new post-Brexit FTA (free trade agreement), invest heavily in UK infrastructure. Certainly, there's going to be retaliation of some kind from China. But this is one of the bigger strategic wins of the Trump administration and foreign policy since they've actually come into office.
Finally, with the US rejecting China's maritime claims in the South China Sea, how will this further escalate tensions?
Well, a little bit. I mean, it's not a military move. It's a diplomatic move. This is more symbolic. It's United States officially aligning itself with the 2016 ruling in The Hague instead of supporting it abstractly, which is what the Obama administration did. The alignment means the United States is formally denying specific claims, most importantly, this nine-dash-line that says that China basically has sovereignty over everything in the water going right down to the borders of South East Asian littoral states. Which is, you know, kind of crazy. Anyone looks at the map and sees what China is laying claim to, it's ludicrous. And it's only because China has such outsized power militarily in the region and of course, economically, that they can kind of get away with it. But again, it's not military escalation. The Pentagon could follow up with more aggressive exercises in the region, and that's certainly possible, especially as we get closer to election, and Trump wants to show his anti-China bona fides, the risk of accident is going up. But for now, this is a diplomatic move, not a military one. That's what I'd focus on.
UK flops on Huawei: The UK has banned equipment made by the Chinese tech titan Huawei from its 5G networks. The move is a big about-face for London, which as recently as January had said it would allow the use of Huawei components, although with some restrictions. But a lot's changed since January. For one thing, the US — which has banned Huawei gear over national security concerns — is putting more pressure on a post-Brexit, pandemic-wracked Britain that badly needs a good transatlantic trade deal. In addition, UK-China relations have soured over Beijing's new Hong Kong security law, which erases the autonomy promised to the city when London handed it back to China in 1997. But in banning Huawei, London is wrestling with an increasingly widespread dilemma. Huawei provides the fastest and cheapest way to build 5G networks, which everyone agrees are critical for 21st century economies. But using Huawei gear also means accepting the risk of Chinese cyber-snooping on the one hand, or Washington's anger on the other. As the US-China rivalry steadily intensifies, this tradeoff is going to become an acute problem for many countries around the world.
Bolivia, a new hotspot: Bolivia, one of Latin America's poorest countries, has emerged as a coronavirus hotspot despite the government's early lockdown efforts. In recent days, the country's interim president, Jeanine Áñez, and her health minister have both tested positive, and authorities are now reporting some of the highest numbers of new daily cases per capita in the world. Bolivia's ramshackle healthcare system has been pushed to its breaking point, doctors say: the country has just 430 intensive care beds for its population of 11.5 million, and there are reports of sick patients being left to die in the streets. But analysts say two factors are making things worse. First, Bolivians who work in the country's informal sector, making up at least 60 percent of the workforce, were unable to adhere to strict lockdown rules without going hungry. Second, the country's deeply polarized political climate has meant that supporters of Áñez's ousted predecessor, leftwing populist Evo Morales, are often reluctant to heed the government's guidance on public health. We're watching to see how this crisis might affect Áñez's chances of keeping her job when Bolivians head to the polls in a few months' time.Caucasian clashes: Skirmishes between Armenia and Azerbaijan have left at least 15 soldiers dead on both sides in recent days, in the biggest escalation of hostilities between the countries since 2016. At issue is the still-unresolved conflict over Nagorno-Karabakh, a territory that is still officially part of Azerbaijan but has been controlled by Armenian-backed local forces since a bloody six-year long war that (mostly) ended in 1994. Low-level clashes have persisted ever since, and both governments have often used the conflict to stoke nationalist support at home. The recent clashes are unusual in that they occurred along the actual Armenia-Azerbaijan border, rather than around the disputed territory itself. A wider outbreak of hostilities could quickly destabilize the South Caucasus, a region crisscrossed by important pipelines carrying oil and gas to Turkey and Europe. The US, the EU and Russia have all called for restraint. Moscow is the dominant external player in the region; it sells weapons to both sides and keeps troops garrisoned in Armenia.
Putin Forever: Russian voters overwhelmingly approved a raft of constitutional amendments that will allow Vladimir Putin to serve two more six-year terms when his presidency ends in 2024. Putin's victory, which surprised no one, came after an independent election monitoring organization said that the Kremlin's referendum campaign was "rigged." Local government officials were told they could lose their jobs if turnout wasn't high enough, the group found. Meanwhile, some authorities had openly offered "prizes" for voting. The constitutional changes, which would allow Putin, now 67, to stay in power until he is 83, were packaged with other amendments, including a clause that outlaws same-sex marriage. Over the last year or so, Putin's popularity has sagged, in part because of specific missteps like a botched pension reform, but also because of a broader lack of clarity about what his plans are for Russia after two decades in power. On the upside, he just got himself another 16 years to figure it out.
Syrians in need get funding lifeline: Dozens of international donors committed on Tuesday a total $7.7 billion to address the ongoing humanitarian crisis in Syria and neighboring countries hosting Syrian refugees. After grinding almost a decade of civil war, Syria has now plunged even deeper into its own abyss owing to the double blow of economic collapse and the coronavirus pandemic. There are currently more than 11 million Syrians in need of assistance, and over 9 million are not getting enough food after food prices have jumped 20-fold since 2011. Almost half the labor force has no work. Still, the money raised at the pledging conference, which was hosted by the European Union, fell well short of the $10 billion the UN asked for, which could provide a glimpse into the future of humanitarian funding for Syria as donor fatigue sets in and donor budgets run low due to the effects of the COVID-19 pandemic.
"Tech Cold War" continues: China has accused the US government of abusing its powers after the US Federal Communications Commission barred Chinese tech giants Huawei and ZTE from benefiting from American subsidies for mobile carriers (mainly in rural areas). The subsidies ban is the latest episode in the deepening US-China war over tech domination, with the US pushing back against China's rise as a technology powerhouse and China looking to cut its own tech dependence on the US. The rivalry has already spilled over to other markets like the UK, which earlier this year decided to allow Huawei, a leading supplier of 5G equipment, to build its 5G network despite US warnings that it is a high security risk for such critical infrastructure. As US-China tensions deepen, more and more countries are going to have to make a tough choice: use cost-effect components made by Chinese firms while risking Washington's ire, or choose budget-busting alternative suppliers.
"Decoupling." It's a word more closely associated with celebrities than global politics. But when it comes to the United States and China, it represents the biggest geopolitical shift to happen since the fall of the Berlin Wall. In the latest episode of GZERO World, Ian Bremmer examines the implications of the two giants going their separate ways in technology. What will it mean for consumers, and will other countries be forced to pick sides in the cyber battle?