"US/China relations have been plummeting. Pretty much everything is getting worse," Ian Bremmer tells viewers in this week's episode of GZERO World. In this commentary on the current state of play between the two global powerhouses, Bremmer breaks down the chess game that could be leading to a new Cold War: Travel between the two sides is restricted. Trade and tech competition abound. Beijing is consolidating control over Hong Kong and threatening Taiwan, while its internment of Uighurs has grown more severe. Meanwhile, Europe and developing nations alike are left with a very difficult choice.
Ian Bremmer shares his perspective on global politics on this week's World In (More Than) 60 Seconds:
Donald Trump, TikTok, and Microsoft. What's the story?
Well, the story is that this incredibly successful app that teenagers everywhere seem to really love is functionally owned by China, they are based in the Cayman Islands, registered there, but the Chinese government has itself said that TikTok is a Chinese firm. And that means that the United States, which is involved in a technology Cold War with China, has been looking to hit Chinese tech firms and make it much more difficult for them to act in the United States. I remember there was one Chinese firm that was trying to buy Grindr, which is this app where I think, you know, men can meet men for dating and whatnot, and the idea, in Congress especially, saying, "oh, my God, we can't possibly have China having data like that." Well, I mean, same sort of thing.
There is a national security issue, there is a political issue with Trump wanting to beat up on China and everyone, both Dem and Republican, finding that's a popular thing to do. And then there's the issue of reciprocity, that if China is not going to allow Facebook to operate in China, or Wikipedia, or Reddit, then why should the Americans allow TikTok? And other countries like India have already banned TikTok, the fastest growing app ever in India. So, no surprise that the Chinese are going to be forced to have to sell this to the US. But what's interesting is the Chinese government has responded very sharply to this move by the US. And assuming it goes through and I think there's no way that, you know, either it's going to be sold, which I think is more likely, or it's going to be shut down, it is going to go forward. I don't think Trump's going to back off. I think that this is going to lead to the Chinese taking serious steps among remaining US high tech firms in China. Not necessarily tariffs, but non-tariff measures. Some of them would be restricted in terms of what they can and can't do. You could even imagine executives being charged with some kind of illegal activity in China like they've done with a couple of Canadians, a former diplomat, the two Michaels they say, all of which has the potential to make this a much worse relationship. The next few months between the US and China in the run up to the election, very, very dangerous indeed.
Spain's former king is gone. What's happening?
Well, he's the Emeritus King Juan Carlos I and has been quite unpopular in Spain because of both tax fraud and money laundering inquiries. Big issues around his role in facilitating contracts with a high-speed rail that Spain was supposed to be building in Saudi Arabia between Mecca and Medina. There were other issues as well. He left Spain because of all of those problems. The decision to do that was actually facilitated with the existing Spanish government so as not to further damage the royalty in the eyes of the Spanish people. A smart move, a useful move collectively for the stability of the Spanish government. I don't think it's going to have a big impact on the existing coalition, shouldn't fall apart. Nor is it likely to have a lot of impact on the existing head of state.
What's interesting is that the King Emeritus does have immunity for any act conducted while in office. But whether or not some of these occurred after his abdication, I mean, that's something that we'll see as the cases continue. That could lead to making this up much bigger and more salacious story for the Spaniards going forward.
What can the US learn from Israel as back-to-school strategies are planned?
Well, Israel in the early days was seen as one of those that had most effectively hammered down the curve with very low transmission on the back of a very effective lockdown, and massive surveillance, and testing, and contact tracing in Israel. They then opened the schools, in part because there's a view that young people are not as likely to get the disease, they are not frequently vectors for transmission. Remember, we don't know a lot about this disease. Turns out that's probably wrong.
As you've seen, for example, a campground in Georgia and many dozens of campers end up getting the disease. Massive amounts of asymptomatic case transmission, which can put older people in a great deal of danger, those with preexisting conditions. So, what we're finding is that even in a country that's relatively small, with a lot of transparency, with incredible testing, very wealthy, good health care system, that Israel gets explosive cases because they bring the students in. And if they don't have massive social distancing and the kids aren't always wearing masks as they do, for example, in Taiwan, or in Thailand, or in South Korea, then you can get that explosive transmission. And that and the Israeli economy contracting this year, probably 5%-6% is leading to big demonstrations against Prime Minister Netanyahu, which, of course, as well, could lead to more explosive transmission in Israel. So, the United States surely is watching this. It's one of the reasons why you're seeing a lot of American political officials backing away from the idea that we can simply open all the schools if we don't have the conditions in place.
Finally, what is going on with Harry Potter inspired protesters in Thailand?
Well, Thailand actually has done a reasonable job of containing coronavirus, but a horrible impact on their economy, especially because they're so reliant on tourism, which is done for the foreseeable future. There's also been some corruption scandals and, of course, of government, which is functionally suspended democratic elections on the back of a military coup. And after the death of the last king, existing king in Thailand, nowhere near as competent, nowhere near as popular. What's interesting about these protests, aside the fact that they're Harry Potter inspired, so a bunch of people with wands and casting spells and holding photos of Voldemort, which, you know, makes it sound fun, but going after the monarchy is illegal. In fact, it is punishable by up to 15 years in prison. And there's never been a mass protest in Thailand that has directly criticized the monarchy before. Now, the prime minister is saying, let's calm this down, please don't be disruptive. They don't seem to be looking for reasons to arrest people for breaking these laws right now because it could make an unstable situation even worse, but that could also raise the question as to the position that the monarchy plays in Thailand. For so long a stabilizing feature, both economically, socially, and politically in that country. Maybe there are questions around how long it is fit to last.
Ian Bremmer's Quick Take:
Happy Monday, we are in August, summer, should be taking it a little easier. Coronavirus not taking the stress levels off but hopefully giving people the excuse, if you're not traveling so much, be close with your families, your loved ones and all that. Look, this is not a philosophical conversation, this is a talk about what's happening in the world, a little Quick Take for you.
First of all, you know, I'm getting a little bit more optimistic about the news in the United States right now. Yes, honestly, I am. In part because the caseload is flattening across the country and it's reducing in some of the core states that have seen the greatest explosion in this continuation of the first wave. Yes, the deaths are going up and they should continue to for a couple of weeks because it is a lagging indicator in the United States. But the fact that deaths are going up does not say anything about what's coming in the next few weeks. That tells you what's happened in the last couple of weeks.
What is likely coming is that even in the red states where governors were most opposing wearing masks in a mandatory way and shutting down the economy, they are seeing that they have explosive case transmission and they're changing their behavior. And mask wearing and social distancing in the United States is less about whether you're Republican or Democrat, it's more about is the disease near you and do you feel threatened by it? And as we see it spreading into rural areas and into red states, we're also seeing mask wearing and social distancing going up in those places.
It's not true everywhere and even some governments that are particularly retrograde, Alabama looks really bad, for example, in that regard. But generally, across the country, you're seeing a response to all of those measures. You're also seeing that improved treatment, the fact that high-flow oxygen actually works better than ventilators in some cases, the fact that plasma treatment is becoming more used and more and more widely understood. I mean, all of these things, plus increased testing numbers that the president keeps talking about, is making it easier for the United States to respond effectively to this outbreak. And that means even with much larger caseload that we know about, you're not getting as many hospitalizations, they aren't lasting as long, not as many people are dying. All of that implies to me that where we are going to be in two months' time doesn't feel as bad as where we are right now. Even though the total numbers of deaths, of course, are going up and the best estimates I've seen so far, about 230,000 by Election Day.
There are more explosive cases that are happening in Japan, in France, in Spain, in the United Kingdom, and in Australia, but let's keep in mind that that is from a much, much lower base and the government response, also learning, is becoming quicker and more effective. And the popular response, better educated around the stuff, also effective. So, the impact that's going to have should be smaller than what we saw in the first wave. So, I mean, even without working vaccines, the learning that's going on around this disease, both the learning in terms of science and also learning in terms of governments and people should actually make us get better at handling it. And that makes me more optimistic. When we were talking in March and April and the explosions, we saw first in Italy and the massive mistakes made around hospitals there, which got overwhelmed. In the United States, in the New York City metro area, the massive mistakes that were made around assisted living facilities and bringing people that had cases there and transmission exploded. We're not doing that anymore. So, we're learning in a lot of different ways. The doctors are learning. Governments are learning at the national and local level, and the people are learning. As all of that happens, we're going to get better very quickly responding to this virus. And so even though you're going to see lots and lots of people still get sick, you're not going to see as many serious hospitalizations and not many will die.
The one thing that bothered me the most since we last chatted, are these studies that show that over 50% of people that have gotten the disease, even if they were asymptomatic, have some lasting heart damage because the heart is working a lot harder to respond to the body's needs when the virus comes. It's only one study but the numbers are significant, it's well over a thousand people in it, and it was well reputed, the scientists involved. So, the longer term implications of all of the people that are getting this virus, many of whom don't know it, in terms of whether or not our life expectancies will be of the quality and the length that we want, that actually does really sort of bum me out. And I'm hoping that we learn a lot more about that in the near future.
So, you know, I mean, you think about the fact that, you know, we go into our cars and we've got thousands of sensors and we know exactly when we need brake fluid, we know exactly when we need gas, we know exactly, you know, what kind of maintenance we need, real time, and we wouldn't buy a car otherwise. And you look at our bodies and we have nowhere near that amount of tracking and tracing. And frankly, it's not even because the technology isn't there, it's just because we haven't felt comfortable with it and we also don't really want companies or governments have access to that data. But in this environment where suddenly you are bringing this new disease into a meaningful piece of the global population, and unchecked, it hits everyone, right? You look at India, Mumbai, and some 50% of people tested in the biggest slum, over a million people, very dense population, already have had the disease. Over half. So, herd immunity actually of some form is proven to come there. I mean, the numbers are just, within a year, the numbers are going to be astonishing to think about. And, you know, pretty much everyone is going to have people close to them that are exposed to it. We are going to want to know, long-term what that means for our health, long-term what that means for our ability to live the lives that we had been, you know, personally, emotionally and financially planning for? So, that is a worry.
US-China, the most recent things. First, the TikTok ban, so many people in the media saying this is because Trump is angry at the kids who embarrassed him in Tulsa, he's angry at this comedian that makes all of these really funny TikToks of him speaking. No. I mean, I'm sure he is angry about it, but this has nothing to do with that. It's almost certain that Microsoft or another company will end up picking up TikTok and all those people can still make fun of Trump if they want to on whatever that new app is. No, this is going after China. And let's keep in mind that this is a China where if you want to use Amazon, you want to use Facebook, you want to use Google, tough. You're stuck. You can't do it. You know why? Because they have their own and they won't let the American companies in. And China is the largest data market in the world. So, if they refuse to allow the biggest American firms, the biggest in the world, to participate there, even if the Chinese weren't stealing data for their governmental purposes, even if they had rule of law on intellectual property, why would you let them operate those apps in your market? You would want to have an agreement where you have reciprocity, where if they want to operate the US and you get to operate in China. Until that happens, I'm not very sympathetic to the people saying the US shouldn't be doing anything. And by the way, most American allies are on board with the US on that front.
Also, interesting to see, probably the most significant sanctions so far by the US against China, it's against the Xinjiang Production and Construction Corps. It is the most important central government sort of corporate entity in Xinjiang, which is the north-west interior part of China, where the Uighurs, the ethnic minority Muslim, have had over a million forced into camps, there has been forced sterilizations, forced cultural integration. It is a horrible, horrible story. And the US is significantly upping the impact in terms of sanctions. It's not clear because there aren't a lot of companies that do direct business in the West with that Xinjiang Production Construction Corp, but there are an enormous amount of firms that do trade, that have inputs that originally come from that company. And that produces much of China's cotton, for example, lots of other things as well. So, a lot of people could be watching very carefully to see what it means and just how broadly those US sanctions are going to apply, whether it's direct or indirect engagement with that entity. If it's indirect, then this is going to be a very significant hit to a lot of Chinese companies and Western companies that really matter, they will have to change business practices and the Chinese will respond and escalate.So, that one is worth watching. TikTok is done, someone else will buy it. And that is your Quick Take.
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.
Did the Philippine midterm election strengthen Duterte?
It certainly did. He won almost all the Senate seats that were up. He has the ability now to move ahead with constitutional reform. Something that has been challenging for him. Any economic and pro-investment pieces he wants to do, also aligning more with China because he wants more inbound investment. Even though it's not all that popular domestically. His drug war on the other hand is quite popular domestically. It's not internationally and certainly not with the drug lords.
How likely is a conflict in the Persian Gulf?
It's getting a little bit more likely. The Iranian economy is falling apart. The Americans are pressing and the Europeans can't help very much. And that means the Iranians are starting to pull themselves out of the nuclear deal something they really wanted to avoid doing. They were hoping they could last Trump out of one term administration. That means that the potential for an accident leading to escalation is growing still not likely but it's absolute something to worry about.
Where does the US-China trade war go from here?
Well it goes to Tokyo, where Trump and Xi Jinping are going to be meeting at the G20 summit. We've got to be worried about that, but I'm still kind of optimistic because the next round of tariffs, if they were to hit, are the ones that go directly on all the goods Americans buy - the iPhone for example - lots of things from China you see those prices go up. It's going to be much worse than what we've seen so far. I suspect that on balance it's close. It's not easy. It's publicly difficult. But I still think on balance we're going to end up with a deal between Xi Jinping and Donald Trump.