“I don’t think the goal is to stem China’s rise. I think the goal is to shape it… It’s going to be a long game. It’s going to last a generation.”
Josh Rogin is a political columnist for the Washington Post, analyst for CNN and author of his new book, Chaos Under Heaven: America, China, and the Battle for the 21st Century.
China has become the main geo-political rival of the United States and the 21st century will be defined by the United States’ ability to manage the relationship. Donald Trump showed correct instincts in seeking to confront China aggressively, but the administration’s general dysfunction undercut efforts. This presents a valuable opportunity for the new administration. “Biden’s administration has a chance to take the ball and run with it and do a better job. Trump was great at flipping over the chess board, but he couldn’t set it back up.”
By integrating China into the global economy, the hope was that global influences would ultimately liberalize the country’s politics. This did not happen and the communist party has nearly total control over China. “I don’t think the goal is to stem China’s rise. I think the goal is to shape it… It’s going to be a long game. It’s going to last a generation.”
LISTEN AND SUBSCRIBE
SPEAKER
Josh Rogin
Global Opinions Columnist
Washington Post
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
John Darcie: (00:07)
Hello everyone. And welcome back to salt talks. My name is John Darcie. I'm the managing director of stall, which is a global thought leadership forum at the intersection of finance technology and public policy. So talks are a digital interview series with leading investors, creators and thinkers. In our goal on these salt talks is the same as our goal at our salt conferences, which is to provide a window into the mind of subject matter experts, as well as provide a platform for what we think are big ideas that are shaping the future. And we're very excited today to welcome Josh Rogan to salt talks. Uh, Josh is a columnist for the global opinion section of the Washington post and a political analyst with CNN. He's also an author most recently of a great book called chaos under heaven, Trump, she and the battle for the 21st century previously, Josh covered foreign policy and national security for Bloomberg view Newsweek, the daily beast foreign policy magazine, congressional quarterly federal computer week magazine and Japan's Asahi Shimbun.
John Darcie: (01:12)
Uh, he was a 2011 finalists for the Livingston award for young journalists and the 2011 recipient of the interaction, uh, award for excellence in international reporting. Josh holds a bachelor's degree in international affairs from George Washington university there in Washington, DC, and studied at Sophia university in Tokyo, Japan today, he lives in the nation's capital, Washington, DC hosting. Today's talk is Anthony Scaramucci, the founder and managing partner of SkyBridge capital, which is a global alternative investment firm. Anthony is also the chairman of salt. And with that, I'll turn it over to Anthony for the interview. So
Anthony Scaramucci: (01:49)
Josh, even though you have the book behind you, I like holding these things up here for our people. Cause you know, I'm not all that self promotional as you know, but, uh, I will say to you that this is, and we were in the green room before we got started here on this salt talk. And I said to you, this is the next 10 years of the United States. Whether we like it or not, there's still be a backdrop of a border crisis. There'll be issues we have to deal with internally with the us. But the next 10 years of the global drama will be between the us and the Chinese. Why did you write the book and am I right after reading your book? Uh, that was my conclusion. I said, man, this is what we're going to be doing over the next 10 years.
Josh Rogin: (02:37)
Right? Well, uh, thanks guys for having me on, basically when I got to the Washington post in 2016 and Donald Trump was elected president, you know, 95% of the foreign policy media was focused on Russia, Russia, Russia, for a number of obvious reasons that we are not going to be able to get into now, but I turned to my boss and I said, well, I gotta do something different. They said, what do you want to do? And I said, I wanna report the story, which I was pretty sure it was going to be pretty crazy considering what the Trump administration was shaping up to look like. And of course I wasn't disappointed little did I know though that not only would we have a trade war and a tech war and sort of a broad awakening in various sectors of American society to the rising challenge that arising China presents to us in our industries, in our schools, in our markets, uh, all of that played out in the craziest way.
Josh Rogin: (03:27)
You could imagine it's a lot of that you know about personally, but then the pandemic hit. And then all of a sudden the fact that China's government is, you know, internally repressive externally aggressive and interfering in our societies toward their political ends became obvious not only to every American, but to every citizen of the world. And there's nobody who's stuck in their basement for a year who hasn't seen their grandma who doesn't realize that, oh, wait a second. We've got to figure out this China thing before it's too late. And it looks like the Chinese government is taking that country in a bad direction. And that doesn't mean we have to have a cold war. It doesn't mean we're going to have a conflict forget about through trap. That's all bumper sticker nonsense. What we have to do is we have to have a national conversation about the challenge that rising China presents to our society and then figure out what we're going to do about it. And this book was a first attempt to start
Speaker 4: (04:17)
That conversation. So you
Anthony Scaramucci: (04:20)
Mentioned that you said that he straps. So let me just explain that to our viewers and listeners, I think is important. Uh, Graham, Alison wrote about this and destined for war. He basically says a rising, super power, uh, basically threatening the existing power structure usually ends in a calamity 12 out of 16 times over 2000 plus years that that's happened. We've gone straight on to war. Uh, and you write in the book you write in the book, which I think is, uh, elemental here that these problems were going to be there with, or without Donald Trump, we are in a economic struggle, we're in a technological struggle. And so what, what, what would you say to your fellow Americans now about what their government missed over the last 20 years as it relates to China?
Josh Rogin: (05:14)
Right. I mean, the facilities traffic's like interesting, but we shouldn't base our strategy on it, but you know, Graham, Alison picked 16 conflicts and then 12 of them matched his theory. So that's all well and good, but you know, the U S China competition is going to be a lot different for a lot of reasons, mostly because if you think about it, it's really not about the U S versus China. It's about an international response to China as it rises. And that means that we're in this together with a lot of other countries that have a lot of things that they need to protect and a lot of interests and values that we believe, believe in and have defended for the last 80 years or so that we would like to keep, you know, that the Chinese communist party is working to erode the mistake that our government made over the last 20 years.
Josh Rogin: (05:57)
You know, not realizing that the large bet that we made, which was essentially, and I'm boiling it down a bit, to be sure that if we gave China all the help, we could and integrated them into our systems as much as possible that the Chinese system would, uh, liberalize is economically and that would lead to it liberalizing politically. And that would solve all the rest of the problems. And we would live in peace and coexistence. And, you know, some people say that was the only responsible thing to do 20 years ago. Some people say it's still the only first possible thing to do right now, but even in 2016, even before Trump was elected, there was a growing feeling inside the U S government and later on in other parts of American society, that that bet had not worked out that choosing paying had taken, decided to take his country in a more authoritarian direction and decided to exert the Chinese model and export it and use it to sort of change the rules of the road in a way that serves their liberal model and not our model, and that we have to respond to that.
Josh Rogin: (06:49)
So, you know, now we sort of the Trump administration to its credit, you know, realize that it, but as you know, it was such a chaotic mess that they've missed a lot of opportunities. They failed to really use a lot of elements of American power. They disrespected allies, there was constant turnover. It was factional infighting from the get-go and the, their response to the China challenge got mired in the overall dysfunction and mismanagement that president Trump brought. And that's a shame. That's something that we, our leaders now have to fix. Josh,
Anthony Scaramucci: (07:19)
That's sort of breaking news. There was constant turnover because I wasn't aware of the turnover or the infighting. I didn't realize that. So that's sort of breaking news for me, but you know, one of the funny things it's April of 2017, it's Mar-a-Lago president Trump and president Xi are meeting down there. He's got the book with them, destined for war. President Xi has obviously had an impact on him. Trump has no idea what's in the book. Take us to that meeting. You write about it. Yeah.
Josh Rogin: (07:47)
So you would think if you watch the campaign and that Steve Bannon and Peter Navarro and Stephen Miller would have been in charge of the China policy, cause that's how the campaign speeches play it out. But as soon as Trump became president, uh, he turned on a diamond handed, much of the policy over to Jerry Kushner. And to an extent, Rex Tillerson, by the time they got tomorrow Lago for a lot of complicated reasons, he wanted to make a deal. And basically what happened at Mar-a-Lago is he established this friendship over the most beautiful piece of chocolate cake you've ever seen according to Trump, uh, to make a deal with changing paying. And then he set us Steve Mnuchin, Gary Cohn, and Wilbur Ross on the path of making that deal. And if you just think of that moment in time, and, and, you know, you could imagine that if the Chinese leadership had just realized what an opportunity they had, if they had given president Trump and his economic officials, a deal that they could sell, that they could run on, that would actually have done some good, they might've avoided what happened next was that was, which was pled.
Josh Rogin: (08:45)
Trump turned on them and turned on the Chinese leadership and then handed the policy over to a Lighthizer. And then to an extent to the Hawks and Bolton and Pence, and, you know, it just went downhill from there. And then when they finally did make a deal in June, January, 2020, it seemed like everything was going to be copacetic again. And then the pandemic hit and the relationship was destroyed. So Mar-a-Lago was that first sort of instance where president Trump and president Xi decided that they were really good friends and that this was going to be a big thing. And that relationship not only ended up being destroyed, but it also ended up having a real horrible effect on our pandemic response. Because later on presented, she lied to president Trump about the coronavirus, told him it would go away when it got warmer, told them that it was under control, herbal medicine could be used to, to secure it. And that fed into Trump's garble in his head, which came out of his mouth, which came out in our policy, which exacerbated the problems that we're having today. Those are excuse the Trump administration's pandemic response, but it explains it just a bit.
Anthony Scaramucci: (09:44)
So, I mean, you're doing, and you do a brilliant job of this in the book. So I want you to pretend I've now landed from Mars. And these are two very important world leaders. And I want you to give me the baseball scouting report on president Xi and president Trump. Go ahead, Josh.
Josh Rogin: (10:05)
You know, there's, there's two scattered reports on president Trump, right? Some people believe that he was just, uh, a neophyte, you know, inexperienced moron who was stumbling through the most important relationship at a critical time setting his advisers against each other in a Coliseum, you know, battle for sport, right? Other people will tell you people who are closer to Trump will say, no, no, no, no. He actually had a firm view on China and he knew what he wanted and he cared about trade, but he didn't care about human rights. And he could just never get the thing that he wanted because his advisors were fighting amongst themselves. And I think there's truth to both of those narratives actually, you know, I went back and I read all of the Trump books, not that he wrote them, but the ones that had his name on them.
Josh Rogin: (10:47)
And, uh, there's an amazingly consistent message on China that actually you can find in all of his statements and speeches and tweets and stuff. Um, at the same time, it's clear that he didn't know anything about the tactics that he got fooled by presidency. And if you're doing this county report on the presidency and you would have to say that, you know, he masterfully played Trump like a fiddle and abused their personal friendship in order to advance China's interests against America's interests. And, you know, sort of, you know, uh, on the other hand, you, you have to say that the Chinese leadership never really understood how the Trump administration works, but you could kind of forgive them for, cause we were all in that same fog. Uh, and because they play so much faith in their billionaire friends and started basically just hoping that the billionaire friends and the wall street guys would, you know, fix everything. And that became their main channel that w once that didn't work, they really had nothing left to fall back on. And when the pandemic hit, it was the, the, the back channels were useless and it was all over.
Anthony Scaramucci: (11:46)
I'm gonna say two things for editorial comment, my observation, uh, th our standing joke, Trump has never read a book and he's never written one. Although we had several best-sellers, we used to always tease about that, even when Steve Mann and I used to talk to each other, but he had very good instincts. I will always say that about him. He had very good instincts and his instincts were that we needed to do something to stem China's rise. I guess my question to you, was it too late where the forces already in play, where China is exponentially rising, and there's really not much that the Americans can do about it. Yeah,
Josh Rogin: (12:29)
No, I, I, I don't think, first of all, I agree with you on your analysis, but I don't think the goal is to stem, trying to thrive. I think that the goal is to try to shape it, you know what I mean? And then if we can't to protect ourselves and protect the things that we care about and the things that are important to our security and our national security and to our public health, by the way, and, you know, uh, it's that, that effort is just beginning and the Trump administration just played the first inning of it, and it's going to be a long game. Okay, it's going to last a generation. And when you see the fight in industry, and again, the big, what you read about Trump's political instincts is, is, is pointing to, is that, you know, the polls show that Americans want a tougher China policy.
Josh Rogin: (13:10)
They see the Chinese government's actions affecting them in their schools, in their markets, uh, in their tech companies and their social media, everything, right. If they're everywhere and in their public health. So they want somebody to do something about it. Um, so actually the Biden ministration has the chance to take the ball and run with it and actually do a better job if they choose to, but we don't know what they're going to do. I think, because I don't think they know what they're going to do. Um, but yeah, I think Trump diagnosed the problem. He was great at flipping over the chess board. Right. But he couldn't send it back up again,
Anthony Scaramucci: (13:40)
Is that analogy because he was flipping chess boards and card tables and kicking slot machines. And so, uh, the Western world is mostly in agreement about the horror of a potential human rights violation in parts of China. Right. But do countries outside the United States have the will to demand a change, uh, given its economic importance, particularly in Europe and Asia. Yeah, no,
Josh Rogin: (14:05)
It's kind of a weird dynamic in that sense, because you're going to have the United States in Europe being the champions of human rights, but it's actually, you know, the Muslim majority countries and the Asian countries that are most directly affected by China's human rights abuses because there are using Hong Kongers and Taiwanese and Tibetans and weekers and, you know, Kazakhs and all other types of minorities that happens that find themselves living inside China's borders. Those countries are, are, have a problem because they live there. They're not moving. So they got to deal with China one way or the other. And I guess the answer that I could give is that, you know, while we all want to change China, we have to re you know, resist this Eucharistic idea that China's going to become more like us and China's development will be determined by the Chinese people one way or the other.
Josh Rogin: (14:48)
So the thing that we actually have to focus on first is trying this in our countries, right. And on our soil. Right. And that's the, that's the most important thing. That's the thing we have the most influence over. And that's the thing we can really join with both Asian allies on and European allies, because they're facing the same thing. You know, whether you were in the Netherlands or you were in Japan, you know, when the pandemic hit and you wanted your factories in China to send you the masks that you thought you owned, because you thought you were in the factories, you realize that you didn't really own the factories. Right. And then all of a sudden you realize that, oh, wait a second, we've got a problem here. And so that's going to take the, the bigger solutions to sort of not decouple, which is, again, it's kind of a bumper sticker, but to reorient the way that we do business, to recognize the fact that there are certain things that we're going to have to route outside of China.
Josh Rogin: (15:35)
And a lot of that is the money by the way. And I know we're going to get to that, but you know, how the markets deal with Chinese companies, especially those companies that are committing atrocities, right? You want to fight atrocities. Well, it's probably not a good idea to funnel trillions of dollars of American and retirement funds into those companies that are building the concentration camps and shipping the human hair over here. Right. And, uh, you know, when you just think about the scope and scale of that challenge, you realize that it's really something that the United States really can't do alone.
Anthony Scaramucci: (16:04)
You said we're going to get to the money. So, so I want to get to the money. And I want you to tell us what you'd like to say about the money. So I'm not going to ask you a question. I want you to frame it in the way that you want our viewers and listeners. Yeah,
Josh Rogin: (16:18)
Sure. Well, let me start. And, you know, by alluding to the story about you and my book, which is, you know, the story of when you came into the Trump administration, when the first time you tried, you decided to sell your, uh, firm to a Chinese company. And, you know, when that was reported, it was all reported wrong. But then when I read the reported it for the book, I came to an epiphany actually. And based on the research that I did with your help actually, and, you know, I, it seems to me that at that time, in 2016, you really couldn't blame wall street firms for thinking about these kinds of transactions were AOK because they had been going on for all this time. And no one had said boo about it. And when the national security community came and knocking on wall street store and said, oh, wait a second, you can't do this type of transaction. Now you can't do this type of transaction. Uh, for sure there was a lot of confusion and there was a lot of conflict and people didn't know what the rules were and the people inside this system didn't know what the rules were. And it was just a total mess. Okay. So I we'll go
Anthony Scaramucci: (17:16)
Back for a second there because I think it's important for people to understand the transactions were happening in a, bought a piece of Hilton. They had a piece of Georgia bank transactions were happening. They were actually referred to me by some very well known private equity people,
Josh Rogin: (17:31)
But you were a relatively small player compared to the billions and billions of dollars.
Speaker 5: (17:36)
Yes. No more training, no, every question.
Anthony Scaramucci: (17:39)
And I never complained about the Syphius decision to block it. There was never any whining on our part. We just moved on. And in many ways I'm grateful that I was able to keep control of the company, but yeah, it all worked out in the end point that I would like to make, or I'd like you to observe. And then you opine upon. And that is, I think wall street was going with the wave of the, the transactions. But I think the NSA was basically saying, wait a minute, some of these companies may be controlled by the Chinese communist party or the Chinese communist army, but the people's Republic, army of result of which they wanted those transactions to stop. And what's your opinion of all that, should they have stopped? Should they?
Josh Rogin: (18:27)
Yeah. So I, so I think what was happening was that the national security community was waking up to this idea that a lot of these investments were problematic for national security reasons. And they were having an internal debate over what to do about it at the same time. They're trying to deal with wall street, not just wall street, by the way, this happened with the tech industry with Hollywood, to an extent or on American campuses. So as the FBI goes around, knocking on all these doors, all these institutions, which protect their independence fiercely, and rightly because we live in a, uh, a pluralistic democracy, it's not the Chinese system, the government can't tell private companies what to do, but at the same time, these national security officials were trying to grapple with what was a real problem. And that real problem was that these acquisitions did have a national security implication and not everybody agreed on what it was.
Josh Rogin: (19:12)
So in that moment, in time that you had Congress dealing with it through Cepheus reform, you had wall street resisting, dealing with it, frankly, because they didn't trust a lot of what the Trump administration was doing because the Trump administration didn't have a lot of credibility. And then you have the national security community trying to manage all this stuff and in the dysfunction of what was going on in the administration. So again, that's my sort of, you know, uh, admission that like, you know, there was, there were plenty of blame to go around. And at that point you couldn't blame wall street for not just falling in line and saying, okay, well we'll just stop every transaction you don't like, but yeah. But when, once you got to like 20, 19 and 2020, I think the story changed. Okay. And basically what happened is you had a much better understanding and discussion of the ways in which wall street was funding Malaysian Chinese companies.
Josh Rogin: (19:57)
And by these, I mean the worst actors I'm talking about, the ones that build the camera's on the concentration camp walls, the ones that build the AI that find weekers in a crowd, and those makers disappear forever. And the ones that are building the missiles and the cyber spies that are attacking us all the time. And now the problem was that you had the commerce department and the NSC and the state department sanctioning those companies. Okay. And at the same time you had wall street increasing its investments in those companies through all sorts of vehicles, not just the CEOs, not just the reverse mergers, I'm talking about the index funds. Okay. I'm talking about directing huge amounts of pensions and other passive institutional investments. So what's the point of sanctioning a company like hick vision for a few billion dollars. If the index funds are going to bake that up for them, tenfold, you know, it's ridiculous. It's, it's a, it's a, it was a total contradiction and that still hasn't been resolved. And that's where the, the bleeding edge of the fight is now. And these wall street firms are still resisting this idea that, wait a minute, we're going to have to merge these two things. The natural, real national security concerns without overreacting. And the fact that these firms have are independent and have to look out for their investor interest. And that conversation is really hard, but it's really not going very well, to be honest.
Anthony Scaramucci: (21:12)
Well, you know, it, it brings up this question and you write a lot about it in the book, and this is basically the foreign influence operations of the Chinese government. So describe that. What does that look like?
Josh Rogin: (21:25)
It means that, you know, if we don't have the same standards for Chinese companies that we have for all other companies, especially American companies, if we can't audit their books, if we don't know how much the Chinese communist party is involved in these companies, spoiler alert, they're involved in all the companies, right? Because the subtext here is that what changing thing has done is he's installed Chinese communist party committees and all these corporations and the ones that don't talk to the party line gets squashed. Okay, look what happened to Jack ma okay, look what happened to H and a, the guy that fell off the wall. Right. Look what happened to the head of, on bond who met with Jared and at the Waldorf, his story, he's gone 18 years in prison, right? So there's something going on in China that we've got to just be honest about.
Josh Rogin: (22:04)
And that's the fact that these companies are no, are all under the thumb of the Chinese communist party, but not all to the same extent. Okay. And so that means we have to think about what it means to do business with them. And, you know, right now that conversation is just impossible to have because we can't even audit their books. And there's been so much lax, uh, attention to the, how much they're in our markets and how much of our capital is going into their coffers. And so the panic amongst the national security people was like, okay, well, we just got to turn off the spigot. Okay. And that's kind of like an overreaction in a sense, but until the wall street firms, you know, get it in their head. And now I'm talking to you guys directly that this is not going away. And that the calls for increased transparency, accountability, and to stop Americans from passively investing in Chinese companies that are committing atrocities are not going away there.
Josh Rogin: (22:56)
You're going to have to deal with it sooner or later. And the argument is that this represents a material risk for your investors, whether you admit it or not, because eventually, you know, changing thing, when you squat squashes, Jack ma, that's going to affect our investments. Eventually when the guy falls off the wall, that's going to affect that company. You know, and eventually when people in America realized that his vision is building the cameras that go on top of the concentration camp walls, regular American investors are going to be like, wait a second, that we don't want to be involved in that. So I think the resistance to dealing with these problems on wall street has got to give, and then on the national security side, there's gotta be more understanding of the competing interest evolves.
Anthony Scaramucci: (23:35)
Yeah. I think it's fast. I'm going to turn it over to John and a second, but I want to talk about the south China sea. And I want to talk about some of the bellicosity of rhetoric that I hear from time to time about a potential military strike on Taiwan and the United States, uh, falling back on its obligations to the time when he's, what are your thoughts there?
Josh Rogin: (23:58)
Well, I have a quote in the book where a GOP Senator goes to president Trump in the oval office. And he says to him, it was just told to me by the Senator himself. And he says to him, listen, you know, I know you don't really care about Hong Kong, but if you let Hong Kong go, Taiwan is going to be next and that's going to be on you. It's going to be bad for your reputation. It's like playing to Trump's vanity is many officials often did, as you know, and Trump looks at me in the eye and he says, uh, we're 8,000 miles away from Taiwan. China's two feet away. If they attack there, isn't an effing thing we can do about it. That's what he said. That's what he thought. That's what the president of United States believes that it actually defending Taiwan as is our policy is not really the thing that we would do if push comes to shove.
Josh Rogin: (24:38)
Now, my opinion is that when you sort of backed down on things like Taiwan, like Hong Kong, you know, you emboldened teaching things, appetite, his appetite, rose with the eating and he'll push as far as we let him. And that actually the way to avoid a conflict in Taiwan is to deter choosing thing from even trying, right. And that means being a little bit tougher up front, rather than having to decide later, whether you send American or Japanese or Korean, uh, boys and girls to go fight the Chinese. Cause that's a horrible situation for all involved. So, you know, is the, are we over, you know, uh, hyping the Taiwan for it, perhaps, perhaps, but it doesn't mean that we can ignore it. And it doesn't mean that if we just say we're ignoring it, that they won't take that as a clear signal to advance.
Anthony Scaramucci: (25:27)
So you didn't really a hundred percent answer the question. I'm not a journalist, but I'm going to give you a follow up now, go for it. They, they invade Taiwan. Yes or no.
Josh Rogin: (25:36)
Uh, eventually, but the question is whether it's in two years, five years, 10 years, 20 years. Right. And what we want to do is we want to deter that as long as possible, because we don't know what's going to happen in China choosing things king forever, but he doesn't live forever. And that system is got its own challenges. So it's not a question of if they will want to evade Taiwan, it's a question of when do they think they can get away with it right now? They don't think they can get, if they thought they could get away with it right now, don't do it right now. You know? And we'll see what happens in two years in four years. But I think our, our, we have to make it clear to them that they wouldn't get away with it to make sure they don't try
Anthony Scaramucci: (26:12)
It. I, I understood, you know, my, my thinking has always been that they have such strong integration in the economies that it just eventually falls into their hands one way or the other without a military invasion. But yeah,
Josh Rogin: (26:27)
But that's, that's what we saw in Hong Kong. Right? Exactly. So that's a cautionary tale. That's not a, that's not a model, right? The Taiwanese looked at the Hong Kong model. We
Anthony Scaramucci: (26:36)
Don't want that. No, I'm not saying I want that even for a minute because there's a great amount of freedom and independence in versus, you know, and, and, you know, believe it or not, I'm old enough to remember when the British controlled Hong Kong and visited there. And it was a totally different city than it is today. Um, but here's my last question. Before I turn it over to John, one thing on Hong Kong before, please, please.
Josh Rogin: (27:01)
So another, here's another decision for the wall street community. Are you going to, uh, are, are wall street firms going to continue to treat Hong Kong as a bastion of rule of law and justice and accountability and free markets though? It's not the case anymore. In other words, it is the Chinese government who are going to be able to have Taiwan and eat it too. And I think that's a, right now, the signs are that the big firms are trying to make it okay to do business in Kong Kong in the middle of the crackdown. And then I think there's a lot of people who don't like that at all.
Anthony Scaramucci: (27:32)
You want my opinion, Josh? Sure. Uh, the, you know, they, they will continue to try to do business there because they, uh, and they will, you know, use cognitive dissonance and say, they're doing that because they think they're in the camp that you described of people. The more business, more commerce will lead to more freedom, which will lead to a breakdown of autocracy. So not that that's true or that's an alibi to do the business. That's what they'll say, but, but I have a different question, you know, can Tom Patel, who John and I interviewed about six, seven months ago is a strategist wrote a great bestselling book on strategy that actually Nelson Mandela praised. He said that China is seven balkanized provinces, and there's a lot of independent streaks in those provinces. And it's not clear that the Chinese communist party can keep its hold on what we formerly know as China forever. Moreover, and I'm interested in your take on this. A one party systems have about a 70 year life expectancy, the Russian, uh, CCP, the USSR 70 years, one party system in Japan folded after 70 years recently, one folded in Malaysia about three years ago, Mexico, 70 years, the Chinese are in overtime 72 years in clocking. So is there any truth to what he's saying that there might be false under the surface of what looks like a fairly well knitted, uh, autocracy.
Josh Rogin: (29:11)
Yeah, no, I, I mean, I take a different view. So I mean, there's no doubt that there's severe challenges in China and challenges to the governance, but if you talk to the people in China and I do as much as I can, especially those Americans in Western who were still out to go there, but also regular Chinese citizens. It's clear that the Chinese communist party has a firm grip on power and a firm grip on the economy, in the military and on society. And in fact has expanded its control over those other provinces, right? What are those provinces to bet Jinjiang inner Mongolia, right? These are the places where the repression is the worst. There's a reason that they're sending millions of Han Chinese there and putting all the native people in camps, right? Because that they're, they're avoiding what this guy is proposing. And you know, bottom line is that, you know, we can't base our strategy on waiting for them to collapse because that may never happen. And you know, if you're a, uh, a 40 year old, uh, I'm 42, if you're a 42 year old person in China, you've lived your whole life receiving almost nothing but Chinese, uh, propaganda. And you probably support your government. You probably believe that everything's hunky Dory. And there are some people who know the truth is still support their government. So I, we can't just wish away this problem. We're going to actually have to deal with it.
Anthony Scaramucci: (30:25)
Okay. Well, you, you, uh, I'm turning it over to John Dorsey. Who's dying to ask questions and I might point out he has those designer millennial eye frames now. So he's going to try to look hip today. Go ahead, John.
John Darcie: (30:39)
I had to work on my appearance for the cameras now that we're, we're all movie stars in the zoom era, but, um, I want to talk about the future a little bit. You know, your book has a lot about Trump. You do. And we talked a little bit earlier about the Biden administration, but it seems like the Biden administration has been dealt a stronger position than maybe the Trump administration was dealt in terms of their leverage over China, with things like tariffs current fully in place. How do you think the byte administration is going to proceed on things like tariffs and other, uh, other things that maybe the, the Trump administration did related to China, they might use as leverage in the future. Right.
Josh Rogin: (31:16)
Great question. So right now I identify three camps on China inside the Biden administration. Roughly one is sort of the, uh, engagers, the optimists, right? This is led by people like John Kerry and Susan Rice who were part of that Obama administration last gasp strategy to focus on cooperation. Now, you know, of course, when you hear 20 blankets, we need some cooperation. We need some competition. We need some computation. That's true as far as it goes, but it's also kind of like, it doesn't tell us anything at all, of course, where it's going to be a mix of all of these things, but the people who wanted to focus more on cooperation, uh, those people don't have the ball right now, right? I'm the relationship. The people who are running the policy are Jake Sullivan and Tony Blinken and Kurt Campbell. And, uh, they're in the competition camp.
Josh Rogin: (32:00)
And because they've been given the ball because they're in control of the policy, you've seen a lot of the Trump administration, uh, uh, initiatives continued, right? They haven't traded away of the tariffs. They haven't, you know, they, they actually increased the sanctions there. The commerce department is keeping up all of its Walway restrictions. Uh, by, in large with a couple of the genocide, determination is reaffirmed. So as long as this camp has control, uh, you're going to see a lot of continuity, more multilateral. It's going to be a little bit nicer that could actually make it more effective. You know, there'll be more values stuff in there. The third camp of course, is the political camp, right? And these are actually, this is actually the most powerful camp. These are the people close to the president, uh, who were in charge of protecting the presidency and protecting his political agenda.
Josh Rogin: (32:47)
And right now they're siding with the competitors because they can read the polls, right? And the polls show clearly that Americans want a tougher approach towards China. And that's partially because of the pandemic, but not all because of the pandemic. So as long as the two out of three wins the day. So as long as the politics of the China issue, favor a tougher approach. And as long as the, uh, competitive camp, uh, is in control of the policy, uh, w we should see a bunch of continuity and not total continuity, but the test will come when the other camp mounts, its offense like when, and when the dangle comes and eventually Beijing will come with a dangle and they'll say, okay, do you want a climate field? Do you want it to Randy? If he wants something else? And then president vinyl will have to decide whether or not to take that dangle or not.
John Darcie: (33:30)
Right. I want to talk about president Obama. You talked about how there's that camp within the Biden administration of ex Obama officials that generally take a more conciliatory collaborative, if you will approach to China. Uh, they also drew some red lines in the middle east that weren't enforced gruesome red lines as it relates to the south China sea that weren't enforced. How much do you think over that eight year period when president Obama was president that China, since his unwillingness to confront them in places like the south China sea and were able to sort of consolidate power in a way that we had a general, I'm not going to name his name that we spoke to on the sidelines of one of our salt conferences that basically said when Obama began his presidency, if, if we had decided to invade China militarily, we could have probably succeeded in that invasion and subdued them on, on a certain level. Uh, you know, at the beginning of that presidency today, that is absolutely impossible to do. They've strategically built out all these military installations in such a way that we, we have no military leverage over them. How much do you think, uh, during that presidency, uh, China was able to ascend and, and, uh, and create that power structure that prevents us from really confronting them in a meaningful way.
Josh Rogin: (34:41)
Right? Well, you know, there's no doubt that, you know, the, the first big opportunity that the Chinese leadership saw was during the 2008 financial crisis. And then the next big opportunity was during the coronavirus prices, but in between they executed a number of five-year plans, as you know, uh, to advance their interests on a global scale. Now, you know, Gigi pink came to power in 2013, right? Even in 2013, he didn't have real good control. Uh, it took him a while to consolidate that control. And all during that time, when he was weak, uh, he was telling the Obama people, especially vice-president Biden, by the way, who we had 25 hours of dinner with when they were both vice-presidents, uh, that everything was going to be fine. And they signed a, uh, cyber security deal and they signed it. He promised not to expand militarize the south China sea.
Josh Rogin: (35:28)
And we now know that he was lying about all of that stuff and that he was abusing their, uh, trust and confidence and consolidating power the whole time until the point where he could, you know, throw off dang shopping's mantra of bide your time and hydro Spanglish, and actively promote what he now calls the rejuvenation of the China dream. And, you know, at that time inside the Obama administration, again, you have the same camp, right? You had the same divisions, you had the same people, right. And if you think about it, you know, back then rice and Kerry were the bosses. They were the national security visors secretary of state. Now they're the staffers and their former staffers are their bosses, if you believe that. Right. So the, the camps actually switched offices literally, but in the same building and they're sitting there. And so, you know, I, I, you know, again, just like everything else, like you could make an excuse for why they wanted to let that optimism play out. And there were, there were plenty of people inside the system, even in 2015 and 2016 that were like, Hey, wait a second, we've got a problem here. We gotta do something different. And I think my opinion is clear that the Obama administration was slow to respond to that evidence.
John Darcie: (36:40)
Right? Switching gears a little bit, you write a lot about China's digital despotism about how they've used technology, both domestically to, uh, control and surveil its population, and internationally been very aggressive in terms of stealing intellectual property, uh, and conducting all types of foreign influence operations. Uh, how does China, just for people that are less familiar with those operations, how do they use technology domestically and also internationally in their influence operations? And how is that a template for other dictators around the world in terms of, uh, digital despotism, as you talk about,
Josh Rogin: (37:14)
Right. Well, this speaks to Anthony Anthony's questions perfectly because you know, it, this is how they break out of that cycle of, of these, uh, dictatorships that ended up folding is that they buy their way out of it and they tech their way out of it. And, uh, you know, we've never seen a totalitarian authoritarian dictatorship that had these kinds of resources and those kinds of technology. And, you know, when we blasted radio free Europe and radio Liberty over the iron curtain, you know, into east Germany, uh, we have the technological advantage, you know, they couldn't stop it. And now they have the technological tool advantage in a lot of ways, especially on their own tariffs. And we can't get through the grid firewall, except in certain cases. And their tech companies are actually beating our tech companies. And then our tech companies can't compete because they get robbed blind.
Josh Rogin: (38:01)
And even when they don't get robbed, robbed blind, uh, they become hostages. I mean, just look what happened to H and M and Nike, the latest hostages, right? So what they do is they take this control over their populous, right? They represent a 1.4 billion Chinese people, and they get that those people have no choice. They have to buy whatever they say, do whatever they say, read whatever social media they say they have to, the party controls everything in a way that we've never seen before. So if Nike says, Hey, I don't really want to use slave labor produced cotton. Uh, okay, well then your whole businesses could put in a second and apple says, oh, well, we don't want to give the privacy data of our users make that available to anyone with an app. And then 10 Chinese companies come together to build the technology to get around that.
Josh Rogin: (38:46)
And apple can't do anything because the giant Chinese communist party, uh, holds, uh, an ax of literally over their head and could bring it down on them any time. Uh, so that just, and then how did they use the technology at home? Well, what they do is they are developing. I mean, when you talk about artificial intelligence, they take all of the data that because people in China don't have rights to their own data. Now that we have total control over a debt, but I'm just saying there it's worse. And then they use it to scoop up minorities and put them in internment camps. Okay. They have, they're using the technology to implement a racist mass atrocities, and then they're using it to go find those people in other countries. And if you're a weaker living in France and you get on a Facebook group and Francis pass, the link you clicked on is actually a malicious link that will compromise everything you have and lead to your family, getting scooped up.
Josh Rogin: (39:38)
So that's about as, uh, as, as malicious as it gets. And the social credit aspect is particularly pernicious because, you know, if you're the NBA or if you're Marriott hotels, or if your coach, and you dare to run a foul of like the unpredictable and delicate sensibilities of the Chinese communist party, you stand to lose billions of dollars in the, in the blink of an eye. And again, I would just, again, point to your, uh, wall street risk calculations. Is that factored in, is that factored into the cost and risks of doing business? I don't think so. I don't think that that most wall street firms or most corporations in America are looking at that and saying, oh, wait a second. Did the MBA factor in that one tweak, we cost them $400 million. Well, that's what happened. Okay. So as they get more repressive and use their technology in more insidious ways, that has an effect on our businesses and our impacts on our pocket books and our freedoms.
John Darcie: (40:34)
Right. Last question I want to ask you, and it's, you know, you talk about it in the title of your book. It's the battle for the 21st century between the United States and China? What is it that, that China is fighting for really, you know, do they have a different vision for the world? And they want to impose, uh, you know, th their communist system on the entire world. They, they want the Chinese culture to pervade every corner of the world. What is it they're really fighting for? And what is the battle that they're trying to win you? The United States, at least there's the perception that we're trying to fight for, you know, our, our liberal values, uh, that our country was founded on. But what is China? What is China's end game here when you talk about their 50 to a hundred year plans?
Josh Rogin: (41:15)
Right. Well, I mean, if you listen to what changing things says and read what he's written, uh, what you see is a very clear pattern of him talking about an ideological and political struggle with the west, where the values of like freedom of speech, journalism, you know, freedom of assembly, religion, that all of these things are seen by him personally, uh, not only is things to compete with, but as direct threats to the legitimacy of the Chinese communist party and its rule. Okay. So that's a way of saying that China's goal China will, the Chinese government will always say, well, we don't interfere in free societies. Well, what about the fact that they're exporting all of those technologies, uh, to, to dictators all over the world, that they're trying to recreate their model of repression and aggression, uh, and expanding their economic reach in ways that put these countries at a disadvantage?
Josh Rogin: (42:06)
You know, I think the, the, the best way to think of it, and I think is a very fair way to think of it is that China doesn't want to rule the world. China wants a world where its rule is uncontested. In other words, they want to make the world safe for autocracy. Okay. And that means not that we can't have a world order and international norms that can be enforced. So if they can just change the world, order enough so that their model, uh, is not challenged, and they're able to do what they want all over the world, while still enjoying the benefits that our world order gives them. They still want the access to our markets. They still want access to our capital. They still want all of that soft power influence. They just don't want to play by any of the rules.
Josh Rogin: (42:47)
That's the goal is to destroy the rules so that they can do whatever they want. And that's not a Chinese led world order, per se. That's just a world order that probably we can't live with. And I just to finish the thought, you know, that, I think what that tells us is that, you know, we don't, we shouldn't be in the business of trying to force the world to choose between the United States and China. We can't get into one of these situations where only one of us can survive. We have to somehow find a, uh, a relationship that both sides can live with to avoid the conflict that neither side seeks. And that involves convincing the Chinese leadership, that they can't have their cake and eat it too. And that involves fixing our democracy and fixing our, our systems so that they actually are better. And that they actually do what they say they're going to do and deliver for our people.
John Darcie: (43:34)
And do you think there's a path to that outcome? You know, talking about the acidities trap and avoiding a greater confrontation, is there a path to, it seems like China is enjoying a lot of the economic spoils that come along with, with their system and people while they pay lip service to human rights issues that people still still commercially do business in China. Are they not enjoying those spoils today? And is there a path to equilibrium,
Josh Rogin: (44:00)
Suffice to say, we're not doing well, we're not rising to this challenge. They bet they've got a 20 year head start, at least. Uh, but the first thing to do is to admit that you have a problem. And I think that is the, if you want to say silver lining of the chaos of the Trump years is that everyone sort of immense. We have a problem. Now we have to figure out what we can do about it. And, you know, the, the, the thing that we can do by the way is to actually live up to our principles. And if we actually enforced, you know, transparency, accountability, rule of law, justice, human rights, democracy of speech, true journalism, all of those things are not aimed at China, right? We don't have to make them about trying to those are about us. And if we just did all of those things, we'd be in a much better place than we are today. But no, to answer your question, we're not doing those things. And right now it's not going well.
John Darcie: (44:47)
Well, Josh, you talked in the opening about how you hope to kickstart this conversation. I think you did that in a great way with your book. Um, so thank you for writing it and thank you for coming on salt talks. We think these topics are going to be continually more relevant over the coming decades for, for young people like you and me, Anthony, you know, he's, uh, we're going to put them out to pasture soon. So he doesn't have to worry about these things quite as,
Anthony Scaramucci: (45:09)
Um, I'm younger than president Shea, be careful. Okay. I'll give you, as you both know, president, she is listening. He didn't like the last comment that you made Dorsey. So let me pull up the book. I think it's a brilliant exposition of what is going on. I congratulate you on the book, Josh, before we do let you go, what's next? What are you working on next?
Josh Rogin: (45:31)
They say writing a book is like having a baby. It takes two years for the pain to wear off before you want to do it again. Uh, I'm looking forward to, uh, you know, uh, a period of covering this administration, holding them to account, making sure that they don't, you know, forget everything that happens in the last four years, but also making sure that they don't repeat everything that happened in the last four years. It would be terrible if the partisanship and toxicity that pervaded our politics and our media continued and even got worse, because that is going to bleed into all of the issues that we have to solve. So we are where we are. You can't go back and fix the last four years, but we can at least get together on this thing and admit that, you know, we can't have the type of politics, uh, that we had in the past. And if my columns and my work and contribute to a common understanding of our shared experience and our shared humanity, and that's my goal, that's what I want to do next.
Anthony Scaramucci: (46:23)
Well, congratulations on the book. I'm looking forward to your byline and other stuff that you work on, and I want to get you to the salt conference. Maybe we can get a couple of people together and get them in the mix and discuss what's going on with the U S and China, apple, have you moderate something like that for us,
John Darcie: (46:43)
One, one name that we spoke about in this talk that we won't reveal that's within the Biden administration that focuses on Asia policy. That's actually confirmed to speak in September on these topics. So, you know, maybe, maybe we get you involved in that conversation. And
Anthony Scaramucci: (46:57)
I'm recommending your book to all of my wall street pragmatists that still liked Chinese Hong Kong cooking. Okay, Josh, we're going to try to get them to rethink themselves. It's a smarter play. It's a smarter
Josh Rogin: (47:11)
Play, to be honest about what's going on in China, it will be we'll end up doing better in the long run. Even if you take a short term hit.
Anthony Scaramucci: (47:17)
I think, I think it's well said, and I think that's probably true about most things in life, Josh. Okay. Most, most things take longer than 11 days. Josh Rogan. Don't forget that. Okay. You want
Josh Rogin: (47:28)
To be right at the, it's not in the beginning, right? Amen. All right. Well, thank
John Darcie: (47:31)
You. Your estimate. Don't talking about chaos. Don't underestimate the amount of chaos you can create in 11 days. Yeah. 11 days I rub it in guys. She's loosening rubbing it. All right. Well, thank you Josh again for joining us and thank you everybody for tuning in to today's salt talk, uh, about Josh's book chaos under heaven about the Trump administration's approach to China and the battle for the 21st century. Just to remind you, if you missed any part of this talk or any of our previous talks, you can access our entire archive on our website@sault.org backslash talks and on our YouTube channel, which is called salt tube. We're on social media. Please follow us. Twitter is where we're most active at salt conference, but we're also on LinkedIn, Instagram, and Facebook. And please spread the word about these salt talks. We love educating people on these issues, uh, and today being another important one, but on behalf of Anthony and the entire salt team, this is John Darcie signing off from salt talks for today. We hope to see you back here soon.