U.S.-Asia relations: What’s next? with Rana Mitter

- [Host] Welcome to the Wiener Conference Call series, featuring leading experts from Harvard Kennedy Schools who answer questions from alumni and friends on public policy and current events.

- Good day, everyone. I'm Ariadne Valsamis from the Kennedy School's Office of Alumni Relations and Resource Development at Harvard Kennedy School. I am very pleased to welcome you to this Wiener Conference Call. These calls are very generously supported by Dr. Malcolm Wiener and his wife, Carolyn, who championed the Kennedy School in so many vital ways. I really appreciate their support, and all of us benefit from these wonderful calls. Before I introduce today's speaker, I'd like to give you a couple of housekeeping notes. I wanna remind everyone on the call that this call is being recorded. It will be posted on the Kennedy School's website and YouTube page. And if you'd like to turn on the feature that provides real time transcription of the audio, please use the meeting controls toolbar. It's at the bottom of your Zoom screen, and you click on Show Captions to give you that. For the best view of our speaker, at the top right of your Zoom window, you can select Speaker View from the View Selections. And with that I will introduce today's speaker. We are very fortunate to be joined by Dr. Rana Mitter, the ST Lee Professor of US Asia Relations at Harvard Kennedy School. He is an expert on the history of China and how it can explain important aspects of contemporary policy and decision making. Professor Mitter is a frequent commentator in global and media forums, including foreign affairs and the World Economic Forum in Davos. And he's the author of several award-winning books. His most recent is "China's Good War: "How World War II is Shaping a New Nationalism". A fellow of the British Academy, he previously taught at Oxford, and we're very fortunate that he's here today to share his expertise with the Kennedy School's alumni and friends. Rana, over to you.

- Ariadne, thank you very much indeed for that kind welcome. You said that it might be best to use the top right hand corner to get the best view of the speaker. Some, possibly include my wife, might say that the best view is to turn off your video completely and just listen to the audio, but we won't go down that particular route. It's a huge pleasure to be with this very distinguished group today on the Wiener Call, and I'm delighted that I think at least two members of the Wiener family who've supported so generously are on the call as well today. We, here at HKS, are very grateful for all you do to support us and for everyone who's part of our community being part of this conversation. What I want to do today is to spend just about 20, 25 minutes or so with a few thoughts about the US-China relationship and where it may go next. I could, as I'm sure you'd be aware, spend, you know, two hours, indeed two days and still not exhaust all of the extraordinary geopolitical, economic, technological, cultural ways in which this relationship has developed and will developed. But since our time is limited, I'm gonna stick to a few of the key issues that I think are, you know, very much there on people's minds on both sides of the Pacific, I would say. This is very much about what China thinks as well, in as much as I can try and illuminate that. And then we've got space for plenty of Q&A, and obviously you are more than welcome to bring in any questions on the subject that I haven't dealt with in the comments that I make initially. But let's try and start that by just getting the presentation up. Let me just see. Yeah, that looks like it's in the right place. Ah, interesting. Now, ah, there we go. Yeah. Right, I'm assuming, Ariadne, that everything's working okay on the screen sharing. If not, you'll interrupt and let me know, but for now it looks as if we're in the right place, so that's great. Great, fantastic. Okay, so let me start before we go to the future with the very recent past. And I think it's worth noting these two pictures just because in some senses, they provide a contrast, you might say, with two faces of the US-China relationship that were notable under the previous administration, the Joe Biden administration, which has just come to an end. And many may remember, but perhaps not have it in the front of your minds that in the far, far off days of nearly four years ago, March, 2021, there was a meeting in Anchorage, Alaska which did not go well. And you see the picture at the top, with US and Chinese flags, key decision makers from both sides. And in fact amongst them were the new Secretary of State at the time, Tony Blinken, and then quite longstanding Foreign Minister of China, Wang Yi. And if you look at the symbolism of that table, and actually of the people sitting at the tables, it tells you quite a lot about that moment. First of all, everyone's sitting on two sides, Chinese on one side, Americans on the other, not really interacting. It's still the last, actually I say the last, it was quite a sort of central part of the COVID era. The United States, of course, actually didn't end COVID restrictions until later that year, 2021, and China went on all the way into 2022, as people will remember. So it's still very much during the pandemic period, which is why the separation is as it is. But it wasn't just the virus that were keeping people apart. Essentially both sides, both sides were supposed to have a dialogue, but it was not really a dialogue. It was two monologues, the Chinese putting forward their complaints about the United States, the United States putting forward their complaints about China. Fast forward to the picture below, well, actually not quite the same actors. Tony Blinken is still there, of course, you see on the left hand side. On the right, we see Qin Gang, Formerly Ambassador to the United States from China, then briefly Foreign Minister. Those of you who follow the intricacies of Chinese politics will know that various things happened both before and behind the scenes that led to the swift departure of Qin Gang as Foreign Minister, being replaced as it were by his predecessor, Wang Yi, once again, who remains the minister. But at that sort of brief moment, Qin Gang was the counterpart for Secretary Blinken. And they're shaking hands, they're there in public, COVID restrictions are over, they can at least see each other publicly. And this appeared to provide a sort of warming of the relationship between the two sides, and to some extent that was true. After a really very rocky 2022 and '23, including the so-called balloon incident, the spy balloon incident you might remember, and other, you know, downs as well as ups. The decision that was made in late 2022 to kind of do a reset, and in some important areas such as military to military conversations that the US and China should once again be talking to each other. This did set the tone for what at least provided, as some people put it, a floor if not a ceiling to the relationship, a level beyond, below which it should not go. And that had remained very much the case through much of the year and a half that, so two years, really, I suppose, year and a half, June, 2023 to January, 2025 that remained of the Biden administration. Last year, of course, saw a whole variety of speculation around the world, but certainly in China about what would happen to the relationship depending on the election outcome. There was a general feeling that, you know, if Kamala Harris won the election, there'd be a sort of continuity, more of the same. Some of the restrictions on Chinese access to US technology would become stronger, that they would probably be kind of slow. But sure attempts to decouple the economies with the reelection for a second term of President Trump, much more uncertainty. But also, and it's worth noting this amongst many Chinese policy circles, a real sense of anticipation of opportunity. The idea that an unpredictable US President might also provide new opportunities for conversations and dialogues that have not yet and not happened for a long time. And I will say flagging up, I think that's where a lot of people in Beijing still are at this moment in February, 2025. But various things sit behind those changes, and let's spend a couple of minutes with some slides just to remind ourselves of those, because these current realities will remain relevant for quite some time to come. So, trade, we are aware that the one policy that really has been implemented by the Trump administration in its first few weeks in office is a 10% tariff on Chinese made goods entering the United States. And this particular graph is a sort of quick snapshot of why, at least in the eyes of those who are keen to impose tariffs, it is necessary to act in a situation of trade imbalance. Now I think it's fair to say that most trade economists, not all, but most argue that the notion of trade being balanced in one direction or another is more complex than the idea that if you are selling more to someone else, you're willing, and if you are buying more from someone else, you are failing. But nonetheless, this is the policy background to a very real policy that has been imposed. That said, and it has certainly been noticed in China, the 10% tariff imposed up to this point is not the 60% tariff that was discussed by the candidate during the election. And what that means, well, if you know the answer to that question, I would love to know, but so would a lot of people in Beijing because nobody is quite sure, but they wonder whether it's more of a kind of starting point for a negotiating position than the intention that it will remain as a continuing tariff. It's worth noting, of course, the 10% tariffs on top of existing tariffs, which actually in some cases were imposed by the first Trump administration and then kept on by the Biden administration. So it's worth noting that a lot of this is about US policy more broadly in the recent past, not necessarily about something very new that happened on January 21st. Anyway, that is the background to some of the language that underpins, first, American, and then Chinese diplomacy around how to navigate this new world. So first of all at the top there, a statement from the now departed former Secretary of State, Tony Blinken, and he made the statement, "The scale and scope of the challenge "posed by the People's Republic of China "will test American diplomacy "like nothing we've seen before." To be honest, I shouldn't think there's any politician in America, regardless of what party they're from, or indeed for much of the rest of the world who would disagree with that statement. It's a broad one, but it gets to the heart of what most politicians think is the case. I would actually venture to say that most Chinese politicians would probably agree with it too if it came out of their mouths too. It's almost a statement of fact, really. The second one comes from, and I'm being as precise as I can, the man who was then Secretary of State designate, Marco Rubio, because actually he wasn't I think confirmed at that point. It was earlier January, 2025. But he was speaking to the Senate Foreign Relations Committee about what might be the case when he took over at Foggy Bottom. And he's made a more pointed statement in a sense there, and you see it there, but I'll just read it, of course. "If we don't change course, "we are going to live in the world "where much of what matters to us on a daily basis "from our security to our health "will be dependent on whether the Chinese "allow us to have it or not." And I think the statement's really interesting because it combines both the continuity with Tony Blinken's statement, you know, the scale of the challenge, the scale and scope of the challenge is essentially the same idea. But Marco Rubio has added an element that isn't in that Blinken statement about how far the US's own priorities are going to be further affected by what actually comes from China. And without kind of going too far down the kind of temptation of, you know, yesterday morning or the day before yesterday morning's headlines, it's worth noting that whatever the logic and whatever the practicability, and you know, that's a different set of questions of the mineral deal that may or may not have been signed with Ukraine in the recent past. Thinking about rare earths, thinking about mineral deposits, and thinking about long-term extraction of raw materials that will then fuel the necessary supply chains for the highest levels of technological manufacturing. There's something China thinks about, United States thinks about it, the European Union thinks about it. And that question of whether the Chinese allow us to have it or not in the Rubio statement, I think is a reflection on the idea that things that are vulnerable from the US's point of view to Chinese control, need one way or another, to be brought out of that particular space. That's the intention, I think, anyway, not that, I hasten to add, I'm privy to any Secretary of State past or present's, personal thoughts. Let me turn to the Chinese side. And again, these are just a couple of examples, you may not know of them, but I'll just say something about about them briefly. These are not politicians. One of the reasons is that, sorry to say it, but even compared to the official statements of American politicians or European politicians, the official statements of Chinese politicians are incredibly well laundered by the propaganda ministry and the news agency, and are usually very, very boring. So you know, you have to analyze them at some length. We do do a bit of that in my class at HKS, but we have limited time here. So instead, I thought I would, you know, break the mold and give you two pieces, paragraphs that are actually by interesting people, both of whom are think tank based, sorry, academics based in universities, but with a think tank mentality in China. And smart and creative thinkers about international relations, both of whom know the US very, very well. Wu Xinbo, the guy at the top here, you see, Wu Xinbo is older generation. I think, I'm trying to remember, I think at Fudan University in Shanghai. But you know, very much a kind of senior respected figure. Dong Wang, the guy underneath, also well respected, but younger, from Peking University, and with, if I remember correctly, a PhD from UCLA, so knows America from the inside very well. And Wu Xinbo starts there by saying, I won't read out the entire quote, perhaps you can read it there on the slide. But it's about Taiwan. And it's about the Taiwan Relations Act passed by Congress in 1979 in the context of the Carter Administration's recognition on 1st January that year of the People's Republic of China. Sometimes forgotten, not by this group, I'm sure. Worth remembering, Nixon went to China, but it was Carter who recognized China. It wasn't an instant thing. It took about seven years before US China relations were formally established. And so Wu Xinbo is analyzing, so these, the top one is a translation from the Chinese. The bottom one actually was originally written in English. So the top one is a translation of an article or a paragraph that's written for a Chinese audience. And that's why these quotation marks and other things are there in trying to step around a really delicate issue. So Wu Xinbo, I suspect, it's almost saying, look, don't blame me, guys, I'm just a messenger. But this is what these crazy Americans think they're doing with Taiwan, which of course, he would say does not accord with China's views. So this idea of having obligations to Taiwan's security in quote marks. Well, from the point of view of the Taiwan Relations Act 1979, they're not obligations in quote marks, they're just obligations. Congress can change it, Congress can change anything, but that's not what the act says right now. And then the second one or the second paragraph, second, the US believes that Taiwan is a so-called, quotes, democratic regime, close quote marks, and that they should support Taiwan's, quote marks, democracy. Now, this is again an important area, because ever since the derecognition of Taiwan in 1979, Taiwan's leaders, both then dominant KMT Kuomintang, or Nationalist Party, formerly under Chiang Kai-shek on the mainland, and you know he's long since gone, but the party is still there. And actually, the now ruling DPP have leaned very heavily into the idea that, okay, Taiwan is not a recognized state, it doesn't have the sovereign rights of Ukraine, let us say. But it does have one of Asia's liveliest civil societies, free press, multi-party democracy, very kind of advanced positions on many aspects of civil rights. And therefore, it has value as a liberal-free democratic state as opposed to recognized country, but state, in Asia that's worth preserving. The Biden administration certainly lean very heavily on that argument, while also remembering the unstated corollate, which is that Taiwan is also, of course, a huge security asset for US interests in the United States. If China controlled Taiwan, then its naval projection, blue water naval capacity in the Western Pacific would be much, much greater. It is not yet clear, and I think that's just a literal statement of the truth. It is not yet clear exactly what the new administration, the Trump administration Version 2's policy is towards Taiwan. Many of the people who were involved with the previous Trump administration's policy on China and Taiwan are no longer in this administration. And we have yet to see what the new team is going to do. So I think we have to wait and see on that. But certainly, Chinese-siders, Wu Xinbo's, you know, very interesting article points out, will push hard on the idea that many of the terms in which traditionally cross Republican and Democratic administrations, the US has looked at the changing nature of Taiwan, and from the '80s to the present day, are not recognized as valid by the Chinese side. They regard Taiwan, as you know, as a purely internal affair, the last unfinished business of the Cold War, an island that needs to be brought into the fold, whatever phrasing you want to use. That is a very different lens. And that then leads us to Dong Wang, again, fascinating and very engaged younger scholar based in Beijing, a lot of knowledge of America. And to be fair, his piece says, "A new engagement consensus "would require both Washington and Beijing "to abandon a zero sum mentality, "and instead conceive of power as a positive sum game, "showing the wisdom that all great thinkers "from China and elsewhere do." He makes sure he quotes our own Joe Nye to back him up on this. Whether or not Joe necessarily agrees with this citation is something I haven't run past him yet, but it's a good way to get credibility in the geopolitical world, to quote our former Dean. And certainly this mindset that actually the US and China have to sort out an arrangement between each other, at least rhetorically, is something that you continue to hear very strongly amongst the Chinese think tank in the Chinese think tank ecology, you might put it. Although the level of gloom in private, to be honest with you, about whether this is really achievable is also quite palpable. And I've certainly found that on previous visits to Beijing recently. Just a few more minutes on some of the issues that underpin these questions. So, you know, that's to do with some of the rhetorical structure around US-China relations and where it may go in the near future. Remember that some of the geo-economic issues that underpin that relationship are not going away. Just a reminder of that export-import graph we had just now, and then go back to this one. Here are four examples. I could give you 14, I could give you 40 probably if I really thought about it. But here are four important ones that are hard geo-economic questions that will not go away just because as is also realistic, the security environment between the US and China on military issues is not a very stable or very trust-enabled one. So first of all, and again, I won't go into huge detail, because you know, an audience, this expert will know a lot about this already. Supply chains. Is the United States and are its allies going to decouple from Chinese production? I mean, I'll put this in the most basic level, and I don't wanna kind of do brand names. You know, other brands are available, but can you make an iPhone without China? Well, Apple is currently moving more production into India, for instance. And that may be part of the question, some people call this ABC, Anywhere But China, as an alternative production chain. But I think a lot of people who are realistic about manufacturing will also say, but you can't do it overnight, you can't even do it in a year. It takes time and it takes a lot of dedicated and strategic effort, and probably between states as well as private companies. So let's see how that decoupling actually works out. But it's definitely underway in many ways, and there are many areas in which there will be decoupling. Just a question of how far it goes. Second point is about talent pool and intellectual property. I think one of the things, 10 years ago the story was, well, Silicon Valley, United States, western world, that's where the innovation happens, and China just takes or steals, or you know, rips off this IP. That is no longer so simplistically the case, it's still the case, I have to say, we upfront here, that there is too much intellectual property theft by Chinese entities from foreign actors. But also, nobody can look at what China is doing today and I think, deny that China is also one of the major innovators in technology in the world today, in artificial intelligence. DeepSeek may be based on things that obviously emerged from the US OpenAI environment, but at least in the first glance that we've seen, China's managed to do an awful lot with AI, and to make it more efficient and cheaper, and to do things that no less a figure than President Trump pointed out to an audience might wanna make America's tech entrepreneurs sit up and think, whoa, what do we wanna do next? So that division, and perhaps that's part of the decoupling too, between a Chinese driven tech and IP environment, and one that is, you know, whether it's gonna be American, or whether there is actually still scope for America, Europe and others to cooperate. That's still unclear. That's gonna be a big question in the next few years. Energy crisis, again, we've seen a much bigger divergence in the last five weeks than would've been the case, you know, a year ago. It would appear at the moment, maybe it'll change, that there's gonna be a big forward facing push back to fossil fuels in the United States and in the economic ecology surrounding that. Meanwhile, China is gonna continue to produce an awful lot of greenhouse gases, and also fuel climate change, along with the US, India and EU as the four, you know, biggest producers of climate change enabling emissions. But China will now almost certainly consolidate its position as the world's biggest and most dominant producer of green energy tech, solar and wind in particular. 90% of solar, 75% of wind, I wanna say off the top of my head, are of those industries are dominated by Chinese tech. The west can make a decision to go another way and go with India, go with what it wants to do. But right now that is where we are, and the demand for post fossil fuel energy outside the United States is not gonna reduce anytime soon, particularly in the global south. That's gonna be another area of immense contestation. And finally, fourth on there, the question of Chinese investment in FDI, and the Biden administration went various ways on this. The Trump administration may do as well. What happens with Chinese investment in the United States if it's purely financial and doesn't involve transfer of IP? Does the US still want that? Don't know yet. Second, what happens, and this is even more tricky, and I have no idea what the outcome of this is, with areas where IP is involved, and TikTok is the obvious case of that? I do not yet have a clear picture. Maybe someone on the call does about where that's gonna go. But it's a case study of a very interesting shift of priorities. And I think that, you know, it may yet be a kind of sounding board or a kind of bellwether for what happens next. So we do, of course, now have an environment in which two presidents, President Trump, President Xi, are now shaking hands and go, well that was from a previous administration, but they will be almost certainly, I suspect, meeting within the next year or so. On the US side, there's been stated to be willingness. I suspect that China will also want to show that they're kind of engaging with a new environment. And of course, it's worth noting that Foreign Minister Wang Yi said last week, shortly after the Munich Security Conference, that China supports, really interesting phrase, the new consensus between the US and Russia, and then added, as long as international protocols are observed, which may have been a sop to Ukraine, in fact. But the idea that China would acknowledge there's something called a US-Russia Consensus, and then back it up. That's new. And as part of that, some people have seen the Wall Street Journal elsewhere, that there's been discussed of what some people have called The Reverse Nixon. The idea that, just as in the bottom half of the picture you see there, Richard Nixon visited China, met Chairman Mao, very old and ill by that stage, but they did meet. And this enabled the US and China to work together against what was then the Soviet Union. And that maybe, as you see on the top right hand, the undoubted close relationship, at least in personal terms that Donald Trump has put forward with Vladimir Putin, might lead to an opportunity for Russia and the US to push back against China, reversing the old dynamic. I will say that I'm not yet convinced that this is quite workable, and you know, without going to huge amounts of detail, we can talk about more of this on the discussion. I would say that the mixed difference is that back in 1969, 1972, whatever, China and the Soviet Union were at daggers draw, and they nearly went to war with each other in 1969. That is not the situation between China and Russia today. I think the relationship between the two countries in many areas is not as close as it's sometimes made out to be, particularly at levels below the top leaders actually, more at the organizational level. But that's a very long way from the two countries essentially be willing to split off, and one of them joining up with the United States. I personally think that's a tough call, but there are lots of very smart people in Washington, who unlike me, have access to power and can make things happen. So maybe they're onto something. We will find out. And it's certainly worth a really lively and rigorous discussion I think. So in terms of what's likely to happen next, let me finish off with a couple of quick thoughts about some of the big policy issues that are already with us are likely to make waves in the near future. First of all, I think this question of tariffs. So I reproduced there, just you know, literally a paragraph taken from a White House statement from the beginning of this month, 1st of February, just four weeks ago, even less actually, talking about why 10% tariffs have been imposed. In response to China's intellectual property theft, forced technology transfer, and other unreasonable behavior, President Trump acted with conviction, et cetera, there you are. Now, using that leverage to reach a historic bilateral economic agreement, I think that is the interesting part, 'cause it's suggesting that all these bad things that China's done are the reason for the tariffs, but also the bit after the comma, there's a way out. It's not just saying you've done bad, decouple, that's it. It's basically seems to me to be saying, this is, I mean if you change the words historic bilateral economic agreement to deal, you can see, I think, what is being quite strongly hinted in that place there. So watch that particular space. How that works, and bearing in mind the US industry still has a lot of interest in China, mentioned Apple, a lot of auto manufacturers, people talk about Tesla, but Ford and other big players are in there too. Fast moving consumer goods, there are lots of areas in which the United States still has significant economic interests in China and its market, even if they're not really flagged up, in the way that they were during the much more warm days, the 1990s and 2000s. And then let me just say in terms of Taiwan, another big issue a lot of people think about, how might China seek to pressure Taiwan, and what might happen in the near future? Well, just as put it out there, and again, very happy to discuss or even argue about this on the call, I think a physical military invasion is of a very low likelihood. It's really hard to organize, and I don't think the military tactic is the first choice of China, even though it's not by any means eliminated from the list. It's too unpredictable, and the risk of a potential US intervention I think is too high. Even with the change of administration, I think the Chinese would think that risky. A naval blockade, which is quite often war gamed by actors is a relatively low likelihood too, but not as low as a full scale invasion. Nonetheless it would have economic and probably geopolitical consequences as well. So I think looking at economic pressure on Taiwan, 80% of whose businesses are linked to the mainland one way or another, and what's already happening, which is the infiltration of Taiwan's social media by mainland bots and actors who essentially are seeking to spread disinformation already happening. I mean again, it's well monitored by the Taiwanese themselves, and certainly a more effective and much cheaper way of trying to get influence. And I would look around the 2028 election, the presidential election the next time round where the DPP will be even more vulnerable. Getting four terms in a row is tough, even with the mainland issue. Taiwan's economy's not doing well, and there's plenty of disinformation. I think that's a cheaper and easier way for China to put pressure on Taiwan than launching an amphibious attack. And let me finish, if I may, with four predictions, which is very foolish of me, for 20 years' time. So we come back on the Wiener Call in the year 20, what's it gonna be? 2044, 2045. We will be in a better position to know whether or not anything I say actually came true. But let me give you a couple of thoughts now. These are drawn actually in some ways from a longer article that I've got coming out of the next edition of Foreign Affairs, which I'm sure many of you read. And it's, as I say, this slightly wild attempt to work out what China might be like in 20 years' time if the global environment keeps changing as it's doing now. So number one is that I think that in 20 years, global divergence on energy policy is likely to be more stark. There will still be a large part of the world assuming that, you know, things stay steady, that is very fossil fuel dependent. And then, and I think that the push towards green energy will have gone much, much further around the world in 20 years than it has now, not least because actually it'll become much more commercially viable. The second, which is not unlinked, is that science research environments are gonna be more split. There's already concern both in China and the US about whether or not allowing the other side's scientists to, you know, take part in that science ecology is a good idea. Obviously far more Chinese science students come to the US than vice versa. But nonetheless I would expect that, in particular, as the global south develops more of an interest in science and technology, choosing between Chinese and American science environments might become more of a factor than it is now. The third one is that I think China's gonna become more ideologically influential. The world as a whole, it's not just about the United States, it's about Europe, it's about South America, it's about parts of Sub-Saharan African, Southeast Asia. Even when the system is democratic in terms of elections, is moving towards a more populist turn, and a relatively more authoritarian form of politics. I think that's not a particularly controversial thing to say. It's sort of, if you wanna say communitarian, that might be a different way of putting it. The point being that that might be an environment in which China's ideas, in which it talks about the need for lots of social welfare, social spending, it likes to spend big, but at the same time, also that individual civil liberties are not the rock on which states should be broken or judged. That overall sense of political mission, which has always been, you know, China's position, or at least it has the last 20, 30 years, might find more political purchase. I think you can find versions of it in slightly unlikely partners of China, like Hungary in Europe, where actually there's been a very friendly relationship between Prime Minister, Viktor Orban, the Fidesz government, and China's financial circles, where there's been, you know, plenty of regular interactions. It's not to say for a minute, that Hungary is the same as China, but that the kind of sense of how the world might be ordered has more similarities than would be the case, say, with more traditional liberal democracies as opposed to what Mr. Orban himself calls an illiberal democracy in Hungary. And last but not least, and this has been touted by a lot of thinkers just in the last few weeks. Are we moving over the next, not this year, but maybe over the next five years, 10 years, 20 years towards a new hemispheric division? Could America be the power of the western hemisphere, China of the Eastern? I still think that that is probably too neat. But having said that, we sell a lot of consolidation north, south already in the language of the current US administration, and over in Beijing, if you look for it, there's more of a sense of discussing this idea, which actually is an American idea, translation to Chinese, and that is in case that doesn't ring a bell, New Monroeism. In other words, if the Monroe doctrine works for the US on that side of the globe, then maybe it's time for China to think about its own version of Monroe, or Mung Law, as a geopolitical thinker for the 21st century when it comes to how Beijing wants to operate influence too. I think by the way, there are lots of other actors, Europe, India and others who might look at both of those powers and say, not so fast, you two are important, but there are other powers in the world. But I think the next 20 years will be an extraordinarily interesting time to find out precisely how those dynamics actually work through. And already, I think I probably spoken enough at this point. Why don't we stop there and open up some discussion?

- Wonderful, thank you so much. That was amazing. We will now open up the session for questions. I want to ask everybody to turn on their cameras. It's very helpful to see you, we'd like to be in community. And to ask a question, please use the virtual hand raising feature of Zoom. You can find that under the React button. I think it's a little heart these days on your screen. And to start us off, I'm gonna ask a question from Jessica Howe. Jessica's a 2024 graduate of both the MPP program and the MBA programs at Harvard. And I think Jessica may be with us, and if she is, I would be very appreciative if she could, and have a follow up and then we'll go down. I can see Paul's put a hand up. Michael, you guys are great, thank you so much. Here's Jessica's question, Rana. With the abolition of the US Agency for International Development, and the apparent retreat of the US from the global stage, what kind of position will China be seeking in the international order, and how will this affect global norms and values?

- Jessica, thanks for your question, and thanks also for your wonderful participation last year in my China class at H Cares. I think it's the same Jessica, I'm fairly sure that it is, and great to have you back on the call, and would love to know what you're up to these days. So we actually discussed this question literally this morning in my class, because I hasten we do update according to what's happening in the world when we discuss what's happening with China's policy too. I think I would slightly rework the question you put forward. I'm not sure actually that the United States is retreating from the world. Certainly there are a whole bunch of people in Riyadh and in Kiev, and other places who are very aware that the US is being very active in the world in many ways. But I think the way in which it's doing it is already visibly and unarguably changing. So the way I would, and with the USA ID question, that's what we were, you know, talking about this morning, compared to the Chinese efforts. Let me put the following to you, and again, feel free others to kind of kick in and push back if you'd like to. Supposing the division is up to now. Sorry, supposing the contrast up to now has not been like with like, and it becomes more like with like, what do I mean by that? USA ID, I mean again, it operated in various different ways, but a great deal of what it did was to take grants and put them into a whole variety of projects, so disease prevention in parts of Sub-Saharan Africa, or you know, various types of community building. For the most part, China's development funding, including, of course, the famous Belt and Road Initiative, has not been grants. China produces a very small number of actual, you know, gifts to, you know, basically money with no strings attached in terms of its overseas policies. It mostly provides financing for infrastructure, and that, as is famously the case, is usually done on a fairly commercial basis, 15 new maturity on many of those loans. And if they don't come out well at the end, then you can gonna be in real trouble. Zambia is a good example of that more recently. I think we're moving into an environment in which it's more likely that US and US linked actors are going to be much more commercial in terms of the way in which they're putting forward their proposition to other actors in the world. But the difference I think will be this, China has done a very good job of branding itself as a place that basically supports infrastructure work that others won't touch, and sort of blurred over the idea that actually, you know, the impression is given that these are sort of gifts from China to the outside world, but most of 'em, as I say, are actually loans. If the, and that's partly about rhetoric and good branding, and you know, credit to China for having actually managed to sell the idea of BRI, I mean everyone in this sort of world knows what BRI is. Very few people know the US and European equivalents, even though they do exist, the branding hasn't been nearly as good, and that's somewhat embarrassing for a western world, which used to be in the Cold War, the winner of that kind of argument of rhetoric. But the flip side of that I think is going to be that if the US doesn't actually choose to project itself as a donor in the world anymore, and USA ID would be the best example of that changing, then the argument is gonna quickly move to who do you wanna borrow from? And in both of those cases it's gonna be up to both the, you know, US as a wider entity, it's not just the government, but also the kind of lending community and private sector, and China to rebrand themselves and see who wins that particular war. But I think it'll be a harder war to win, but maybe a more evenly matched one if both sides are actually lending, not giving.

- That's great. Jessica, I'm gonna assume you're good and we'll go on to Michael.

- Hello, Michael.

- Michael, if you're able to unmute yourself, otherwise we'll go to Andrew, and we'll circle back to Michael. How about that?

- Sounds good.

- [Michael] I am Michael, but that's because my husband--

- [Rana] Hello, Michael.

- [Michael] My husband's name is on here. Sorry, I couldn't change it. So I did wanna ask, because we've seen some articles in the news about some of the challenges that the Chinese regime is facing, including sort of economic stagnation, young people lying flat, demographic challenges, et cetera. So your presentation seems to assume a stable Chinese regime for the next 20 years. Do you see any process for domestic difficulties to change China's sworn stance in the next two decades?

- Hmm, no, very good question. And I would say, I mean, again, you know, sort of flagging forward, I don't myself see a Chinese internal economic situation that spells collapse. I do not think that that is very likely. I do see a domestic economic situation that means that China's growth is gonna be seriously impeded for quite some time to come. And I think it's a combination of factors, and as you've indicated in your question, that are purely economic and are sociological. So I think in economic terms, I think the biggest break on more unrestrained economic growth is that the economy of China is structured in such a way that it's trying to do two things which are not compatible with each other. It's equivalent of kind of putting your feet on the gas and the brake at the same time. In other words, China is currently arguing that it wants to keep its global trade surplus as wide as it is at the moment. And obviously the Trump administration wants to change that with regard to the US, but of course China has a lot of global customers elsewhere, so it can always increase its global trade surplus elsewhere. So that's number one. It also says that it wants to increase domestic consumption, which is generally regarded as one of the ways in which you can kickstart a certain type of growth, at least over time, and create a more stable domestic economy. But the third thing is it also wants to make sure that it doesn't open its capital accounts, and it basically retains very kind of close control of the currency, which basically a political choice. You know, basically in the '70s and '80s, lots of countries, the United Kingdom was one of them, decided to kind of go all out to let the currency float with the markets. And actually Nixon did something similar in 1972 when he broke the old gold, the dollar following the price of gold. And China isn't, you know, it's not following gold, but it's not going, the party is not going to allow the international markets to control the value of the renminbi freely. The problem is that those things aren't compatible with each other. And the one that always gets squeezed is Chinese domestic consumption. Linked to that there are other longer term secular issues, as they say, such as the fact the Chinese housing market has, A, been in the short term very badly damaged by taking on huge amounts of debt that they can't pay back, and it's internally designated debt. The state will basically sort it out in various ways, is my bet. But the problem is that you can't start from that point again because China has built huge amounts of infrastructure and housing in the last 15 years. There isn't the market there for yet more apartments for young families, particularly with the demographic shift, meaning that fewer Chinese are having kids. So that's a difficult problem to overcome. And then finally, you mentioned lying flat and so forth. I mean it's well known that there are a whole variety of areas where China's urban youth in particular are becoming increasing disillusioned. Many of them are not just unemployed, some are, but also underemployed. There are people with math degrees, or you know, physics degrees who are delivering noodles kind of on motorbikes because that's the only job they can get. Even for those who have good professional jobs, academics, media people living in the top tier cities, Beijing and Shanghai, has become very expensive, just as it has in Boston, or in London, or other major cities around the world. And this is creating a strong sense of disillusionment amongst many, many younger Chinese, which you can see on social media. But that's a very long way from arguing, I think, that this is a situation where the government itself is likely to change in a big sort of way. I think that what is more likely to happen, and that this is necessarily good for China, but it's a slow burn problem rather than a kind of sudden crisis problem is that that disparities between urban and rural China may well become greater, because the human capital is better educated in the cities. There will be attempts to use many of the capacities of new technology, artificial intelligence, and the kind of huge size of China's internal market, which is linked, of course, by probably the world's biggest and most sophisticated system of e-commerce to create new forms of employment. And I think that this means that in tech hubs, and there are lots of them, most of eastern China, around Hangzhou where Alibaba is originated, southern China, where Shenzhen on the south coast links to Hong Kong with its immense pools of VC capital, and that's still very much a thing. Northwest Beijing in terms of innovation in Haidian around the major universities, you know, Qinghuayuan, Beida, the Harvard and MIT of China, or maybe we should say Harvard and MIT or the Qinghuayuan, Beida of America. You know, these places all exist, just as Silicon Valley exists, and Route 128 exists, and you know, the Sun Belt, where people are moving to to Texas exists. But also Wisconsin, and Michigan, and Indiana still have lots of economic problems. And I don't, and you know, that is one of the things that's being worked through in the US today. I don't see quite how Qinghai province, or Gansu province, or places in the interior of China benefit from this kind of tech boom. And one of the answers might be to do one thing that China hasn't done yet, and of course, is very much the case in most other countries, including the US, which is allow more free movement of workers and people within the country itself. The internal Hukou residence permit system still quite heavily restricts movement, although it's been loosened in various ways. I suspect one of the answers may come in just saying, you know, guys, go where you want, create employment, create jobs, see what you can do. That may or may not be the solution, but I suspect that over time we'll see more changes in that direction to try and deal with exactly the problem that you've identified in your question. Thank you.

- [Michael] Thank you.

- I'll be calling on Andrew, you should be able to unmute yourself in just a moment. I wanna just remind people to use the Zoom hand raising feature. It's down under React, I think that's a little heart at the bottom of your screen. We really appreciate it. And Andrew, you should be good to go. Please remind us of your Kennedy School affiliation.

- I'm most senior fellow at VAR doing a book on the Chinese property market, that it's on the question of the domestic impact on the China's international relations. They're now transitioning from the debt fuel property construction business model to essentially some new model which we've yet to see. And even by the NBS standards, I think their total accounting of GDP for technology is about 9.9%, which is about one third of property. So, and China's running provincial fiscal deficits from 4 to going up to 6 or 7%. How do you think that this transition, which looks like it's really gonna be an inadequate economically, it's gonna impact China's ability to project its power globally, both militarily and also through political means.

- There's no doubt, as you've identified, there are a whole variety of different factors within China that make it increasingly difficult, certainly in the short term to see a sustainable economic model. And by the way, that's one of the reasons why I think, and this is a good thing, to be clear, that I think that there probably isn't an appetite in Beijing for any kind of confrontation with the United States, or more broadly in the region at the moment that would make a bad economic situation even worse, I suspect, at least in the minds of most. But what can be done over, you know, that longer period, and how will it enable China to project its power. I think you can still see a variety of ways where in the medium term, China can see that it has leverage, that it can project. So, you know, more and more FDI is actually leaving China and heading to places like Southeast Asia, partly because there isn't the capacity to be able to use it within China itself. And that, you know, may not be great if you're living in Gansu province, but it's certainly one of the ways in which China overall is seeking to get more economic foothold in its, what it regards as its own backyard. And you know, economic investment is probably more powerful than battleships, even though, as you'll have seen, in a frankly somewhat weird and counterproductive mood, Chinese warships have been firing off the coast of, you know, quite close to Australia in the last week or so, which doesn't seem like a wise direction to go in. In terms of wider projection also, I would say that over time, the path dependency that China has managed to create, to be fair, largely through its own efforts in recent years in terms of technology or another way in which they'll exercise influence. More and more countries outside the northern hemisphere are using Huawei, or ZDE equipment as the basis of their 5G and 5G plus provision. And that is a form also of power and enables a sort of dependency and renewability to come into the model of where China has influence in other countries too. Beyond that, you also have, I think, a strong sense that China is keen to try and make sure that it has more power in international institutions. We don't need yet quite how far withdraw from certain UN institutions in the Trump administration is gonna change balance of power in the UN. But there's no doubt that China, as the second biggest power of dues, is going to take every opportunity to use its influence at places like the UN, and including any influential places where it already has a seat, like the International Telecommunications Union, Food and Agriculture organization to make its global goals, and therefore, you know, it's wider influence, better known as well. And finally, and you know, it needs to be said, China has been building up its military at a major pace, for reasons I explained, I don't think that it's that likely that we're gonna see an actual confrontation anytime soon. But the fact is that China has the capacity to project at a far greater distance than was the case a generation ago. Its own power, whether it's maritime or airborne, or in terms of partnerships with, you know, military bases in places like Djibouti, Cambodia and so forth to be able to project coercive influence when the other methods fail or don't seem to be providing the results that they want. Thanks.

- Thank you so much. Yang Wang, please ask your question and please let us know what your Kennedy school affiliation is.

- Hello. Thank you, Professor Rana Mitter. I'm from Kenya School's MPP09, and I live in Amsterdam right now and an entrepreneur here in Amsterdam.

- Great.

- So my question is, yeah, so the recent visit by JD Vance in Europe, and his speech in the Munich conference is shocked the Europeans, and many on the media, people are talking about the split of NATO and the possibility of the European Union to recalibrate its China policy. So what do you see the relationship between Europe and China? It seems to me that it could be an opportunity for this relationship to warm up.

- The European question, a really important one. Thank you Yang Wang for that thought. There are some areas where it's already happening, and I would look at those areas in more detail to see what the direction of travel might be. So think about the automobile sector. One of the things that has been true for decades until suddenly it is no longer true, is that Germany sits at the forefront of global auto manufacturing, let alone European. And that it's had a huge market in China as part of its wider global network. But since the move to EVs has taken off, China has become much more dominant in that sector, and German manufacturers are struggling. If German manufacturers struggle, that means, really, that European ones do. There are of course big French manufacturers, Renault, Citroen, et cetera, Fiat in Italy. But really, it's the German industry which is seen as the bellwether. And what's been happening is that there's more and more cooperation between the German manufacturers and other Europeans as well, to be fair, with Chinese technology. So Geely, to give one example of one company, is working quite closely with some of the German auto manufacturers. What does this mean in a world where, A, the United States wants to bring more manufacturing back into the borders of the US, and B, we're certainly under the Biden administration, let alone what happens with the current administration, keeping Chinese automobile technology out of the supply chain was a top priority. One of the very last orders actually put in by the Biden White House was to sort of ban certain types of, I think Chinese self-driving software, I remember correctly coming into the American market. It didn't actually exist at that point, it's just that it was a prohibitive thing to prevent that happening. I'm not at the moment convinced that's what the EU is likely to do at all. So that might lead to a significant divergence in terms of where the EU and China can cooperate in an economically vital sector from the European point of view. In terms of the wider question, and the question of Vice President Vance and his comments, I think you are right. I mean, I'm obviously sitting here in the US, so I don't have a bird's eye view of Europe at the moment, but I would say that certainly the vibe has become one in which Europe has begun to think of itself as having, you know, really a very short notice to start reworking its spending priorities and its industrial strategy to stand more on, you know, on its own. And if that happens, I think that there's going to be an urgency about looking at sources of economic cooperation that sit separate from the ones that they traditionally had in the relationship with the United States. I think there's likely to be a further division, some will be in areas like automobiles, where I said I think there's an obvious entry point that's already happening for China. Others, such as areas like the building of defense and armaments, are by definition, not going to have Chinese involvement. You know, Dassel or other major European arms manufacturers couldn't be in a position, where they're essentially dependent on Chinese technology. The question of how far and how fast they can work with the United States will be important there. So that's the sort of division that I think I'd see, that that speech by the Vice President accelerated, but was already underway when he made that speech at Munich. Thank you.

- Paul, I want to invite you to ask a question, or is that a Zoom hand raise?

- Yes, it is.

- [Rana] It's a couple of hands, yep.

- And mid-career from 2009.

- Ah, hi Paul.

- You mentioned a possible 20 year outcome being, you know, the United States is dominant leadership in the West, and China-dominant leadership in the East. I'm wondering about those two other very, very large countries in the eastern part of the world, Russia and India, and whether you see, how you see it working out for them in terms of their dominance, and whether this thing can be split even further than two major leaders.

- So it's a very, very interesting thought, Paul, and I will say the following, but again, you know, call me back in 20 years, and we'll see if this has come off or not. The thing that the United States and China at the moment in terms of narrative you might say, is that both have global stories to tell about themselves and about each other. You know, each one is the other's greatest threat, they think, to global supremacy, even though supremacy is not always very well defined in those cases. They're also the only countries, I think, still that tell apocalyptic stories about themselves and each other. So, you know, either China's gonna take over the world, or China's gonna collapse tomorrow morning. But you know, my own answer, which is I think China will chug along and it will be fine, but not necessarily actually that spectacular in some ways, is less exciting, and therefore, you know, less touted. Indian and Russia, I think differ from that model in different ways. Russia has a certainly widely regional, and to some extent global ambition. You know, Russia wants to be big in the Middle East. Russia wants to have more say so in Europe, and thinks that it has an opportunity now to do that in the Ukraine context and beyond. Don't forget also, you know, the maritime sphere, undersea cables, all those sorts of things are very much in Russia's bailiwick. But once you start getting more broadly into Sub-Saharan Africa, actually into Asia, and I think Latin America, the Russian presence is less immediately obvious. I was about to, I was gonna say Africa, and actually there is more and more kind of Russian presence in various ways in Sub-Saharan Africa too. So you could say that that's part of it. However, Russia is not financially or demographically in a position where it can exercise those aims, I think very successfully. Its population is about 110 million, which is small. It's demographically getting older faster. And although, you know, I don't claim to have my finger on the pulse of the Russian people, I would've thought that they feel there's sort of been enough of Russia's, you know, public image been expended essentially on violent expansion in recent years. I'm not sure really how popular it is. It's not that I don't think there's likely to be a great uprising in Russia. I think that's not very likely. But the kind of global mission that there is, isn't one that I think has huge amounts of purchase locally. And I think that's likely to continue for some time because the demographic shift and the lack of building of a secure middle class lifestyle will remain an issue for quite some time. India, I think it's a different position. It can slowly begin as it is doing, I think now, to kind of raise itself to a more prosperous position domestically. I still have doubts about how extensive India's aims are in terms of international influence. India's made some half-hearted attempts to be, you know, to match China in terms of assistance in Sub-Saharan Africa, but never really gone very far with it. I mean, India's much poorer than China, of course, you know, the per capita income is less than half what it is in China. And beyond that, the sense that India needs to sort out its region, you know, it's always been wary of Pakistan, continues to be so, worried about what might happen in Sri Lanka, you know, keeping an eye on the broader region. But the idea that India, I mean, I think that India's interests say in really becoming a big player in Southeast Asia or in Sub-Saharan Africa is quite limited. Indian Ocean I think is different. And I think that is one area of greater expansion, and we see both Indian and Chinese naval capability growing as well, and kind of Maldives and Mauritius, and other places where there's kind of back and forth are examples of that. But overall, I would say that Russia, Russia has ambition, but not the means. India's beginning to get the means, doesn't have 'em yet, but might have soon, but I'm not sure it has the ambition. And maybe the US and China, even in 20 years will be the only countries that have both. But I think the kicker on that is that American ambition is still there, but it's changing before our eyes. And I think the big question, maybe one of the ones to leave everyone with is when you ask what are China's ambitions and what are now the US's ambitions? Asked as a supplementary question, ambitions to do what? And if you can answer that question, you can probably come up with quite a good answer to where things will be in 20 years.

- Thank you, Rana. In the two minutes we have left, I wanna invite Mirek Szydelski, who had a question, and I'll just, as he's unmuting himself, I'll just note he's an MPA 1995, I believe, living in Poland. And Mirek, are you able to- Oh, terrific.

- [Mirek] Okay, can you hear me because my background--

- We can hear you very well.

- [Mirek] Working, okay. So it's a follow up, because we sense in Europe that US is abandoning NATO, and you know, playing weirdly, at least to say. Yes, the relationship with Russia is something that is, seems like completely corrupted. Anyway, the question is about the Philippines, because we observed the tension in the South China Sea, and it's serious, and yep, maybe not 20 years, it may be just five years or four years. And we know that from the static point of view, the control of Philippines is important to, for the next step with Taiwan. And it seems like logically that like a preparation for the kind of one way or the other to take control over Taiwan, whether military or different is not clear. But the question is about the US, because they have the treaty, there is one of the strongest treaty. And with the current approach, it seems like US may say, oh we don't have, you know, we don't have much to gain. You know, it's not the business, the probably they don't have the resources that you can take over or whatever. And it's really very strange that US may resign from the Pacific policy. That's the question.

- Yeah, no, well let give a brief answer, partly 'cause I think there's so much in flux, but that we can't know where it's gonna go. I think the short answer is I haven't yet seen an indication, this is different from the European situation, I think. I don't think we've yet had a clear indication that the new administration seeks to withdraw from the Pacific at all. I think there is a very strong sense that they are rethinking where priorities lie. But you know, you pointed out that the Philippines has a formal treaty, so does Japan, of course. There's, you know, big troop present South Korea as well. There's big US troop presence in both of those, actually in the Philippines as well, actually under the SOFA< the State of Forces Agreement. And actually partnerships, if not full alliances with Singapore and whole variety of other actors. What I think I can say, maybe this is my last thought, and maybe it's a positive one, I think in many ways. Most of the other actors in the region in Southeast Asia, which is of course where South China Sea is so much of a contentious point, realize that they need China's economy to thrive. And that is, you know, a fact. But at the same time they would be extremely nervous, despite some of their surface rhetoric, if the United States were to withdraw its presence in the region. The fact that there is a hegemon, who is locally based, China, is not necessarily a sign that it means a disaster. And China wants to improve its economy, and to trade with its neighbors to increase its own economy. And that doesn't suggest military action. But without the presence of an alternative leading power who is willing, for instance, to do phone ops, freedom of allegation operations and push back against Chinese attempts to define at a maximalist level where their influence is, Indonesia, Malaysia, and lots of other countries that would profess being broadly neutral would not actually, I think, be so neutral after all. So there's a real opportunity that has always been there for the United States, still is there. I would suggest it's a very good opportunity to work out how to maximize the real leverage that the US has in the region and make sure that it's to the mutual benefit of all, including, of course, China, which will benefit greatly from a stable, peaceful trading environment in the Asia Pacific region.

- Wonderful. Well we will have to leave it there due to time. This was wonderful. I wanna thank everybody for joining today's Wiener Conference Call for asking such great questions. And a special thank you to Professor Rana Mitter. Thank you so much. Please mark your calendars for our next call, which is April 11th. We'll be joined by Juliette Kayyem, Belfer Senior Lecturer in International Security. Thank you again. Goodbye, everyone.

- Thanks, everyone, bye bye.