00:00:00.000Hey everybody, today on the Charlie Kirk Show, a comprehensive episode about China.
00:00:04.000If you're confused about what's happening to the Chinese Communist Party, this is the episode for you.
00:00:08.000If you want clarity about what's happening to the Chinese Communist Party, this is the episode for you.
00:00:13.000Senator Marsha Blackburn and Kyle Bass, join us.
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00:01:47.000There's so much news happening with China right now.
00:01:51.000And so I wanted to bring who I consider to be the preeminent expert on all things China, Kyle Bass, great American patriot.
00:02:00.000He's the CIO of Heyman Capital and Conservation Equity Management and a China scholar and also a member on the Council of Foreign Relations.
00:02:10.000Kyle Bass, welcome back to the program.
00:02:29.000Yeah, you know, Charlie, it looks to me if you just, if you get out of whiteboard and you take into account many of the things that she's done in the last, call it, four or five months.
00:02:40.000First thing he did is he told his banks to run a stress test, an aggressive stress test, in how they might deal with the asset side of their balance sheet in the event of extremely restrictive U.S. sanctions.
00:02:53.000Well, the only thing the U.S. has never sanctioned Chinese SOE banks or joint stock banks, right?
00:03:00.000There are 12 super regionals and they're about 10,000 local banks.
00:03:04.000But we've never really sanctioned any of their big banks or even talked about it for that matter.
00:03:10.000We should have long ago, given their malign activities and money laundering and funding terrorism and dealing with the enemies of the United States.
00:03:18.000But irrespective of that, I think it's important to note that he ordered a stress test on the banks to deal with U.S. sanctions.
00:03:26.000And then the next thing he did is he told the 90 million Communist Party members to divest of any of their personal assets they have in the U.S. and the West.
00:03:36.000And then they revamped a couple of the laws that are on their books that deal with their national security.
00:03:43.000The first one enables them to nationalize any assets in China that are currently owned by Western investors or Western corporate interests in the event of what they deem to be special circumstances, which include war.
00:04:00.000And then they actually brought into law, Chinese law, a new law about dealing with compliance of foreign sanctions, i.e., if the U.S. sanctions China and a U.S. company based in China simply adheres to those sanctions, the expats can be arrested and the assets can be nationalized.
00:04:22.000So when you look at the kind of flowchart on the wall, it's all there.
00:04:26.000It's all there that they're moving towards a wartime footing.
00:04:29.000And just in the last few days, we've been talking to some friends that have people that own factories all over China, and they're being forced to set plans for, again, wartime production.
00:04:42.000So it sure looks to me like in the last few months and then literally in the last few days, you've probably seen that the rhetoric, whether it's coming out of General Milley yesterday or whether it was Janet Yellen doing the about face on the Chinese submitting themselves to Western audits, I've seen a sea change in the recent time that tell me that things are worsening, not getting better.
00:05:05.000So just from a probability standpoint, what happens if China makes a move?
00:05:10.000I mean, is Taiwan, how easy is it for them to take over, if at all?
00:05:15.000I'm not a military expert by any means.
00:05:16.000I know you know the region far better than most.
00:05:19.000Is this going to be an easy endeavor for them if they are indeed preparing to go on war footing?
00:05:25.000Yeah, I don't think it's going to be an easy, an easy, call it amphibious assault if that's the way they do it.
00:05:33.000I think that I think everybody knows that the best window for the Chinese to cross the Taiwan Strait for an invasion happens basically in the autumn between call it the end of August and the end of September or the end of October.
00:05:47.000And so here we are approaching those times.
00:05:49.000We have Pelosi saying she's going to visit Taiwan, I think in August.
00:05:54.000And so, you know, Charlie, the way that wars happen, no one can predict what's going to spark one of these wars, but it's easy to see the frictions build over time.
00:06:05.000And whether you're talking about World War I or World War II or any of the major wars, these frictions build over long periods of time.
00:06:12.000And then all of a sudden, something unpredictable happens, which kicks it off.
00:06:16.000I have no idea of knowing what that's going to be, but I can tell you the frictions are at a boil.
00:06:22.000So something that you've always said that has fascinated me that I want to make sure our audience hears is the fundamentals of China.
00:06:30.000They're actually a lot weaker than a lot of the West realizes, that their banking system, their financial system is actually largely built on a house of cards.
00:06:40.000Can you elaborate on that for us, please?
00:06:44.000So, you know, without diving too deep into kind of how the financial architecture is, it's important to note that basically the U.S. banking system, let's say going into our financial crisis in 2008, we had about 17.5 trillion of GDP.
00:06:58.000We had about 17.5 trillion of bank loans on balance sheet in the system.
00:07:03.000So call it one times our GDP in our bank loans.
00:07:06.000And if you remember in the financial crisis and the aftermath, if you remember how Iceland and Ireland and Greece fell like dominoes, Iceland and Ireland had 10 times their GDP in banking assets.
00:07:20.000So when the assets turn bad, let's just say a number of, let's say 5% of the loans go bad.
00:07:26.000Well, if 10 times your economy has 5% of its loans go bad, you are completely broke as a country, right?
00:08:06.000Almost 40% of the loans in the Chinese banking system are lent to real estate, which is in major crisis.
00:08:12.000You've had 91 downgrades of Chinese property developers this year alone.
00:08:17.000And in the last 10 years, you've only had about 50 downgrades over the last decade.
00:08:21.000So you have property developers collapsing.
00:08:25.000You have Chinese property prices collapsing.
00:08:27.000You have people in China boycotting their mortgages because they've been lining up at their banks to get money out or cash out and the banks won't give it to them.
00:08:37.000So you've seen bank runs and even the SOE banks in Hawaii.
00:08:56.000Xi Ji Peng wrote in one of his musings at some point or a speech that he gave all about how the theory of Western capitalism is the ultimate force and it's being shaken to its core.
00:09:08.000Socialist development has experienced a miracle.
00:09:10.000Western capitalism has suffered reversals, a financial crisis, a credit crisis, a crisis of confidence, and their self-conviction has wavered.
00:09:17.000Western countries have begun to reflect and openly or secretively compare themselves against China's politics, economy, and path.
00:09:24.000Xi Ji Ping, on the inevitability of socialism.
00:09:27.000About your immediate reaction to Xi Ji Ping's musings on the inevitable Chinese future.
00:10:33.000You rarely see this kind of focus and commitment.
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00:11:12.000Kyle, what should we do, especially on a state-by-state basis right now, to prevent the incursion of the Chinese Communist Party into our way of life, whether it be buying farmland or hacking into our grid?
00:11:22.000You did something in Texas that I think can be scaled across the country.
00:11:27.000You know, and Charlie, it's a great question.
00:11:30.000And it's important to note that what Texas did with the Lone Star Infrastructure Protection Act that we helped a lot with, what we were trying to do is stop malign actors as kind of defined by the annual threat assessment by the Director of National Intelligence from acquiring, not actually from acquiring, from basically interfacing directly with what we deem to be critical infrastructure.
00:11:57.000So that is the power grid, the water treatment, the nuclear facilities, the teleco facilities.
00:12:02.000But what we didn't do, what we were unable to do with that bill, is simply stop outright malign foreign actors from acquiring land, whether it be farmland or land near our critical infrastructure.
00:12:18.000Imagine if we tried to acquire several hundred acres of land next to China's largest nuclear power plant or next to their largest military base, their largest military training base for their pilots.
00:12:33.000And yet we in our open society are constantly infiltrated by these actors that create U.S. companies, fund them with U.S. dollars, and buy them with malign intentions.
00:12:48.000And in this case, there's 200 square miles of Texas was bought just 25, 30 miles from our largest Air Force training base and next to our border.
00:13:01.000And they've filed applications to build 700-foot-tall windmills.
00:13:06.000So imagine a Washington monument with blades on it and over-the-top mapping that allows them to map everything over the horizon with precision.
00:13:16.000So they'll be able to map every single airplane or maybe not airplane that flies by there on our base.
00:13:25.000And it's all under the auspices of, hey, they can own land just like anyone else.
00:13:32.000This is, you said, you said it's states.
00:13:34.000You know, states could do it, but our federal government needs to revamp Cypius and say foreign ownership of lands near anything strategic or critical is simply off base.
00:13:52.000Senator from North Dakota, Senator Kramer, and he agreed that this was a problem, but I couldn't get him to just say bluntly that the Chinese Communist Party should not be able to own land in America.
00:14:04.000I just think it should be that simple.
00:14:05.000Now, that's probably going to be too much for the Washington, D.C. to stomach.
00:15:27.000Why is it our elites are so cowardly on the issue of China?
00:15:32.000And the easy answer is they're bought and paid for.
00:15:34.000But there's another one, which is, and I told you this when I saw you privately two weeks ago, they whisper in your ear, well, Charlie, a Chinese future is inevitable.
00:15:42.000They're parroting Xi Jinping's talking points because I think they don't have the stomach for confrontation.
00:15:47.000And you can't have a country that way.
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00:17:28.000I want to talk to you about China in particular.
00:17:30.000You have been leading on this issue for quite some time now, where it seems as if the current regime, the Biden administration, is putting our country last and China first.
00:17:41.000There's so much news happening with China almost in real time.
00:17:48.000You are so accurate when you say there is news happening in real time.
00:17:54.000And that's what makes it so difficult to keep up with.
00:17:57.000And Charlie, I think it's also why people are saying, well, really, all of this can't possibly be going on, but it is.
00:18:08.000And we know of the problems around COVID, the denial that was there, how they cornered the market on PPE for over 50 days while they tried to keep quiet, that they had a pandemic.
00:18:22.000We know what they have done with producing fentanyl and working with the Mexican cartels and pushing it over the border and into the cartel hubs that are actually on U.S. soil.
00:18:36.000And that killed over 71,000 Americans last year, in addition to thousands that have become addicted to these synthetic opioids.
00:18:47.000We know what China is doing to the Uyghurs and how they're using them as slave labor and how American companies are continuing to manufacture in Xinjiang province using this slave labor.
00:19:03.000We know also that the Chinese Communist Party is active in just about every company that is doing business there in China, and they continue to reverse engineer American products and they continue to steal our intellectual property.
00:19:23.000At the same time, when you look at big tech and not only are they manufacturing many of their products there in China, but big tech social media platforms such as TikTok are gathering data on the American public and they're doing it every single day.
00:19:44.000They're building digital virtual use of our children.
00:19:49.000Then, Charlie, as we look at our military, and what we term great power competition, we know that the communist Chinese are using their Belt and Road initiative debt diplomacy to bring other countries under their influence and into their sphere.
00:20:11.000And China partners with Russia, Iran, and North Korea in creating what I call the new axis of the evil.
00:20:21.000And they're kind of the leaders of that.
00:20:23.000And of course, we see what they're doing in the Horn of Africa.
00:20:27.000We see what they're doing in South America.
00:20:29.000We have watched in real time what they're doing in Afghanistan as they're going in and pulling all the rare earth minerals and lithium that we charted and mapped using that and flying all of that out of Bagram airfield every day and into China,
00:20:50.000where they're using it for component parts, for telecommunications, for different electronics and for electric vehicle batteries.
00:21:01.000And that's just part of it, not to mention they're buying farmland here.
00:21:07.000So part of what I want to ask you about, Senator, is this theme of how they're able to do what they do domestically here, which is the great frustration, irritation.
00:21:19.000I think we should have banned TikTok a long time ago.
00:21:21.000I also think it's increasing depression, anxiety, and other issues in our nation's young people, something that I could speak to personally and also, you know, based on the scientific data.
00:21:32.000But Senator, you're such a clear voice on this.
00:21:36.000I mean, we've had other senators that kind of tip dance as a tiptoe around this and tap dance around, I'll be honest.
00:21:42.000Why is it that we kind of all know what's happening, but it's hard to build consensus to do something about it?
00:21:48.000I mean, you listed off all these things, fentanyl and TikTok and farmland.
00:21:52.000Why is it that there is this gap between the understanding of the problem and actually getting something done about it?
00:21:59.000And Charlie, I think that many times people think, well, it can't really be that bad.
00:22:05.000And when I started over a decade ago working on this issue of holding China to account for the piracy that they were conducting, for the way they tried to work here in our country outside of the same rules that we hold our companies to.
00:22:26.000People just thought, well, it can't really be that bad.
00:22:29.000You know, we've sent all of this manufacturing over there.
00:22:33.000Well, fine, let's bring it back and let's put it in place here.
00:22:38.000But you mentioned something that is so very important.
00:22:41.000You look at how the Communist Chinese Party is buying property in the U.S.
00:22:49.000They like to buy property and farmland that is in proximity to our military bases.
00:22:56.000They like to buy big buildings in big cities, like they did with the Waldorf Astoria Hotel in New York City.
00:23:10.000We also see them being very aggressive on college campuses.
00:23:16.000Now, as you know, and Turning Point has been so good on these issues, what you see with the Chinese on college campuses is their push to do Confucius Institutes.
00:23:30.000And many colleges have now ended those institutes, but the communist Chinese continue to try to get their researchers and professors, many of whom are spies. onto these campuses.
00:23:46.000But we have to realize and be clear-minded about this because the communist Chinese look at this as a 100-year marathon.
00:23:57.000And they look at this as these are the steps we need to take in order to be globally dominant by 2050.
00:24:07.000They want to be the only superpower on the face of the earth.
00:24:14.000Sister city programs, Confucius classrooms in high schools, Confucius Institutes on college campuses, getting in there, getting people to like them, to say, oh, you know, Chinese people, we like them and we all do.
00:24:30.000We have to realize this is not the Chinese people.
00:25:00.000And so I guess I'm just super frustrated, Senator, because we see what's happening.
00:25:04.000We see the damage that's being done to our own citizens.
00:25:06.000And there is just kind of this bureaucratic process where we just can't seem to get what is done necessary.
00:25:14.000Donald Trump got stuff done, thankfully, just through executive orders and decisions.
00:25:19.000I mean, is it fair to say that the reason that this regime isn't doing anything, Joe Biden is just, he's just completely captured by China?
00:25:26.000I mean, we know the financial ties to some extent.
00:25:29.000I mean, this is, there's some very serious words that we could use to describe this.
00:25:36.000But if you're not acting against an enemy where they're buying up farmland and buying up reconnaissance technology and dumping fentanyl and manufacturing because you're purchased or they have blackmail on you, then what exactly, how are we supposed to think about that?
00:26:02.000And then I find out that they are carrying out a malign influence campaign against me because they don't like that I think they should be held to account.
00:26:15.000We should, in sanctioning the Chinese Communist Party and some of these Chinese businessmen who are Chinese Communist Party leadership, we should prohibit them from buying buildings and farmland here in this country.
00:26:32.000Chinese-based companies should have to abide by the same rules that U.S. companies abide by if they're going to be publicly traded in the United States.
00:26:46.000And what we need this administration to do is to admit that the Chinese Communist Party is our adversary.
00:26:56.000They are not our friend and they do not wish us well.
00:27:00.000And Donald Trump, as you said, was very successful in holding them to account and in making certain that they came to the table on trade deals.
00:27:12.000And what we find out now with this Biden administration, when it comes to ag products with our farmers in Tennessee, China is not buying what they promised to buy.
00:27:24.000They are not fulfilling their obligation because Joe Biden is not going to make them fulfill their obligation.
00:27:32.000Yeah, and you brought up such an important point, which is, look, we have some people that are speaking out against it, you being one of them.
00:27:41.000The Chinese Communist Party, they're a bunch of snakes.
00:27:44.000And this is what drives me nuts, Senator, is when I hear people in the Biden administration, even some Republicans are like, well, China's a rival or China's a competitor.
00:28:13.000So they're teaching their children about art and poetry.
00:28:16.000Tucker had a great segment on this last evening, where our TikTok is kind of a steaming pile of garbage, as if you wanted to destroy the hearts and minds of an entire youthful population.
00:28:29.000Senator, you voted no for the $40 billion of aid to Ukraine, of which I want to thank you for that.
00:28:34.000I got very fired up about that story where we can't build a border wall.
00:28:37.000We don't know where this money's going.
00:28:39.000And it turns out that that $40 billion has really not been traced to specific armament deals.
00:28:46.000So just explain that vote and kind of how should we think about what's happening in Russia and Ukraine, all the while there's all this drama with our greatest enemy happening in the Far East.
00:28:59.000And when you look at what is happening in Ukraine, we're all supportive of the Ukrainian people and making certain that they have what they need to defend themselves.
00:29:12.000And last fall, I wrote the White House and pointed out that Putin was beginning to assemble troops and armaments and equipment on the border.
00:29:24.000And just as in 2008, when he went into Georgia and 2014, he went into Crimea, he did it in the Olympics during that period of time.
00:29:36.000And then we find out that Putin has gone over and had a personal meeting with Xi Jinping.
00:29:43.000And we know that they are partnering up through this Axis abievil.
00:29:48.000So my recommendation to the White House was take this seriously.
00:29:54.000Look at what he's done in the past, what he's planning to do in the future.
00:29:58.000Look at who these alliances are with and between.
00:30:02.000And then go ahead and put some sanctions on the oligarchs and on Putin, his family, and on the country.
00:30:12.000Be sure that you keep the sanctions on Nord Stream 2.
00:30:16.000And if they go in, go after Nord Stream 1.
00:30:20.000And then to begin sales of arms, sales, very important, of arms and equipment to the Ukrainian people so that they would be able to be prepared.
00:30:33.000And Charlie, I have been with our troops in Ukraine and in Poland prior to all of this.
00:30:41.000Now, the administration chose to wait and not to do anything until Putin made a move.
00:30:49.000But this just shows you the difference between strength and weakness.
00:30:54.000So after the fact, they get start saying we have to get things into Ukraine, but then it's more difficult with your supply lines to get it where it needs to go.
00:32:20.000They are fearful of what is happening with the economy, with the southern border.
00:32:25.000They don't like the crime uptick, the drugs that are on our streets.
00:32:30.000They want to see adults back in charge of this government.
00:32:35.000And they want the federal government to do what they're supposed to do to protect the people, provide for the common defense, and defend our freedom and liberty.