CHINA MANAGING ITS OWN DECLINE
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Summary
In this episode of the Great America Show, host Lou Dobbs talks with China's premier, Li Keqiang, about China's economic slowdown and the impact of the country's leadership style on its economy. They talk about the role of China's leader, Xi Jinping, and the economic challenges China is facing.
Transcript
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Hello, everybody. I'm Lou Dobbs, and welcome to The Great America Show. Thanks for being with us
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as we take a look today at what the Biden White House is doing about the greatest threat America
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now faces from both within and without. That enemy is communist China. I call China our enemy
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advisedly because that is the appropriate name for nation states that mean to destroy or diminish
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other nation states and to hold global dominion. That is China's purpose and what they intend.
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Their strategic partnership with Russia is, in fact, a force multiplier for China and its military.
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China is importing more oil from Russia than ever before at discount and last month boosting its
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trade by 50 percent. That cuts China's dependence on foreign oil, foreign meaning any nation that
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isn't a strategic partner of China. That Russian oil will support Russia's air force and its navy in
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the event of conflict. As to China's threat within the United States, they have thousands of front
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companies and entities operating in this country with one purpose, to surveil, spy, and steal U.S.
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intellectual property and technology, an estimated $600 billion worth each year. And there's no reaction,
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no response from the Biden White House, and the threats keep rising, whether in the South China Sea,
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in space, or over Taiwan. The pace and pulse of the Chinese threat to Taiwan is building. But China is
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now facing profound challenges to its economy and, as a result, its national power, including a slowing,
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perhaps contracting economy, a rapidly spreading series of lockdowns because of a new
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variant of the China virus. As many as 400 million people in China are now in lockdown.
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A larger number of people than live in the United States and Canada combined. Our guest today is
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attorney and author, China expert, Gordon Chang, preeminent among China watchers.
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Gordon, great to have you back with us here on the Great America Show. It is a sobering time,
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isn't it? It's a difficult time. And we're getting news out of China. And I've been absolutely excited to talk to
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you about these new developments. But one of them is Premier Li talking about what was styled as a grave job
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market in China. Very, I don't think we've talked much about, when I say we, the Western world hasn't talked much
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about unemployment or employment in China for a couple of years. What is what is going on? And what
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has Premier Li and the CCP so ginned up and concerned about their labor market?
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Well, China right now is in contraction. The April numbers show that it was not only contraction month to
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month, but also year to year. March was also a bad month. And Li Ka-chang understands this, he can see
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numbers which we don't have access to. But the COVID-19 lockdowns that are mandated by Xi Jinping,
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the Chinese ruler, have undermined employment, they've undermined the economy, and indeed society as a whole.
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Well, Premier Li's talk on Saturday followed Xi Jinping's speech to the Politburo Standing
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Committee, which is the highest political body in China, in which Xi Jinping doubled down on his
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COVID strategy, which means further lockdowns. Lockdowns, of course, mean people can't go to work,
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unemployment. And we can see Li Ka-chang, who is no friend of Xi Jinping, trying to bring back some
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rationality to Chinese policy. But unfortunately for China's people, Li doesn't have the clout within
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the political system. And he can warn us, but he can't really do very much right now.
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Very much in the way of policy, but he is at least ostensibly number two in the power structure.
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Why is it he has such limitations in terms of taking action in policy?
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When Xi Jinping became General Secretary of the Communist Party at the end of 2012, he had found
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a consensual political system where every important decision was shared across the Politburo Standing
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Committee. But what Xi Jinping was able to do was to take power from virtually everybody else in Beijing.
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And that included Li Ka-chang, who comes from a faction that Xi Jinping doesn't particularly like.
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And so really what's happened is Li has lost power. And although he's the head of the state council,
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in other words, the Chinese central government, he really doesn't have the ability to implement
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policy. He knows what's going wrong in China, as do many other people. But Xi Jinping has decided
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for various political reasons to continue with policies that don't make sense for anybody but Xi Jinping.
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And within this look at the economy of China, we're seeing their export growth slowing,
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weakening to pre-pandemic levels in point of fact. What is, I guess, the issue right now? Is it Shanghai?
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Is it the lockdowns? Is it something demographic? What is what is changing here that is affecting the
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Chinese economy and therefore may influence world events? There are two things, Lou. First of all,
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before COVID-19 hit, the Chinese economy was slowing anyway. It was choking on debt. In order to get past
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the 2008 downturn, China went on a massive spending spree. And that has created the debt crisis, which
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we got a glimpse of last September, when Evergrande, the large property developer, was not able to meet
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its obligations. We saw defaults among other property developers. Beijing has been able to rescue the
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situation, but only really to postpone it. But when you put that in connection with the second factor,
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which are the COVID-19 lockdowns, which are not just Shanghai and Beijing, but they're across the
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eastern portion of China. And the eastern portion of China is where the economic growth comes from.
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And we're seeing problems, for instance, in Guangdong province in the south, where we've had
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limited lockdowns. But we have also seen the disease not only hit cities like Shenzhen, which is right
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across from Hong Kong, but they've come back and hit Shenzhen for the second time in the last three or four
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months. So right now, China has basically, as I mentioned, in contraction, it isn't able to
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create the output to retire the debt. And there are actually no good options, because Xi Jinping
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believes that China should go with this zero COVID strategy of even more draconian lockdowns of
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Chinese cities, and indeed, the country as a whole.
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More draconian, hard to imagine, based on what we know of the lockdowns as they appear now,
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the fencing in people who have contracted the virus, families, whole apartment buildings,
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whatever. It doesn't get much more draconian than that, does it?
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No, it doesn't, because we have seen people confined to their apartments for no good reason.
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Also, a lot of these contact tracing and testing, which was so admired by the international community
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two years ago, are now actually spreading the disease in Shanghai, because people are tested daily,
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they stand in these long lines, they infect each other. And also, when people are taken to these
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massive quarantine facilities, many of them are COVID negative, but they contract the disease and
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the horrible conditions there. So this makes no sense from a disease point of view. And of course,
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Lou, it doesn't make sense from an overall point of view, because people are not getting health care
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for other conditions. We are seeing mental health problems. There's a rage in Chinese society,
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people jumping off balconies, killing themselves in Shanghai. Basically, Shanghai, which sort of prides
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itself as like the most sophisticated society on earth, has been reduced to a primitive one,
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as these lockdowns now going on for about six weeks, have turned a once vibrant city into a ghost town.
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And give us your judgment about, give us a Sino forecast, if you will, both politically and
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economically, is based on what we're seeing right now, a contracting economy, a, it seems, frustrated
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central government, the only government they know, of course, the CCP and Xi Jinping.
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He sounds like he's, he's having more than a little trouble right now, governing communist China.
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Yes, well, nothing's going China's way right now, because it's not only the COVID lockdowns,
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the debt crisis, a stagnant and now contracting economy, they've got worsening food shortages,
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a deteriorating environment. And something that you referred to earlier, and that is a demographic
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crisis. China is probably going to lose half its population within 45 years. That's a prediction
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made by two Chinese demographers from Xi'an. And if you just do the arithmetic, China probably will be
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one third as populous at the turn of the century as it is now. There's never been a steeper projected
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decline in demography of any society in the absence of war or disease. So that really puts a very
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limited outlook for China. But in the, in the, well before that, these other problems, which are
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hitting China simultaneously, I think the Communist Party doesn't have a solution for them. And part of
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it, Lou, is because people around the world are in no mood to help China. We have seen in the past,
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American presidents, Nixon, Clinton, George H.W. Bush, run to the rescue of the Communist Party.
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I actually don't think that's going to happen this time.
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I'm, as you said that I'm, I'm sort of holding up Joe Biden, H.W. Bush, George W. Bush,
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and sort of wondering what the similarities are. In many ways, in many ways, Gordon, I think of
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Joe Biden as being more ideologically akin to the authoritarian communist Chinese than,
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Yes, I agree with that. Because what we have seen Biden do as president, you know, we don't know what
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it's in his mind, but we do know what he's been doing. And he's taken a number of actions that can't
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be explained any other way than to say that he must be ideologically determined to help China at the
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expense of the United States. There are just so many things, starting from his first day in office,
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when he, for instance, reversed some of President Trump's executive orders that were intended to
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protect the United States. And then it's continued on since then. Biden right now is at a point where
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he is doing things that are helping Beijing, and undermining the ability of the United States to
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protect itself. And, and you just got to wonder in bewilderment, what the hell is going on?
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And, you know, chief amongst those developments or initiatives on the part of the Biden administration,
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give us an example of what you think are the most egregious.
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Well, the one that sticks in my mind is one that a few people have focused on, but I think it's
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illustrative of Biden's state of mind. So for instance, on his first day in office, Biden issues
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an executive order that repeals a Trump executive order that prohibited the importation into the United
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States of equipment for our grid. President Trump's order was meant to protect our grid from
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sabotage. And there's a real concern of that. Now, Biden, when he issued this, his executive order said he
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wanted to review the Trump era of protection. I can understand a president coming in and wanting to review
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the work of his predecessor, but he should have left the protection in place while he figured out what was
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going to happen. And I think that that's just illustrative of Biden's blindness or whatever
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one wants to call it, ideological bet. But this really has, I think, undermined the ability of
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the United States to protect itself from a critical threat, and one which was not theoretical. So then
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there are many more examples, but that one just to me stuck in my mind because there was no explanation
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for what President Biden did. And accelerating waivers to the tariffs, whatever the issue, it's all
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broken China's way and exposed the U.S. economy. When I look at China right now, is it this past weekend
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sent over 18 aircraft into the Taiwanese defense zone, and they had to scramble fighters.
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This is becoming a more provocative, and I won't say it's in any way destabilizing, but it's becoming
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routine. It's as if they're trying to set a mark that says, yes, we're going to do this, and we're
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going to continue doing this until you're used to us doing this, and then we're going to do it for real.
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Yeah, I agree with you, Lou. The most recent incursion into the air defense identification
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zone, which you referred to, was 18 aircraft, which was the second largest incursion this year.
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What was significant about it was the mix of planes that China sent in. They sent in their H-6K
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nuclear-capable bombers, plus also strike aircraft, and there had not been that combination before.
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These incursions into the ADIS, as they're called, have become commonplace, as you note.
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People have not focused on what happened on February 5. In air defense identification zone
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incursions, they've been into international airspace. They've been belligerent and provocative,
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but China, in a sense, has a right to do them. But what it did on February 5, it sent a plane
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over one of Taiwan's outlying islands, directly over the island. This was a violation of Taiwan's
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sovereign airspace. This was potentially an act of war. And it shows the boldness of the Chinese
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regime right now in these maneuvers over Taiwan's air. And that is a warning to us. China, as you say,
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is trying to make this commonplace, to sort of maybe put us off our guard. But the point is that
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this is going in a direction which shows that China is actually preparing for war.
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Preparing for war. The United States has aircraft carriers in the South China Sea. We are maintaining
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on the, I won't say pretext, but on the announced policy of free navigation and preserving those free
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navigation zones and channels. But nonetheless, they're there. And a carrier group is a powerful
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statement. But those carriers can't stay in the South China Sea or nearby forever.
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What is, does this policy make sense on the part of the Biden administration and in the South China
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Sea to try to blunt the expansionary strategies of the Communist Chinese?
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These freedom of navigation operations are consistent with America's longest held foreign policy
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approach, which is to make sure that the global commons is available for all nations,
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including the United States, which is a trading nation. I think that they make sense. And this
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is a continuation, not just, this is not just Biden policy. This goes back to Trump, goes before,
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you know, into Obama, before Obama. This goes long, long way back. And the reason I think we're trying
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to do is send to the message to Beijing that we're not afraid of you. But a carrier in the South China
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Sea is extremely vulnerable. One of the things that President Trump did, which was extremely important,
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was to withdraw from the INF Treaty, which was a building block, important arms control agreement,
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that intermediate range nuclear forces agreement. And the reason why this was so critical,
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and the reason why I'm mentioning it now, is because while we were in INF, we could not develop
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certain types of missiles. Those missiles are necessary to protect a carrier and to protect
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our Navy and to protect our friends and allies. We couldn't do it. We were in that treaty with
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Russia. China was not a party to it. China now has better range, longer range, and more capable
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missiles than we do, because we were bound by INF until Trump took us out. And we are very much
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behind the ball. So we've got aircraft carriers, though. They're very impressive looking. But in
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actual war with China, we're not going to be able to bring those carriers anywhere near China's shores
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because they would be too vulnerable. And just being in the South China Sea is itself somewhat limiting
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for those carriers. It is not ideal. But at the same time, we don't have much of a list of options to
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respond to China. And we have our submarine force. We have our carriers. But that is pretty much it. Beyond
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that, we have no land-based response to speak of. It's a very difficult situation. And the supply lines,
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the logistics lines for the United States and the region are severe and thin.
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Yes. And as a number of people have said in the last couple hours, Lou, that the U.S. military is,
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the word they use, fragile. In other words, because of the reasons you mentioned, the United States,
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it's not clear that we could sustain a long war. Remember, we've given a lot of material to Ukraine
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in the last couple months, which is a good thing, I think. But the point is that we don't have that
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material now. We're not being able to sell material to Taiwan. We don't have that material in our own
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inventory. We are ramping up as fast as we can. But this shows how thin the American armed forces are
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in terms of being able to maintain a sustained conflict. So we're in a really bad place right
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now. And of course, the Chinese know that. So, you know, for all the reasons you just mentioned,
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And meanwhile, the neocons are urging war with China. It's that straightforward. They're not
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simply talking about supplying the Ukrainian military and resistance with our weaponry.
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They're talking about the prospect. And you can almost hear the glee in their voices as they discuss
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an expanded war in Europe with Russia over Ukraine. The problem is, of course, that's mindless.
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And we have gone through that era of the neocons and the aggression from our national security
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establishment. There's no room for it now. And because we have military capabilities that are
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severely diminished, despite four years of Trump, despite everything he did to build up our forces,
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we are now watching the personnel. The U.S. Army is dwindling in size, and it's doing so
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at a rapid rate. And then technologically, we're still behind in hypersonic missile technology
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and won't be caught up in the at least near future. This is an extraordinarily limited capability
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we're talking about on the part of what has always been the superpower. I'm not sure that we can back up
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I agree with you 100 percent, Lou. You know, you take a look at weapon for weapon. China can actually
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field superior weapons to a battlefront in Asia. And we're going to take at least a half decade to catch up.
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And that means and that's if the Biden administration were to make a decision to do so, which it's not in any
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mood to. You know, we have we have seen the hollowing out of the U.S. military.
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It's not a lethal force as it once was. And to the point about Asia, the U.S. Navy is deeply troubled.
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I mean, one could spend hours talking about the problems in the U.S. Navy and the question whether
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the Navy could fight. And that's not entirely clear to me. Now, the U.S. Navy is capable in a sense if
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you compare it to, let's say, your average run of the military. But with regard to China, it's not
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entirely clear to me that we have any sort of edge. You know, right now, war with China would be
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a horrible idea. The point is, this decision is not up to us. This is really up to China right now.
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But we do have to prepare because the Chinese are actually thinking in terms of using their military
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against not only Taiwan, but against Japan, the Philippines and India, where Chinese troops are
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already deep into Indian controlled territory already. So this is, you know, people who talk about
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wanting a war with China right now are just truly dangerous.
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Yeah, because that war, given the conventional shortfall that we're facing, both in manpower
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and in weaponry, we would have to be in a fight with a country the size of China and with its
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advanced technology. We would have to be almost in response to any act of aggression.
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We would have to be almost immediately at DEFCON 5 and be ready to go to nuclear war because we
00:24:06.920
Yeah. Right now, we have to do so many things with regard to our military. We need better weapons.
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We need more fighting spirit. We need to stop talking about diversity in the military and start
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talking about killing our enemies. Because we have an administration that's much more concerned about
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non-military issues and ideologically promoting its ideas inside the Chinese military. You know,
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it's very fortunate that the chief of naval operations, which is the Navy's top officer,
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just released his reading list. And fortunately, he's taken the woke books off of the list that
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appeared last year. So that's at least a sign of moving in the right direction. But as a friend of
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mine who has a son who's a lieutenant in the US Army in Europe, his son has been saying,
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Dad, we do not have a lethal armed forces anymore. And that's a warning to all of us that we have
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forgotten what we should be doing with our military.
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It is sobering and it is deeply concerning to put the nicest spin on that word I possibly can.
00:25:18.180
It's scary. And I want to close with one question that we haven't answered. And that's
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probably right now the most immediate important question. Is there any sign that the Chinese are
00:25:32.760
supplying weapon, weaponry and military supplies to Russia in its war against Ukraine?
00:25:40.740
There is open source reporting that China is supplying military intelligence to Russia.
00:25:46.520
So, for instance, in the beginning of the war, the Ukrainians were using drones made by DJI,
00:25:53.220
the Shenzhen-based company. And China was supplying targeting information to Russia so that they could
00:25:59.540
locate where the Ukrainian drone operators were, because they would know from the DJI drones,
00:26:07.520
which are connected to the cloud. So we know that. We've got to be concerned about China's shipment of
00:26:13.880
anti-aircraft missiles to Serbia, which is a very close friend of Russia. There are unconfirmed reports
00:26:22.000
about Chinese rifles showing up in Ukraine. But really, the issue here is China's economic support
00:26:29.380
from Russia. Because in April, Chinese imports from Russia increased 56.6%. That means China is buying
00:26:38.540
commodities and other items. And that's supporting Russia's ability to wage war. So that and for other
00:26:46.860
means China has been supporting Russia in this. And the Biden administration, which keeps on issuing
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warnings, warnings are fine. But at some point, we got to back them up and start imposing sanctions
00:26:57.240
on China for helping Russia prosecute the war in Ukraine. But unlike Russia, China has a lot of
00:27:06.860
leverage with the United States. We're utterly dependent on China for a host of products, a host of
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of everything from pharmaceutical ingredients to pharmaceuticals themselves. It would be an ugly
00:27:21.700
moment were we to attempt sanctions at the same level that we did with Russia, would we not?
00:27:29.880
We would have problems in a couple areas, pharmaceuticals being the most important. There's
00:27:36.200
a company called Apple, which would have a problem. But I think that we would be able to adjust.
00:27:42.420
But the point is, we need to separate ourselves from China in anticipation of the problems that
00:27:50.140
will inevitably arise. Because we see China is preparing for war. We nonetheless, you know,
00:27:56.960
no one wants war. But nonetheless, if we want to stop it, the drift to war, we're going to have to make
00:28:02.760
sure that we can supply Americans with pharmaceuticals and with all the other necessities in their lives.
00:28:09.400
We need to bring our factories back to this side of the Pacific. We need to make sure that we are resilient.
00:28:16.000
And unfortunately, the globalists for a very long time actually promoted the idea that we should make
00:28:22.220
ourselves more dependent on China so that we could have a peaceful world. That idea was, that's atrocious,
00:28:30.660
100% wrong. And now we have got to reverse that process, Lou. You've been talking about this for decades.
00:28:37.260
We actually got to do this now. Because if we want to retain our independence and our sovereignty,
00:28:42.380
we've got to start protecting Americans. And we've got to start that absolutely right now.
00:28:49.260
And this administration makes the timing awful. Because there is no way, in my opinion, this Marxist left
00:28:56.820
president, this puppet president, is going to respond in the affirmative to any kind of strategic
00:29:05.180
thinking, including, as a matter of fact, it's the inverse. He's turning over a million barrels a day
00:29:11.680
from the Strategic Petroleum Reserve, 180 million barrels of oil, for which he has absolutely no
00:29:19.020
authority. And there is no precedent for any president ever having done such. He's taken just
00:29:26.300
about every wrong turn a president possibly could. As you know, this show always gives our guests
00:29:33.580
the very last word. And Gordon, your concluding thoughts?
00:29:37.280
Well, Henry Kissinger on Saturday said that we are living in a totally new era. And I have to agree
00:29:46.040
with him. And I believe, Kissinger didn't say this, but I believe that we have to radically rethink
00:29:52.460
our approach to Russia and China, if we are going to be able to navigate ourselves through this.
00:29:58.880
We are very fortunate, Lou, in that we are self-sufficient in food, and we can be self-sufficient
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in energy. We should survive, and we should prosper in the new era. But we need to rethink
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globalization. We need to go to de-globalizing. And it's important for us, ultimately, to make
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ourselves independent and self-sufficient so that we can protect Americans, and we can protect our
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friends and allies. Well said, as always. Gordon Chang, thank you, my friend, for being here. We
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appreciate your insight, your perspective, your knowledge, and, yes, your wisdom. Thanks so much.
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Thanks, everybody, for being with us today. Tomorrow, our guest is international journalist,
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best-selling author Lee Smith. He wrote the terrific book, The Plot to Overthrow the President,
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and worked on the documentary of the same title based on his book. Please be with us here tomorrow.
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Till then, God bless you, and God bless America.