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Welcome back everybody with a focus back on China this week with the president of China.
Visiting President Obama for big state visit to -- to bring -- Someone who has some very keen insights on our relationship but with China -- Gordon Chang here who is.
A a computer Forbes dot com as well as the author of nuclear showdown North Korea takes on the world great to have you here it's always a pleasure.
Your interview you -- GL UTC via satellite -- had your incentive right now with us to talk about what's at stake right now you view the but the visit right now -- given the fact that there are those of who were very critical of Chinese.
The Chinese stance in terms always been lecturing the United States await his you know acting as though it is strong arming.
The US with the fact that our dollars down and that we owe them a lot of money.
What -- severity of the Chinese have been very arrogant recently but we've been feeding their since America especially with this whole idea of a state visit to the 21 gun salute the black tie dinner.
In the Chinese of course -- -- -- be much more difficult to do it they love that they want that though they want that show of respect is that not true they want us to should they want to show respect to the Communist Party and so therefore you know they had this issue of legitimization back home.
And so this is gonna really help because these images we'll go back to China -- go across the country.
Good thing this really interest you know is that we think that if we showed a sign of cooperation they'll be cooperative.
But the Obama administration has tried this twice server 2009.
November 2009 and after both of those very important signals.
The Chinese just got more belligerent so the problem really is that we are sort of feeding this Chinese sense that they -- the world they -- the century.
And I think they're a little bit less diplomacy on our part probably would get us where we want to go.
How vulnerable the warily at this moment knowing that we do owed them a lot of money that we are dependent on them for a -- -- larger credit line so to speak -- And how how how hard can you be when that isn't a real fat how strong can you be an.
An issue demands at a time when we are so vulnerable well.
They are much more dependent on us -- we are on them they've got an economy that is geared to selling things to the United States.
Last year about a 140%.
Of China's overall trade surplus related to sales to the United States that's incredible number they've been running deficits with the rest of the world to run a surplus against us.
That number is up from ninety point 1% -- 1008.
And we have all this leverage and we're not even thinking of using it.
So of course you know we see the Chinese is ten feet tall you know that they don't know us they don't.
They have to buy US treasury obligations because their economy is so dependent on the US market they have no choice.
And everybody says well you -- suppose they dump our debt.
But they've been threatening that since August 2007 they called the nuclear option they never do it.
And the reason they don't do it is because it won't work.
Because if they sell our debt you know they got to buy something sure euros for -- and that's not even anywhere near that's not anywhere near and having -- dollar the value of the Euro would go up.
That means the Europeans -- have to go into the global markets to rebalance their currency and the only way they can do that is to -- Dollars right so essentially what we have is the Chinese don't use the nuclear option because they don't -- know it won't work.
So if that's the case you may know work -- Arcsight has to know that too.
So why not become more.
Vocal and -- more and have stricter measures in place and it talked tougher and not just talk act tougher.
Enact tougher again we should actually treat the Chinese the way they treat us -- just reciprocity and that has been missing in in our relations with China.
Since the basically the end of the.
War -- really -- I think that that even forget Obama from -- bush one bush to let me Reagan and yet doesn't have it tougher on some levels -- -- the opens up the relationship yes but on the other hand we just seem to feel.
This need to.
-- -- in so many -- because we are dependent on them for certain things but as I Anderson this is not true trying to has restrictions for example if you want to do business in China 70% -- to be given pet a home ground -- -- -- -- -- you -- you -- -- you have to -- companies -- there in -- -- and I did not.
It is of utmost foremost -- from -- sales -- and actually they're getting worse on local content requirement -- -- -- and essentially.
Local ownership -- is really very important to them now transfers of technology.
Why don't we a couple of car the same thing in our country.
We know we should we should be treating them freed for us it's it's not so much that the Chinese.
Are going to the US for the same things that we're going there for sure but there -- a number of things that we can do to impose restrictions on China and some sort of get the point across and we haven't been doing that.
And in this is not a partisan -- because the last administration.
Was -- in many ways just as bad as this one.
Why -- trying to I.
You can you hear someone who's obviously studied this for many many years you have a good sense of that the relationship on both sides.
Why why is there this reluctance to take a tougher stand I think.
Part of -- because we have always wanted to avoid the problems that occurred during the last century with the rise of Japan and Germany.
And so what we've tried to do is to engage the Chinese to integrate them into the international system and because of that we've become very indulgent.
You with a Chinese have done bad things that's we treated them well.
So -- continue being bad we continue to treat them well and so we have created these perverse incentives where.
You know basically we've encourage them to do the things that we don't want them to do this is really bad foreign policy.
-- is is it also because we need China to deal with North Korea.
What we think we do but you know as we saw last year where North -- is too horrific provocations.
The sinking of the South Korean vessel.
The shelling of the South Korean island.
The Chinese are getting closer and closer and supporting North Korea more -- and that's just we should've known that.
Then the Bush Administration tried to sort of -- China to try to sort of put China's position where would grow up in a sense.
But it didn't work.
Basically the Chinese gave the north Koreans the one thing that they really needed most and make themselves a real threat.
That is time we gave them the time to detonate their nuclear devices and to test their long range missiles and China it is the one that did that.
Time -- that -- if it just it boggles the mind on some levels you know you know that this continues this is happening that.
China tends to even become even more emboldened right to act this way.
Knowing that there's not any real repercussions as a result fitness apps -- -- and I.
And I find it to the very disheartening Hampshire as well as you do it and good to see what the long term and that's going to be a far country.
As we move forward ticket -- and our economy's not doing as well and you know we're looking for -- you know harmony in the world and trying to keep that you know -- -- a powder -- You know and we're -- -- we haven't really dealt with that country in a way that need to be dealt with also those.
That whole focus is just -- -- -- he only seems to me that I'm talking a couple different things here but they don't seems to me we react to North Korea after an incident happens we don't put -- proactive as.
We don't have a long term policy -- -- the reason -- for sixty years you know we're the sole superpower in the North Korea is one of the most destitute countries on earth.
You know with an economy which is just 25 billion dollars this building that we're -- has a gross domestic product bigger than North Korea that is I believe -- didn't you know why because we don't pay attention to it.
And also during the Bush Administration we subordinated.
Dealing with North Korea -- our goal of trying to integrate China into the international system so we accomplish neither.
And that really is a failure a very big failure of his foreign policy with regard to Asia.
What about the personality of this particular Chinese leader how do you described this individual terms of his.
Openness to even considering some type of -- a more.
More reason -- relationship with the US.
Well he's very enigmatic he's unknown to be a hardliner.
-- with regard to the United States.
We don't really doesn't matter what he thinks because he's in -- system right now where a couple of things are going on first of all there is the political transition where.
His generation of leadership called the fourth generation is gonna give way to the fifth.
Plus also in the top of the Communist Party right now it's really been splintered into factions and it's becoming very chaotic.
The military is is getting so much more power in Chinese politics and policy.
And so it's very difficult for any one individual to really frightening is that for the government at this point to note that -- military is becoming far more powerful is extremely threatening because last February for instance Chinese flag officers and senior colonels started talking about.
Waging war on the United States come.
And these are the guys who are now have much more influence in what China actually does so this really has become as -- become an enormous problem for us.
And end our secretary of defense Bob gates who was really.
And I hate to say this but he was slapped around in Beijing as it was obvious you know now talks about the disconnect between the civilians on the military in Beijing.
This is perhaps the most worrisome trend in the world today -- a hearing a lot about this.
It's overshadowed by a number of things.
Both domestic and foreign.
But it is clearly a critical trend that is occurring and it's been.
There's this really military is a nation of China has been occurred started basically around 20022003.
And is only really picked up steam -- and become noticeable.
Let's say in the last 23 years I've been writing about it since.
Beat and -- 2006.
But it's there it's there and and something that we got to deal with and and we're not we're not you know when when President Obama or secretary.
Clinton or even President Bush before -- talked about China being cooperative.
They were describing -- China that they wanted to see not the China that actually is and the idea was that the Chinese would bask in the -- -- -- -- sort of live up to share well they haven't they've gone the opposite direction.
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