00:00Well, let's talk now to John Queltz.
00:02He's the Executive Vice-Chancellor of Duke Kunshan University in Jiangsu.
00:06Welcome to the program, John. Good to see you.
00:09We're talking now about the third round of talks between the United States and China, aren't we?
00:13What's different this time?
00:15First of all, Robin, it is the third round,
00:18and the third round between Secretary of the Treasury Besant and Vice-Premier He.
00:23These are the high-level officials continuing to lead this negotiation,
00:29and so it's very encouraging that we have the third round.
00:33I think they're developing a much deeper mutual understanding of the pain points of each side
00:39and also of the economics associated with any adjustments to tariffs or non-tariff barriers or export controls.
00:48So, all in all, very encouraging, and I think likely to continue through another 90-day extension.
00:57Do you think we're going to get an extension rather than perhaps a deal on this occasion?
01:02Well, I think there may be a few comments made regarding reinforcement and continuity of agreements already reached
01:14regarding the transfer of high-level chips to China and also of rare earths to the U.S., as your lead reporter indicated.
01:26So, one thing the United States wants is for China to rebalance its economy away from exports.
01:32Do you think that's something that is likely or even possible?
01:37Well, in China there's a realization that the export-led economy cannot drive growth forever
01:45and that there has to be a rebalancing towards more emphasis on domestic consumption and more growth of the service sector.
01:53The problem that China faces is, of course, that consumer confidence in China at the moment is not that strong.
02:03And as a result, consumers tend to save rather than consume.
02:08The United States has already put restrictions on tech exports on hold.
02:14Do you think this is a sign of goodwill between the two or does it look more like a climb down?
02:19Well, I think that the U.S. had to relent or reposition its approach to the high-tech exports of the NVIDIA H20 chips, to be specific,
02:33simply because China holds a very strong leverage with respect to its control of rare earth refining capacity.
02:42And those rare earth minerals are really very, very important components, as you know,
02:50in a whole variety of electronics and manufacturing goods at the highest level.
02:56So China had pulled the trigger on rare earth access and that, I think, prompted the U.S. to relent on the high-tech chip export restrictions.
03:11John, great to talk to you today. Thank you so much for coming on the program.
03:14That's John Quelch, the Executive Vice-Chancellor of Duke Kunshan University.
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