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Clash Of The Superpowers America Vs China S01E01 FTP
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00:04Xi Jinping and Donald Trump, the leaders of the world's most powerful countries, are locked in
00:11a high-stakes battle for global power and influence. It's a fight that's threatened to
00:18explode since Trump first took office, tore up the diplomatic rulebook, and smashed the
00:24consensus on free trade. We lose almost $500 billion a year with China and we want to know
00:32what's wrong with us. We are about to help President Trump affect the biggest shift in
00:38U.S. foreign policy since the end of the Cold War. Now with both sides staking their claims on
00:44different parts of the world, this is the story of how these two superpowers have become tangled
00:49in a struggle for economic supremacy with repercussions everywhere. We have to realize there's this
00:56crisis and we have to take action to change. The alternative is total defeat. We'll hear
01:03from top U.S. officials and Chinese academics who give the inside track from Beijing. When
01:10the president's off the handle, you don't know what's going to happen. As well as those caught
01:17in the middle of this dangerous standoff. The message from the White House was the President
01:23of the United States wants you to choose, and he wants you to choose America.
01:47A few days before Donald Trump was first sworn in as president, Xi Jinping headed to the
01:53Swiss Alps. The leader of the world's largest communist country was there to join the business
01:59and political elites at the annual World Economic Forum.
02:04This is the first time President Xi attended. So China wants to make a clear point where we
02:11stand on international economic system.
02:19Davos is an extraordinary environment. It's jammed solid with the world's political leaders,
02:27bankers, bankers, financiers. This year, in particular, was extraordinary because Trump was about to be
02:37inaugurated and many of us were quite alarmed. We have never seen a politician like Trump.
02:46Nobody knows his quality, how he operates. Trump was clearly turning his back on free trade and open markets.
02:56The traditional American mantras that had led the traditional American mantras that had led the free world for decades.
03:02And then enrolls President Xi in a magnificent piece of theatre and delivers a speech which says essentially,
03:11I am the custodian of free trade and open markets.
03:40I never thought in my lifetime to see a communist leader actually to defend the free trade.
03:46But remember, free trade is good for China. The other thing is to remind Trump that this is your system
03:54you created to benefit you and also benefit the rest of the world.
03:59So you better keep it. Don't abandon the ship. You are the captain.
04:06People didn't know whether he was taking the mickey a little bit at first. It was such an extraordinary counterintuitive
04:15speech for Xi to be making.
04:18Follow me, work with me to ensure that we don't allow anyone, in brackets, incoming US President Trump,
04:26to trample down this magnificent free trading structure that has made us all so much more prosperous.
04:37He saw an opportunity and he took it. It was a brilliantly crafted intervention and it completely stole the show.
04:45Xi was the toast of Davos.
04:50Quite a journey for a man who became leader of the Chinese Communist Party, the CCP, only four years earlier.
05:03He'd taken office promising to build on a booming economy and to reclaim China's centuries old place as a leading
05:10nation of the world.
05:12He called his vision the Chinese dream.
05:15To perform a Chinese dream, you must go on the path of China.
05:22The Chinese dream is the people's dream.
05:28What China dream basically means that China restore its previous position.
05:36It's not China will dominate or try to take over the world.
05:43In the West, the press call it rise of China, which is a total misnomer.
05:50Xi make a point saying this is a restoration, not rise.
05:55Please welcome the next President of the United States, Mr. Donald J. Trump.
06:02Now Trump was heading to the White House with his own promise to make his country great again.
06:09His victory followed a campaign where he put China front and center of his foreign policy in his own unique
06:17style.
06:17We can't continue to allow China to rape our country, and that's what they're doing.
06:24It's the greatest theft in the history of the world.
06:30One of the first times I briefed President Trump was during the campaign.
06:35I get about four sentences into my briefing, my brilliant briefing on China, and then Donald Trump, with like a
06:41staccato approach, starts firing questions at me.
06:46What's China's GDP? What's China's GDP? What's the trade imbalance between the United States and China? Is there military any
06:52good?
06:54And then I realized he cared about the balance of payments. He knew about tariffs. He understood the business aspect
07:03of the relationship.
07:06For many decades, we've made other countries rich, while the wealth, strength and confidence of our country has dissipated over
07:18the horizon.
07:19USA! USA! USA! USA! USA!
07:22He paid attention to a group of people, what we call our Rust Belt, the former manufacturing part of the
07:26United States.
07:27He was the only candidate who recognized their legitimate pain, and the only candidate who had a solution, which is
07:34we're going to go and renegotiate all those trade deals with China.
07:38Together, we will make America great again. Thank you, God bless you, and God bless America.
07:56I remember walking into the executive office building one day into the Trump presidency, and there's a big sign that
08:03lists all the meetings that are being held.
08:05And one of the titles is something like, let's talk about greater US-China economic integration.
08:12This is a day into the Donald Trump administration, and he's just won an election with a significant part of
08:18his agenda being to fight off China's economic predation.
08:23And people in his bureaucracy, in his building, are having meetings about how we could do more economically with China.
08:31I was surprised by some of the assumptions that were being presented by long-time diplomats, long-time intelligence officers
08:42and others.
08:44There was a view that really all that Beijing wanted at the end of the day was just to access
08:49a large American market and to prosper and thrive in a US-dominated world order.
08:58I thought that those assessments were out of date, to put it mildly.
09:04In the 80s and 90s, the Chinese Communist Party had opened the country to Western markets, part of what they
09:11called socialism with Chinese characteristics.
09:15The country enjoyed unprecedented growth, which was given a huge boost in 2001, when China was welcomed into the WTO,
09:24the World Trade Organization.
09:29It defined China as a developing economy, meaning trade rules were applied more leniently.
09:34While the world's biggest companies continue to flood into the country.
09:39I was there as a reporter for Reuters news agency, all the way from the late 90s until 2005.
09:49It was a heady time. It was hard not to feel optimism that China would continue opening up, that its
10:00marketization would continue.
10:04And there was a hope the politics would begin to moderate as well.
10:09But by the time I left, I had this sinking feeling that many of those optimistic assumptions were going to
10:18be dashed.
10:22I think China entered the WTO with a really good deal.
10:27They got the benefits of participating in a global trading system in which there were rules and norms.
10:34But it was given a special carve out where it could pretend that it was a developing country.
10:40Which I think is always tough when you're one of the world's largest consumers of Ferraris and Lamborghinis.
10:46It's entirely logical and sort of expected that Beijing would want to maintain that system.
10:55Coming into the White House, Trump's team included hawkish advisors who wanted to ensure the new president would deliver on
11:03his promise to take on China.
11:05But they knew that for all of Trump's tough talk, he had a reputation to protect as a champion of
11:11business.
11:13And he wanted to keep the CEOs on side, many of whom had moved manufacturing to China.
11:22In the White House, we had the two camps start to develop.
11:25The more globalist establishment camp and more the kind of disruptors, populist nationalist camp.
11:33The biggest fights were about China and trade.
11:37And that's because the reason is we had so many Wall Street guys.
11:41And look, I worked at Goldman Sachs, we had Goldman Sachs guys in there.
11:45Goldman Sachs and Wall Street is the investor relations partner for the Chinese CCP.
11:51This radical cadre that runs China.
11:55The chief amongst the Wall Street faction was Gary Cohn, the former president of Goldman Sachs and Trump's choice as
12:03his top economic adviser.
12:05As a market practitioner, I think that we can have a globalized world that works well.
12:14You want to expand your plant, or when Mark wants to come in and build a big massive plant, or
12:20when Dell wants to come in and do something monstrous and special, you're going to have your approvals really fast.
12:29Thank you, sir.
12:30The question is, can we both be complementary to each other?
12:34I think the answer is yes.
12:38Whether the hawks or the globalists would have their upper hand, would be put to the test at Trump's first
12:44summit with Xi.
12:46As he got ready, the US president was briefed by his national security adviser.
12:53President Trump is kind of reflexively contrarian.
12:56And because he's reflexively contrarian, if you advise President Trump and say, hey, everybody agrees, this is what you should
13:03say.
13:04He might just say the opposite to spite everybody.
13:07So what we decided is what we would emphasize with President Trump is what Xi Jinping wants him to say.
13:13And let President Trump be contrary to Xi Jinping rather than to his advisers.
13:23What we said to President Trump is how Xi Jinping uses this language that sounds nice or at least innocuous.
13:30And when the Chinese Communist Party officials say win-win, what they mean is they win twice.
13:36Xi arrived in America hoping Trump might back down from the aggressive threats of his campaign.
13:43You know, for people in China, basically, we know every election, there's always a bashing China element somewhere.
13:50A lot of name calling, a lot of blaming.
13:53I think also the advisers that he's using at that time was very hawkish, like Steve Bannon, Matt Partinger and
14:00all those people.
14:01But then normally when the new administration come into the White House, it becomes more, you know, pragmatic.
14:09President Xi attached great importance to the personal relationship.
14:14His personality is, he's very easygoing.
14:19He wants to make friends.
14:22And when he recognizes the other side as a friend, I think that will be very helpful for the bilateral
14:28relations.
14:31Trump had chosen to host Xi, not at the White House, but at his Palm Beach resort, Mar-a-Lago.
14:39President Trump, he fancies himself as a great negotiator.
14:43And part of that is separating the relationship from the tough issues you're negotiating.
14:48Thank you, everybody. Thank you.
14:50He's in the hospitality business.
14:52He had his granddaughter, was learning Chinese.
14:56I wanted to make you feel at home.
14:58Sing a Chinese folk song.
15:05This is a great move.
15:07It's very positive.
15:09It's like a family reunion.
15:16One of the biggest parts of Mar-a-Lago was time set aside for the two heads of state to
15:23be alone one-on-one.
15:25The two spent a vast amount of time together.
15:29And the main message the president was delivering to us is that, you know, he and Xi were hitting it
15:35off.
15:38It seems they like each other.
15:41Yeah, chemistry is good.
15:44We've had a long discussion already.
15:48And so far, I have gotten nothing.
15:51Absolutely nothing.
15:53But we have developed a friendship.
15:55I can see that.
15:56You know, President Trump, he's a New Yorker.
15:59I'm a New Yorker.
16:00And New York men of that certain age, they tend to say he's my best friend.
16:04He's a pal of mine.
16:07And they were not really friends.
16:08They've just met each other.
16:09And they probably have business interests together.
16:11But it doesn't mean they're golf buddies.
16:13So when President Trump says, oh, he's my friend, I think what that meant is that President Trump met him.
16:18He understands how he's going to negotiate with him.
16:20Thank you, everybody.
16:21Thank you, Grandma.
16:28Xi wasn't only relying on his budding relationship with Trump.
16:32He'd long been working to ensure China would be at the center of global trade, with or without America.
16:40A month after Mar-a-Lago, he played host to leaders from around the world to celebrate his flagship initiative.
16:49Belt and Road.
16:58Harking back to the ancient Silk Road between East and West, Belt and Road aimed to better link China with
17:05the world, financing huge infrastructure projects.
17:11One of the most ambitious schemes ever conceived.
17:15It spanned continents with over a trillion dollars spent.
17:21Showcasing China's ability to deliver world-leading feats of engineering.
17:27Now Xi put on a summit befitting its scale.
17:31The Chinese do know how to put on a show.
17:35The biggest rooms you've ever seen.
17:37Vast banqueting tables.
17:39You know, more flowers than they've got in Kew Gardens.
17:42To invite President Xi to the podium.
17:45President Xi decided to make a Belt and Road Summit to assure the world,
17:50if the U.S. is back to the protectionism, China is still there to help and to work with everybody.
17:59Belt and Road is important in demonstrating to the American president or American government
18:07that China could have an alternative if Western countries decide to block or slow down Chinese economic activities.
18:26Cutting a somewhat lonely figure at the summit was the U.S. Representative Matt Pottinger.
18:32One of the things that Beijing does is to try to create the sense that the Communist Party's success is
18:39inevitable.
18:40So come jump on the bandwagon.
18:45They wanted to assemble as many world leaders as possible to essentially endorse Belt and Road.
18:54I remember speaking to President Trump explaining that Belt and Road was actually a system designed to diminish the influence
19:04of the United States.
19:05It was an extremely opaque system whereby governments would have to surrender sovereignty over critical infrastructure as collateral in case
19:18they weren't able to pay back debts.
19:22And so it was really sort of a form of loan sharking on a global scale.
19:28Pottinger's line didn't go down well with the other attendees.
19:33One of them was Kenya's president, whose country had just that month opened a multi-billion dollar new railway, largely
19:41financed by China.
19:43Kenya took a big loan to build the standard gauge railway and it was never going to be easy paying
19:50it.
19:51But was there a Chinese debt trap? No.
19:55African countries are caught in a debt trap, but it's not of Chinese making.
20:00The predominant amount of money owed by African states is owed to Western governments and private banks.
20:09The Americans were uncomfortable with any Chinese initiative that looked as though it had a strategic dimension.
20:15And this clearly was a strategic project.
20:18It was about projecting Chinese influence, securing Chinese supply lines and securing export routes as well.
20:27The same day that Xi was hosting his guests in Beijing, Trump's new trade representative was being sworn in.
20:38Robert Lighthizer had spent years accusing China of breaking trade rules.
20:42Thank you all very much for being here. I'm very grateful for your friendship.
20:46He quickly summoned top officials to the West Wing.
20:50The senior people were there.
20:52A lot of them were in the direction of, well, we have to have dialogue, we have to tell the
20:57Chinese what we want, all these kinds of things.
21:00You know, I said, you know, I don't agree with any of this.
21:03The Chinese game plan has been dialogue, dialogue, dialogue, talk, talk, talk, talk, talk, and then don't do anything at
21:11all.
21:13Lighthizer's strategy was to tax goods coming to the US from China.
21:18Very, very good chance of happening.
21:19But his plans ripped open divisions with the Wall Street faction in the White House.
21:25I wanted tariffs on as much as we can to change the economic relationship between the United States and China,
21:32to force companies to come back to the United States or to find other places to manufacture.
21:37But there was an organized group who's against tariffs.
21:43I thought there was more question to who we were hurting and who we were helping by putting tariffs on.
21:52Lighthizer started to get to the president and say,
21:55Mr. President, your voters, the people who trusted you, expect that this is going to get done.
22:03It's not getting done not because you don't want it to get done.
22:06It's not getting done because people on your team are deliberately obstructing your order to bring China to account for
22:15what it's done to the American people for 30 years.
22:17And the president said, I'm not going to let people delay anymore.
22:25Trump gave Lighthizer the green light to launch a major investigation into China's trade practices.
22:31Thank you very much, Ambassador Lighthizer.
22:34Especially claims it was forcing US companies to give up blueprints for their most valuable technology.
22:40We're going to be fulfilling another campaign promise by taking firm steps to ensure that we protect the intellectual property
22:49of American companies and, very importantly, of American workers.
22:54American companies were desperate to do business in China.
22:57And the Chinese would say, you can enter the Chinese market, but you have to allow us access to your
23:03proprietary technology.
23:04Well, when American companies did that, very quickly they found that that technology belonged to their Chinese partners.
23:12And then they would go flood the market with these products at a much cheaper rate, put American businesses out
23:20of business, and dominate the global supply chains.
23:25The investigation could pave the way for wide-ranging tariffs on China.
23:30This is just the beginning.
23:32Economists believe that tariffs are going to raise prices and lead to inflation.
23:37Even if you bought the idea, what's the alternative that we teach our children Chinese and tell them to prepare
23:45for a life of servitude?
23:48We have to realize there's this crisis and we have to take action to change.
23:53And if there's some small cost associated with it, the alternative is total defeat, and that's not an option.
24:05In Beijing, Xi was showing no sign of making concessions.
24:12Although China's phenomenal growth was slowing, his ambition remained resolute.
24:28In a three-hour speech to the annual party congress, he described 5,000 years of China's great imperial past,
24:38before the century of humiliation that started with the opium wars of the 19th century.
24:46Before British came to invade the opium war, I'm talking about 1820s, 30s, Chinese economy 32.5% of global
24:58GDP.
24:59When communists took over in 1949, Chinese economy less than 2% of global GDP.
25:06That is a freefall disaster.
25:09At the time that Xi Jinping announced the China Dream, we are about 12 or 15% of GDP, which
25:17means if you compare with the 1830s, we still have a lot of room there.
25:25Three weeks later, Trump arrived in Beijing for what the Chinese were calling a state visit plus.
25:33With the threat of tariffs looming large, this was a chance for Xi to win round the US president.
25:41Xi want to make it as spectacular as possible, for obvious reasons.
25:49Everybody knows that Trump likes spectacle.
25:55He likes, well, being treated like a king, maybe.
26:02We talked to President Trump about the images that Xi Jinping would try to create.
26:07He would try to make it seem like the leader of the free world, President Trump, was coming to Beijing
26:13to kowtow, you know, to the emperor, you know, Xi Jinping.
26:17He would try to make it seem like a king.
26:18He would try to make it seem like a king.
26:23Picture yourself as Nero, the emperor of Rome, and you want to impress somebody.
26:31What would you do?
26:33It was everything you can imagine.
26:39Everything from music to singing to dancing.
26:47They really pulled out all the stops and it was impressive.
26:55Perhaps most extraordinary, Trump was invited to dine in the Forbidden City.
27:04Forbidden City means forbidden.
27:07Historically, this is a residence of emperor.
27:12This is an extraordinary honour.
27:16Chinese are not even allowed to go.
27:19So it's quite amazing to treat Trump that way.
27:23That's something, we're having a great time.
27:27I don't believe Putin even get that treatment.
27:31Earlier that day, Xi had even given Trump a personal tour.
27:36But not everyone was welcome.
27:39As President Trump was about to be escorted through the Forbidden City,
27:44before I understood what was happening, I was diverted before I could get into the gate.
27:52Matt Ponger is like the man who knew too much.
27:54You know, and he really would make the Chinese leadership very uncomfortable.
27:59I mean, there's a guy who's fluent in Mandarin and knew the Chinese Communist Party so well.
28:05When we get to the Forbidden City, I'm looking around, yep.
28:09Where's Matt Ponger? He's not there.
28:10The one guy who can actually speak the language and know something about this system has somehow been kept out.
28:22The imperial setting was the perfect spot for Xi to give Trump an education on China's historic place in the
28:29world.
28:30And I guess the oldest culture, they say, is Egypt at 8,000.
28:35Yeah, 8,000.
28:37Iji, Iji.
28:38Iji.
28:38Iji.
28:38Iji.
28:59Iji.
29:08Iji.
29:10She's Charm offensive looked to be working as the leaders and their teams sat down in the Great Hall of
29:16the People.
29:16Our meeting last night was absolutely terrific.
29:23Our dinner was beyond that.
29:27Then Trump turned to his team.
29:30The president, after the first two or three statements,
29:34asked me to address the trade issue.
29:38I didn't have a script.
29:40I didn't know for sure that I would be called on.
29:43Lighthizer is really the trade war warrior for many, many years,
29:48so Chinese know that.
29:50His basic argument is familiar,
29:51but the way he presented is quite, I would say,
29:57quite aggressive from a Chinese point of view.
30:01Lighthizer couched his presentation
30:03around the practices of forcing the transfer of intellectual property.
30:08So he just went through many of these practices with such clarity.
30:12I think it was arresting to Xi Jinping and the other officials there.
30:18I basically made the argument that we were the victim here.
30:22It wasn't China, and it can't continue and it won't continue.
30:27And I think that was a little befuddling, like, what's going on here?
30:35But the Chinese hosts weren't done yet.
30:39Trump had travelled to Beijing
30:40with dozens of American business leaders in tow.
30:44In front of the cameras,
30:46they signed more than $250 billion worth of deals with China.
30:55China was quite generous to really make all those things happen.
31:00It shows that China is really willing to collaborate with the US.
31:03Dallas, the president and CEO of Boeing Commercial Airplanes
31:06and Mr. Jia Baojun.
31:08That was really a big boost for President Trump,
31:11and he really had a big harvest for his first trip to China.
31:16Donald Trump wanted to show the American people
31:19that during his visit to China,
31:21he got something for, you know, America.
31:24And this was something really tangible
31:27and right in his wheelhouse.
31:30Now Trump had his chance to talk directly to the press.
31:34I don't blame China.
31:41After all,
31:43who can blame a country for being able to take advantage of another country
31:48for the benefit of its citizens?
31:51I give China great credit.
31:55He turns to Xi Jinping and goes,
31:57for all this, I don't blame you.
31:59I blame us.
32:01But in actuality,
32:03I do blame past administrations
32:05for allowing this out-of-control trade deficit
32:09to take place and to grow.
32:12It was very Trumpian
32:14in that it was simultaneously gracious to the host,
32:16but also had a sharp edge to it.
32:19In spite of all the flattery and the rest,
32:22he was not going to back off his demands
32:24for a really significant shift
32:26in that economic relationship.
32:28When that shift did not materialize,
32:31President Trump resorted to a trade war.
32:34Here's what's on the power lunch menu.
32:36President Trump hitting China
32:37with $60 billion worth of tariffs,
32:40raising fears about a global trade war.
32:43In March 2018,
32:45Lighthizer's report was published.
32:47It says the economic harm to the U.S.
32:49of unfair trade practices on intellectual property
32:52is in the range of $50 billion.
32:54And so it plans to try to recoup
32:57some of that cost with these tariffs.
32:59Trump announced tariffs on Chinese exports,
33:03particularly those the U.S. said
33:05use stolen technology.
33:08China would respond in kind,
33:10sparking a tit-for-tat escalation
33:12that spiraled over the coming months.
33:15If they charge us,
33:17we charge them the same thing.
33:20That's the way it's got to be.
33:21Trump was smashing decades
33:24of Washington consensus on trade.
33:27Earlier that month,
33:29Gary Cohn resigned.
33:30The only thing the tariff was doing
33:33was acting as a consumption tax
33:38to the U.S. consumer
33:40that bought that good from China.
33:45I can remember talking with business leaders
33:48and investors and many folks
33:50assuring me that there's no way
33:52these tariffs could stay on
33:53more than three or four months
33:55because it would be too harmful
33:57to the U.S. economy.
33:59And I can remember telling folks
34:01that I think we're actually
34:02much more in a new normal.
34:04Just because they have a business model
34:06that works really well,
34:07that the rest of the world
34:09should just stay static
34:10so that they can benefit from that
34:13isn't a realistic perspective to have.
34:16And that's tough to hear,
34:17particularly when you're
34:19a powerful company,
34:20you've been kind of a master
34:22of the universe,
34:22but that's the reality.
34:26Trump's team now had to face
34:28officials from Beijing.
34:30The Chinese really were taken aback.
34:33They didn't think that Trump
34:35would really go ahead with the tariffs.
34:38They had a sense for a long time
34:40that it was a bluff.
34:42You know, they had signed
34:44this $250 billion worth of deals
34:46just back in November.
34:48You know, that was a serious
34:49amount of money,
34:50and they thought, you know,
34:51they had done the necessary
34:53and didn't understand
34:55why, you know,
34:56it wasn't working.
35:01As America and China braced
35:03for what could be a costly trade war,
35:06Xi put on a show of strength.
35:10Within weeks of the tariffs
35:11being announced,
35:13he donned military fatigues
35:14to preside over
35:15a massive naval parade,
35:17the largest of its kind
35:19ever conducted by the Chinese.
35:22It took place
35:23in the South China Sea,
35:25a crucial shipping corridor
35:26where China was building
35:28artificial islands
35:29to back up its claims
35:30on the area.
35:32claims rejected
35:33by most countries,
35:34including the U.S.
35:37He says he wants
35:38a modernized military
35:39by 2035.
35:41He wants a world-class military
35:43by 2049,
35:46which means pretty much
35:48he wants to displace
35:49the United States
35:49from the Indo-Pacific.
35:51They want to defend
35:52all the waters
35:52surrounding China
35:54and manage the trade
35:55and everything
35:56passing through them.
35:58This was China
35:59interrupting
36:00and trying to change
36:01international rules
36:02and norms
36:03that we felt
36:04that we couldn't tolerate.
36:06The situation
36:07was becoming
36:08more and more dangerous
36:09as U.S. ships
36:11and aircraft
36:12continued what they called
36:14freedom of navigation
36:15exercises.
36:37Tensions were high
36:39as world leaders
36:40arrived in Argentina
36:41for the annual
36:42G20 summit.
36:44It would be Trump
36:45and Xi's
36:46first meeting
36:47since Beijing.
36:49The U.S.
36:50had a new
36:51national security
36:52advisor.
36:54I thought this was
36:55obviously a significant
36:57opportunity
36:59to make points
37:01about things
37:02that concerned us
37:03about China's
37:04aggressive behavior
37:05along its periphery
37:06and talk about
37:07the big strategic issues.
37:09What Trump mostly
37:11wanted to talk about
37:12though was trade.
37:15By now,
37:16the U.S.
37:17had ramped up tariffs
37:18to hit $250 billion
37:20worth of Chinese goods.
37:24Trump was threatening
37:25to go even higher.
37:28But Bolton feared
37:29the prospect
37:30of a trade deal
37:31with China
37:31might soften
37:32Trump's resolve.
37:37The two leaders
37:38met for dinner
37:38on the sidelines
37:39of the summit.
37:42This was the first time
37:44I had seen them together.
37:45It was unnerving
37:47to watch Xi
37:49in a very systematic,
37:52thorough way
37:53advance
37:53what were clearly
37:54his well-thought-out
37:56objectives
37:57and to watch
37:58Trump wing it.
38:00The relationship
38:02is very special,
38:03the relationship
38:03that I have
38:04with President Xi.
38:05And I think
38:07that is going
38:08to be a very
38:08primary reason
38:09why we'll probably
38:10end up getting
38:11something.
38:13Xi had come
38:14to the meeting
38:15with a headline-grabbing pitch.
38:17If the U.S.
38:18would hold off
38:19further tariffs,
38:20China would commit
38:21to buying U.S.
38:22goods and services
38:23worth over
38:24a trillion dollars.
38:27Chinese site,
38:28for example,
38:28Walmart
38:29and other
38:31successful retailers,
38:32how they're successful
38:34because of Chinese
38:35made in China.
38:37So that is
38:38what the argument
38:39they are making,
38:40saying you might
38:41end up hurting yourself.
38:45I was worried
38:46throughout the dinner
38:46that we were basically
38:47going to agree to things.
38:49And indeed,
38:49Trump did make
38:50concessions in terms
38:51of not putting tariffs
38:53in place
38:53that he had threatened.
38:55so that we could have
38:56good trade discussions
38:58with China.
39:00A truce in the trade war
39:02was agreed.
39:06But just then,
39:07news came through
39:08that it had the potential
39:09to undermine
39:09any goodwill.
39:11I hear my phone ringing,
39:13I look down
39:13and it's my colleague
39:16at the Justice Department
39:18and I don't normally
39:19get calls
39:20from the Justice Department.
39:22And he informs me
39:23that they're going
39:24to exercise
39:25an arrest warrant
39:25against the chief
39:27financial officer
39:27of Huawei
39:28as she goes through
39:29at Vancouver Airport.
39:31I immediately think
39:32about how
39:33this is going
39:34to be interpreted
39:35as a deliberate snub
39:36and a deliberate affront
39:38to the Chinese counterparts
39:40and how
39:42this will throw a wrench
39:43into what the president
39:44is trying to achieve.
39:46And let's get back
39:46to the big story
39:47this morning weighing
39:47on futures
39:48with big implications
39:49for the U.S.-China trade
39:50truce and relationship.
39:51Canada has arrested
39:52the CFO of Huawei
39:53who also happens
39:54to be the daughter
39:54of the company's founder.
39:56Meng's charges
39:56were part of a sweeping
39:58set of criminal charges
39:59by the Trump administration
40:00unveiled yesterday
40:01accusing the company
40:03of stealing trade secrets
40:04and violating sanctions.
40:06We all hear the news
40:07we were surprised
40:08because while we're
40:11shaking hands
40:11on the table
40:12and the U.S. is kicking
40:14us back
40:14under the table.
40:17We knew for some time
40:19before that Meng was coming
40:21it was imperative
40:23that not leak out.
40:25John Bolton had been told
40:27that Meng's arrest
40:28was imminent
40:28just before the dinner
40:29with Xi.
40:31He decided not to inform Trump
40:33until it was made public.
40:36On the flight back
40:37to Washington
40:38I explained what
40:40had happened in Canada
40:41and what would flow
40:42from that.
40:43He didn't really have
40:44much of a reaction
40:45to Meng's arrest
40:46when I briefed him on it.
40:49Officially
40:49the Chinese government
40:51isn't directly linking
40:52Meng's arrest
40:54to the trade negotiations
40:55just yet
40:56but unofficially
40:57in the state media
40:58this is being seen
40:59as a political decision.
41:06Trump had a Christmas dinner
41:07in the East Room
41:08for his top
41:10White House staff
41:11and at one point
41:13out of nowhere
41:14he said
41:14by the way
41:15why did we arrest Meng
41:17the Ivanka Trump
41:18of China?
41:20I thought maybe
41:21first I would say
41:22you didn't tell me
41:24that Ivanka was a spy
41:25and an agent
41:26of our government
41:27but I didn't
41:28fortunately for me
41:29probably.
41:30the way.
41:32Telecom's giant Huawei
41:34was a shining example
41:36of Xi's vision
41:37for China
41:37to dominate
41:38technologies
41:38of the future.
41:40It had become
41:41a battleground
41:42with the Americans
41:43who placed restrictions
41:44on the company
41:45citing fears
41:47China could use
41:47its equipment
41:48for spying.
41:51Meng's high profile arrest
41:53only raised the tensions.
42:00the government
42:01of Xi's vision
42:01of Xi's vision
42:02of Xi's vision
42:03of Xi's vision
42:03of Xi's vision
42:05and the government
42:09of Xi's vision
42:11of Xi's vision
42:12of Xi's vision
42:14With relations
42:15between the superpowers
42:16deteriorating
42:17other countries
42:18were finding themselves
42:19caught in the crossfire
42:20and not just over Huawei.
42:24The British Chancellor
42:25got a taste of this
42:26when he addressed
42:28that year's Belt and Road Forum.
42:31The speech lauded
42:33the scale
42:34and ambition
42:35of the project
42:36and the Chinese
42:37delivery of it
42:38but said explicitly
42:40that if this is going
42:41to work
42:41it's got to
42:42be very careful
42:43about the debt burdens
42:44that recipient countries
42:46are taking on.
42:48I was invited
42:50to the heads of state
42:51lunch
42:52which was hosted
42:53by President Xi
42:54and he just
42:56lashed into me
42:57saying this was
42:58none of my business
42:59and the Belt and Road
43:02was China's project
43:03and China would run it
43:05in the way
43:06that China chose
43:06to run it.
43:07So it was quite
43:08a moment
43:09being given
43:10a finger-wagging lecture
43:12by President Xi.
43:16Returning to London
43:17Hammond would find
43:18that the fallout
43:19wasn't over.
43:22So I get a call
43:23from the White House.
43:25I get the
43:26Deputy National Security
43:27Advisor on the phone
43:28and he says
43:31we'd like to talk
43:32to you about
43:32your speech.
43:33We had seen
43:34a speech that
43:35Philip Hammond
43:36had just delivered
43:37that it appeared
43:39to be an endorsement
43:40of China's debt trap
43:41diplomacy.
43:42So it was a bit cheeky
43:45but one of my colleagues
43:46from the State Department
43:46printed out
43:48Hammond's speech
43:49on a poster board
43:51with some of
43:52the key phrases
43:53that looked like
43:54they'd been taken
43:55straight from Beijing's
43:56propaganda highlighted.
43:59A meeting was set up
44:00and somebody came over
44:02and arrived in my office
44:04in number 11.
44:05He laid them out
44:07in my office
44:09in Downing Street
44:11along the wall
44:12so that all the text
44:14of the speech
44:14was there
44:15and I was asked
44:16by the Americans
44:16to justify the...
44:19to explain
44:21my thinking
44:22behind the less critical
44:25parts of that speech.
44:27I'd said
44:28from the outset
44:29the UK
44:30cannot be
44:31in a position
44:33of having to choose
44:34between the world's
44:35largest economy
44:36and the world's
44:37second largest economy
44:38and that was what
44:39I told the Americans.
44:41The response I got
44:42was
44:43that is exactly
44:44what the President
44:45of the United States
44:46wants you to do.
44:48He wants you to choose
44:49and he wants you
44:50to choose America.
44:56Trump now ramped up
44:57the pressure even more.
44:59He signed
45:00an executive order
45:01preparing the ground
45:02for a total ban
45:03of Huawei equipment
45:05in US systems
45:07and the Americans
45:08set to work
45:09persuading other countries
45:11to follow suit
45:12beginning with
45:13their closest ally.
45:17We had to start
45:18with the UK
45:19because in many ways
45:20the UK's
45:21position as sort
45:22of a cyber security
45:23and telecommunications power
45:25GCHQ
45:26is seen as sort
45:27of world class
45:28and that was allowing
45:30everybody else
45:31to essentially
45:32point to and say
45:33well GCHQ says
45:34it's okay
45:34so why are you
45:35America making
45:36a big deal
45:37about this?
45:42The position
45:43of the British
45:44government
45:44was very strongly
45:46against making
45:46any significant
45:48changes to Huawei
45:49and we met
45:50with a lot
45:50of resistance.
45:52Philip Hammond
45:53the Chancellor
45:53of the Exchequer
45:54and others
45:55were very strong
45:56on that.
45:59The message
46:00from the White House
46:01was we want
46:03Huawei out
46:03get it out
46:04and tell these
46:06Europeans
46:06that they've got
46:07to toe the line.
46:09The Chinese
46:10had made this
46:11a totemic issue
46:13that if we cut
46:14Huawei off
46:15there would be
46:16significant trade
46:18and other consequences.
46:21So we're very much
46:23squeezed in the middle.
46:26As Trump arrived
46:27for a long
46:28promised state visit
46:30the Brits
46:31hoped to convince
46:32the Americans
46:32that they could
46:33keep Huawei
46:34out of the most
46:35sensitive parts
46:36of their network.
46:38Our security
46:40experts essentially
46:41said we've
46:41engineered the
46:42systems in a way
46:43that the Americans
46:44are overstating
46:45the risk.
46:47We had very
46:49deep concerns
46:50and plenty
46:51of evidence
46:52that there
46:53were back doors,
46:54there were software
46:55and hardware
46:56vulnerabilities
46:57that would make
46:58it fairly easy
46:59for data
47:01to be siphoned
47:02out of those networks.
47:04They thought
47:05they could protect
47:06telecommunications
47:07in Britain
47:07and we simply
47:08didn't agree
47:09with that.
47:10There was this
47:11tension between
47:12our security experts.
47:14Ours were clear
47:15that we could
47:16manage any risk
47:18from Hawaii.
47:19It was never
47:19in the core
47:20of our infrastructure,
47:20only in the
47:22periphery.
47:23And they didn't agree.
47:25Our main point is
47:27that this is not
47:28a technical
47:29discussion,
47:30this is a policy
47:31discussion, right?
47:32We felt that they
47:33simply did not want
47:34to re-examine
47:36the decision
47:36because changing
47:38their decision
47:39that they had made
47:40before would likely
47:42entail retaliation
47:43by Beijing.
47:45We explained to
47:46Trump how our
47:47network was
47:48configured differently
47:49from the American
47:50network, that we
47:51were very confident
47:52that what we had
47:53was a robust system,
47:55but he was not
47:56listening.
47:57In fact, most of
47:58the time when you
47:59engaged with the
48:00president, there was
48:01no sense that he
48:02was actually listening
48:03to what anybody else
48:05was saying.
48:05He was simply
48:06preparing for the
48:07next sentence that
48:09he was going to
48:10say.
48:12We said to each
48:13other that this
48:14is a foretaste
48:14Huawei, we're
48:16going to be here
48:16a lot in the
48:17future.
48:18We're going to
48:18find plenty of
48:19issues where the
48:21Chinese are squeezing
48:22us from one side
48:22and the Americans
48:23from the other.
48:24Not just the UK,
48:25but all the
48:26middle-ranking
48:27powers.
48:31The Brits stood
48:32firm on Huawei
48:33for now.
48:35It was some of
48:36Trump's aides who
48:37worried their boss
48:38might not stick to
48:39his guns.
48:42I felt that it
48:44was important to
48:45impress on Trump
48:46that if we were
48:46going to take strong
48:47measures against
48:48Huawei, this was not
48:50something to give
48:51away later.
48:51This had to be the
48:52beginning of a strong
48:54and consistent
48:55policy because to
48:57Trump, everything is
48:58negotiable.
48:59Everything is a
49:00bargaining chip.
49:04While Trump was in
49:05the UK, in Hong Kong,
49:08thousands joined a
49:09vigil to mark 30
49:10years since China's
49:12deadly crackdown on
49:13pro-democracy
49:14protesters in Beijing's
49:16Tiananmen Square.
49:18The vigil took place
49:20in the midst of a
49:21growing wave of
49:21protests against a new
49:23law that would make
49:24extradition to mainland
49:25China easier.
49:28Normally, every fifth
49:29anniversary of Tiananmen,
49:31the White House would
49:32put out a statement on
49:33behalf of the
49:33president, and I had
49:36given Trump a draft
49:37statement that would
49:39commemorate the 30th
49:40anniversary, and Trump
49:42said, I'm not going to
49:43put it out.
49:43And I said, but we
49:45always put it out every
49:46five years, and if you
49:47don't put it out, it
49:48will look like we're not
49:50concerned about what
49:50happened to Tiananmen or
49:52what it represents for the
49:53future of China and Hong
49:54Kong, and he said, I
49:56don't care.
49:58Trump sees international
49:59relations through the
50:00prism of his personal
50:01relations.
50:02He thought Xi would
50:04take offense if we put
50:06out a statement by the
50:07president on Tiananmen,
50:08and he wasn't going to
50:09do it.
50:12Within weeks, as the
50:13protests in Hong Kong
50:14grew, the authorities
50:17responded with brutal
50:18force.
50:25It was against this
50:26backdrop that Trump would
50:28next meet Xi at that
50:29year's G20 summit.
50:37The U.S.
50:38president was facing
50:39further calls to confront
50:40him about Hong Kong and
50:42China's wider human rights
50:43record, including the
50:45treatment of Uyghur Muslims
50:46in Xinjiang.
50:47Hong Kong.
50:48As he landed, he took a call
50:50from the Speaker of the
50:51House.
50:54He said, well, since you're
50:55at the G20, you're in Asia,
50:57isn't it remarkable what's
50:59happening in Hong Kong?
51:01Millions of people are in the
51:02streets demonstrating for
51:05democracy.
51:07I'm sure G20 won't say
51:09anything about that because
51:10she is there.
51:13But I think it would be great
51:14if you could say something to
51:16him that the House and the
51:18Senate, Democrats and
51:20Republicans, have voted in
51:23favor of the Uyghurs.
51:27There's always a summit dinner
51:29at these G20 summits, and
51:31typically it's just the leader
51:33of each country and their
51:34spouse if they're there.
51:37One of my staff talked to the
51:39U.S.
51:41interpreter who was with Trump
51:42who reported that he had a
51:43conversation with Xi Jinping
51:46and talked about the Uyghurs,
51:47and Xi defended against
51:50charges that these are
51:51essentially concentration camps.
51:53And he said the Uyghurs
51:55appreciated it.
51:56They liked it.
51:57It was a good thing to do.
51:58And Trump basically said, well,
52:00then go ahead and do it.
52:03Next day, he calls me back and
52:05he said, I mentioned Muslims
52:08to President Xi, and he said
52:11they like being in those
52:12labor camps.
52:19China's record on human rights
52:20was never going to be top of
52:22Trump's agenda.
52:24Trade negotiations had ground
52:26to a halt, and election year
52:28was fast approaching.
52:30A trade deal with China could be
52:33a vote winner in the
52:34manufacturing and agricultural
52:35heartlands of America.
52:38You know, we've had a
52:40excellent relationship, but
52:42we want to do something that
52:45will even it up with respect to
52:47trade.
52:47I think it's something that's
52:48actually very easy to do.
52:51Trump basically said to Xi,
52:53look, I want to win this
52:54election and I need the
52:55farmers vote and you can help me
52:56out on that.
52:57And indeed, the trade negotiation
53:01then turned into how many tons
53:03of soy beans are they going to
53:05buy next year.
53:07At that point, the trade is
53:09mostly focused on Chinese buying
53:12things.
53:13OK.
53:14On a massive scale.
53:30Xi Jinping had great skill in
53:32flattering Trump and Trump
53:34responded as he as he often did
53:37with flattery of his own.
53:40So he took to calling Xi king.
53:45And in Osaka, it got even worse.
53:48He told him at one point, you're
53:49the greatest leader in contemporary
53:52Chinese history.
53:53And 30 seconds later, he said,
53:54you're the greatest leader in all
53:55of Chinese history.
53:57So we waited to see how Xi would
53:59respond to Trump.
54:02But he didn't call him the greatest
54:04leader in all American history.
54:06He just pocketed it and the
54:08conversation went on.
54:19At home, Xi appeared more
54:21powerful than ever.
54:23Later that year, he took center
54:26stage as the Chinese Communist
54:28Party celebrated 70 years of rule
54:30in China, a statement of power in
54:34the face of the Hong Kong protests.
54:59China.
55:00Unlike Trump, Xi didn't have to worry
55:02about elections.
55:05In fact, China had abolished term limits,
55:09meaning he could now remain president
55:11for life.
55:14And when it came to negotiating with
55:16Trump, the Chinese were increasingly
55:18confident that by playing the long
55:20game, they would ultimately win out.
55:24China understood Trump's way of operating
55:28as a professional wrestler.
55:32Start opening sabot, it's always
55:34outrageous, frightening.
55:38If you chicken out, then he will push
55:41even more.
55:42If you know you have capacity to stand up,
55:46he will come down.
55:49While Xi was parading his military
55:51might, his negotiators were putting the
55:54final touches to a trade deal with
55:56Trump.
55:57It was optimistically named the Phase
56:00One Agreement.
56:01Trump would sign it with China's vice
56:03premier to much fanfare.
56:06The U.S. agreed to ease tariffs on
56:09China.
56:11In return, China pledged to buy hundreds
56:14of billions of dollars of U.S.
56:15goods.
56:17But Trump didn't get the major concessions
56:19on China's trade practices he talked
56:22about on coming to office.
56:24It's a relief from the Chinese side
56:26because we had a very, we have a
56:29tension, you know.
56:31And January 2020, it's less than one
56:33year ahead of the general election.
56:35We believe we would have a relatively
56:38stable bilateral relations in that
56:40year.
56:40And if President Trump won the election,
56:43paved the way for the second term.
56:48It's important to remind yourself that
56:50it's not possible to have an agreement
56:55between the United States and China
56:57that's going to resolve the problem of a
56:59Marxist-Leninist country that wants to be
57:02the number one country in the world.
57:03It's like you can't imagine an agreement
57:06between the United States or the West and
57:09Soviet Union that would have resolved the
57:12fact that they want to take over the world
57:13and we don't want them to, right?
57:15Today we take a momentous step, one that
57:19has never been taken before with China.
57:22But what these agreements can do is stop
57:24movement towards a hot war, which would be a
57:26catastrophe.
57:27Nobody's ever seen anything like it.
57:29This is the biggest deal there is anywhere in the
57:32world by far.
57:34Trump had his deal.
57:37But as he talked it up, the world was about to be
57:40hit by a catastrophe that few saw coming, one that
57:43would bring the U.S. and China closer than ever to a new
57:47Cold War.
57:50China plague.
57:52That's where it comes from.
57:53They say, please don't mention China.
57:55I say, why?
57:55That's where it comes from.
57:58I remember President Trump telling me that if he did a
58:01hundred trade deals with China, it still wouldn't make up for
58:06the losses that COVID had inflicted on the United States.
58:10In the next episode, as a global pandemic rocks the U.S.-China
58:16relationship, the race for technological supremacy ramps
58:20up.
58:22And the stakes are raised as one of America's leading figures
58:26crosses a Chinese red line.
58:29You have to understand whether it's going to Tiananmen
58:31Square or going to Taiwan.
58:33You cannot let somebody else decide where you're going.
58:39This is the closest moment of a military encounter.
58:45My understanding is that 20% of the Chinese did not sleep at
58:48that night.
58:49She's going to tell us where we can go?
58:52I don't think so.
58:57And you can watch the next episode right now on BBC iPlayer.
59:02Also there, AI Confidential with Hannah Fry.
59:05Extraordinary human stories from the high-tech frontier.
59:09Watch now.
59:10Inside a publishing scandal with a new podcast on sounds,
59:14Secrets of the Salt Path.
59:16Listen now.
59:23Subtitle by
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