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Clash Of The Superpowers America Vs China S01E01 FTP
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00:04¡Suscríbete al canal!
00:30We are here with China, and we want to know what's wrong with us.
00:34We are about to help President Trump affect the biggest shift in U.S. foreign policy since the end of
00:40the Cold War.
00:41Now, with both sides staking their claims on different parts of the world,
00:46this is the story of how these two superpowers have become tangled in a struggle for economic supremacy,
00:52with repercussions everywhere.
00:54We have to realize there's this crisis, and we have to take action to change.
01:00The alternative is total defeat.
01:02We'll hear from top U.S. officials and Chinese academics who give the inside track from Beijing.
01:10When the president's off the handle, you don't know what's going to happen.
01:16As well as those caught in the middle of this dangerous standoff.
01:20The message from the White House was,
01:23the President of 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 Swiss Alps.
01:54The leader of the world's largest communist country was there to join the business and political elites at the annual
02:01World Economic Forum.
02:04This is the first time President Xi attended, so China wants to make a clear point where we stand on
02:13international economic system.
02:19Davos is an extraordinary environment.
02:23It's jammed solid with the world's political leaders, bankers, financiers.
02:30This year in particular was extraordinary because Trump was about to be inaugurated, and many of us were quite alarmed.
02:42We have never seen a politician like Trump, because nobody know his quality, how he operates.
02:51Trump was clearly turning his back on free trade and open markets, the traditional American mantras that had led the
02:59free world for decades.
03:01And 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.
03:16Hemos hecho un sistema de seguridad, como si se despejó a la calle,
03:25como si se despejó a la calle de la calle.
03:29Pero también se despejó a la luz y el aire.
03:34El resultado de la guerra de la guerra es solo un golpe de golpe.
03:40Nunca pensé que en mi vida,
03:42en mi vida, a ver un líder de la guerra de la guerra de la guerra.
03:46Pero recuerda que la guerra de la guerra es bueno para China.
03:50Otra cosa es decirle a Trump que este es tu sistema,
03:55que creó que te beneficie y también beneficie el resto del mundo.
03:58Así que debería mantenerlo.
04:01No abandono el船.
04:04Tú eres el capitán.
04:06People no sabía si estaba tomando la mickey un poco al principio.
04:33Gracias.
04:36Un saludo.
04:48Un saludo.
04:50Un saludo.
04:52Un saludo.
05:05Un saludo.
05:06Y el capitán de la guerra de España.
05:28China 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.
05:50She makes a point saying this is a restoration, not a race.
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 centre 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.
06:40And then Donald Trump, with like a staccato approach, starts firing questions at me.
06:46What's China's GDP?
06:48What's China's GDP?
06:48What's the trade imbalance between the United States and China?
06:51Is there military any good?
06:54And then I realized he cared about the balance of payments.
06:58He knew about tariffs.
07:01He understood the business aspect of 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.
07:20USA! USA!
07:21He 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.
07:43Thank 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 U.S.-China economic integration.
08:11This 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 U.S.-dominated world order.
08:57I 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, while the world's biggest companies continue
09:37to flood into the country.
09:41I was there as a reporter for Reuters news agency, all the way from the late 90s until 2005.
09:49It was a heady time.
09:51It was hard not to feel optimism that China would continue opening up, that its marketization 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, which I
10:41think 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.
10:56Coming into the White House, Trump's team included hawkish advisers 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 of 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.
11:41Look, 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.
11:55Chief amongst the Wall Street faction was Gary Cohn.
11:59The former president of Goldman Sachs and Trump's choice as his top economic adviser.
12:05As a market practitioner, I think that we can have a globalized world that works well.
12:14If you want to expand your plant, or when Mark wants to come in and build a big massive plant,
12:20or when Dell wants to come in and do something monstrous and special, you're going to have your approvals really
12:28fast.
12:29Thank you, sir.
12:29The 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 U.S. 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, he might just say the opposite to spite everybody.
13:06So 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 is always a bash in 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.
14:00But 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.
14:21And 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, President. Thank you.
14:50He's in the hospitality business.
14:52He had his granddaughter, was learning Chinese.
14:56We 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.
15:26The two spent a vast amount of time together.
15:29The main message the president was delivering to us is that, you know, he and Xi were hitting it off.
15:38It seems they like each other.
15:40Yeah, chemistry is good.
15:44We've had a long discussion already.
15:48And so far I have gotten nothing, absolutely nothing.
15:53But we have developed a friendship, I can see that.
15:56You know, President Trump, he's a New Yorker, I'm a New Yorker.
16:00And New York men of that certain age, they tend to say, he's my best friend, he's a pal of
16:06mine.
16:07And they were not really friends, they've just met each other, and they probably have business interests together, but it
16:11doesn'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. Pleased to be around my home.
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 if the U.S. is back
17:52to the protectionism, China is still there to help and to work with everybody.
17:59Well, the road is important in the demonstrating to the American president or American government that China could have alternative
18:11if 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.
18:33One of the things that Beijing does is to try to create the sense that the Communist Party's success is
18:39inevitable.
18:39So come jump on the bandwagon.
18:44They 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.
20:52And a lot of them were in the direction of, well, we have to have dialogue, we have to tell
20:57the Chinese what we want, all these kinds of things.
20:59You 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.
21:14Lighthizer's strategy was to tax goods coming to the US from China.
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, Mr. President, your voters, the people who trusted you, expect that
22:01this is going to get done.
22:02It'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.
22:18And 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 U.S. 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.
22:53American companies were desperate to do business in China.
22:56And the Chinese would say, you can enter the Chinese market, but you have to allow us access to your
23:03proprietary technology.
23:05Well, 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.
24:00And 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 is 32.5% of
24:58global GDP.
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.
25:16Which means, 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,
26:12was coming to Beijing to kowtow, you know, to the emperor, you know, to Xi Jinping.
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. Thank you.
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 Pottinger is like the man who knew too much.
27:55And he really would make the Chinese leadership very uncomfortable.
27:59I mean, here'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, you know, where's Matt Pottinger?
28:10He'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, Iji.
28:38Iji.
28:38Iji.
28:38Iji.
28:38Iji.
28:39Iji.
28:39Iji.
28:39Iji.
28:39Iji.
28:41Iji.
28:43Iji.
28:49Iji.
29:10Iji.
29:12Iji.
29:12Iji.
29:13Iji.
29:13The Nazis in the ground epitome and große Memorial Institute is surveyed at Paris.
29:20es totalmente
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29:23Pero la cena
29:26Eveении
29:28Jesús
29:29Tiene
29:29El presidente
29:31el primer
29:32detalle del mes
29:33y preguntándome
29:34la mañana le el,
29:37el
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29:37es
29:38la
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29:41el
29:43el
29:43es
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29:48el
29:50His basic argument is familiar, but the way he presented is quite, I would say, quite aggressive from a Chinese
29:59point of view.
30:01Lighthizer couched his presentation around the practices of forcing the transfer of intellectual property.
30:08So he just went through many of these practices with such clarity, I think it was arresting to Xi Jinping
30:14and the other officials there.
30:18I basically made the argument that we were the victim here. It wasn't China. And it can't continue and it
30:26won't continue. And I think that was a little befuddling, like, what's going on here?
30:35But the Chinese hosts weren't done yet. Trump had traveled to Beijing with dozens of American business leaders in tow.
30:45In front of the cameras, they signed more than $250 billion worth of deals with China.
30:55China was quite generous to really make all those things happen.
31:01It shows that China is really willing to collaborate with the U.S.
31:03Dallas, the president and CEO of Boeing Commercial Airplanes and Mr. Jia Baojun.
31:08That was really a big boost for President Trump. And he really had a big harvest for his first trip
31:14to China.
31:16Donald Trump wanted to show the American people that during his visit to China, he got something for, you know,
31:23America.
31:24And this was something really tangible and right in his wheelhouse.
31:30Now Trump had his chance to talk directly to the press.
31:55He turns to Xi Jinping, goes, for all this here, I don't blame you. I blame us.
32:01But in actuality, I do blame past administrations for allowing this out-of-control trade deficit to take place and
32:11to grow.
32:12It was very Trumpian in that it was simultaneously gracious to the host, but also had a sharp edge to
32:19it.
32:19In spite of all the flattery and the rest, he was not going to back off his demands for a
32:25really significant shift in that economic relationship.
32:28When that shift did not materialize, President Trump resorted to a trade war.
32:34Here's what's on the power lunch menu. President Trump hitting China with $60 billion worth of tariffs, raising fears about
32:41a global trade war.
32:43In March 2018, Lighthizer's report was published.
32:46It says the economic harm to the U.S. of unfair trade practices on intellectual property is in the range
32:53of $50 billion.
32:54And so it plans to try to recoup some of that cost with these tariffs.
33:00Trump announced tariffs on Chinese exports, particularly those the U.S. said use stolen technology.
33:08China would respond in kind, sparking a tit-for-tat escalation that spiraled over the coming months.
33:15If they charge us, we charge them the same thing. That's the way it's got to be.
33:22Trump was smashing decades of Washington consensus on trade.
33:27Earlier that month, Gary Cohn resigned.
33:30The only thing the tariff was doing was acting as a consumption tax to the U.S. consumer that bought
33:41that good from China.
33:45I can remember talking with business leaders and investors and many folks assuring me that there's no way these tariffs
33:52could stay on more than three or four months
33:55because it would be too harmful to the U.S. economy.
33:59And I can remember telling folks that I think we're actually much more in a new normal.
34:04Just because they have a business model that works really well, that the rest of the world should just stay
34:10static
34:10so that they can benefit from that, isn't a realistic perspective to have.
34:16And that's tough to hear, particularly when you're a powerful company.
34:20You've been kind of a master of the universe, but that's the reality.
34:26Trump's team now had to face officials from Beijing.
34:30The Chinese really were taken aback.
34:33They didn't think that Trump would really go ahead with the tariffs.
34:38They had a sense for a long time that it was a bluff.
34:42You know, they had signed this $250 billion worth of deals just back in November.
34:48You know, that was a serious amount of money.
34:51And they thought, you know, they had done the necessary and didn't understand why, you know, it wasn't working.
35:01As America and China braced for what could be a costly trade war, Xi put on a show of strength.
35:10Within weeks of the tariffs being announced, he donned military fatigues to preside over a massive naval parade,
35:17the largest of its kind ever conducted by the Chinese.
35:22It took place in the South China Sea, a crucial shipping corridor where China was building artificial islands to back
35:29up its claims on the area.
35:32Claims rejected by most countries, including the U.S.
35:37He says he wants a modernized military by 2035.
35:41He wants a world-class military by 2049, which means pretty much he wants to displace the United States from
35:49the Indo-Pacific.
35:51They want to defend all the waters surrounding China and manage the trade and everything passing through them.
35:58This was China interrupting and trying to change international rules and norms that we felt that we couldn't tolerate.
36:07The situation was becoming more and more dangerous as U.S. ships and aircraft continued what they called freedom of
36:15navigation exercises.
36:17U.S. military aircraft, POP-8 Alpha, this is Chinese U.S. reef.
36:22China had 70 of the national islands including U.S. reef and its adjusted waters.
36:26Leave immediately and keep far off so that to avoid any misstanding.
36:37Tensions were high as world leaders arrived in Argentina for the annual G20 summit.
36:44It would be Trump and Xi's first meeting since Beijing.
36:48The U.S. president had a new national security advisor.
36:54I thought this was obviously a significant opportunity to make points about things that concerned us about China's aggressive behavior
37:05along its periphery and talk about the big strategic issues.
37:14By now, the U.S. had ramped up tariffs to hit $250 billion worth of Chinese goods.
37:24Trump was threatening to go even higher.
37:28But Bolton feared the prospect of a trade deal with China might soften Trump's resolve.
37:37The two leaders met for dinner on the sidelines of the summit.
37:42This was the first time I had seen them together.
37:45It was unnerving to watch Xi in a very systematic, thorough way advance what were clearly his well-thought-out
37:56objectives and to watch Trump wing it.
38:00The relationship is very special, the relationship that I have with President Xi.
38:06And I think that is going to be a very primary reason why we'll probably end up getting something.
38:13Xi had come to the meeting with a headline-grabbing pitch.
38:17If the U.S. would hold off further tariffs, China would commit to buying U.S. goods and services worth
38:24over a trillion dollars.
38:27Chinese site, for example, Walmart and other successful retailers, how they're successful because of Chinese made in China.
38:37So that is what the argument they are making, saying you might end up hurting yourself.
38:45I was worried throughout the dinner that we were basically going to agree to things.
38:49And indeed, Trump did make concessions in terms of not putting tariffs in place that he had threatened.
38:55So that we could have good trade discussions with China.
39:00A truce in the trade war was agreed.
39:06But just then, news came through that it had the potential to undermine any goodwill.
39:11I hear my phone ringing, I look down and it's my colleague at the Justice Department.
39:18And I don't normally get calls from the Justice Department.
39:22And he informed me that they're going to exercise an arrest warrant against the chief financial officer of Huawei as
39:29she goes through at Vancouver Airport.
39:31I immediately think about how this is going to be interpreted as a deliberate snub and a deliberate affront to
39:39the Chinese counterparts.
39:40And how this will throw a wrench into what the president is trying to achieve.
39:45And let's get back to the big story this morning, weighing on futures with big implications for the U.S.-China
39:50trade truce and relationship.
39:51Canada has arrested the CFO of Huawei, who also happens to be the daughter of the company's founder.
39:56Meng's charges were part of a sweeping set of criminal charges by the Trump administration unveiled yesterday,
40:02accusing the company of stealing trade secrets and violating sanctions.
40:06We all hear the news, we were surprised, because while we're shaking hands on the table, the U.S. is
40:13kicking us back under the table.
40:17We knew for some time before that Meng was coming, it was imperative that not leak out.
40:25John Bolton had been told that Meng's arrest was imminent just before the dinner with Xi.
40:31He decided not to inform Trump until it was made public.
40:36On the flight back to Washington, I explained what had happened in Canada and what would flow from that.
40:43He didn't really have much of a reaction to Meng's arrest when I briefed him on it.
40:49Officially, the Chinese government isn't directly linking Meng's arrest to the trade negotiations just yet.
40:56But unofficially, in the state media, this is being seen as a political decision.
41:06Trump had a Christmas dinner in the East Room for his top White House staff.
41:11And at one point, out of nowhere, he said,
41:14by the way, why did we arrest Meng, the Ivanka Trump of China?
41:20I thought maybe first I would say, you didn't tell me that Ivanka was a spy and an agent of
41:27our government.
41:27But I didn't, fortunately for me, probably.
41:32Telecom's giant Huawei was a shining example of Xi's vision for China to dominate technologies of the future.
41:40It had become a battleground with the Americans who placed restrictions on the company,
41:45citing fears China could use its equipment for spying.
41:51Meng's high-profile arrest only raised the tensions.
42:13With relations between the superpowers deteriorating,
42:17other countries were finding themselves caught in the crossfire.
42:21And not just over Huawei.
42:24The British Chancellor got a taste of this when he addressed that year's Belt and Road Forum.
42:31The speech lauded the scale and ambition of the project and the Chinese delivery of it,
42:38but said explicitly that if this is going to work,
42:41it's got to be very careful about the debt burdens that recipient countries are taking on.
42:48I was invited to the heads of state lunch, which was hosted by President Xi.
42:54And he just lashed into me, saying this was none of my business.
42:59And the Belt and Road was China's project,
43:04and China would run it in the way that China chose to run it.
43:07So it was quite a moment being given a finger-wagging lecture by President Xi.
43:16Returning to London, Hammond would find that the fallout wasn't over.
43:22So I get a call from the White House.
43:25I get the Deputy National Security Advisor on the phone,
43:29and he says,
43:31we'd like to talk to you about your speech.
43:33We had seen a speech that Philip Hammond had just delivered that it appeared to be an endorsement of China's
43:41debt-trap diplomacy.
43:42So it was a bit cheeky, but one of my colleagues from the State Department printed out Hammond's speech on
43:50a poster board
43:51with some of the key phrases that looked like they'd been taken straight from Beijing's propaganda highlighted.
43:59A meeting was set up, and somebody came over and arrived in my office in Number 11.
44:05He laid them out in my office in Downing Street along the wall so that all the text of the
44:14speech was there,
44:15and I was asked by the Americans to justify the, or to explain my thinking behind the less critical parts
44:26of that speech.
44:27I'd said from the outset, the UK cannot be in a position of having to choose between the world's largest
44:35economy and the world's second largest economy.
44:38And that was what I told the Americans.
44:41The response I got was, that is exactly what the President of the United States wants you to do.
44:48He wants you to choose, and he wants you to choose America.
44:56Trump now ramped up the pressure even more.
44:59He signed an executive order preparing the ground for a total ban of Huawei equipment in U.S. systems.
45:07And the Americans set to work, persuading other countries to follow suit, beginning with their closest ally.
45:17We had to start with the UK because in many ways, the UK's position as sort of a cyber security
45:23and telecommunications power, GCHQ,
45:26is seen as sort of world class.
45:29And that was allowing, you know, everybody else to essentially point to and say, well, GCHQ says it's okay.
45:34So why are you, America, making a big deal about this?
45:42The position of the British government was very strongly against making any significant changes to Huawei.
45:49And we met with a lot of resistance.
45:52Philip Hammond, the Chancellor of the Exchequer, and others were very strong on that.
45:59The message from the White House was, we want Huawei out, get it out, and tell these Europeans that they've
46:07got to toe the line.
46:09The Chinese had made this a totemic issue that if we cut Huawei off, there would be significant trade and
46:18other consequences.
46:21So we very much squeezed in the middle.
46:26As Trump arrived for a long-promised state visit, the Brits hoped to convince the Americans that they could keep
46:33Huawei out of the most sensitive parts of their network.
46:39Our security experts essentially said, we've engineered the systems in a way that the Americans are overstating the risk.
46:47We had very deep concerns and plenty of evidence that there were back doors, there were software and hardware vulnerabilities
46:57that would make it fairly easy for data to be siphoned out of those networks.
47:04They thought they could protect telecommunications in Britain, and we simply didn't agree with that.
47:10There was this tension between our security experts.
47:14Ours were clear that we could manage any risk from Huawei.
47:19It was never in the core of our infrastructure, only in the periphery.
47:23And they didn't agree.
47:25Our main point is, is that this is not a technical discussion, this is a policy discussion, right?
47:32We felt that they simply did not want to re-examine the decision because changing their decision that they had
47:39made before would likely entail retaliation by Beijing.
47:45We explained to Trump how our network was configured differently from the American network, that we were very confident that
47:52what we had was a robust system, but he was not listening.
47:57In fact, most of the time when you engaged with the president, there was no sense that he was actually
48:03listening to what anybody else was saying.
48:05He was simply preparing for the next sentence that he was going to say.
48:11We said to each other that this is a foretaste, Huawei.
48:15We're going to be here a lot in the future.
48:18We're going to find plenty of issues where the Chinese are squeezing us from one side and the Americans from
48:23the other.
48:24Not just the UK, but all the middle-ranking powers.
48:31The Brits stood firm on Huawei for now.
48:35It was some of Trump's aides who worried their boss might not stick to his guns.
48:42I felt that it was important to impress on Trump that if we were going to take strong measures against
48:48Huawei, this was not something to give away later.
48:51This had to be the beginning of a strong and consistent policy because to Trump, everything is negotiable.
49:00Everything is a bargaining chip.
49:04While Trump was in the UK, in Hong Kong, thousands joined a vigil to mark 30 years since China's deadly
49:12crackdown on pro-democracy protesters in Beijing's Tiananmen Square.
49:18The vigil took place in the midst of a growing wave of protests against a new law that would make
49:24extradition to mainland China easier.
49:28Normally, every fifth anniversary of Tiananmen, the White House would put out a statement on behalf of the president.
49:34And I had given Trump a draft statement that would commemorate the 30th anniversary.
49:41And Trump said, I'm not going to put it out.
49:43And I said, but we always put it out every five years.
49:47And if you don't put it out, it will look like we're not concerned about what happened to Tiananmen or
49:52what it represents for the future of China and Hong Kong.
49:55And he said, I don't care.
49:58Trump sees international relations through the prism of his personal relations.
50:03He thought Xi would take offense if we put out a statement by the president on Tiananmen.
50:08And he wasn't going to do it.
50:12Within weeks, as the protests in Hong Kong grew, the authorities responded with brutal force.
50:25It was against this backdrop that Trump would next meet Xi at that year's G20 summit.
50:37The U.S. president was facing further calls to confront him about Hong Kong and China's wider human rights record,
50:44including the treatment of Uyghur Muslims in Xinjiang.
50:48As he landed, he took a call from the Speaker of the House.
50:54He said, well, since you're at the G20, you're in Asia.
50:57Isn't it remarkable what's happening in Hong Kong?
51:01Millions of people are in the streets demonstrating for democracy.
51:07I'm sure G20 won't say anything about that because she is there.
51:13But I think it would be great if you could say something to him that the House and the Senate,
51:19Democrats and Republicans, have voted in favor of the Uyghurs.
51:27There's always a summit dinner at these G20 summits, and typically it's just the leader of each country and their
51:34spouse if they're there.
51:37One of my staff talked to the U.S. interpreter who was with Trump, who reported that he had a
51:43conversation with Xi Jinping and talked about the Uyghurs.
51:48And Xi defended against charges that these are essentially concentration camps.
51:53And he said the Uyghurs appreciated it.
51:56They liked it.
51:57It was a good thing to do.
51:58And Trump basically said, well, then go ahead and do it.
52:03Next day, he calls me back and he said, I mentioned Muslims to President Xi, and he said they like
52:11being in those labor camps.
52:19China's record on human rights was never going to be top of Trump's agenda.
52:24Trade negotiations had ground to a halt and election year was fast approaching.
52:30A trade deal with China could be a vote winner in the manufacturing and agricultural heartlands of America.
52:38You know, we've had an excellent relationship, but we want to do something that will even it up with respect
52:47to trade.
52:47I think it's something that's actually very easy to do.
52:51Trump basically said to Xi, look, I want to win this election and I need the farmers' vote and you
52:56can help me out on that.
52:57And indeed, the trade negotiation then turned into how many tons of soybeans are they going to buy next year.
53:07At that point, the trade is mostly focused on Chinese buying things on a massive scale.
53:30Xi Jinping had great skill in flattering Trump, and Trump responded as he often did with flattery of his own.
53:40So he took to calling Xi king, and in Osaka, it got even worse.
53:48He told him at one point, you're the greatest leader in contemporary Chinese history.
53:53And 30 seconds later, he said, you're the greatest leader in all of Chinese history.
53:57So we waited to see how Xi would respond to Trump.
54:02But he didn't call him the greatest leader in all American history.
54:06He just pocketed it and the conversation went on.
54:19At home, Xi appeared more powerful than ever.
54:23Later that year, he took center stage as the Chinese Communist Party celebrated 70 years of rule in China.
54:32A statement of power in the face of the Hong Kong protests.
54:59Unlike Trump, Xi didn't have to worry about elections.
55:05In fact, China had abolished term limits, meaning he could now remain president for life.
55:14And when it came to negotiating with Trump, the Chinese were increasingly confident that by playing the long game, they
55:21would ultimately win out.
55:24China understood Trump's way of operating as a professional wrestler.
55:32Start opening sabot, it's always outrageous, frightening.
55:38If you chicken out, then he will push even more.
55:42If you know you have capacity to stand up, he will come down.
55:49While Xi was parading his military might, his negotiators were putting the final touches to a trade deal with Trump.
55:57It was optimistically named the Phase One Agreement.
56:01Trump would sign it with China's vice premier to much fanfare.
56:06The U.S. agreed to ease tariffs on China.
56:11In return, China pledged to buy hundreds of billions of dollars of U.S. goods.
56:17But Trump didn't get the major concessions on China's trade practices he talked about on coming to office.
56:24It's a relief from the Chinese side because we had a very, we have a tension, you know.
56:31And January 2020, it's less than one year ahead of the general election.
56:36We believe we would have a relatively stable bilateral relations in that year.
56:41And if President Trump won the election, it would pave the way for the second term.
56:45President Trump won the election.
57:15Today we take a momentous step, one that has never been taken before with China.
57:22But what these agreements can do is stop movement towards a hot war, which would be a catastrophe.
57:27Nobody's ever seen anything like it.
57:29This is the biggest deal there is anywhere in the world by far.
57:34Trump had his deal.
57:37But as he talked it up, the world was about to be hit by a catastrophe that few saw coming.
57:43One that would bring the U.S. and China closer than ever to a new Cold War.
57:50China plague, that's where it comes from.
57:53They say, please don't mention China.
57:55I say, why?
57:55That's where it comes from.
57:57I remember President Trump telling me that if he did 100 trade deals with China,
58:04it still wouldn't make up for the losses that COVID had inflicted on the United States.
58:10In the next episode, as a global pandemic rocks the U.S.-China relationship,
58:17the race for technological supremacy ramps up.
58:22And the stakes are raised as one of America's leading figures crosses a Chinese red line.
58:29You have to understand whether it's going to Tiananmen Square or going to Taiwan.
58:34You 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 that 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.
59:19Listen now.
59:19Listen now.
59:24Listen now.
59:24Listen now.
59:24Listen now.
59:24Listen now.
59:24Listen now.
59:24Gracias.
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