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Clash Of The Superpowers Ameri Episode 1 Engsub
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00:04Xi Jinping and Donald Trump the leaders of the world's most powerful countries are locked in a
00:11high-stakes battle for global power and influence it's a fight that's threatened to explode since
00:19Trump first took office tore up the diplomatic rulebook and smashed the consensus on free trade
00:26we lose almost 500 billion dollars a year 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
00:40end of the Cold War now 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
00:51supremacy with repercussions everywhere we have to realize there's this crisis and we have to take
00:58action to change the alternative is total defeat we'll hear from top U.S. officials and Chinese
01:06academics who give the inside track from Beijing when the president's off the handle you don't know
01:14what's gonna happen as well as those caught in the middle of this dangerous standoff the message
01:21from the White House was president of the United States wants you to choose and he wants you to
01:27choose 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
02:00elites at the annual world economic forum this is first time president Xi attended so China want to
02:10make a clear point where we stand on international economic system
02:19Davos is an extraordinary environment it's jammed solid with the world's political leaders bankers financiers this
02:32year in particular was extraordinary because Trump was about to be inaugurated and many of us were quite alarmed
02:42we had never seen a politician like a Trump you can nobody know his quality how he operates
02:51Trump was clearly turning his back on free trade and open markets the traditional American
02:57mantras that had led the free world for for decades and then enrolls president Xi in a magnificent piece of
03:07theater and delivers a speech which says essentially I 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 it's good for China the other thing is to remind Trump that this is your system
03:55you created to benefit you and also benefit the rest of the world so you better keep it don't abandon
04:03the 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 follow me work with me to ensure that we don't allow anyone in brackets
04:24incoming US President Trump to trample down this magnificent free trading structure that has made us all so much more
04:33prosperous
04:37he saw an opportunity and he took it it was a brilliantly crafted intervention and it completely stole the show
04:46Xi was the toast of Davos
04:50Quite a journey for a man who become 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
05:28For China dream basically means that China restore its previous position it's not China will dominate or try to take
05:41over 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 rice
05:55Please welcome the next President of the United States Mr. Donald J. Trump
06:03Now 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
06:15In his own unique style
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 GNP?
06:48What's the trading balance 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
07:00He understood the business aspect of the relationship
07:06For many decades we've made other countries rich
07:11While the wealth, strength and confidence of our country has dissipated over the horizon
07:20USA! USA! USA!
07:22He paid attention to a group of people
07:24What we call our Rust Belt
07:25The former manufacturing part of the United States
07:28He was the only candidate who recognized their legitimate pain
07:31And the only candidate who had a solution
07:33Which is we'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
07:55I remember walking into the executive office building
07:59One day into the Trump presidency
08:01And there's a big sign that lists all the meetings that are being held
08:05And one of the titles is something like
08:08Let's talk about greater U.S.-China economic integration
08:11This is a day into the Donald Trump administration
08:14And he's just won an election
08:16With a significant part of his agenda being to fight off China's economic predation
08:23And people in his bureaucracy, in his building
08:26Are having meetings about how we could do more economically with China
08:31I was surprised by some of the assumptions that were being presented
08:37By long-time diplomats, long-time intelligence officers and others
08:43There was a view that really all that Beijing wanted at the end of the day
08:48Was just to access a large American market
08:51And to prosper and thrive in a U.S.-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
09:10Part of what they called socialism with Chinese characteristics
09:16The country enjoyed unprecedented growth
09:18Which was given a huge boost in 2001
09:21When China was welcomed into the WTO
09:24The World Trade Organization
09:29It defined China as a developing economy
09:31Meaning trade rules were applied more leniently
09:34While the world's biggest companies continue to flood into the country
09:41I was there as a reporter for Reuters news agency
09:45All the way from the late 90s until 2005
09:49It was a heady time
09:51It was hard not to feel optimism
09:55That China would continue opening up
09:59That its marketization would continue
10:03And there was a hope
10:05The politics would begin to moderate as well
10:09But by the time I left
10:12I had this sinking feeling
10:13That many of those optimistic assumptions were going to be 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
10:31In which there were rules and norms
10:34But it was given a special carve out
10:37Where it could pretend that it was a developing country
10:39Which I think is always tough
10:42When you're one of the world's largest consumers of Ferraris and Lamborghinis
10:46It's entirely logical and sort of expected
10:50That Beijing would want to maintain that system
10:56Coming into the White House
10:57Trump's team included hawkish advisors
11:00Who wanted to ensure the new president would deliver on his promise to take on China
11:05But they knew that for all of Trump's tough talk
11:08He had a reputation to protect as a champion of business
11:13And he wanted to keep the CEOs on side
11:16Many of whom had moved manufacturing to China
11:22In the White House
11:23In the White House, we had the two camps start to develop
11:25The more globalist establishment camp
11:29And more of the kind of disruptors, populist, nationalist camp
11:34The biggest fights were about China and trade
11:36And that's because the reason is we had so many Wall Street guys
11:41And look, I worked at Goldman Sachs
11:43We 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
12:02And Trump's choice as his top economic advisor
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
12:16Or 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
12:27You're going to have your approvals really fast
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
12:41Would be put to the test at Trump's first summit with Xi
12:46As he got ready, the US president was briefed by his national security advisor
12:53President Trump was kind of reflexively contrarian
12:56And because he's reflexively contrarian
12:58If you advise President Trump and say, hey, everybody agrees
13:02This is what you should say
13:04He might just say the opposite to spite everybody
13:07So what we decided is what we would emphasize with President Trump
13:11Is what Xi Jinping wants him to say
13:13And let President Trump be contrary to Xi Jinping
13:16Rather than to his advisors
13:23What we said to President Trump is how Xi Jinping uses this language that sounds nice
13:29Or at least innocuous
13:30And when the Chinese Communist Party officials say win-win
13:32What 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
13:47There's always a bashing China element somewhere
13:50A lot of name-calling, a lot of blaming
13:53I think also the advisors that he's using at that time was very hawkish
13:57Like Steve Bannon, Matt Partinger, and all those people
14:00But then normally when the new administration come into the White House
14:05It 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
14:25I think that will be very helpful for the bilateral relations
14:31Trump had chosen to host Xi not at the White House
14:34But 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
14:45From the tough issues you're negotiating
14:48Thank you, President
14:49Thank you
14:50He's in the hospitality business
14:52He had his granddaughter, was learning Chinese
14:58Sing a Chinese folk song
15:05This is a great move
15:06It's very positive
15:09It's like a family reunion
15:16One of the biggest parts of Mar-a-Lago
15:19Was time set aside for the two heads of state to be 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
15:33Is that, you know, he and Xi were hitting it off
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
16:03They 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
16:16I think what that meant
16:17Is that President Trump met him
16:18He understands how he's going to negotiate with him
16:20Thank you, everybody
16:21Pleased to go on my call
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 centre of global trade
16:37With or without America
16:40A month after Mar-a-Lago
16:42He played host to leaders from around the world
16:45To celebrate his flagship initiative
16:49Belt and Road
16:58Harking back to the ancient Silk Road between East and West
17:02Belt and Road
17:04Belt and Road aimed to better link China with the world
17:06Financing huge infrastructure projects
17:11One of the most ambitious schemes ever conceived
17:15It spanned continents
17:17With 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
17:49To assure the world
17:50If the US is back to the protectionism
17:53China is still there to help
17:55And to work with everybody
17:57Belt and Road is important in demonstrating to the American president
18:05Or American government
18:08That China could have alternative
18:11If Western countries decide to block or slow down
18:15Chinese economic activities
18:26Cutting a somewhat lonely figure at the summit
18:28Was the US representative Matt Pottinger
18:32One of the things that Beijing does
18:35Is to try to create the sense
18:37That the Communist Party's success is inevitable
18:40So come jump on the bandwagon
18:45They wanted to assemble as many world leaders as possible
18:49To essentially endorse Belt and Road
18:54I remember speaking to President Trump
18:56Explaining that Belt and Road
18:58Was actually a system
19:01Designed to diminish the influence of the United States
19:05It was an extremely opaque system
19:10Whereby governments would have to surrender
19:13Sovereignty over critical infrastructure
19:16As collateral
19:18In case they weren't able to pay back debts
19:22And so it was really sort of a form of loan sharking
19:25On a global scale
19:29Pottinger's line didn't go down well with the other attendees
19:33One of them was Kenya's president
19:35Whose country had just that month opened a multi-billion dollar new railway
19:40Largely financed by China
19:44Kenya took a big loan to build the standard gauge railway
19:48And it was never going to be easy paying it
19:51But was there a Chinese debt trap? No
19:55African countries are caught in a debt trap
19:57But it's not of Chinese making
20:00The predominant amount of money owed by African states
20:04Is owed to Western governments and private banks
20:09The Americans were uncomfortable with any Chinese initiative
20:12That looked as though it had a strategic dimension
20:15And this clearly was a strategic project
20:18It was about projecting Chinese influence
20:21Securing Chinese supply lines
20:23And securing export routes as well
20:27The same day that Xi was hosting his guests in Beijing
20:32Trump'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
20:44I'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
20:54Well, we have to have dialogue
20:56We have to tell the Chinese what we want
20:58All 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
21:08Talk, talk, talk, talk, talk, and then don't do anything at all
21:14Lighthizer'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
21:28To change the economic relationship between the United States and China
21:32To force companies to come back to the United States
21:34Or 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
21:47And 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
22:00Expect that this 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
22:09Are deliberately obstructing your order
22:12To bring China to account for what it's done to the American people for 30 years
22:18And the president said
22:20I'm not going to let people delay anymore
22:25Trump gave Lighthizer the green light
22:28To launch a major investigation into China's trade practices
22:31Thank you very much, Ambassador Lighthizer
22:34Especially claims it was forcing US companies
22:37To give up blueprints for their most valuable technology
22:40We're going to be fulfilling another campaign promise
22:44By taking firm steps to ensure that we protect
22:47The intellectual property of American companies
22:50And very importantly of American workers
22:53American companies were desperate to do business in China
22:56And the Chinese would say
22:59You can enter the Chinese market
23:00But you have to allow us access to your proprietary technology
23:05Well, when American companies did that
23:07Very quickly they found that that technology
23:10Belonged to their Chinese partners
23:12And then they would go flood the market with these products
23:16At a much cheaper rate
23:18Put American businesses out of business
23:20And dominate the global supply chains
23:25The investigation could pave the way
23:27For wide-ranging tariffs on China
23:32Economists believe that tariffs are going to raise prices
23:35And lead to inflation
23:37Even if you bought the idea
23:40What's the alternative?
23:42That we teach our children Chinese
23:44And tell them to prepare for a life of servitude?
23:48We have to realise there's this crisis
23:51And we have to take action to change
23:54And if there's some small cost associated with it
23:57The alternative is total defeat
23:59And that's not an option
24:05In Beijing, Xi was showing no sign of making concessions
24:12Although China's phenomenal growth was slowing
24:15His ambition remained resolute
24:18The Chinese Communist Party
24:20The Chinese Communist Party
24:21The Chinese Communist Party
24:24It's not easy to beat the beat
24:27The Chinese Communist Party
24:28In a three-hour speech to the annual party congress
24:32He 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 the British came to invade the Opium War
24:50I'm talking about 1820s, 30s
24:53Chinese economy is 32.5% of global GDP
24:59When Communists took over in 1949
25:02Chinese economy less than 2% of global GDP
25:06That is a freefall disaster
25:09At the time Xi Jinping announced the China Dream
25:11We are about 12 or 15% of GDP
25:16Which means if you compare with the 1830s
25:19We still have a lot of room there
25:21Right?
25:25Three weeks later, Trump arrived in Beijing
25:28For what the Chinese were calling a state visit plus
25:33With the threat of tariffs looming large
25:35This was a chance for Xi to win round the US president
25:41Xi want to make it as spectacular as possible
25:45For obvious reasons
25:49Everybody knows that Trump liked 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
26:24Picture yourself as Nero, the emperor of Rome, and you want to impress somebody
26:31What would you do?
26:34It was everything you can imagine
26:39Everything from music, to singing, to dancing
26:47They really pulled out all the stops and
26:52It 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
27:13This is an extraordinary honour
27:15Chinese 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
27:40As President Trump was about to be escorted through the Forbidden City
27:45Before I understood what was happening
27:46I 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
28:02And knew the Chinese Communist Party so well
28:04When we get to the Forbidden City, I'm looking around, yep
28:08Where's Matt Ponger? He's not there
28:10The one guy who can actually speak the language
28:13And know something about this system
28:15Has somehow been kept out
28:18Hey, there we are
28:22The imperial setting was the perfect spot for Xi
28:25To give Trump an education on China's historic place in the world
28:30And I guess the oldest culture they say is Egypt at 8,000
28:35Yeah, 8,000
28:37IJ, IJ, IJ, is the old one
28:38But the culture has never been stopped
28:41It's just the Chinese civilization
28:45So this is your original form of my, Jeff?
28:50You're the same as the old one
28:51Yes, so we are the original ones
28:54The black hair, the black hair, the black hair
28:57We face back to 5,000 years ago
28:59Red hair, yellow skin
29:01We call ourselves the...
29:03People going down from China
29:08That's good
29:10Xi's charm offensive looked to be working
29:12As the leaders and their team sat down in the great hall of the people
29:16Our meeting last night was absolutely terrific
29:23Our dinner was beyond that
29:27Then Trump turned to his team
29:29The president, after the first two or three statements, asked me to address the trade issue
29:38I didn't have a script, I didn't know for sure that I would be called on
29:42Lighthizer is really the trade war warrior for many, many years
29:48So Chinese know that
29:50His basic argument is familiar
29:52But the way he presented is quite, I would say, quite aggressive from a Chinese point 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
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
30:23And it can't continue and it won't continue
30:27And I think that was a little befuddling
30:29Like, what's going on here?
30:35But the Chinese hosts weren't done yet
30:38Trump had traveled to Beijing with dozens of American business leaders in tow
30:44In front of the cameras, they signed more than $250 billion worth of deals with China
30:51China was quite generous to really make all those things happen
31:00It shows that China is really willing to collaborate with the U.S.
31:04Dallas is the president and CEO of Boeing Commercial Airplanes and 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 that during his visit to China
31:21He got something for, you know, America
31:24And this was something really tangible and right in his wheelhouse
31:30Now Trump had his chance to talk directly to the press
31:34I don't blame China
31:41After all, who 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, for all this here, I don't blame you, I blame us
32:01But in actuality, I do blame past administrations
32:06For allowing this out-of-control trade deficit to take place and to grow
32:12It was very Trumpian in 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 for a really 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
32:36President Trump hitting China with $60 billion worth of tariffs
32:40Raising fears about a global trade war
32:43In March 2018, Lighthizer's report was published
32:47It says the economic harm to the U.S. of unfair trade practices on intellectual property
32:52Is in the range of $50 billion
32:54And so it plans to try to recoup some of that cost with these tariffs
32:59Trump 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
33:20That'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
33:38To the U.S. consumer that bought that good from China
33:45I can remember talking with business leaders and investors
33:48And many folks assuring me that there's no way these tariffs could 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
34:07That the rest of the world should just stay static
34:11So 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 a powerful company
34:20You've been kind of a master of the universe
34:22But 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
34:43You know, they had signed this $250 billion worth of deals just back in November
34:48You know, that was a serious amount of money
34:50And they thought, you know, they had done the necessary
34:53And didn't understand why, you know, it wasn't working
35:01As America and China braced for what could be a costly trade war
35:05Xi put on a show of strength
35:10Within weeks of the tariffs being announced
35:12He 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
35:24A crucial shipping corridor where China was building artificial islands to back up its claims on the area
35:32Claims rejected by most countries, including the U.S.
35:38He says he wants a modernized military by 2035
35:40He wants a world-class military by 2049
35:46Which means, pretty much, he wants to displace the United States from the Indo-Pacific
35:51They want to defend all the waters surrounding China
35:54And manage the trade and everything passing through them
35:58This was China interrupting and trying to change international rules and norms
36:03That we felt that we couldn't tolerate
36:07The situation was becoming more and more dangerous
36:10As U.S. ships and aircraft continued what they called freedom of navigation exercises
36:17U.S. military aircraft, Papa-8 Alpha
36:20This is Chinese U.S. RIP
36:22China had 70 of the national islands including U.S. RIP
36:25And it's adjusted waters
36:26Leave immediately and keep far off
36:29To avoid any misdandy
36:38Tensions 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
36:49The 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
37:03About China's aggressive behavior along its periphery
37:06And talk about the big strategic issues
37:10What Trump mostly wanted to talk about though was trade
37:15By 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
37:57And to watch Trump wing it
38:01The 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
38:21China would commit to buying U.S. goods and services worth over 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 had the potential to undermine any goodwill
39:12I 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 informs me that they're going to exercise an arrest warrant against the Chief Financial Officer of Huawei
39:29As she 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
39:41And 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
40:09Because while we're shaking hands on the table
40:12And the U.S. is kicking us back under the table
40:17We knew for some time before that Meng was coming
40:22It 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
40:38I 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
41:32But I didn't know what he said
41:33Telecom'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
42:14With 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
42:36And 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
42:52Which was hosted by President Xi
42:54And he just lashed into me
42:57Saying 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
43:25So I get the Deputy National Security Advisor on the phone
43:29And he says, we'd like to talk to you about your speech
43:33We had seen a speech that Philip Hammond had just delivered
43:38That it appeared to be an endorsement of China's debt trap diplomacy
43:43So it was a bit cheeky, but one of my colleagues from the State Department
43:47Printed out Hammond's speech on a poster board
43:52With 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
44:06He laid them out in my office in Downing Street
44:11Along the wall so that all the text of the speech was there
44:15And I was asked by the Americans to justify the...
44:19To explain my thinking behind the less critical parts of that speech
44:27I'd said from the outset
44:30The UK cannot be in a position of having to choose between the world's largest economy
44:36And the world's second largest economy
44:38And that was what I told the Americans
44:41The response I got was
44:43That is exactly what the President of the United States wants you to do
44:48He wants you to choose
44:50And 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 US systems
45:07And the Americans set to work persuading other countries to follow suit
45:12Beginning 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
45:28And that was allowing, you know, everybody else to essentially point to and say
45:33Well GCHQ says it's okay, so 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
46:02We want Huawei out, get it out, and tell these Europeans that they've got to toe the line
46:09The Chinese had made this a totemic issue
46:13That if we cut Huawei off, there would be significant trade and other consequences
46:21And so we're very much squeezed in the middle
46:26As Trump arrived for a long promised state visit
46:30The Brits hoped to convince the Americans that they could keep Huawei out of the most sensitive parts of their
46:36network
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 that this is not a technical discussion
47:30This 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
47:51That we were very confident that what 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
48:12We said to each other that this is a foretaste Huawei
48:16We'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
48:49This was not something to give away later
48:51This had to be the beginning of a strong and consistent policy
48:56Because to Trump, everything is negotiable
48:59Everything is a bargaining chip
49:04While Trump was in the UK
49:07In Hong Kong, thousands joined a vigil to mark 30 years since China's deadly crackdown on pro-democracy protesters in
49:15Beijing'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
49:52Or what 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
50:16The 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 Xi is there
51:13But I think it would be great if you could say something to him
51:16That the House and the Senate, Democrats and Republicans, have voted in favor of the Uyghurs
51:28There's always a summit dinner at these G20 summits
51:31And typically it's just the leader of each country and their spouse if they're there
51:37One of my staff talked to the U.S. interpreter who was with Trump
51:42Who reported that he had a conversation with Xi Jinping
51:46And talked about the Uyghurs
51:47And Xi defended against charges that these are essentially concentration camps
51:53And he said the Uyghurs appreciated it, they liked it, it 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
52:10And he said they liked being 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 a excellent relationship
52:41But we want to do something that will even it up with respect to 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 soy beans are they going to buy next
53:06year
53:07At that point the trade is mostly focused on Chinese buying things
53:13Okay
53:14On a massive scale
53:15The international situation has happened to a huge change in the international and the US
53:21It was a massive change in the international situation
53:22But there was no major change in the international situation
53:24We didn't change in the international situation
53:25That is that the US are both sides of the war
53:28We are the only two sides of the war
53:30Xi Jinping had great skill and flattering Trump
53:33And Trump responded as he often did with flattery of his own
53:38um so uh he he took to calling xi king and uh and in osaka it got even worse he
53:48told him at one
53:49point you're you're the greatest leader in contemporary chinese history and at 30 seconds
53:54later he said you're the greatest leader in all of chinese history so we waited to see how xi
53:59would respond to trump but he didn't call him the greatest leader in all american history just
54:06pocketed and and the conversation went on
54:19at home xi appeared more powerful than ever later that year he took center stage as the chinese
54:27communist party celebrated 70 years of rule in china a statement of power in the face of the hong
54:35kong protests
54:59unlike trump she 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
55:19that by playing the long game they would ultimately win out
55:24china understood trump's way of operating as a professional wrestler start opening sabo it's always
55:34outrageous frightening if you chicken out then he will push even more if you stand for if you know
55:44you have a capacity to stand up he will come down while she was parading his military might
55:51his negotiators were putting the final touches to a trade deal with trump
55:56it was optimistically named the phase one agreement trump would sign it with china's vice premier to much fanfare
56:07the u.s agreed to ease tariffs on china in return china pledged to buy hundreds of billions of dollars
56:15u.s goods but trump didn't get the major concessions on china's trade practices he talked about on coming to
56:23office
56:24it's a relief from chinese side because we had a very we have a tension you know and uh january
56:322020
56:32it's less than one year ahead of the general election we believe we would have a relatively stable bilateral relations
56:40in that year
56:40and if president trump won the election paved the way for the second term
56:48it's important to remind yourself that it's not possible to have an agreement
56:55between the united states and china that's going to resolve the problem of a marxist-lenonist country
57:01that wants to be the number one country in the world it's like you can't imagine an agreement
57:06between the united states or the west and soviet union that would have resolved the fact that they
57:12want to take over the world and we don't want them to right today we take a momentous step one
57:19that has
57:20never been taken before with china but what these agreements can do is stop movement towards a hot war
57:25which would be a catastrophe nobody's ever seen anything like it this is the biggest deal there is
57:31anywhere in the world by far trump had his deal but as he talked it up the world was about
57:40to be hit
57:40by a catastrophe that few saw coming one that would bring the u.s and china closer than ever to
57:46a new cold war
57:51china plague that's where it comes from they say please don't mention china i said why that's where it comes
57:56from
57:58i remember president trump telling me that if he did a hundred trade deals with china
58:04it still wouldn't make up for the losses that covid had inflicted on the united states
58:11in the next episode as a global pandemic rocks the u.s china relationship the race for technological
58:18supremacy ramps up and the stakes are raised as one of america's leading figures
58:27crosses a chinese red line you have to understand whether it's going to tangerine square or going to
58:33taiwan you cannot let somebody else decide where you're going this is the closest moment of a military
58:42encounter my understanding is that 20 the chinese did not sleep at that night
58:50she's going to tell us where we can go i don't think so
58:58and you can watch the next episode right now on bbc iplayer also there ai confidential with hannah
59:05fry extraordinary human stories from the high-tech frontier watch now inside a publishing scandal with
59:12a new podcast on sounds secrets of the salt path listen now
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