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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
04:34Thank you
04:35He 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
05:06and to reclaim China's centuries-old place
05:09as a leading nation of the world
05:12He called his vision the Chinese dream
05:28Well, China dream basically means that China restore its previous position
05:36It's not China will dominate or try to take over the world
05:43In the West, the press call it rise of China, which is a total misnomer
05:50Xi make a point saying this is a restoration, not rise
05:55Please welcome the next President of the United States
05:59Mr. Donald J. Trump
06:02Now Trump was heading to the White House
06:05with his own promise to make his country great again
06:09His victory followed a campaign
06:11where he put China front and centre of his foreign policy
06:15in his own unique style
06:17We can't continue to allow China to rape our country
06:23and 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
06:38my brilliant briefing on China
06:40and then Donald Trump, with like a staccato approach
06:43starts firing questions at me
06:46What's China's GNP?
06:48What's the trade imbalance between the United States and China?
06:51Is there military any good?
06:54And then I realised 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
07:16has dissipated over the horizon
07:20USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA! USA USA! USA! USA USA USA USA
07:24USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:27USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:28USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:28USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:28USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:28USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:32USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:32USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:35USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA USA
07:35USA USA USA USA USA USA
07:35all 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,
07:59one day into the Trump presidency,
08:01and there's a big sign that lists all the meetings
08:05that are being held.
08:06And one of the titles is something like,
08:08let's talk about greater U.S.-China economic integration.
08:12This is a day into the Donald Trump administration,
08:14and he's just won an election
08:16with a significant part of his agenda
08:19being to fight off China's economic predation.
08:23And people in his bureaucracy, in his building,
08:26are having meetings
08:28about how we could do more economically with China.
08:31I was surprised by some of the assumptions
08:35that were being presented by long-time diplomats,
08:41long-time intelligence officers, and others.
08:44There was a view that really all that Beijing wanted
08:47at the end of the day was just to access
08:49a large American market
08:51and to prosper and thrive in a U.S.-dominated world order.
08:57I thought that those assessments were out of date,
09:02to put it mildly.
09:04In the 80s and 90s,
09:06the Chinese Communist Party
09:08had opened the country to Western markets,
09:10part of what they called
09:12socialism with Chinese characteristics.
09:16The country enjoyed unprecedented growth,
09:19which 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,
09:32meaning trade rules were applied more leniently,
09:35while the world's biggest companies
09:37continued to flood into the country.
09:41I was there as a reporter for Reuters news agency,
09:46all the way from the late 90s until 2005.
09:50It was a heady time.
09:52It was hard not to feel optimism
09:55that China would continue opening up,
10:00that its marketization would continue.
10:03and there was a hope.
10:05The politics would begin to moderate as well.
10:10But by the time I left,
10:12I had this sinking feeling
10:13that many of those optimistic assumptions
10:17were going to be dashed.
10:22I think China entered the WTO with a really good deal.
10:27They got the benefits of participating
10:30in 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,
10:40which I think is always tough
10:42when you're one of the world's largest consumers
10:44of 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,
10:58Trump's team included hawkish advisors
11:00who wanted to ensure the new president
11:02would 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, we had the two camps start to develop.
11:25The more globalist establishment camp
11:29and more of the kind of disruptors,
11:32populist, nationalist camp.
11:34The biggest fights were about China and trade.
11:37And that's because the reason is
11:38we 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
11:49for 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
12:10a globalized world that works well.
12:14You 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.
12:47As he got ready, the U.S. president was briefed
12:50by his national security adviser.
12:53President Trump was kind of reflexively contrarian.
12:56And because he's reflexively contrarian,
12:59if you advise President Trump and say,
13:01hey, everybody agrees, this 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 advisers.
13:23What we said to President Trump is how Xi Jinping uses this language
13:27that sounds nice or 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
13:39from the aggressive threats of his campaign.
13:43Xi Jinping
13:43You know, for people in China, basically,
13:45we 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 advisers that he's using at that time
13:56was very hawkish, like Steve Bannon,
13:59Matt Partinger, and all those people.
14:01But then, normally, when the new administration
14:03come into the White House,
14:05it becomes more, you know, pragmatic.
14:09President Xi attached great importance
14:12to 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
14:27for the bilateral relations.
14:31Trump had chosen to host Xi,
14:33not at the White House,
14:34but at his Palm Beach resort, Mar-a-Lago.
14:39President Trump, he fancies himself
14:41as a great negotiator.
14:43And part of that is separating the relationship
14:45from the tough issues you're negotiating.
14:48Thank you, President. Thank you.
14:50He's in the hospitality business.
14:53He had his granddaughter,
14:54who was learning Chinese,
14:58singing 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
15:19was time set aside for the two heads of state
15:23to be alone one-on-one.
15:26The two spent a vast amount of time together.
15:29The 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.
15:57You 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 is that President Trump met him,
16:18he understands how he's going to negotiate with him.
16:21Thank you, everybody.
16:21Thank you very much.
16:27Xi 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,
16:37with or without America.
16:41A month after Mar-a-Lago,
16:43he played host to leaders from around the world
16:45to celebrate his flagship initiative,
16:50Belt and Road.
16:58Harking back to the ancient Silk Road between East and West,
17:03Belt 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 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,
17:40you know, more flowers than they've got in Kew Gardens.
17:42To invite President Xi to the podium.
17:46President Xi decided to make a Belt and Road summit to assure the world
17:50if the U.S. is back to the protectionism,
17:54China is still there to help and to work with everybody.
17:59Well, the road is important in the 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.
18:17Our world will be like a long-term path.
18:26Cutting a somewhat lonely figure at the summit
18:28was the U.S. Representative Matt Pottinger.
18:32One of the things that Beijing does is 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
18:48to essentially endorse Belt and Road.
18:54I remember speaking to President Trump explaining that Belt and Road
18:58was actually a system designed to diminish the influence of the United States.
19:05It was an extremely opaque system
19:09whereby governments would have to surrender sovereignty
19:14over critical infrastructure as 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 on 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 multibillion-dollar new railway,
19:40largely financed by China.
19:43Kenya 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,
19:58but 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.
20:43Thank 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.
21:00You know, I said, you know, I don't agree with any of this.
21:03The Chinese game plan has been dialogue, dialogue, dialogue,
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.
21:19But his plans ripped open divisions
21:21with the Wall Street faction in the White House.
21:25I wanted tariffs on as much as we can
21:28to change the economic relationship
21:30between 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
21:40who'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.
22:03It's not getting done not because you don't want it to get done.
22:06It's not getting done because people on your team
22:09are deliberately obstructing your order
22:12to bring China to account
22:14for 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 U.S. 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.
22:54American companies were desperate to do business in China.
22:57And 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,
23:08very quickly they found that that technology
23:10belonged to their Chinese partners.
23:13And then they would go flood the market
23:15with these products at 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 for wide-ranging tariffs on China.
23:30This is just the beginning.
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 that we teach our children Chinese
23:44and tell them to prepare for a life of servitude?
23:48We have to realize there's this crisis
23:51and we have to take action to change.
23:53And if there's some small cost associated with it,
23:57the alternative is total defeat.
24:00And that's not an option.
24:05In Beijing, Xi was showing no sign of making concessions.
24:11Although China's phenomenal growth was slowing,
24:15his ambition remained resolute.
24:18The Chinese Communist Party,
24:21it's never easy,
24:25it's possible to make it happen.
24:28In a three-hour speech to the annual party congress,
24:33he described 5,000 years of China's great imperial past
24:38before the century of humiliation that started with the Opium Wars
24:42of the 19th century.
24:46Before British came to invade the Opium War,
24:50I'm talking about 1820s, 30s,
24:54Chinese 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 free-fall disaster.
25:09At the time Xi Jinping announced the China Dream,
25:12we 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, right?
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,
25:36this 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
26:05that Xi Jinping would try to create.
26:07He would try to make it seem
26:09like the leader of the free world, President Trump,
26:12was coming to Beijing to kowtow,
26:14you know, to the emperor, you know, to Xi Jinping.
26:23Picture yourself as Nero, the emperor of Rome,
26:29and 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,
26:49and it was impressive.
26:55Perhaps most extraordinary,
26:57Trump 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.
27:16Chinese are not even allowed to go.
27:19So it's quite amazing to treat Trump that way.
27:24That's something.
27:24We're having a great time.
27:27I don't believe Putin even get that treatment.
27:31Earlier that day, Xi had even given Trump a personal tour.
27:36But not everyone was welcome.
27:40As President Trump was about to be escorted through the Forbidden City,
27:45before I understood what was happening,
27:47I was diverted before I could get into the gate.
27:52Matt Ponger is like the man who knew too much.
27:55And he really would make the Chinese leadership very uncomfortable.
27:59I mean, there's a guy who's fluent in Mandarin and knew the Chinese Communist Party so well.
28:05When we get to the Forbidden City, I'm looking around.
28:08Where's Matt Ponger? He's not there.
28:10The one guy who can actually speak the language and know something about this system has somehow been kept out.
28:22The imperial setting was the perfect spot for Xi to give Trump an education on China's historic place in the
28:29world.
28:31And I guess the oldest culture, they say, is Egypt at 8,000.
28:37And Egypt is not the old culture.
28:39But the culture has never been changed.
28:41It's always been a tradition of China.
28:43Only in China.
28:44But the Chinese civilization is between China.
28:46So this is your original form of a man?
28:49Yeah.
28:49Of course.
28:50This is your original form of a man.
28:51Yes.
28:52So we're actually the original people.
28:54Yes.
28:54We're the original people.
28:54People like us, we've been traced back to 5000 years ago.
28:58We're the people like us, we've been traced back to 5000 years ago.
28:58We're the people like us.
29:02We're the people going down from Trump.
29:08That's good.
29:10Xi's charm offensive looked to be working.
29:13As the leaders and their team sat down in the Great Hall of the people.
29:17Our meeting last night was absolutely terrific.
29:24Our dinner was beyond that.
29:27Then Trump turned to his team.
29:30The president, after the first two or three statements, asked me to address the trade issue.
29:38I didn't have a script.
29:40I didn't know for sure that I would be called on.
29:43Lighthizer is really the trade war warrior for many, many years.
29:48So Chinese know that.
29:50His basic argument is familiar, 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 their 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.
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.
30:30Like, what's going on here?
30:35But the Chinese hosts weren't done yet.
30:39Trump 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.
30:55China was quite generous to really make all those things happen.
31:01It shows that China is really willing to collaborate with the U.S.
31:04Dallas, 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, he got something for, you know,
31:24America.
31:25And 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 for the benefit of
31:50its citizens?
31:51I give China great credit.
31:56He turns to Xi Jinping and goes, for all this, I don't blame you.
32:00I 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.
32:36President Trump hitting China with $60 billion worth of tariffs, raising fears about a 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.
32:55And 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.
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 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
33:53could stay on more than three or four months because 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 so 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, you've been kind of a master of the universe,
34:23but 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 and they thought, you know, they had done the necessary and
34:54didn'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, the largest
35:18of 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.
35:40He 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.
36:38Tensions 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 adviser.
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.
37:09What 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 and 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, 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 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 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 news, we were surprised, because while we're shaking hands on the table, the U.S. is kicking
40:14us 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,
41:15By the way, why did we arrest Meng, the Ivanka Trump of China?
41:20I thought maybe first I would say,
41:23You didn't tell me that Ivanka was a spy and an agent of our government.
41:27But I didn't, fortunately for me, probably.
41:33Telecom's giant Huawei was a shining example of Xi's vision for China to dominate technologies of the future.
41:39It had become a battleground with the Americans who placed restrictions on the company,
41:46citing 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, other countries were finding themselves caught in the crossfire, and 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, it's got to be very careful about the debt burdens
42:44that 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, and the Belt and Road was China's
43:03project, and 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, and 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,
43:38that it appeared to be an endorsement of China's debt-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
44:36economy
44:36and the world's second largest economy, and 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 cybersecurity and
45:24telecommunications power, GCHQ,
45:27is seen as sort of world-class.
45:29And 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,
45:50and 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
46:19other consequences.
46:21So we were 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
46:34Huawei 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. Ours were clear that we could manage any risk from Huawei. It
47:19was never in the core of our infrastructure, only in the periphery. And 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.
48:06He 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. We're going to be here a lot in the
48:17future.
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. It was some of Trump's aides who worried their boss might not
48:38stick to his guns.
48:43I 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. Everything is
49:01a 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. And I said, but we always put it out every
49:46five 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.
50:02He thought Xi would take offense if we put out a statement by the president on Tiananmen, and he wasn't
50:09going 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,
51:20Democrats 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 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, 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,
52:06I mentioned Muslims to President Xi, and he said they like 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 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.
52:59And 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, on a massive scale.
53:16The international situation and the United States had a huge change.
53:22But a basic reality has never changed.
53:25That is, the United States are both sides of the war.
53:28They are both sides of the war.
53:30Xi Jinping had great skill in flattering Trump,
53:34and Trump responded as he often did with flattery of his own.
53:40So he took to calling Xi king,
53:45and in Osaka it got even worse.
53:48He told him at one point,
53:49you're the greatest leader in contemporary Chinese history,
53:53and 30 seconds later he said,
53:54you're the greatest leader in all of Chinese history.
53:57So we waited to see how Xi would respond to Trump.
54:03But 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.
54:24Later that year, he took center stage as the Chinese Communist Party
54:28celebrated 70 years of rule in China.
54:32A statement of power in the face of the Hong Kong protests.
54:36Today, China's socialist socialist is still in the Middle East.
54:45There is no power to prevent Chinese people
54:51and the Chinese people's front of the Chinese.
54:59Unlike Trump, Xi didn't have to worry about elections.
55:05In fact, China had abolished term limits,
55:09meaning he could now remain president for life.
55:14And when it came to negotiating with Trump,
55:17the Chinese were increasingly confident that by playing the long game,
55:21they would 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,
55:52his negotiators were putting the final touches to a trade deal with Trump.
55:57It was optimistically named the Phase One Agreement.
56:02Trump would sign it with China's Vice Premier to much fanfare.
56:07The 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.
56:40And if President Trump won the election, pave the way for the second term.
56:48It's important to remind yourself that it's not possible to have an agreement between the United States and China
56:57that's going to resolve the problem of a Marxist-Leninist country that wants to be the number one country in
57:03the world.
57:03It's like you can't imagine an agreement between the United States or the West and Soviet Union
57:10that would have resolved the fact that they want to take over the world and we don't want them to,
57:15right?
57:16Today 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. This 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 US 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. I say, why? That's where it comes from.
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.
58:10In the next episode, as a global pandemic rocks the US-China relationship, the race for technological supremacy ramps up.
58:22And the stakes are raised as one of America's leading figures crosses a Chinese red line.
58:28You have to understand whether it's going to Tiananmen Square or going to Taiwan.
58:33You cannot let somebody else decide where you're going.
58:40This is the closest moment of a military encounter.
58:45My understanding is that 20% of the Chinese did not sleep at that night.
58:50She's going to tell us where we can go?
58:52I don't think so.
58:58And you can watch the next episode right now on BBC iPlayer.
59:02Also there, AI Confidential with Hannah Frye.
59:05Extraordinary human stories from the high-tech frontier.
59:09Watch now.
59:10Inside a publishing scandal with a new podcast on sounds, Secrets of the Salt Path.
59:16Listen now.
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