US Can't Love Taiwan Too Much, Former CIA Official Says

Summary

The discussion centers on the complex yet stable relationship between the U.S. and China, highlighting recent high-profile visits and ongoing strategic competition. Despite tensions over Taiwan and differing ideologies, both nations aim to avoid war. The conversation touches on the potential impact of U.S. elections on China policy and the challenges businesses face due to increasing uncertainty and emerging technologies. The narrative underscores the delicate balance Beijing must maintain between national security and attracting foreign investment, with the upcoming third Plenum seen as pivotal for future economic policies.

Takeaways

• 🕊️ The relationship between the U.S. and China is an uncomfortable coexistence, marked by strategic competition over technology, values, and global influence.
• 💼 Both U.S. and Chinese leaders emphasize they do not want war, but competition and ideological differences are inevitable.
• 🚩 The danger lies in Beijing feeling that peaceful unification with Taiwan is impossible, which could pressure Chinese leaders to take action.
• 🗣️ William Lai's recent comments have provoked Beijing by moving away from the one China concept, creating a more tense period that needs careful management.
• 🇹🇼 The U.S. must be cautious in its support for Taiwan to avoid giving Taiwanese leadership a false sense of security and potentially destabilizing the region.
• 📜 The status quo, as established during George Bush's presidency, is seen as ideal: Taiwan enjoys some independence without the U.S. supporting full independence.
• 🔄 The upcoming U.S. elections could influence relations with China, with current anti-China measures being politically motivated to win key swing states.
• 🛑 Biden's strategy focuses on galvanizing union votes in swing states by taking anti-China steps, expecting more actions before the election.
• 🛡️ China's likely response will include retaliatory steps to deter European countries from taking similar measures against it.
• 💼 Businesses face increased costs and uncertainty in China due to emerging technology restrictions and geopolitical tensions, affecting investment levels.

Q & A

What is the current state of the U.S.-China relationship?

The U.S.-China relationship is described as an uncomfortable coexistence marked by long-term strategic competition over technology, values, and global influence. Both nations are the two greatest economic and military powers, but this competition does not necessarily imply a war.

Why is there frequent discussion about the possibility of war between the U.S. and China?

There is concern that if Beijing feels peaceful unification with Taiwan is impossible, it might feel pressured to take action. This tension is exacerbated by statements from Taiwanese leaders and actions from U.S. politicians that could be perceived as moving away from the one-China concept.

What stance has the U.S. taken regarding Taiwan's status?

The U.S. maintains a principle of no unilateral changes to the status quo by either side, as established during George W. Bush's presidency. This position allows Taiwan a degree of independence while assuring Beijing that the U.S. does not support Taiwanese independence.

How might a potential second Trump administration affect U.S.-China relations?

A second Trump administration might see Trump attempting to negotiate a trade deal with China. Although Trump has been less engaged with the Taiwan question, his administration's actions and rhetoric could still impact the delicate balance in U.S.-China relations.

What impact is the upcoming U.S. election having on U.S.-China relations?

The U.S. election is causing increased anti-China rhetoric and actions as candidates, particularly President Biden, seek to win key swing states like Wisconsin, Michigan, and Pennsylvania. These states have significant union votes that are often anti-China.

How is China likely to respond to the U.S. election-related actions?

China is aware that much of the anti-China rhetoric is political noise, but it will still want to make a point. This could involve taking retaliatory steps to discourage similar actions from Europe and to assert its position.

What challenges do businesses face in the current U.S.-China climate?

Businesses face increased costs and uncertainty due to the strategic competition between the U.S. and China. This includes challenges related to emerging technologies, supply chains, and market access, as the U.S. continues to impose restrictions and China navigates its own national security concerns.

What does the term 'small yard high fence' refer to in the context of U.S.-China relations?

'Small yard high fence' refers to the U.S. strategy of tightly controlling sensitive technologies while allowing other areas to remain more open. However, as technology evolves, this approach is likely to expand, making the yard bigger and the fence higher.

What is the current state of foreign investment in China?

Foreign investment in China has not returned to pre-pandemic levels, despite China's messaging that it is open for business. There is a tension between China's emphasis on national security and its desire to attract Western investment.

What upcoming events could provide insight into China's economic policies?

The third Plenum of the Chinese Communist Party is an upcoming event that will be closely watched for insights into China's economic policies and its approach to opening up to the West.

Outlines

00:00

🤔 Uncomfortable Coexistence Between the U.S. and China

The U.S. and China are in a long-term strategic competition involving technology, values, and global influence. Despite the competition, both nations do not seek war. The complexity of the relationship is highlighted by recent high-level visits by U.S. officials to Beijing. The discussion transitions into the Taiwan issue, emphasizing the importance of maintaining the status quo to avoid escalating tensions. William Lai's provocative stance and U.S. political dynamics, particularly regarding Taiwan, are examined. The potential impact of a Trump 2.0 administration on U.S.-China relations is also considered, noting Trump's potential focus on trade deals rather than the Taiwan question.

05:00

🔄 Navigating Uncertainty in U.S.-China Business Relations

Businesses face increased costs and uncertainties due to the U.S.-China strategic competition. The administration's continuous evaluation and restriction of emerging technologies contribute to this uncertainty. Companies dependent on China for supply chains or as an end market experience challenges, despite China's claims of being open for business. The tension between Beijing's emphasis on national security and its desire to attract Western investment is highlighted. The upcoming third Plenum will be crucial in understanding China's economic policies and approach to opening up to the West.

Keywords

💡Strategic competition

Strategic competition refers to the prolonged rivalry between the U.S. and China over areas such as technology, values, and economic influence. This term highlights the ongoing geopolitical struggle and underscores the theme of rivalry between the two greatest economic and military powers. The script mentions this as an inevitable aspect of U.S.-China relations.

💡Taiwan

Taiwan is a key focus in the video, representing a point of tension between the U.S. and China. The discussion centers on the complex and sensitive nature of Taiwan's status and its implications for U.S.-China relations. The script references various political leaders' stances on Taiwan and the potential for conflict if peaceful unification is deemed impossible by Beijing.

💡Unilateral changes

Unilateral changes refer to any alterations made by one party without the consent or agreement of others involved. In the context of Taiwan, it means that neither side should make independent moves that could disrupt the status quo. This principle, established during George Bush's presidency, is seen as crucial for maintaining stability in the region.

💡Status quo

The status quo in the context of Taiwan refers to the current state of affairs where Taiwan enjoys a degree of independence without a formal declaration of independence, and the U.S. does not officially support Taiwan's independence. Maintaining this status quo is seen as a way to prevent conflict between China and Taiwan. The script emphasizes its importance in U.S. policy.

💡Emerging technologies

Emerging technologies are new and developing tech innovations that have the potential to significantly impact economic and military power. The script discusses how the U.S. administration continuously evaluates and restricts these technologies to maintain an advantage over China, leading to ongoing uncertainty for businesses.

💡National security

National security involves measures taken by a state to protect against threats and ensure the safety of its citizens and interests. In the video, China's emphasis on national security is mentioned as a factor influencing its economic policies and interactions with foreign investors. This tension affects how open China is to Western businesses.

💡Trade relations

Trade relations between the U.S. and China are a central theme, focusing on tariffs and economic negotiations. The script mentions Trump's approach to trade with China, including his tariffs strategy aimed at stimulating talks. Trade relations are depicted as a critical area of strategic competition and potential cooperation.

💡Geopolitical tension

Geopolitical tension refers to the strained political relations and strategic rivalry between nations. In this script, it specifically pertains to the U.S. and China's interactions over Taiwan, trade, and emerging technologies. These tensions shape the broader narrative of U.S.-China relations as both countries navigate their global influence.

💡Political noise

Political noise refers to actions and rhetoric primarily driven by domestic political agendas rather than substantive policy changes. The script suggests that some of the anti-China steps taken by the Biden administration are influenced by the need to win key swing states in upcoming elections. This term highlights the influence of internal politics on international relations.

💡Economic policies

Economic policies are strategies and decisions by a government to manage the economy. The video discusses U.S. and Chinese economic policies in the context of their strategic competition. For instance, Biden's administration focuses on tariffs and incentives to protect American industries, while China balances national security with its desire to attract foreign investment.

Highlights

The relationship between the U.S. and China is described as an 'uncomfortable coexistence' with long-term strategic competition over technology, values, and economic and political issues.

Despite competition, both U.S. and Chinese leaders are clear that they are not looking for war, emphasizing the importance of managing differences peacefully.

The tension around Taiwan is a significant issue, with concerns that Beijing might take action if it believes peaceful unification is impossible.

William Lai's inaugural address is mentioned as a potential provocation to Beijing, moving away from the one-China concept and causing increased tensions.

The status quo regarding Taiwan, where no unilateral changes are made by either side, is highlighted as the preferred position to maintain stability.

The possibility of Donald Trump returning to office raises questions about U.S.-China relations, with some viewing his trade policies as a way to stimulate negotiations with China.

The upcoming U.S. elections are likely to intensify anti-China rhetoric as part of political strategies to win key swing states like Wisconsin, Michigan, and Pennsylvania.

China's response to U.S. political noise is expected to be measured, though they will take steps to make a point and possibly deter European actions.

Businesses face increased costs and uncertainties in the U.S.-China relationship, particularly concerning emerging technologies and ongoing restrictions.

The U.S. administration is expected to continue tightening restrictions on emerging technologies, increasing uncertainty for companies relying on China.

China's messaging about being open for business contrasts with the reality of decreased foreign investment post-pandemic, highlighting the challenge of balancing national security with economic openness.

Beijing faces a dilemma between emphasizing national security and encouraging Western investment, with recent espionage concerns complicating their position.

The upcoming Third Plenum in China is anticipated to provide insights into Chinese economic policies and their approach to opening up to the West.

The U.S.-China strategic competition is framed as inevitable given their positions as the two greatest economic and military powers in the world.

Managing U.S.-China relations carefully is crucial to avoiding escalation, particularly around sensitive issues like Taiwan.

Transcripts

Taiwan quite timely. We'll get to that in a moment.

Let's set the stage. We're coming off some pretty high

profile visits, high level visits. Secretary Yellen was in Beijing.

Sure. You know, Anthony Blinken there as well.

Is this relationship, while complex, as stable as one can reasonably hope?

I think it is. I would call it uncomfortable

coexistence. I think we're going to have strategic

competition for great length of time over things like technology, values,

global, South, economic, political. We are in a long term strategic

competition with the Chinese, and it's inevitable the two greatest economic

powers in the world now, really the two great military powers in the world.

We inevitably are in this position, but that doesn't mean war.

And I think Americans are very clear, American military leaders and American

political leaders. We're not looking for war with China,

but we do compete and our values are different and we do have different

ideologies. And that is just a reality that we're

all going to have to live with. That takes us into that Taiwan

conversation. You mentioned war.

The U.S. has said it's not interested in war.

The Chinese have also said it's not something they want.

Right. Why do we keep talking about it, then?

Because there is a danger here. And the danger is that if Beijing were

to ever feel that peaceful unification is impossible, then the political

leadership in Beijing would be under pressure to do something about the

situation. I do worry that William Lai, in his

inaugural address went too far. I think he provoked Beijing a little

bit. The fact that he did not say that

negotiations would be under the principle of the Republic of China

constitution was a dangerous thing to say because it gets away from the one

China concept. So I worry that we are in a little more

tense period, that Beijing and Washington are going to have to

carefully manage William Lai. Washington can't love Taiwan too much.

There is a danger with all of these congressmen and senators loving giant

Taiwan that the leadership in Taiwan might get the sense that they can move

further. And I think that's very dangerous.

The status quo is wonderful. My president, when I served him, George

Bush, established the principle of you. No unilateral changes to the status quo

by either side. I think that's the perfect position.

Taiwan gets a certain degree of independence.

Beijing is assured that the United States isn't going to support

independence. I think that's where we want to be.

If I remember correctly, that takes me into Donald Trump, possibly a 2.0.

One of the first calls he took during his first few days in office was from

the time was then Taiwan President Tsai Ing Wen.

What does that look like for these relations, for the status quo as you

laid it out? I think there's some danger.

I notice that former Secretary Pompeo is in Taiwan a lot.

I wonder what he is saying to the government on Taiwan about what would

happen in a Trump administration. I think personally, Trump actually is

not that engaged on the Taiwan question. I see Trump trying to make a deal with

the Chinese over trade, actually. I think he's got

this whole plan of 64. Ten tariffs is really a way to stimulate

the Chinese into talks. And I think we would actually find that

Trump and Xi Jinping end up with a fairly good relationship.

Is there room for an improvement in relations going into elections, which is

six, let's call it five, six months away?

No, in fact, it goes the other direction.

If you look what Biden and right now is focused on is Wisconsin, Michigan and

Pennsylvania and all the anti-China steps that have been taken recently on

tariffs, on EVs. It's all about those states.

If Biden is going to win, he has to take those three states.

My friend Charlie Cook, who's here as well, makes that case.

The only way Biden wins is through those three swing states.

So he is doing everything possible to galvanize and get out the union vote,

and that's an anti-China vote. And so that's why you're seeing these

steps. And I would anticipate more of them

before the election. What do you expect from the Chinese

side? They probably know they likely know this

is all political noise to the U.S. Understand what's going on.

They're not going to overreact because it's politics.

They want to make a point, though. They will want to make a point.

And we're going to see them do some things.

We've already seen them threaten a few things.

I think they'll have to in part to keep the Europeans from doing some of these

things. Remember, on the leaves, there's the

whole issue of Europe now and what steps Europe might take.

So I think the Chinese to scare the Europeans off a little bit, we're going

to see them take some some retaliatory steps.

What does this mean for businesses? Certainly the cost of doing business has

gone up. China, China plus one reshoring

derisking, Right. Companies are sometimes willing to make

that investment if there is certainty ahead, if they can make that investment

back. Yeah, there's the level of uncertainty

even get worse from here. Or do you see things as bad as they can

possibly get? I think a little more uncertainty.

One of the problems is that on emerging technologies, the administration is

going to keep looking at these and keep ratcheting up.

We're not at the end because think about emerging technologies as they continue

to move and the administration is going to have to make decisions on new

technologies and how much to restrict those.

And so the small yard high fence is going to get bigger, The yard is going

to get bigger, the fence is going to get higher.

That is an inevitability just because of the nature of technology.

And for those companies that rely on China, whether as an end market, as a

part of their supply chain, and China has maintained and said it's open for

business, it says, come in, we welcome foreign investments, but foreign

investment has trickled. Screw it.

It's not pre-pandemic levels just yet. What do you make of the messaging coming

out of Beijing? What do you think they need to do to get

that message across? Because there seems to be also this

information, this asymmetry, this gap in between the difficulty in Beijing right

now is that there is this emphasis on national security.

They have this problem with Chen Gong. I believe Chen Gong was an espionage

case. I think that scared Beijing.

And you can see that the man has been allowed to do much more publicly than it

had before. So there's this tension between national

security and wanting the West to come in.

And it's going to be interesting to see how Beijing navigates that.

I'm very interested, obviously, in the third Plenum coming up and what that

tells us about Chinese economic policies and about the opening to the West.