Trump 2.0 - China policy with Barath Harithas

In this episode of Geoeconomic Competition, Francesca Ghiretti talks with Barath Harithas, Senior fellow in the Economics Program and Scholl Chair for International Business at the Center for Strategic and International Studies (CSIS). The episode analyses the elements of (potential) continuity and the differences in the approach to China of the first and second Trump Presidency. It dives into tariffs and export controls, the appointments made so far and recommendations of things to keep an eye on. 

Transcript

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SPEAKER_01 0:09

Welcome to geoconomic competition. I'm Francesca Giretti, your host, and in every episode I dumb leaving to the intricacies of geoeconomics with other experts. I haven't promised you that I would have done an episode entirely dedicated to China and a second Trump presidency. So here we are. Today with me, I have Baramarita, Senior Fellow at the Center for Strategic and International Studies. Welcome, Balant.

SPEAKER_00 0:35

Hello.

SPEAKER_01 0:36

Okay, so let's get started. So we can say that Trump won, let's call it Trump One and the future administration, Trump two. Trump won was the administration that changed the relationship between the US and China, most notably through the trade war with China between the US and China. And technology appeared increasingly as an important element in the relationship between China and the US, even after Trump left the White House. So the natural question that I have to ask you is what would be the elements of continuity and the differences between Trump 1 and Trump 2 on trade and tech competition?

SPEAKER_00 1:23

Thank you, Francesca. I'm going to tackle the trade and technology question separately, but they're sequential. So the first part on trade, I think there tends to be a little bit of selective memory on what the Trump administration did on trade. There tends to be a little over-indexing on just tariffs, but there were a broader cluster of actions taken, and they're taken in different settings. So for simplicity, we'll say what was done at the WTO at the multilateral setting, what was done in a bilateral, prelateral setting among allies in free trade agreements, and what was done in a unilateral setting. So the first one, I think one broad trend that we see is that the diagnosis of Trump and Leitheiser and his co-tree of advisors were not entirely unfair. I think there were some fair grievances, and I think some of the points made were quite qualifiable. But perhaps the prescription or the execution of this and the choice of tools perhaps did not lead to the impact that they hoped for. So on the WTO firstly, so what were some of the traditional grievances? And I think it's worth qualifying that many of these uh grievances preceded the Trump administration. So there are a core claim of three grievances. I think the first one is that the WTO had overreached itself. So when the Appellate Court in the dispute settlement mechanism were arbitrating on cases, uh, many times because the WTO jurisprudence was a little patchy, because it's very hard to get more than 100 countries to agree on a comprehensive and full legal text. And so what they do sometimes is that there needs to be a little bit of interpretation of what the WTO law is. Now, the US would say was that we had not strictly agreed to any of these matters or interpretation in the original text, and this is an act of overreach. Again, perhaps not an unfair claim. The second one is a simple one. Uh, whether you are a developed or developed country is a matter of self-reporting. So many countries who had then progressed from developing to advanced economies over over decades still continue to reap the benefits by self-reporting as developing countries, and this included countries like China. Now that seems unfair. I mean that's again a qualifiable point. The third one is on subsidies. Now, their main sort of grievance was not with the subsidies and countervailing agreement per se. That is a half-decent agreement, and I know that because I had to sit through a three-day WTO workshop when I was a trade officer. Now, the problem was when it came to state-owned enterprises and the clauses within WTO to discipline that. Now, because the US realized that the subsidies program in China was propped up often not just by the government per se, by the local and provision level, typically by state-owned enterprises. Now the problem with the WTO law was that um subsidies uh were considered subsidies if they're provided by government or public bodies. Now, state-owned enterprises can skirt this uh claim by claiming they are private bodies, and it's very difficult to establish that legal claim that they were executing or directed by a government body. So there were three core claims that uh the US was making, not unfair. So to this extent, they continued to throttle and strangle WTO, they blocked the appointment and appellate judges, and so we've seen the collapse of the dispute settlement mechanism because you needed at least, I believe, four judges on the court in in order to hear a case, and over time um I think they were only left with two. I will need to fact-check this. But this had started with the Obama administration and even underpushed many of these claims, so I think it'd be unfair to purely pin it on Trump. So that's on the WTO side, and um, of course, many of us were hoping for a Schumpeteran act of creative destruction where the US will take this core grievances and then hope to reform the WTO. They had done this when we moved from CAT to WTO, and so but I think over time that optimism has become a little tapped and worn out. Now on the unilateral claims, because this proceeded alongside what they believed was deficient at WTO, and there were three main instruments used by them um section 231, 232, and I'll look at them together, and then 301. So the first one was again based on that claim of subsidies. Um, and and the claim was that this had led to zombie inefficient steel and aluminum mills in China. They caused this global supply, oversupply of steel and aluminum that depriced global prices, companies elsewhere to shut down, and the Chinese playbook was that when that happened, they bankrupted them and then they acquired those companies, and now effectively China has complete supply of uh complete control of the global supply chain. Of course, this is a simplistic narrative, but this was the core claim that was used for section 231 and 232, and so they imposed steel and minimum tariffs. We will speak on the impacts later on because I do not want to confuse the reader so early on. But um the results I think clear to say were mixed, perhaps not entirely effective. Now we have section 301. Now, this is where I think um it's difficult to refute what the US was claiming. Now they claimed they were unfair intellectual property practices. Uh, what did it mean? So, in uh in order to enter China for certain markets, what do you have to do? You're forced to enter into a force of joint venture with a Chinese company. Um, this tends to be largely 50-50, and over the course of that forced JV, you would have some form of forced technology transfer. And this I know from my time studying those claims and sexing the legal merits of it were not untrue. Um, the problem is that under the WTO law, prima facie, because you had voluntarily entered into the agreement with the company, uh, there was actually, in fact, not entirely anything wrong legally. Of course, this undermined the spirit of the law, it was seen as patently unfair, but prima facie, there was no legal claim that you really could undertake the WTO, which is also why the US felt they had to act on this unilaterally. So, so let's let's let's step back a little. They started to strangle WTO, they felt the need to move ahead unilaterally, and then on the trade side, we saw firstly they pulled back from the Trans-Pacific Partnership. This was uh I was a little sad. I was in the policy team of the Trans-Pacific Partnership, and in my first month of joining the Ministry of Trade after leaving the Foreign Service, uh Trump announced a withdrawal. So that's one thing. Uh, participation in trade agreements were a lot more sparing, and where they continue to move forward, for example, in USMCA, they took quite aggressive actions that I remember when I first saw some of the reports at the desk on what the US was proposing on USMCA, we laughed it off. We thought this was this was impossible. A sunset clause claiming that after five years the US could choose to withdraw. I think um you had to uh produce 75% automobiles that we produced in um the US instead of Canada and Mexico. This was uh quite a bit up from 62.5% under NAFTA. 70% of all steel aluminium had to come from the US. So, again, very muscular and aggressive uh suggestions, but they were accepted because this was seen as the cost of continued market access to the US. So these are the three things we saw under Trump 1.0. Now, what would happen in Trump 2.0? I think I think the WTO we can write them off a little, and I say this with uh a great deal of sadness. Tariffs, I think, will continue. That's already been a plank of the campaign. Uh, we have seen fairly concrete suggestions on what this will look like, and then on free trade agreements, I think the narrative on trade has turned quite acidic. Um, there's bipartisan consensus or lack of on it, um, which is interesting because um 10-20 years ago, Republicans or conservatives were supporters of free trade, and it was Democrats who would sort of uh cabble and grouse about it in Congress, and we've seen a reversal of that. So, what will then change? So, I think tariffs will continue. I think we'll continue or see more export controls. I think many people tend to um assume that this was a brainchild of the Biden administration, but for the export control nerds, you would know that it was really kick-started under Trump. In fact, it was under Trump that we had the Export Control Reform Act, um, the introduction of the foreign direct product rule, and then um even on the investment side, Firma was really unveiled under Trump. He also unveiled something that I think has slipped on a notice a little. So BIS, which is the enforcement authority looking at export controls and commerce, they used to have two divisions. Now, one broadly looks at policy, one looks at enforcement. Trump also announced an executive order on ICTS, info communication and technologies, and we've seen the Connected Vehicles Act then come out as a consequence of this earlier executive order. Now I invite people to start thinking about this as part of a coordinated vehicle or instrument, a mecha suit, a new Gundam suit of economic security tools. You have export controls. Now I say you cannot sell XYZ goods to China, and then you also have both inbound and outbound investment screening now saying that you can no longer invest in Chinese companies producing XYZ. And now I'm also saying with the Connected Vehicles Act, you cannot buy EVs, so you cannot buy products A, B, and C. And now also there's a bulk data transfer sort of restriction. Now you also cannot exfiltrate data back to China. So we are really seeing effective decoupling or sort of dual circulation economy. And I think this is what we're going to see over the next four years. But these are broad vectors. Glad to dig into it more.

SPEAKER_01 10:52

Great. Um, just a quick clarification FERMA is uh part of the foreign investment screening mechanism of the United States, no worries. Um, okay, now we mentioned time reliefs, we mentioned export controls, and we started talking about what has been the impact, whether some of the grievances were actually solved by these instruments. So let's talk about these two. Let's talk about time reliefs, let's talk about export controls. Um and I'll ask you to organize your answer into parts. The first part will be about the past. So were they actually affected? What were the what was their impact? And then I'm gonna ask you to look a little bit into the future and think about how they may develop, although you've already touched upon uh quite a few of these issues.

SPEAKER_00 11:46

Fantastic. So I'll tackle first uh the question of tariffs, um past performance, and then I'll try to gaze into the crystal ball and see whether they will be effective over the next four years. So I think the first thing is to perhaps clarify this presumptive instinct to think that tariffs are bad or evil. So tariffs are part of the traditional trade arsenal, um, they are part of trade remedies, and you're allowed to impose tariffs if you can make a qualifiable and fair claim that there's been some form of mercenary dumping. X countries selling goods far below the fair value of it in your country, and that may sort of drive out or dilute domestic competitiveness. Of course, you have to demonstrate a material injury, and then you're allowed to impose tariffs. Um, so that that there's a fair use case for tariffs. Of course, uh sometimes it also becomes the guise for domestic protectionism, so that's where it can veer off and become bad. But I think that's the first core claim. And then the next thing, what happens when tariffs are imposed? Because this really gets at the impact and effectiveness of it. So the first thing you can do if you're exposed to tariffs is you firstly you you reorganize the supply chain, you look for a new intermediate supplier who is not subject to the same tariffs and therefore will allow you to continue to sell your finished product at the same price. Now, what is the problem, the challenge of that? Well, it's time consuming. It's hard to find a new intermediate supplier, especially when you've committed to thousands of orders for the next three, four, or five months. So, what do you do? Well, the second option is then maybe you eat the price of the tariffs yourself. Have we seen that in the past? So there was a paper, I believe, by the Oxford Academy quarterly journal Economics, I think it was titled, The Return of Protectionism, and they showed that price reductions by exporters were minimal at best. Now, this is the the the anticipated or hoped-for case is that exporters will eat the tariffs and then they continue selling to American consumers at the sale price. Didn't happen. And then the the third and most likely scenario is that you pass on prices, the raise in prices to consumers. Uh, and we did see evidence of that in the past. In fact, consumers ended up paying higher prices for affected imported goods, they were higher than the full amount of the tariff, in fact. Um, and I think there's a paper on this by the American Economic Association, I think, broadly titled The Impact of 2018 Tariffs on Prices and Welfare. So that was what happened in the past. Let's now look ahead to the next four years. I think Trump has uh drawn up what appears to be the preliminary plan for it, which is firstly to slap on a 60% broad tariff on all Chinese goods, and then anywhere from a 10 to 20% tariff on goods from everywhere else. Let us assume the upper ceiling of 60 and 20% for those goods. Um, so the Peterson Institute of Economics, um, who are far better economists than I ever will be, now they've done uh some calculations and they've found that the average cost to the median household in the US will be roughly $2,600 or more. But I think what is more interesting, and that was lost in some of the reporting, was the distribution effect of it. Now, so what is going to happen is that those in the top 1% of income earners, well, their increase in prices will be greatly offset or more offset by tax cuts. So on a net level, they will benefit by I think roughly 0.9%. Now, the problem is for those who are in the lowest quintile of the population. Now, for those people, they will not benefit from any tax cuts, if any, but they will be hurt on a day-to-day basis by increase of everyday goods and products. And for them, I believe, um, the aggregate effect is something like 6%. So we're gonna see um, and and and this is important because part of the the claimed promise of the Trump campaign was that the working class Americans will benefit more. So I think that is so that is the impact of terrorism, or at least the the anticipated effects based on this. Now, a lot of inner circle of Trump advisors will claim this is just a negotiating ploy, this is just an early promise, but we'll see because um I think Leitheiser uh has had his eye on this for a while. I don't think this was just uh an invented figure for the campaign. I think they've had now anywhere from four to eight years to really think through what the what the new terrorist plan will be. Now an export control is moving on. What has the impact been effectiveness been? We know there's still highly reported figures of smuggling. We've now seen investigative reports of thousands of advanced chips being smuggled to China, and importantly, also smuggled in sort of full service, which is what you need at the data center level to train frontier models. And we're seeing single bulk orders of above 100,000. And this what is most significant to me is that they are being sold at prices of just 10 to 50% more than the retail price, and with sort of impossibly short uh supply and delivery times. And this shows and hints at a certain level of confidence in the supply chain of smuggled semiconductors. But the next point is that I think the more important thing is not just limiting excess of semiconductors that I think the real long-term play, have you kneecapped and materially degraded China's ability to produce those technologies at scale and at a cost-efficient price over the long term? Now it does seem that that seems to be the case. On lithographic equipment, for example, China has not been able to make much progress. And it's also important to note that they are so capex intensive, and in order to be competitive and to stay afloat, you need to produce at a certain amount of yield rates, you need to sell them at huge volumes, and they need to continue making the right business bet every five years. Now, without access to um EUV machines, which are the advanced photographic machines from ESML, uh, you can brute force the older machines to a certain extent. There's some techniques called multi-pattering, for example, but they're inefficient, yield rates are low. So, on that extent, it does seem that China has has for now been has had their path blocked by export controls, but smuggling is happening in fairly high volumes. Um, and I expect there might be a new round of export controls to to further plug gaps. But um, I I think it's um on the long term, what matters is the compute gap between the US and China. How many chips can the US produce versus how many chips China can produce? Because we are increasingly seeing that the biggest or the most advanced frontier models are guzzling a huge amount of computing power, and we are we are writing a paper on that, in fact, and Chat GPT-4 required something in the region of 25,000 GPUs or chips. By our estimation, or some low estimates or high estimates we've seen around, a single frontier model in 2030 will require anywhere from one to six million chips and GPUs. So, in the long term, what matters is the ability to produce a lot of chips, and you've got to be do that at a cost-effective price as well. So for now, Xbox controls, I think we can say performance has been mixed, but I think on the whole, I think it would be unfair to claim that it's been a failure.

SPEAKER_01 18:47

All right. I want to link to this before we move on to the next sort of chunk of questions. Um you spoke about a comprehensive type of uh regulations, not just the single regulations to regulate the automotive sector. And you mentioned a few of these, right? From connected vehicles to the tariffs and expo controls, etc. And now we're talking about semiconductors. So I um I have to ask you, what are the other technologies that will continue to see regulations and maybe this sort of type of comprehensive regulations emerge in the Trump II administration?

SPEAKER_00 19:29

This is an excellent question. So, like context is key. So let's if you move back to 2016, what was the fears that the US had uh seen from China? It was really in that broad terrain of industrial competition. I think uh the US saw that China was now on a certain inflection point, and if it didn't check its rise, then China could supplant or overtake the US as the leading uh superpower in the world. And back then this was based on a broad class of industries, and in many ways it was motivated by fears that seemed to have been concretized by the publishing of Made in China 2025. And I think back then these were not entirely unfounded claims, but that really gave voice to those fears. And in some ways, I also see some parallels to Japan because um US sort of uh perhaps economic paranoia over Japanese competition also started when Japan, I think, published this book called The Japan They Can Say No. This was co-authored by um the Japanese politician Shintaro Ishihara as well as the co-founder of Sony Corporation, Akio Morita. And the idea was that the US was now in this phase of systemic decline, it was time for Japan to be more assertive. What was interesting is that both those documents were really meant to sort of grandstand to a domestic audience. I think there was no real inkling that this would be picked up by the US and then become come to sort of power that that sort of economic containment textbook that was then brought out against it. So I think that was the initial. But then over time, what we've now seen is that back then when expert controls and critical technologies were defined around things like AI, biotechnology, semiconductors, quantum, um, I don't want to say they were sort of speculative technologies, but the use case now for AI has sort of progressed so much further. And we've seen the importance of leading edge semiconductors for training frontier models. Um the use case has been a lot more established. Um, I think quantum, and people think talk too simplistically about quantum, there's also not just quantum computers, there's sensing communications. Some of them have already seen early use cases, it's not just something that'll happen in five to ten years, but we're still away from the commercialization of that and practicable use cases of that, I think. But we're starting to see things like biotech, AI, semiconductors all really now come to the table in a very concrete and real way. But I think the important thing when you're now going back to the question on the trade tools and how they will be expanded. So, what are the vectors of industrial competitiveness now in 2024 for the next five, 10, 15 years? I see two broad vectors. Two real points of directionality. One is on green technologies and one is on digital technologies. So we've spoken about the AI, the semiconductors, quantum, biotech. I think we classify that uh squarely in the digital technologies. But I also think um, even though they're perhaps not full acknowledgement on the uh the climate change is real, I think we know that transition technologies, green transition technologies will be an important frontier for economic competitiveness. So if your EVs, your batteries, your solar cells, etc. And so the the country that will be most competitive economically in 15 to 20 years will be the country that dominates not just the digital technologies but also green technologies. And so what we will see, I think, is that things like export controls, um, connected vehicles, for example, um, or even outbound investment screening, currently they are sort of based on a presumptive uh or nominal uh small yard high fence. I think that yard will get quite a bit bigger, the fence will get quite a bit higher. It already has over the past three to four years. But I think now you'll be expanded to include whole new categories. You would no longer just be AI quantum semiconductors. I think there might be a case where including some of these green technologies as well. So I think we're going to see the terrain of economic warfare get quite a bit broader as well.

SPEAKER_01 23:14

Only good news. Um, okay, let's move on to something I don't want to say more concrete, but perhaps uh where we can have a little bit more fun. Um we've seen Trump has already made some appointments for his new administration. If I'm not mistaken, some key ones are still missing, such as Treasury and Commerce. Maybe by the time we publish this, this will have actually been appointed already. Um what can this appointment tell us about the future of the relationship with China?

SPEAKER_00 23:51

I think you're exactly right. I think whoever is appointed to commerce or Treasury or USTR will be key. So the first point on commerce first. So commerce has always been part of this three-way territorial turf war with with uh DOD and state when it comes to export controls. Um over the past four years, we've seen an unprecedented role for commerce. I mean, it has had a particularly muscular role, not just in export controls, but also in sort of um I guess industrial policy. And I think it's it's simplistic to claim the US has never done industrial policy. It's simply never quite called it that. Uh, it's never been so brush as to say uh the US will embrace subsidies. Uh, but it has done this in terms of subsidies for, I mean, post-wor two with the same character industry, with the early internet, and we've always seen that. But so for now, commerce started to hold or monopolize the export controls pie because very often in in the past the role of commerce was to be the person that was friendly to corporates, and then um DoD and state had to come in and like, hey, I think this is a little uh we are sort of uh diluting the US's competitiveness here. We don't see that. Gina has been particularly powerful or effective, um, and then also having to do industrial policy as well. So we see an unprecedented new role for commerce. So it will be key who takes over, but also we know in the Trump administration personalities matter. Leitheiser was uncommonly influential and powerful as USTR. In fact, I think one can quite easily make the claim that he was more powerful and significant than Wilbur Ross was in commerce. And of course, Leithheiser, we have heard rumors that he wants a larger role beyond just USTR. So there is the possibility of commerce and perhaps treasury, although it seems that Trump might be favor Wall Street type of treasury. But so, regardless of what happened, I think we can expect that Leidheiser will play a key role in one of these three portfolios. What does that mean? I think sometimes when people talk about Trump's trade agenda, they assume this sort of simplistic run by people who don't understand what they're doing. I think that's a very unfair claim to bring. Um Leitheiser has been working on trade longer than I've been alive. He was the leading lawyer on the Senate Finance Committee in the 1980s. In the 30s, hec became deputy USTR to Ronald Reagan. And I met him once. I mean, from afar I didn't meet him, of course, I was unimportant, and I assume I continue to be over the next four years. But uh, this was in Papua New Guinea for the Apex Leader meeting. And Leitheiser sort of strolled up to the bench. He had this sort of gravelly sort of Clinton's wood persona. His staffer gave him a one-pager talking points, and Leightheiser just shoved that to the side and just spoke off the cuff. And and I always remember this one story that some of uh my most senior trade negotiator friends told me about Leightheiser in the 1980s. So back then, before WTO, trade rules were a little looser. They depended more on diplomacy than sort of formalized uh WTO or GET rules. And so um this was a negotiation between uh Japan and uh and the US. So uh if you've been a trade negotiator in the past, you'll know that Japan, for some reason, comes to every negotiation with an army of negotiators. So you have 20 Japanese trade negotiators around the table, and then you can imagine Lightheiser on the other side, and apparently one of the eight or staffer walked up to his table, offered him uh the proposal, he looked at it, folded it up into a paper plate, and threw it back at the Japanese negotiators. So a pretty gruff and abrasive style to negotiations, and it worked. He managed to bully or compel the Japanese to accept voluntary export controls or restraints. And I I anticipate that this is something that will continue and because Leitheiser has seen the fact that or demonstrated the fact that the US can do this.

SPEAKER_01 27:41

Okay, we need to come to a close. I will have so many questions, and we should have probably a series of episodes on these topics, but maybe we will once the administration is uh in place. Let me just conclude with the classic question, which is what are three things that we should keep an eye on in the coming months?

SPEAKER_00 28:04

I think we always talk about what Trump and the US will do, and I think the real question is how will China retaliate? So we've seen some early indicators, some silent lurking indicators with sort of export controls on critical minerals. And if I if I understand the Chinese sort of pathology, then I think this is sort of like this are signs of things we will deepen or do more of if you were to undertake uh actions that we find to be disagreeable. So I think look look uh for what China is already doing or hinting at. And then the second one, which I think is important, is that I think back in 2016 when when the trade war, as we called it, happened, I think the assumption was that perhaps this was um uh a four-year term of a Mercurial president and this was anomalous for American policy. I think what we've now seen is that that really opened what is now we're gonna be almost a decade into um American economic security as targeted against China. So I think at this point there's there will be some little place of balancing uh retaliation with appeasement strategies. But I think China has accepted now that this is we no longer just have to stonewall Trump for another four years. This is this is the direction of American economic security policy for the coming five years or decade at least. So China might be more uh willing to retaliate harshly. I think back then there was always this soft strategy of uh we'll match the amount of tariffs the US raised. Every now and then we were willing to enter negotiations with Trump and you know enter into those claim deals of uh we'll buy 200 million or billion worth of soybeans. Of course, that never quite transpired. I think there's no clear data or evidence that they ever did. But they were more willing to sort of wheel and deal, try to find a deal. But I at this point, I think if it's become clear that economic war has already started and it's full-blown, then perhaps there's no more reason to. And so China might be willing to take more, I think, severe sort of retaliation actions. I don't know about claims of um unwinding their treasury bond yields, I think that might be damaging to China. But I think that we'll start to see more severe and harsher penalties left against the US. Um, but I also think many times retaliation will take place indirectly, it will take place against allies of the US who are more beholden to China or who have a larger trade relationship with China. And this is the case, for example, Japan and Korea, which we assume to be cleanly as US allies. But if you look at trading patterns, uh China was their number one trading partner for many, many years. Um, that has shifted somewhat over one to two years, but it's still at least a solid number two. So retaliation will take place that way. I think China might be willing to contemplate far more severe retaliations than we've seen in the past. Um, and so I think broadly we need to separate what is the performative theater of tit for tat, and this is where the US does certain things because he has to play to the gallery to show that deliver the campaign promises China recognizes in in kind, and they sort of retaliate in a way that sort of matches uh um the moves on the theater. Um, and then there's sort of more serious uh retaliation plays where at this point it's just like now we we've admitted that this is a struggle, um, a contest of empires, and and and what will China do? And the third thing is to look for what China does, not just against the US but in the global south, among the other countries. They've already started to build the infrastructure, the one battle on road, the digital silk road. And I think if the the US has perhaps over-indexed on things like AI, semiconductors, quantitative, uh quantum technology, and this speculative bets on the future, then China's like, well, we're gonna eat the rest of the economy. We're gonna produce the things that people use on the everyday basis: your EV vehicles, your batteries, your solar cells, your shoes, your clothes. Um, anyone who's uh shopped on Xin and Tamu knows how much cheaper Chinese consumer products are. And so that would be the strategy if you're to fight the asymmetrical warfare and where it might be difficult to match the US on high technology sectors. Well, then the obvious strategy is to eat everything else in the economy. And then based on that sort of higher floor of economic resources, and then you you go ahead and conquer the high technology sectors. I think that would be the asymmetrical play by China. And thank you for inviting me.

SPEAKER_01 32:21

Thank you, Barat. Um, there will be so many questions. We haven't even talked about TikTok. We haven't talked about the fact that China is widely present in the EV sector in third markets when it comes to electric vehicles, not just automotive, but two-wheeled electric vehicles, etc., etc., and batteries and so on and so forth. Um, but we can cover everything in 13 minutes. Pop campus, so I want to thank you for talking to me today and for covering so much and so little. Hopefully, we'll have you soon again on this podcast. Um, thank you again.

SPEAKER_00 32:59

Thank you. It was an incredible pleasure to be invited. Thank you for having me.