Trump, Xi, and a New Balance of Power

Introduction to Running

0:01Hey, how are you? Ready to go for a run? Running connects us to a rush of energy that flows through our world.

0:09The cheers of friends that unlock a new gear within us. The intersection of interests that inspires a run crew. The support that gets you over the finish line. Connection is why we move forward and what inspires us to keep going. Let's run there. Learn more at brooksrunning.com. Hi, I'm Ravi Agrawal, Foreign Policy's Editor-in-Chief. This is FP Live.

Trump's Visit to China

0:41Donald Trump's big visit to China, the first by a US president in nine years, has now concluded. What was achieved and what pitfalls were avoided? This week I will speak with a top historian of China to tell us where the world's most consequential relationship is headed. That's coming up in a moment, but first, here's my read on something that came up in the US-China summit, but not to much effect. Iran. We know that Trump wanted Chinese President Xi Jinping to broker a peace deal between Washington and Tehran.

1:15It didn't happen. It didn't happen. Now, I'm sure China wants the war to end, but I also don't see why it would go out of its way to get Trump out of a big mess of his own making. I wrote about this in FP this week. The evidence just keeps on growing that the Iran conflict is disastrous for Trump. And no matter how it now ends, the pain for Trump, for the United States, and for the entire global economy will go on for some time. To what end?

1:45We've talked about how key objectives in Iran simply haven't been met. Yes, many leaders, including Supreme Leader Ali Khamenei, were killed. Iran's Air Force and Navy were decimated, and its ability to launch missiles were degraded. But that's where the gains end. The regime is still in place with a younger and more vengeful leader. A damning report from the New York Times, based on US intelligence assessments, revealed that Iran still has 70% of its pre-war missile stockpile,

US Military Losses

2:1770% of its mobile launchers, and operational access to more than 90% of its missile sites along the Strait of Hormuz. That final detail means that Iran can continue to disrupt traffic through the world's most vital energy choke point at any point in the future. That Iran can also still attack Israel and US allies in the Gulf with missiles. And most strikingly, Iran still has a stash of highly enriched uranium. If one goal of the war was to ensure that Iran could never develop a nuclear bomb, that objective has simply not been met.

2:53Meanwhile, the Pentagon is counting its losses. An investigation by the Washington Post found that Iran has damaged 217 structures at 15 US military sites in the Middle East. CNN reported that at least nine US bases in the region were significantly damaged by Iranian strikes. Rebuilding these resources will take years and cost billions of dollars. Here's one more. According to the Center for Strategic and International Studies, the United States expended between half and 60% of its Patriot defense missiles,

3:30more than Ukraine has used in four years of war with Russia, and a third of its Tomahawk missiles in engaging Iran during the hot phase of the ongoing war. Both types of munitions would take up to four years to manufacture and replace. So if the United States were called into action in another arena, defending Taiwan, for example, it would go into battle sharply diminished.

Energy Crisis

3:55Then there's the energy crisis. As we've been discussing on this show, the price of gasoline in the United States is up by nearly half since this time last year. Diesel, which is used by trucks, is up by 59%. And as I've written previously, the pain is even more acute in Europe and Asia. Bad as all of this is, the worst is yet to come. Energy prices would have risen far higher by now were it not for the United States ramping up oil exports and drawing on its strategic petroleum reserve.

4:28China has also been using up its immense cash of petroleum. That can't last forever. When Washington eventually cuts exports and Beijing dips into the market instead of its reserves, prices will spiral upward.

Global Economic Impact

4:43Global growth is already faltering, as we've talked about on this show as well. The IMF expects growth to fall to 2% by next year if energy supplies do not return to normal, a rare scenario that now feels increasingly likely. Consider also the cost to U.S. alliances. Ties with Europe have become more strained. In the Gulf, countries that invited the United States to build military bases on their soil are now wondering why they willingly put a target on their backs. Asian allies with limited ability to withstand shocks are questioning whether the United States is a rogue actor on the world stage.

5:20And then there are U.S. adversaries, which see the war differently. China is likely pleased at how overstretched and weakened the U.S. military has become. And Russia has emerged as the clear winner of the conflict, doubling its monthly oil revenues since the start of the war. Doubling down on this war remains an option that Trump has publicly contemplated. But it would come with even more uncertain benefits than before, and much more potential pain.

5:51As for how to get out of this, diplomacy is preferable, but it still begs the question, why start the war in the first place? And all of this leads us back to Trump's summit with Xi last week. If you were Beijing's leader, would you want to interrupt your primary long-term competitor as they make a catastrophic mistake? I don't think so.

Interview with Rana Mitter

6:15Time now for our featured interview this week and a deep dive into the meeting between Donald Trump and Xi Jinping. How should we read what we know about the summit? And has the balance of power shifted? Well, my guest this week is Rana Mitter, one of the great historians of modern China. He's the S.T. Lee Chair in U.S.-Asia Relations at the Harvard Kennedy School and the author of China's Good War, on how World War II is still shaping Chinese nationalism today.

US-China Relations

6:45Let's dive in.

6:49Rana, welcome to FP Live. Ravi, it's a huge pleasure to be in this conversation with you today. Oh, the pleasure is ours. So, Rana, let's start with your basic take. What stood out to you about the summit? Well, you mentioned Boeing's beans. People mentioned beef as well as one of the things that's going to be exported into China from the U.S. I'll add one more B, which I think in the end may be the thing that is most important to take away. And that's buoyancy. In other words, keeping this relationship, the U.S. and China afloat. If we want to contrast it with what is still, to use a very technical term, Ravi, the OG of U.S.-China meetings, which, of course, is Richard Nixon visiting Chairman Mao back in 1972.

7:29Nixon called that the week that changed the world. This is not the two days that changed the world, but it is the two days that kept the relationship buoyant, floating at least in conversation between Presidents Trump and Xi. And for now, that's probably good enough in terms of what we got out of it. Well, as you mentioned, there's some agricultural deals that we've just heard in the last few hours that several billions of dollars worth of soya and other products are pledged to be sold to China. We'll see if that comes off. There was also a certain amount of conversation around Taiwan, which I'm sure we'll get back to.

8:03And I'd want to flag up also the topic that was sort of the undercurrent, the baseline, you might say, BASS baseline, like a sort of good guitar solo, which was AI. The fact that we had Elon Musk there, the fact that we had Jensen Huang there was a reminder that tech is probably the ecology in which that U.S.-China relationship is going to develop, not in the next two weeks or two months, but, you know, two decades or so. And talking about how the two sides manage AI may be the equivalent of the conversations about nuclear weapons that so exercised Richard Nixon, Mao and their generation 50 years ago.

8:40So not much in terms of instant takeaways, but in terms of the bigger ecology, actually, I think quite a lot there to pick from. That's great. I love the four. Maybe it's the five B's. There's one element, I guess, that's connected to buoyancy that some commentators are lingering on. There was this line from Foreign Minister Wang Yi in which he said the two sides had agreed to reach, quote, a constructive China-U.S. relationship of strategic stability. What does that mean? Well, I have to say there are people who are inside the central party school in Beijing.

9:13And when I say party school, I don't mean the University of Miami, who are basically writing this kind of language to make sure that it fits in with the wider precepts of Xi Jinping thought. In other words, the way in which China's top leader is being projected as thinking about world order. So that word constructive is very important. So is the word stability. In other words, it's pushing an idea which I saw very strongly in the vibes from these two days. And that's the idea China wants to project that the U.S. is no longer the pivot of global order and stability.

9:45That will be China. In other words, when we think about geoeconomics, global trade, international institutions such as the United Nations, that's where China sees its ecology developing. And talking about constructiveness and stability is actually a way of China saying on the surface we don't want world order to change, implied the United States does and we're not buying that. But second, and this is more implied, we do want to change what is inside that order. In other words, we want to make it much more friendly to what we regard as Chinese interests.

10:17So that's what that rather kind of convoluted phrasing, I think, is getting at, which Wang Yi will have spoken, but will have been written by very careful ideological theorists in Beijing before he never actually entered his script. Fascinating. I mean, one more reading of it, Rana, could also be that China sees itself in a pretty good position vis-a-vis the United States because it's only in that kind of a moment that you would want the status quo and more stability. I think that's exactly right. Right now, although the world is certainly in more turmoil than it's been perhaps for decades in certain ways, China doesn't perceive it as at the moment being in a crisis situation from Beijing's point of view.

10:57Yes, there are problems. Clearly, the Straits of Hormuz being blocked means that there is an issue with certain fuel supplies. That's true, of course, for many other countries in the world. There's obviously the tariffs the United States has put on Chinese goods coming to its market, although they're famously much lower than they were a year or so ago. But in terms of sitting at the apex of global diplomacy, China thinks that right now it's in that particular position. I should note that, of course, something diplomatically almost unprecedented is happening this week. We may get back to more details of that.

11:28Three or four days ago, the president of the United States was in Beijing. Tomorrow, the president of Russia will be in Beijing. In other words, in terms of the optics of saying that China sits at the heart of creating a stable idea of what the new world order is. Yep, that's a message that's very, very strongly being sent out by Xi and people around him. And if I can just add to that, I mean, the previous week you had Iran's foreign minister Abbas Aragchi in Beijing. Before that, you had Pakistan's foreign minister go there. I mean, it really does seem that the pageantry that we saw out of Beijing, the symbolism for much of the rest of the world,

12:04and I guess for Chinese as well, is that the world comes to China. Yes, that's absolutely right. And I would say that if we just go for a moment with body language and symbolism, that may be one of the most interesting and productive places to look. If historians look at this summit in 20, 30 years' time, or even 50, like the Nixon one, I don't think it'll rank, to be honest, quite at that level. Then there were lots of little indications of things that suggest the Chinese were shaping a narrative that they wanted. I'll give you my favourite, if slightly fanciful one, but the Temple of Heaven, the Tientan,

12:35one of the most beautiful buildings in Beijing, Ming Dynasty. It's where the emperor used to go and essentially worship to make sure there would be an abundant harvest that year in China. So what better place to bring a foreign leader who wants agricultural exports to be sold into China? You know, the definition in the modern era of an abundant harvest. We also saw that the PLA band were trained in playing YMCA, a little gesture to obviously keep their guests happy. But at the same time, also the chairs that Presidents Xi and Trump sat in.

13:08They do seem to at least at one angle to have been arranged in such a way that President Trump seemed to maybe be sitting very slightly below President Xi on this. And one of the little thing was just a friendly dig in the ribs, I think. When President Trump was brought into Zhongnanhai, the absolute inner sanctum of Chinese leadership. Again, this is part of the old Ming Dynasty, Forbidden City, which is where the top leaders all live and work in the present era. Very, very few foreign leaders at all get to go in there.

13:38Most national leaders would be taken to somewhere like the Diao Yitai guest house. But Trump was taken in. And, you know, he asked, I think, you know, does any other foreign leader get to come here? And she said, no, this is very special. Then he added, except for Putin. So, again, just a little reminder that Xi is able to pick and choose at a global level when it comes to those sorts of conversations. And all of that sort of symbolism, it was a very interesting tightrope to walk because it wanted to leave Donald Trump with a really warm feeling about being in Beijing, that he was respected, that he was treated as the most honored guests.

14:11And I think he did leave very much with that feeling. But at the same time, just a little indication every now and then that China is also a masterful country when it comes to shaping the political and visual language around these sorts of visits, perhaps even more than the US. Fascinating. And Trump kind of played into this as well. I mean, he spoke about Xi in almost fawning language. What do you make of some of that? And what does that tell you about the way in which Trump and Xi see themselves?

14:42Because all of that feels a marked difference from 2017, the last time Trump went to China with a decidedly more pugilistic tone. He did. But there's one other element just from 2017 before we come right back to the present day, Ravi, that's worth remembering, which I think was a different sort of dynamic. You remember that in 2017, Xi Jinping was invited not just to Washington, but to Mar-a-Lago, Trump's private club, and was hosted there. And Trump later told the story of how he'd been offering dinner to Xi Jinping.

15:15And I think the phrasing was something like, I gave him the biggest piece of chocolate cake he'd ever seen and then announced that we were bombing Syria. And I think this was supposed to be a real sort of signature version of the Trump style, in other words, that you're treated as the most honored guest. But also, I'm going to do geopolitics my way, even while you're sitting in the room. And while I'm afraid I don't have inside takes on how Xi Jinping reacted nearly nine years ago, I think you must have been a little taken aback, to put it mildly. This time around, I think the dynamic was different. Of course, Trump was Xi's guest rather than the other way around.

15:45And we have to remember that I think just in a few months time, Xi has now officially accepted the invitation to go the other way, to go to the US. So we really have to read the body language there and see how it is. But I think even this Beijing visit, it was clear that Donald Trump was looking to make a really warm set of gestures. He talked, I think, more than once about Xi Jinping as being his friend. And that's a big word to use. He doesn't use that about a lot of leaders, including people who lead various allied countries. Xi Jinping did not say that in return.

16:16Now, I don't think you have to read too much into that, because if you look at the way that Xi Jinping interacts with almost any other foreign leader, it's pretty buttoned up. It's pretty choreographed. You know, the people who look at almost every hand gesture will have known what it is that Xi is going to say or do at any particular point. And while he was warm, he smiled. He didn't really show a tremendous amount of warmth in that sense. So I think that there was a mismatch in terms of the emotion between the two sides. I will add just once more that one of the leaders with whom Xi does appear to loosen up when he meets him is none other than Vladimir Putin.

16:51So we should probably look at their body language tomorrow when Putin is in Beijing as well. Indeed, we will. There was one more mismatch and I'm curious whether you think it was choreographed or not. But we in the United States have been covering this summit before and after quite extensively, as we should. I mean, it's a very important meeting between the world's two most powerful leaders. But it struck me that China did not cover it in the same way. The state mouthpiece, People's Daily, put commentary on the visit on page three.

17:22The main evening news broadcast gave it 12 seconds before moving on to a six minute segment on the Yangtze River Delta. All of that's from James Palmer, who writes China Brief for us. I mean, this is a real asymmetry in terms of how much importance they placed on the summit tree on the two sides. What does that tell you? Yes, that's absolutely right. And a shout out here, if I may, to James Palmer, who is, you know, one of your great assets of foreign policy in terms of analyzing China, whose work I've been reading in various forms for decades now. And he's an immensely astute observer.

17:53I think what James spotted there is exactly right. There wasn't any particular need to emphasize this visit on the Chinese side, other than that they wanted to push forward the narrative, which, you know, is part of a continuing development that the United States and other big powers come to China. In other words, if you have news coverage that the president of France or, you know, the president of various African countries, various places that are linked to China are visiting, that becomes part of the evening news round.

18:23But at the same time, it's also the case that, in a sense, the Chinese news authorities may have made quite a similar judgment to, seems to me, many of the Western media, which was that there weren't that many news hooks that came out of it. As I said, I think there are some big underlying themes, such as AI, that are really important in terms of what was discussed. But broadly speaking, I wouldn't say that there were big lines that the Chinese would have felt could have been put on the front page of People's Daily saying, from now on, we will do X or Y or Z.

18:54In fact, one of the places, I'm not sure if this is in James' report or not, but it might have been, where there was a bit more excitement, was in one of the visitors who came with President Trump. And that was Elon Musk, not just because Musk himself, of course, is a major celebrity in China, but of course, his mother, May Musk, is also a very well-known figure on social media. She has, I think, her own place in Shanghai. And so anything around the Musk family has the same sort of effect that, you know, when the British royal family visits some parts of the United States.

19:25And it may have been that that was where a bit more of the buzz, a bit more of the glamour was. But for that, you have to go to other places like the major Chinese websites like Bilibili or, you know, little Quai Shou videos or so forth. So the People's Daily, which is a pretty staid sort of publishing outfit, probably wouldn't go with the Elon Musk's mom as style guru type of line. I would imagine as much. It struck me that Trump was actually remarkably disciplined about Taiwan in a way that even his predecessor, Joe Biden, was not.

19:57I'm wondering if you're surprised by that at all. And and also just what emerges from this summit in terms of the status of Taiwan, because the relative lack of news seemed like a, you know, good news overall. But then Trump did seem to vacillate on the United States sending weapons to Taiwan and maybe treating that as a negotiating chip.

20:20So I think the Taiwan conversation was very interesting for the reasons that you mentioned. And one can sort of divide it into a couple of quick parts. The first is what happened in Beijing itself. And you asked if I was surprised. Actually, not really. The reason being that if you talk to people who are in that broader policy world around China, China thinking in the US and in Washington, they do actually note that despite the reputation he sometimes has, President Trump actually has kept to a fairly clear line in terms of actually promising any change or lack of change on Taiwan.

20:52So he makes, as he often does, statements, you know, kind of growl now and then about how, you know, he doesn't like Taiwan having too big a semiconductor industry, whatever it may be. But in terms of shifting away from the core agreements, the six assurances that Ronald Reagan gave back in the 1980s or, you know, even before that, what Nixon and Kissinger came up with, we haven't seen much sign of that. So to that extent, I wasn't surprised that when the Chinese broke their sort of warm words just once with those pretty sharp statements about Taiwan and not mishandling the situation.

21:25I think, you know, literally President Trump came back with, you know, almost silence at that point. He just sort of moved the conversation on. Now, you are right that when he came back, he then did make the statement saying that actually he talked about arms sales. He didn't want to be held back by something that Ronald Reagan had said back in 1982 and that he believed that the arms sales were a bargaining chip. And we had two reactions off the back of that that I saw. One was the Taiwan government pointing out the Taiwan Relations Act of 1979 is not a suggestion. It is, in fact, a law passed by the U.S. Congress that says that the U.S. has to help Taiwan to defend itself.

22:02It is not optional in that sense. And also, I think within the last few hours, U.S. Trade Representative Ambassador Jameson Greer has stressed again that there is no indication that there is a change in policy on Taiwan. So that much you might say in the Biden administration, there were words that had to be reinterpreted by administration officials. Does it mean anything substantial at this point? My sense is that it really doesn't. At this point, Taiwan is still almost certainly going to get that arms sale. The major holdup, as you will know as a close observer of these things, Ravi, is that the Taiwan parliament, the Legislative Yuan, has actually been holding up the budget to buy those arms.

22:41And this is partly because the opposition and government parties, the KMT and DPP, are locked in almost a 50-50 disagreement within the parliament. How unlike Congress in the U.S., of course. So there's an extent to which the Taiwanese may have to make sure that they are putting forward a clear line to make it clear that they're not actually getting in the way of the U.S. fulfilling the Taiwan Relations Act. But at this moment, I don't think there's anything existential in terms of a change on Taiwan policy when you look beyond the rhetoric. And I feel like every few months it's worth just reassessing the state of China's possible designs on Taiwan.

23:18And I'm curious, given everything you've just said, what is your sense of where Xi Jinping is at when it comes to the possibility of reunification or forcibly trying to take Taiwan? I think that right now, and this is something when I speak to people who are close to Chinese think tanks and people who try and get a sort of feel for how these issues are being seen in Beijing at the moment. But actually, this may be surprising that they feel quite confident at the moment, not because of something that tends to hit the headlines in Washington and on the East Coast, which is the idea that there's going to be an invasion of Taiwan by China, you know, next year, 2027 or beyond that.

23:58Let's be clear, an invasion is neither impossible nor out of the question. China has now the second biggest military in the world, huge amounts of amphibious capacity. And if it wanted particularly to launch a very violent unification of the island by taking it by any means necessary, it could do that. You know, I think all strategists would say it's not impossible at all. But overall, it's very clear that Xi Jinping and the Chinese Communist Party want unification of Taiwan with the mainland, but they want it by as peaceful a means as possible.

24:28And something that at least nominally could look non-coerced. So I think that the tactics they're using now, they think, are likely to lead in that direction. We mentioned the KMT, the Nationalist Party, the Kuomintang, who are the main opposition in Taiwan at the moment. Well, just a few weeks ago, one of the big headliners in the region was the visit of Zhang Liwen, the president of the Kuomintang, who visited the mainland for several days and ended up with a photo opportunity with Xi Jinping.

24:58Now, it's been 10 years since any leader of Taiwan's opposition went to the mainland and actually had a direct meeting with a CCP, you know, the top CCP leader in this case. And I think that's an indication that within the domestic politics of Taiwan, a sort of feeling is emerging in some sections of the electorate that if they cannot rely on the United States as the backstop, as the guarantor of Taiwan's self-defense, then having to think about doing a deal with China to avoid essentially a violent confrontation might be unpleasant, but necessary.

25:34Now, to be clear, this isn't something the DPP, the current governing presidency, would contemplate, not least because Beijing has made it clear that they won't talk to President Li Jingde, the current president. But it's also clear that with the presidential election in Taiwan turning up in just a few months time, January 2028, a few months ahead of the U.S. presidential election, that Beijing's tactics, which include, you know, flooding the social media zone in Taiwan with pro-unification language and propaganda, and also the feeling that Taiwan's own quite polarized politics might push it in that direction means that it's become more and more important not to take Taiwan for granted,

26:14but to understand how it's changing domestically. The reason being that despite everything, Taiwan is still very important to the United States and the liberal world for a variety of reasons, whether it's control of the first island chain or, of course, as much of the world now knows, it's monopoly on very high-end semiconductor chips that come out of the TSMC, the Taiwan Semiconductor Manufacturing Corporation that's based in Taiwan itself. So those questions will not go away.

Taiwan and US Policy

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28:07I want to come back to the broader trajectory of the U.S.-China relationship. You know, it was striking to me that in the lead up to this summit, it was Treasury Secretary Scott Bessent who seemed like the main player setting up the trip. And that is, of course, unusual. It is usually the Secretary of State National Security Advisor, in this case, Marco Rubio, who was on the trip, but seemed a bit peripheral. And Rubio, of course, is an old China hawk who seems to be at some level sidelined on China issues currently.

28:39And I'm curious, as we think about the cast of characters here and Trump's own mild changes in tone, how you think the United States has become less hawkish on China in general? And is that part of the new trend now?

28:58I think you're right to note that the lead on this trip unusually was the Treasury. And of course, that would explain, amongst other things, the huge stress on trade, on finance and all those sorts of issues that were at the heart. And while I can't claim to have inside track on everything the administration was saying, I think I can say without fear of contradiction that the Secretary of State and the National Security Advisor were absolutely at one on policy for this particular trip. But I think that it's fair to say that the President, in this case, does seem to like to have people in his administration who have very different views when it comes to China.

29:33So I think it's fair to say that there are certainly people like the Secretary of State, Marco Rubio, who are, as you say, probably more inclined to want to really push back against the expansion of China's power. You know, China Hawk is the shorthand that you'd use for that worldview. And that's still clearly in there. It gave, by the way, the Chinese a certain diplomatic problem, because Marco Rubio was still officially sanctioned from his time as a senator. And so they, at least according to the Washington Post, they compromised by letting him in, but changing the Chinese character that was used to actually transliterate his name

30:07to make it seem as if it was someone else actually turning up. One imagines also Secretary of State probably sits in that position as well. But at the same time, it's very clear from interviews that he's given on television, interviews he's given to the press, that President Trump doesn't seem to be looking for any kind of existential clash between China and the United States. For instance, the language that you heard at the beginning of the Biden administration, perhaps not so much by the end about having a league of democracies versus autocracies,

30:39that's not at all the kind of language that we put forward. It is very clear that the Trump doctrine is very much fixated on dealing with the trade deficit specifically, but it really does concentrate in that area. And I think because this administration, above all, is one where, in the end, the president decides what the tone is going to be, one imagines that it has to be in the case that he's decided that the trade deficit comes first and foremost, and the other elements, including Taiwan, AI, Iran, and fentanyl, which were on the agenda

31:10as well, would be second to that. And it's worth noting that for all the things in the three, four days since the end of the summit that have entered the headlines as being forthcoming, it is that sale of agricultural products, the beans, the beef, even the Boeings, that seem to be dominating the headlines. So that trade-driven story is still very much, it seems, the summary of what that summit was about. You know, and if indeed there is a bit of a recalibration in how the administration thinks about China, there's an argument to make that part of that is because China asserted its control of

31:44the critical minerals and rare earth supply chains, which in a sense pushed Trump to rein in some of the tariffs, but also readjust how he sees China. I mean, is there merit to that argument?

31:59I think it's fair to say that there's a sort of standoff that you can see that basically was settled in last October, when it became clear that China can't really think about growing its economy further and faster under its current export-oriented model without having access to the United States market, which is still the biggest and most lucrative overall in the world. Of course, China wants to be in Europe and other places too, but without the US, that export drive really begins

32:30to falter very strongly. But on the other hand, the United States clearly cannot do a whole variety of things that it wants to do in technology, for instance, without access to those rare metals in neodymium, yttrium and others. And again, I point back to the presence of quite so many tech CEOs and entrepreneurs in the entourage that surrounded President Trump as he went there. Because if you're going to point to any group of people who consider it absolutely essential to keep those rare earths and critical

33:01minerals flowing, it is, of course, people working in technology. Without that supply chain being constant, you cannot, for instance, see the drive, which you see in Silicon Valley and elsewhere in the US, towards ever higher levels of AI, including the great holy grail of AGI, artificial general intelligence. For that, you need a lot more compute, as they call it, but also a lot more capacity to have all of those rare earths that essentially underpin the chips that are going to make that happen. The Chinese know that perfectly well, not least because they're in a huge AI drive of their own.

33:33But at the same time, they are very, very much aware that the US market still remains very important. Just to give one other quick example, which sits slightly away from the AI example, but I think is an example of how these things are quite difficult to untangle. We should think about biotech. This is one of the other areas of scientific development and commercialization, which is very important to the US and to China, as well as to other actors like the Europeans. Well, right now, a huge number of the most innovative biotech startups in the US basically are then sent out to China to

34:07scale up before they actually get shipped back into the United States. If that particular chain were to be broken for reasons of geopolitics or technology or whatever it might be, it would essentially put a really big dagger through both the biotech industry in China and in the United States. That doesn't mean it won't happen one day because the geopolitical division between the two countries is real. But it's another rather specific example of why in practice, the US right now, driven in part by tech considerations, may think that a very confrontational attitude towards China simply

34:42isn't going to work out because essentially, both sides in the short term might find themselves severely damaged. You know, the other thing that depends on rare earths is, of course, defense equipment, missiles, munitions. And I'm curious how China is looking at the Iran war right now, where the United States has, of course, expended some 60% of its Patriot defense missiles, I think something like 30% of its Tomahawk missiles. The United States is overstretched. It has some of its military munitions have been

35:16degraded. We could be on the cusp of energy prices soaring much more than they already have. And that, of course, could lead to global growth reducing by a fair bit this year. If you're China, you're affected by some of these things. But of course, you're watching as the United States is mired in this war and Trump's approval ratings continue to fall. So what does Xi Jinping make of it all? I think that he and those around him will be looking at the Iran war situation very, very carefully. And the

35:48reason I can say that with confidence is that we know from the kind of courses and publications that have come out over the last two, three decades from the Academy of Military Sciences and other specialist defense outfits in China, that one of the main sources they draw on is understanding what has happened with America's wars in the world. China likes to say that it hasn't actually been involved in any conflicts for a very long time. In fact, the last international conflict it was involved with in 1979 was the invasion of Vietnam under Deng Xiaoping, but that was very brief. So they have been dependent on looking at how powers that go to

36:22war more often, such as the United States, have done and what's gone well and what's gone badly. Top of their particular ranking, of course, would have been way back in 1991, the first Persian Gulf War, where, you know, they saw how information technology really gave the Americans a huge edge. And today they'll be looking at the way in which the Iran war has played out and draw certain conclusions. One is about American stamina and morale and how likely it is that the US will stay the course. And that, of course, would factor into questions about Taiwan. They also look at the

36:56questions of technology and the way in which drones and other technologies have been used essentially for a sort of asymmetry of cost as well as availability. The fact that you have to have very, very expensive interceptors to get rid of very cheap drones. And of course, they'll also link it in again to that visit that's happening as we speak tomorrow, which is the link with Russia's defense technology capability. Now, China has been very careful and so far, at least I think it seems that they've managed to walk on one side of that line to make sure that they are not directly assisting Russia's defense

37:29and offense capability as military capability in its war against Ukraine. But it is certainly the case that plenty of technology that China has shared with Russia has military applications that could be used. And there is no doubt that combining what China has learned about Russia's experiences in Ukraine and what it's learning now about America's capacities in Iran is being drawn together to essentially make for what is probably the next great shift in Chinese military doctrine. There are

38:00great scholars based in Washington elsewhere, Rush Doshi, who was recently in the Biden administration, and Professor Taylor Fravel of MIT, who have looked in real detail at the changing way in which China has shifted its military doctrine from essentially very inward looking, very land based, to being much more outward looking and much more naval and air force based. And I think now that we're moving into the era of AI, drones, and a whole variety of different types of autonomous weapons, we will see that China will almost certainly be thinking about redefining its own military doctrine. Although whether it does so in

38:34public, I think is a slightly different question. He's come up a few times in this conversation now, Vladimir Putin, and he will be going to Beijing as we speak, I'm sure. What are you expecting that summit to look like? And how do you see the China-Russia relationship adapting or changing in the coming years?

38:56I think if we go back to one of the points we were talking about briefly earlier, I would expect slightly different body language from what we saw with the Trump-Xi meeting. In other words, not just polite smiles and correctness, but actually a certain amount of relaxation. It does appear from what people who are frankly closer to the leadership than I would ever be, that Xi and Putin do seem to have a genuine sort of regard for each other. They talk to each other, I think, quite regularly on the phone. I mean, through interpreters, evidently, but nonetheless. And clearly, there are many aspects of the world that they agree on in terms of still being wary of the United States and believing that

39:31there's a whole lot of turmoil which they can possibly use to the advantage of their particular countries. I think there will be specific things that are likely to happen in the very short term as the meeting happens later this week, as we're speaking in Beijing. In particular, probably a signing off of the power of Siberia 2 natural gas pipeline from Russia to China. I think the Iran situation has pushed China in the direction of thinking that having as many sources of fuel as possible is going to be worthwhile. And so the slight sort of humming and hawing over signing off this

40:04contract is likely to be dealt with. But in terms of the wider scenario, I think the bottom line is that it seems to me very unlikely that Xi and the system around him want anyone other than Vladimir Putin to stay in charge in Russia for as long as possible. Why so? Well, first of all, they know him and broadly speaking, they trust him and maybe not kind of super intimate trust despite the language of being a friendship with no upper limit, which was used a few years ago. That sort of, I think, stepped back a bit from that point. And I think there's a certain amount of

40:36weariness because there's still some controversy in analytical circles about whether or not Putin really told Xi about what he was going to do in February 2022 about reinvading Ukraine. But having said all that, it's clear the two of them do feel comfortable with each other in that sense. But more broadly speaking, Putin also fits the bill for Xi and others because he is, some people use the term vassal state for Russia with regard to China. I think that's a bit strong. I think Russia still has its own agendas and it seeks to exercise in many places, including, I suspect, a resurgence in the Middle East where

41:08China's not all that keen on getting too involved. But certainly having a friendly power with a multi-thousand mile border on the Northeast borderline is something that China wants to keep as it is because it does remember that just 40, 50 years ago, the Soviets and the Chinese, despite their shared communist ideology, nearly went to war with each other. Beyond that, I think it's fair to say that because Putin is perhaps a little bit, if not precarious, at least, you know, not sure whether or not his Ukraine war is going to work out or not, that's not the worst position from China's point

41:43of view. Having a neighbor who is somewhat dependent on China, I think is helpful as long as the whole thing doesn't move into global conflagration. And it's worth remembering there are a couple of areas where, when they want to, China is able to push quite hard on Putin. Many people think that, you know, a couple of years ago, Xi was one of those who quietly told Putin that he should not think about using a nuclear weapon in the Ukraine war. And of course, there are areas such as the Arctic, where China has a lot of plans in the next 10, 20, 30 years as global warming possibly makes

42:15those northern sea passages more passable. Russia has always regarded that, for frequent reasons, as its own backyard. China wants to make it clear that if it's going to continue to work well with Russia, it too will use its rather impressive new icebreaker fleet to actually make sure that China has a role there as well. And a slightly weakened Putin-Russia is probably easier to do that with than perhaps some unknown alternative leadership clique within that country. So from their point of view, better if Putin stays. Rana, over the last week or so, and obviously in general, there's a lot of commentary about how

42:50China sees the United States. Does it see it as a declining power? Does it see the United States as overextended, overstretched? Does it rate Donald Trump as someone who is not doing a good job for US standing in the world? And I'm curious how you read that commentary. But this is also a moment for me to take on a subscriber question more directly. This one's from Cedric Sussman, who wonders if Xi Jinping is underestimating the United States.

43:21So certainly the catchphrase, the East is rising, the West is falling, is declining, is one that you hear both in Xi's mouth and in the mouths of many of those at the top of the Communist Party. And it expresses this idea, indeed, that as the US-led order seems to be much more turbulent, China becomes both more stable and essentially more central to global politics. So there's no doubt in that formulation that East really does mean specifically China in this case. And I think that, yes, this is

43:52something that at the moment does seem very much to be the kind of general feeling, the emotional heft of what you hear in Beijing. The term confidence is one that over and over again is given the kind of one word characterization of how China feels that it's navigating the world at the moment. If it looks like China at the moment isn't being very prominent in the world, you know, declining to intervene in the Middle East, keeping a bit of a low profile, having this summit with the US where very little news was made. I think all of this suits Beijing just fine, because essentially accumulating

44:26power while making sure that it doesn't cause too many ripples is exactly where they want their policy to be. So in those terms, I think they will feel that right now they are achieving that goal. But your subscriber's question was, what about possibly underestimating the United States? And yes, I think that that is a real danger. I mean, first of all, China may be the second biggest economy in the world, second biggest military in the world, but the United States is still number one on both of those counts. And actually, it will take a great deal even now to dislodge those two positions.

45:00There was some talk a few years ago of possibly China exceeding the size of the US's GDP. And partly because of China's own demographic problems, partly because it's also got its own huge underemployment and unemployment problem with urban youth, and also has not been firing on all cylinders when it comes to the economy. Catching up with the US economy, I think will be more difficult to do. But in the end, I think the things that are likely to keep the United States at the forefront, and I think quietly you will hear quite a lot of Chinese acknowledge this in private,

45:31are things like the US's capacity for blue skies innovation. People talk rightly about the astonishing capacity China has developed in recent years, even the last decade or two, to take technology and scale it up and make it of even higher quality than it was before. But even now, very few of the transformative technological inventions, smartphones, AI applications and so forth, were originated in China. And that is a flaw, that is a problem that they haven't yet

46:04really got round. I have to say also that there are pools of capital in the United States in terms of its finance markets that are still unmatched really anywhere else in the world. I mean, China does have Hong Kong and Hong Kong is still very important in those terms, but it's not really comparable to what US venture capitalists can do. And finally, and it's worth noting this, the US has assets which perhaps are not always valued as much as they might be, but really should be, which includes the huge capacity that comes from combining its astonishing system of research,

46:36development and education with commercialization. It's no accident, for instance, Stanford University and Silicon Valley are in the same place. It's no accident that on the east coast of the United States, you have a whole variety of immensely innovative universities and research centers and a whole tech ecology around there too. China has places that are a little bit like that, Haidian in northwest Beijing, the area around Hangzhou City where Alibaba, one of the world's biggest retailers, was birthed, or even actually the Shenzhen, Hong Kong corridor down south. But compared to

47:09what the US can do at its most, you know, maximal, it's still in a different category. The question really, the minute the Chinese ask is, is the US going to allow itself to really benefit as much as it might do from all of those? But in the end, that's a decision for the United States, not for China. What a great place to end. Rana Mitter, thank you so much for joining us. Ravi, a huge pleasure to be with you on this podcast.

47:38And that was Rana Mitter, the S.T. Lee Chair in US-Asia Relations at the Harvard Kennedy School. FP Live, the podcast, is produced by Rosie Julin. The executive producer of the show is Donna Schoen. And I'm Ravi Agrawal. I'll see you next time. Thank you. Thank you.