Michael Beckley on The End of China’s Rise & the Future of Global Order | WORLD KNOWLEDGE FORUM 2024

thank you very much it's really a great honor to be here we're often told that we're living in an Asian Century that's going to revolve around a forever Rising China but I think when the history books about the 2020s are written they're going to say that this was the decade that China's epic rise finally came to an end and that changed everything it's what took us fully from a postc cold war globalized happy International order to one of much more intense security competition among rival blocks so I realize that's not the conventional wisdom so I'm

going to develop that in three key points the first is that China's rise is not just slowing down it's not just ending it's actually starting to reverse the second point is that uh the China hangover is here and what I mean by that is many countries tied their economic wagons to China they got rich selling into the China Market they became dependent on Chinese loans but now the slowdown in China's economy which lifted up so many economies around the world is going to drag more of them back down and already countries are starting to point

the finger at China which is putting China in a much more difficult geopolitical situation at the same time that its economy is slowing and then the third and final point I'll make is I don't think China's going to react particularly well to these pressures it's a classic peaking power meaning that it was once Rising but now it's facing slowing growth and greater geopolitical push back and what we've seen from past peaking powers in history is that they don't just mellow out and dial back their Ambitions they tend to crack down on descent at home and

then expand aggressively abroad and I think there's already evidence that unfortunately China is starting to inch its way down this ugly historical path so I'll get to all that fun wonderful story in a little bit uh but first this idea that China's rise is reversing I mean that literally so this is China's economy compared to that of the United States and you can see that China is actually shrinking relative to the United States and this is using Chinese government data which we know exaggerates the size as well as the speed of China's GDP growth when

these are the different growth estimates for China the red line is what the Chinese government says the Chinese economy is growing at the lines are based on objectively measurable data things like how much electricity is being used at night that you can see from Outer Space if you use those other estimates then China's economy is actually at least 20% smaller than the graph I showed you before and when you dial down into other metrics you see a similar story so this is productivity this is what you really need to grow an economy to grow an

economy you can either add more workers or you can spend more money or ideally you can become more productive by producing more at lower cost and you can see that with really the exception of the 2021 that the reopening from zero covid productivity growth in China has been negative for over a decade which means that China is becoming less efficient over time and you see this also reflected in the so-called Capital output ratios so this is how much capital or money do you have to spend to produce every unit of GDP growth you can see

that in recent years those of skyrockets which means that China is spending more and more to produce less and less and the natural outcome of this is a huge explosion in debt so in recent years China has gone from you know about an average developing country level of debt similar to India to above and beyond even the American Fat Cats in terms of its debt with no end in sight so if any of you have been traveling to China recently as I imagine some of you have been um you know a lot of people come

back and say there's a palpable malaise in Chinese society that didn't used to exist before and you're seeing that in public opinion surveys so for the first time really in more than a generation you're having more and more Chinese citizens saying that their lives are getting worse year by year you see this reflected in the so-called lying flat generation a lot of the youth who can't find jobs commensurate with their education level you see it in the capital flight the wealthy who are trying to get their kids and their money out of the country as

quickly as possible a whole host of indicators suggest that all is not right with China's economy and you know I think a lot of people have been saying this this slowdown in China's economy was entirely predictable a lot of people think that the rise of China was the normal thing that China would just rise forever that's just what it does and that anyone who argues that it's going to slow down doesn't know what they're talking about but in retrospect we now know that China's rise was the exceptional event it was the weird thing that usually

does not happen in the International System and it was propelled by a few fleeting circumstances a few fleeting Tailwinds that have now become headwinds that are dragging China back down so I just want to walk you through some of these the first of these Tailwinds turned headwinds is just basic security for much of the last 40 years China has had the most secure geopolitical position of any time in its modern history and that's really important because China as you know is in a very neighborhood is surrounded by 19 countries most of which are powerful or

unstable or both trying to you know if you play the geopolitical board game Risk you know that trying to hang on to the territory of China is damn near impossible and that's what China has to do every single day and for big parts of its modern history uh China failed to do this so for a hundred years from the first Opium War in 1839 until the end of the Chinese Civil War in 1949 China just gets ripped apart by imperialist Powers it collapses into two of the worst civil wars in history and then even after

the Chinese Communist Party unifies the country in 1949 China almost immediately becomes the chief enemy of the United States because of the Korean War and the direct fighting between the two countries and then 10 years later China's alliance with the Soviet Union falls apart and so by the 1960s China is the top enemy of both Cold War superpowers and not surprisingly it's isol and impoverished so it's not till 1971 and the opening to the United States that China starts to get some reprieve from this geopolitical Vice because now it has a superpower on its side

and the Americans actually warn the Soviet Union on multiple occasions do not attack China otherwise we're going to have a problem with that the Americans also FastTrack China's entry into Western markets and the timing of China's opening up is perfect so China starts to join the global economy right as this period that we now call hyper globalization kicks in so this is the period where in 30 years you know from the 1970s to the early 2000s world trade and investment surges six plus fold China both propels and rides this wave to become what we know

of it today which is this dominant Workshop of the world a huge manufacturing power and a rising economy the second factor that China really needed for its rise was decent government so in 1976 Mao dies and China's leaders basically say let's not do another Cultural Revolution and so they start to reward lower level Chinese leaders for good economic performance not just blind loyalty to the Chinese Communist party uh the actually ironically the cultural revolution itself so destroyed the state planning apparatus that there just weren't as many Chinese bureaucrats running around telling the peasants what they

could and could do and so the Chinese people were partially freed from that rigid state plan and they basically formed quasi private markets and industries and started trading and you had this big boom of economic activity and the Chinese Communist Party eventually started to begrudgingly accept that and then expand the range of Quasi private markets around the country so China had the right policies to capitalize on its new opportunities at the right time a third crucial Factor was the greatest demographic dividend in human history so for a big part of the last 35 years China

had anywhere between 10 to 15 workers available to support every elderly retiree that's two to three times the global average and it's the unrepeatable result of China's very peculiar population history basically in the 50s and 60s Mao inherits this country that has been decimated by Decades of war and strife and he wants to turn China into a superpower and so he the Chinese government starts to incentivize Chinese families to have lots of children and they do and so the population explodes by 80% in 30 years but then the Communist party starts to worry about overcrowding

and in the late 1970s they implement the one China the one child policy and so for much of the last 35 years you've had this baby boom generation in the prime of their working lives they had relatively few parents to take care of because so many of them had died in the in The Civil Wars and the the famines and they had relatively few children to take care of because they weren't allowed to have them so this population was absolutely primed for economic productivity demographers think this demographic bubble alone explains at least 25% of China's

rapid growth over the last 35 years and then the final factor that China had going for it that was really crucial for its rise was abundant natural resources so up until fairly recently China was almost self-sufficient in just basic things like water food energy resources and this made growth very cheap cuz Raw materials were cheap you could just set up a factory plow through the raw materials uh and grow very quickly so really from the early 1970s up until I would say the early 2010s China had these four factors working for it uh to varying

degrees but now each of these assets are becoming liabilities that are starting to drag China down and this is why we shouldn't expect a major turnaround in the China's economy anytime soon so for starters China is just running out of resources half of its rivers are gone 60% of its groundwater is so polluted that the Chinese government has said it's unfit for human contact so you can't touch the water so that means you can't use it even for agriculture or industry let alone to drink uh Beijing has about as much water available per capita as

Saudi Arabia does it's a similar story in terms of energy resources so China's plowed through most of its exploitable oil even coal is becoming scarce so as a result China is now the top importer of energy resources around the world it's also the top food importer in the world China can't feed itself anymore because half of its Farmland has either become so polluted you can't use it or it's just turned into desert and so raw material costs in China have gone up substantially in recent years and that makes economic growth much more expensive it's more

it's three times more expensive to produce each unit of GDP today than it was in the 2000s and that's rising at the same time China's running out of people so that baby boom generation I mentioned earlier is now retiring and falling onto the backs of a tiny one child generation just over the next 10 years China is going to lose more than 70 million working age adults it's going to gain more than 130 million senior citizens that's like taking an entire France of workers consumers taxpayers out of the country and adding an entire Japan of

elderly pensioners and it's going to happen just in the next 10 years that 50 15:1 ratio I mentioned earlier of workers to retirees that's going to collapse to 2:1 two workers available to support every retiree uh by the late 2030s now managing these problems is going to be increasingly difficult because China is now run by a dictator who consistently sacrifices economic efficiency to enhance his political power the zero Co lockdowns the crushing of Hong Kong those are just the most obvious examples the the channeling of subsidies to state connected firms the anti-corruption drive that has

scared lower level officials from engaging in any kind of experimentation or entrepreneurship because they don't want to ruffle the wrong feathers disrupt the wrong patronage Network and end up the target of an anti-corruption probe the censoring of negative economic news so youth unemployment data is going off the charts and then that's just eliminated all these things just make it harder to course correct in the middle of an economic downturn and don't bode well for China's economy and then finally China is starting to lose some of that easy access it had to rich country markets technology

and capital so the United States obviously is waging a sort of trade and Tech war against China the European Union Japan to VAR degrees are starting to follow suit and so China just faces thousands of new trade and investment barriers every year that it didn't face as recently as 10 years ago and at the same time China's security environment is also starting to look a lot more dangerous so this is a map of US military bases that are currently being expanded you don't need to be a strategic genius or attend the World Knowledge Forum to

understand the basic story that's going on here this is what Shan ping calls all around encirclement by the United States so China's boom now is finally coming to an end and unfortunately it's having shock waves for lots of other countries today because so many economies tied their fortunes to a rising China um and for good reason and so to sketch this out kind of I want to take you back to the 2000s some of you are probably too young to remember that but for those of you that do remember it uh you'll remember that China

was growing at double-digit rates you might also remember that the ri the rise of China was the most readout news story in the world by far nothing else came close it was the most decisive event of the first two decades of the 21st century way more than 9911 or the the British royal wedding or whatever other news story you want to put out there and for good reason uh China generated more than 40% of global economic growth in the 2000s and the 9s um some Scholars compare it to the Industrial Revolution or the Renaissance in

terms of its Global impact I don't know if I'd go that far but it certainly was spectacular to see China rise and during this time China becomes a buying machine it just starts buying up everything around the world soybeans computer chips cars Pharmaceuticals Machine Tools whatever it was China was buying it and so the China Market becomes a gold mine for many countries around the world you can see that Imports as a share of China's economy rise substantially The Economist magazine even created an entire index that they call the Sino dependency index which just showed

how incredibly dependent other economies became on China's economy even major countries Germany South Korea Japan France had upwards of 10% or more of their fortunes essentially tied up in trade and investment with with China China's rise its insatiable demand for resources also just drove up the price of Commodities around the world and so this had the indirect effect of bringing up countries that weren't even trading directly with China they just benefited from the fact that the things they had to sell were selling for a higher price uh Russia for example the rise of China basically

created massive demand for everything that the Soviet Union used to produce whether it was weapons or uh oil and gas or machine tools and so China's rise helped Propel the Resurgence of Russia as well as dozens of other economies during this time at the same time China wasn't just buying stuff it was also lending money abroad so as it accumulates wealth it then turns around and starts lending out money so that mainly so countries could employ Chinese companies to build infrastructure roads Bridges telecommunications networks soccer stadiums uh over the last 20 years is one out

of every three infrastructure projects built in Africa was built by China um and so China becomes this dominant dispenser of of uh of loans but unfortunately that era is now over this era where really countries were getting a triple win from China a huge Market to sell their exports into a seemingly bottomless supply of loans to finance all their development projects and then lots of experienced Chinese companies that knew how to build pretty much anything that all has been going away in recent years studies show that every 1% decline in China's economic growth rate reduces

the economic growth of its trading its main trading partners by about the same amount and one reason for this is that China is just buying less from the world than it used to so this is Imports as a share of China's already slowing economy and as a result countries are seeing their exports to China plummet so South Korea's exports to China dropped about 20% % last year Germany's dropped 9% commodity producers like Australia Saudi Arabia Brazil are starting to feel the pinch at the same time China's not loaning money anymore it wants that cash at

home it's not offering debt relief to other countries it's demanding that its Partners now pay back the money with interest and as a result lots of economies are being pushed into debt distress because of the massive loans they took from China you've seen seen just in recent years Venezuela La uh Zambia um lots of other countries are starting to feel this Pakistan um because of the drying up of Chinese loans and at the same time to make matters worse in order to save its own economy China is pumping up its companies with subsidies its manufacturing

Enterprises and then flooding Global markets with subsidized exports you're seeing this obviously in electric vehicles solar panels a number of other main manufacturing Industries and so as as a result many countries trade deficits with China have really surged in recent years and so this is now creating a triple threat to a number of economies because China's buying less of their stuff it's no longer giving them easy loans and now their markets are being flooded with a wave of cheap Chinese Imports that are crowding out domestic producers so you're starting to see this bite and needless

to say China's not making a lot of friends during this time so China's International favorability around the world has fallen by more than half since the 2000s anti-china sentiment around the world has surged to levels we haven't seen since the 1989 tanaman Square massacre and this really is a sea change because when China's economy was growing very rapidly so many other countries were currying favor with Beijing to get access to its Market uh you know the British handb back Hong Kong the Portugal hands back maau the Taiwanese pursue engagement with China you have doz a

dozen countries settle their border disputes with China you have the United States shepherding China into the World Trade Organization and in fact writing technology transfer uh protocols into China's accession agreement so like please take take some of our technology but that now is flipping as as China's economy slows as China focuses on trying to save its own economy and putting other economies at a disadvantage now more more countries are seeing China less as a profitable economic partner and more as a Potential Threat both economically as well as in some cases geopolitically and so this now

is putting China under a lot of pressure because it's not only dealing with a slowing economy it's starting to get more geopolitical push back and so this then begs the question how is China going to react to these pressures so I actually um because I knew I needed to make slides I put my presentation notes into chat GPT and just asked it to draw a picture of what I was talking about and this is what it came up with um everything's going to be fine don't worry about it uh no look I don't want to

be alarmist uh but I am my my concern is that China is becoming a classic peing power which historically have been the most dangerous kind of countries in the world so for the past four decades this rapid growth has pumped China up it's equipped it with the money and the military muscle to really make big moves on the international stage it's also just puffed up the Ambitions of China's leaders you know they think hey this could be our Century uh and we need to move on it but now slowing economic growth greater International push back

is giving China the motive to move more aggressively to achieve those lofty Ambitions and when you look back at history a lot of these peaking Powers really none of them mellowed out and dialed back their Ambitions instead as I said they crack down on descent at home and they expanded aggressively abroad a few even uh catalyzed massive Wars so I I'll just give you a few examples of these historical cases so you can kind of see the range of different outcomes and then I'll go back to talking about China and how I worry that it's

starting to inch its way down this well warn historical path so one of these cases is actually the United States in the late 19th century basically after the US Civil War in the 1860s there's this big economic boom in the United States cuz they're no longer the Americans are no longer fighting each other they're starting to spread Westward across the North American continent but then by the 1880s you have a series of what were at the time the worst depressions in American history and the Americans started to freak out that the reason their economy was

doing so badly was the frontier was closed there was no more open land to expand into there were no more Greenfield investment opportunities to exploit and so the US government did a couple of things first it cracked down hard on organized labor so if you study us this is the era of just brutal repression of Labor movements uh sending in police forces to basically beat workers with clubs and then at the same time the Americans started to pump exports and investment into Latin America and Asia then the Americans built a giant Navy to protect those

far-flung Investments and then the United States just started annexing territory overseas so when times got tough the United States really got moving in a big way this is the era of American imperialism full-throated imperialism um it comes right after the worst economic crisis that the United States had suffered up to that point uh Russia around the same time at the turn of the 20th century sees its economic boom fizzle out and the Zara responds by putting 70% of the country under martial law and then seizing assets and resources in Manchuria moving into Korea as well

Russia sends about 200,000 troops into East Asia to take over resources and they don't stop expanding there until the Japanese as you can see on the right side of that screen uh boot them out in the Russo Japanese war Germany and Japan we know this story well the Great Depression they don't react particularly well uh to that Japan in particular as it's experiencing these economic troubles also is feeling the pressure from the United States but more recently you know people forget that Russia's aggression today also has a peaking power origin so in the 2000s Russia

was a resurgent economy it was banging out roughly 8% annual economic growth rates largely because all those commodity prices were very high but then after the 2008 financial crisis a lot of the prices for all the things that Russia was selling go down they take down Russia's economy and Putin's popularity with it he responds first of all by jailing more dissident and dialing up anti-western propaganda but he also starts putting pressure on former Soviet States to join the Eurasian economic Union this Customs Union where he basically says I'm going to put tariffs around all of

you so that it's harder for you to trade with the rest of the world but you have to lower your tariffs with Russia and basically become economic vassals of the Kremlin so needless to say some ukrainians were not so excited about that idea they were much more interested in getting a giant trade deal with the European Union and we know how that tug of war between Russia and the West has ultimately played out so you see this pattern over and over again in history it's the the rapid rise followed by the fear of a potential

decline if countries don't do something that if you don't get moving the international balance of power may eventually turn against you and so when I look at China today I see China doing three things that make me very concerned uh first of all China has been dialing up domestic repression and I actually I now use the term Fascism and I don't use that lightly because I know it's a loaded term but if you look at what's happening in China today a lot of the classic Hallmarks of a fascist regime are starting to show themselves so

first of all you have the worship of a central leader if you listen to Chinese propaganda today they celebrate xiin ping like he's the third pillar of this Holy Trinity so they say under Mao China stood up under Danga ping China got rich and under xinping China is going to become Mighty again hentau and Jang zamin I guess are just forgotten they're not even mentioned in this but you see this extreme worship and he is centralized power of course as no leader has sense M another aspect is dialing up of hyper nationalism and not just

like our country is great nationalism but this this idea of taking revenge on hostile foreign forces that disrupted the Golden Age Of The Nation this golden age that the dear leader is going to eventually restore you see these themes of national Rejuvenation and recovering from the century of humiliation increasingly featuring in schools in popular media as well as in government documents you also have the Brut repression of ethnic minorities so Chinese documents increasingly describe the Wagers other ethnic minorities as a cancer that has to be cut out of the system before it infects the rest

of the body politic and you've seen the Extreme Measures that China has gone to in order to control these minority populations the re-education camps the bulldozing of uh traditional communities and so on you also have the development of this orwellian surveillance state that can just track massive populations and then discipline people instantly by if you do something wrong maybe getting cut off from travel um and then if worse comes to worse you can just send in the traditional authorities to crackheads and then finally this worship of military strength and it's not just the the parades

and the goose stepping it's it's more subtle things like the Civil military Fusion concept which is explicitly designed to erase the boundaries between civilian and Military Life any organization any company can essentially be commandeered to serve the nation in a geopolitical or military sense so at the same time um China also is developing a new economic strategy and it seems to be one that is prioritizing leverage rather than just rapid growth so I think the basic idea is okay our economy is not going to grow as fast as it did but we can still get

leverage over our trade partners by dominating what Chinese documents call the choke points of the global economy so these are things that other countries can't live without whether it's medical PPE or rare Earths or certain types of computer chips or access to the South China Sea there are certain strategic industries that China is looking to dominate and you see that China pairing that with an increased willingness to impose sanctions on other countries so for example Australia calls for an investigation into where covid came from and China uses its economic leverage to basically wage a trade

war against Australia now the Australians in typical Australian fashion kind of react with Good Humor they sponsor this uh fight commun ISM by buying Australian wine campaign and then uh Parliament members and other Western democracies kind of pick this up and you know it's the sort of patriotic thing um but it's it shows that China is much more willing to adopt a mercantilist strategy to flex its muscles in reaction to the fact that it can no longer just buy off other countries through Promises of rapid growth um by partnering with China and then finally what

worries me the most is this big military buildup so um China is engaged in the largest peacetime military buildup of any country since Nazi Germany it's churning out warships and ammunition at an extremely rapid rate you see that reflected in a huge increase in the military budget so China still claims it only spends about 230 billion a year American intelligence suggests it's uh almost three times that amount that's been backed up by think tanks that basically find things that other countries put in their military budgets that China has been leaving out to make its budget

look smaller but when you Factor those things in you see a major increase in the budget and you can also just see the results of this military investment with things that you can see with your own eyes so the number of Warships that are coming out of Chinese shipyards has surged in recent years uh China is doubling the size of its nuclear Arsenal and increasingly China is deploying these military assets in more aggressive ways than it used to and I think this all reflects a basic calculation that China can no longer rely on economic carrots

to get other countries to give it concessions and so it's more willing to start using military sticks to try to coers compliance so in the Taiwanese case you know China used to hope that the Taiwanese would eventually just unify with the mainland through trade and investment links and tourism that eventually the Taiwanese would come back but that has failed and so now China is sustaining um the the largest military show of force in the Taiwan straight in more than a generation to really underscore that China has built full scale models of Taiwanese and American military

bases out in the desert as well as fulls scale models of American aircraft carriers so that Chinese forces can do practice bombing raids on those uh on those uh mock military vessels you're seeing something similar happening in the South China Sea so this is a heat map that the New York Times put together that shows just from 2021 to 2023 the increase in the density of Chinese Naval and Maritime militia uh operations a lot of these are concentrating around disputed features in the South China Sea and they're not just increasing the presence China's just gotten

much more aggressive in the way that it uses these Naval and Maritime militia vessels so especially the Philippines has really come in for a lot of coion just over the last year where China you know blasting Filipino ships with water cannons and and lasers uh you know boarding Filipino ships literally with knives drawn and so you're just seeing a greater willingness to court risk and you're also seeing something similar happening on the border with India where you've had a number of skirmishes some of which have actually killed several dozen troops so it just seems like

across the board China is much more willing to try to extend its security perimeter even having to use Force to shove its way to carve out space for itself in what it views as an increasingly hostile world uh the the last part of this and and what also worries me is just that China in addition to building up its own military has been working increasingly with other autocratic uh revisionist Powers uh most notably obviously Putin's war in Ukraine sustaining that by providing critical components China recently reaffirmed its alliance with North Korea and then with Iran

really giving it an economic Lifeline there was a massive infusion of Chinese investment recently at the same time that China sold Iran a bunch of weapons and so the again the strategy here seems to be what political scientists call external balancing there's internal balancing where you try to counter your adversary by building up from within your own military forces your own power but if you can't catch up then what you can do is external balancing so I'm just going to get allies to help me do some of that dirty work and so it seems like

China by cultivating these partners and helping them foment Conflict at various points around Eurasia is stretching Western forces thin um it's also just gaining military technology so Russia is giving China um quieting technology for it submarines stealth technology for its aircraft early morning systems Etc so You' seen these autocratic links some people call it an axis I think it gives it too much credit I don't think it's quite on the level of like a full-fledged military Alliance but certainly it's a it's a beneficial partnership as far as these guys are concerned so naturally all of

this is fueling conflict with the United States and unfortunately I think it's going to get worse before it gets better part of that again is based on history so there's been over the last 200 years there's been 27 great power rivalries and these cases really only wound down not with the two sides talking their way out and kind of figuring out how they're going to divide up parts of the world but only after one side basically loses the ability to compete only after there's a major shift in the balance of power that forces one side

to basically make major concessions and unfortunately in the vast majority of these cases that just comes through a massive war where one side beats the other into submission there's the Soviet case the Cold War where the Soviets just run out of gas and have to sell out through peaceful exhaustion but that's not the norm and when you look at the fundamental problem is that um it's what political scientists call a credible commitment problem meaning making concessions to the other side that are big enough to reassure the other side also give the other side a huge

Advantage strategic advantage that you have no idea if they're going to exploit it or not and they can't really cred promise not to exploit it so like you look at something like Taiwan and uh the Americans say China lay off Taiwan stop all that aggression and the Chinese say yeah if we do that the Taiwanese are probably going to drift further and further towards independence we have to threaten them in order to keep them in line why don't you the United States stops selling arms to Taiwan but the Americans say okay yeah if we do

that then the military balance is going to shift more in your favor and that just makes an invasion or a blockade even more likely so there's lots of examples like that where a lot of the main issues in us China relations are not what the Chinese call win-win they're essentially Zero Sum you know you can either govern Taiwan from taipe or Beijing not both the South China Sea can be Chinese territorial Waters or international waters Russia can be ground down or propped back up and so on so it's just very hard to walk all of

this out now um I am cautiously optimistic that in 10 maybe 20 years uh just based on the trends I showed you now there's a possibility that China won't be ble to sustain the level of military investment and international expansion that we're currently seeing I don't think Xin ping would be willing to really dial back his Ambitions but he's 71 years old presumably he'll move on at some point and I could see the next round of China's leaders if they're faced with a declining power ratio to the United States and its allies having to come

back and rebar essentially and there is a potential bargain I think that could be had to resolve a lot of the tension between the United States and China really between the west and in China in general which is basically peace and economic access so you go back to that bargain it's really the bargain that Germany Japan France united king United Kingdom all these Mighty Empires took which is we're going to forego our dreams of regional dominance and territorial acquisition and in exchange we get tremendous economic access to the whole Western Network we basically get security

guarantees and our people are better off for it so I could see something like that happening between the United States and China somewhere down the line but I think you're going to have to have this shift in the balance of power first I think the most likely scenario is that China runs out of gas for all those economic reasons I gave but you know it could be we just had the debate I didn't see how it went between Harris and Trump uh but if the United States tears itself apart uh and just collapses well then

that's a shift in the balance of power and maybe that'll get resolved in China's favor the bottom line is something big is going to have to happen for us to break this deadlock but the good news is in the meantime a cold war between the United States and China doesn't have to go hot and there in fact fringe benefits to a cold war you could have a relatively tense but stable situation where ironically the two sides in sort of a space race Dynamic push each other to innovate faster and as a result humans get better

Ai and better climate reducing uh climate change reducing Technologies and all other kinds of good things come out of this competitive dynamic between two of the leading states in the International System so we are to have a cold war for now the bad news is I think we're entering a moment of Maximum danger just because of where China is in its life cycle as a great power but if we can make it through these terrible 20s I think there's we can be cly optimistic we'll get to a better place maybe in uh 10 years uh

so on that happy note thank you so much and I hope to see you all uh at the dinner later tonight appreciate it