panel will china's economic

warfare as a part of its decades long quest for global dominance, leveraging a multifaceted to supplant the current world order? i'm cliff may. i'm flds founder and president and we're pleased to have you here some in person, some tuning in live for this conversation. in the economic realm, the chinese communist party bullies, companies and governments to follow beijing's which benefit to the detriment of all others. to discuss how the west can resist china's illiberal influence and safeguard u.s. national security, we are proud to be joined by bethany allen-ebrahimian axios china. reporter, author of the recently published book beijing rules how

china weaponized economy to confront the world. also joining us are liza tobin senior director economy at the special competitive studies project, scc and former china director on the national security council and scott keefe the fred stevenson research professor at the gw law school and founder of keefe strategies during the obama administration in the senate unanimously confirmed as commissioner of the u.s. international trade commission today is discussion will be moderated by craig singleton senior fellow here at fcd. before we dive in just a few words about effective for more than 20 years now fcd has operated a fiercely independent research institute, exclusively focused on national security and foreign policy as a point of both pride and principle. we do not accept foreign funding. we never have. we never will. for more on our work, do visit our website, fdr, dawg, and

follow us on at ftd. and that's enough for me. craig, over to you in panel. thank you. great. thank you so much, cliff, for the warm introduction and thank you all for joining us today in person or virtually. let's let's dive right in. you know, bethany, it's wonderful to have you back in d.c., even if just for a few weeks. and many congratulations. your excellent book, beijing rules. it was a great summer read. i think all of us sort of devoured really fast. i want to talk a little bit about something that we've talked about a few years, and that's the idea that when china joined, the world trade organization there was this idea that it was to become this trustworthy partner trade, that free markets in, democracy were somehow inseparable. but as your book sort of details, it didn't really work out that way, huh? yeah. i mean, i think it's understood and noble, you know, it's easy to look back now for me and oh we were so naive, you know, how could we have granted the

chinese party this kind of loan of trust, you know, granting them access based on the promise of future reform or the promise of future behavior. but the nineties were such a decade of optimism, and i think, you know, it makes sense to see that, you know, perhaps the government would have gone the way of moscow, you know, or some of the other just that the whole wave of democracy that we saw. but that's not what happened. and so instead what we see is that as the chinese economy got more and more integrated economies around the world, instead the chinese government became very good at came up with these really innovative quite creative new levers to pull using all of its economic links to shape the behavior beyond its borders, to shape the decisions of individuals, companies and government, to bring them more

in line with the chinese party's core interests and you could call this a kind of a global authoritarian sanctions regime, although those mechanisms, most of them aren't traditional sanctions. you know, totally. i think it's a fascinating perspective. and in your book, you sort of piece it all together. and one of the things that you mentioned in beijing is china's use of de facto sanctions from everything targeting the nba, norwegian, you know, fishery. it's fascinating, right. but you also talk a, about how sometimes china's on money and aid has sort of been counterproductive, which i think is interesting because there's a narrative out there that china is winning over all of these countries. what does it look like? places like africa? yeah. so i just got back a trip in july to and one of my chapters is about ethiopia and i'll run through my takeaways from my about ethiopia.

so you know, the, the world health organization and the head of it is oh dear ghebreyesus tedros athenaeum ghebreyesus and back at the beginning of the pandemic it was, you know, and the trump was super critical of him because he seemed to echo beijing's talking points about pandemic. he praised xi jinping's response right in middle of the chinese government, basically a cover up of this. and it was really striking. and so people talked about his background as ethiopia's health minister. but actually what i look in to in my book and what i think is a lot more relevant for how for his initial reaction, the pandemic as the head of the w.h.o. was his role as ethiopia's foreign minister, which a position he held from around 2012 and 2016. if i get years. right, and in fact when he was was the foreign minister ethiopia that was the peak year

that the pinnacle of ethiopia's close relationship china and they still they still have a close relationship with china but his job foreign minister was to steward that close relationship with beijing and in 2014 he had a you know he went to beijing. he had a you know, he jointly announced with his chinese counterpart a comprehensive know a new a leveling up of the relationship to some kind of comprehensive strategic partnership. he was himself, you know, raised politically in a in a one party state in ethiopia. and that's how he related to beijing. so you look at the way that the chinese government was, you know, really reaching out to ethiopia, giving them tons of infrastructure and assistance, you know, really. and for decades doing that, it shaped behavior and his approach to china. he knew that he had that he couldn't criticize them publicly. and that's what we see in his and how he guided the w.h.o. and i think in the early months of the pandemic, that was and it

was obviously the wrong decision. but i think it was really harmful the way that he couldn't be honest. what was happening in china. but here's the here's the the place where it changes that eventually didn't work. and i don't actually think that tedros was is an agent of china i think that he was shaped by his long standing relationship beijing to try to get his in a way that they could accept. but what's encouraging about this is that when it didn't work, when the w.h.o. was not able to get scientists into for an independent mission to understand the origins of the coronavirus and and when he became more critical of china and they actually censored him his words china so he changed his tack he changed his tactics he ended up being independent then certainly the chinese government wanted him to be. so what what's the big takeaway here? yes, the chinese government can

throw money at people. it can throw all kinds of loans and assistance at foreign governments, and that can often work. but it doesn't always work because there are independent institutions. at the end of the day, foreign government and actors there are they have their own agency and they're chinese citizens. and so it's not predictable how china's influence strategies will work out. and i think that's encouraging for the us this week not to give up and to continue to try to engage know. it's a great point and you mentioned your trip to africa. you know, you had this great exclusive to i just want a flag for folks about you know the establishment of ccp schools in different parts of the world tanzania being an example and you can start to see rhetoric reinforce and sort of amplify about this ideology infused order and how it's taking hold in parts of the global south highly encourage everyone to check out that piece was a recent exclusive in an axios was really it was great and i'm not sure be able to go to tanzania again soon but oh you went there on a tourist hopefully you your

passport and there you go but want to bring in our other panelists to lise and scott. so much for joining us, lightsail with you. it's great to have here. you know, bethany's book, i think paints a pretty stark image of what you've called i love this term chinese brute force economics. i love that phrase. i'm going to start to steal it. i think and think tank world. we both worked in government. we're both out of government now. are you a little more optimist or less optimistic of sort of on this issue now that you're. thanks so much for having me here, craig. this is a great event and i feel really lucky to be sitting next to bethany. her book came out in early august. i downloaded it on my phone right away and listened to it on my commute and got through it really quickly because what bethany got so many things right and i think this issue of china's economic coercion and the weapon and weaponization of the economy has been getting growing in washington and around the world over the last ten plus

years probably since they fired that first shot against japan in 2011 with the rare earths export incident. but i think, bethany, very skillfully avoids a couple of traps and tropes that are that are true of a lot of the analysis out there of either on the one side people often paint china with a really broad brush and kind of put you know, basically attach the same level of skepticism to any of economic activity or entity coming out of china. and so that, of course isn't right or on the other side failing to acknowledge the long term strategy that the ccp has been pursuing for a long time to achieve global. and i think bethany does fantastic job of not falling into trap and giving a really vivid and accurate depiction the problem that's neither too

optimistic nor too pessimistic. and i think another thing she gets is acknowledging that in the united states, we've used economic coercion as well. and giving a very careful assessment of how our use economic coercion and economic power is similar or different to beijing's without falling into the trap of what about ism that that kind of pervades a lot of the analysis out there so but to get to your question and i'm more optimistic i left government almost two years ago and when you're in policy you spend maybe 90% of your time in bandwidth staring at a really big problem, it's very close up. they're kind of right up against your nose and the toolkit that you have often seems much too small, much too finite. and these these policy tools, trade tools, diplomacy, other things often seem kind of clunky

and not well-suited to this large, complex issue of china's weaponization since leaving government, i've had the opportunity to engage a lot more with the private sector, particularly technologists who are doing really exciting things. i'm getting just a couple of points of encouragement are i think there's been a real sea change in. a couple of the major power centers in the us economy. so if you of break it down very simplistically as main wall street and silicon valley i think in main street and silicon there is now a broad recognition of this challenge and. companies and investors and technology just they're starting to bake this into their there's a lot more work to do. but i'd say especially on that third power center, wall street, where they still need to be brought along and sort of aligned with the national interest. but but that is an encouraged gene shift over a few years ago

and then also kind of getting back to that snarky, funky, finite government toolkit in the private sector, there's just so much exciting work being done to find workarounds to. some of these challenges like this dependance that we have on china for processing critical minerals, it's a really thorny challenge. but but companies are out there doing interesting things on, you know, recycling rare earths that we have right here, developing alternative to lithium and things of that nature. yeah, i totally i think it's fascinating, right, because when we were both in government, you think you have this buffet of policy options, but because you are literally from the fire hose every single day, i think it's sort of it sort of limits our ability to think about new tools that didn't work didn't exist in the cold war when talk about great power competition and, the role of technology in this debate, we have to start to sort of expand open the a little bit. so csp does a tremendous job at that. i highly recommend taking a look at liz's research and everything

they do over there scott, want to turn to you a little bit because you've had the opportunity to see this both in government many years in government but in the academic domain at george washington university, where professor and you've you were really, i think, at the front of the line blending your experience in tech and law to talk a little bit chinese lawfare and how the chinese are sort of using courts particularly even patent courts to their advantage. i was wondering how do you see lawfare fitting into rules. thank so much for bringing us together for this conversation. congratulations on the work you're all doing and congratulations to our great author on this great book and and you know, i think as we all struggle together with the topics we've been discussing so far, it gives us a chance to remember a few things we

emotionally and intellectually we can hold, we can survive we can maybe even thrive with just a little bit of complexity that don't have to be all of one or all of another. and so i think the question you're asking gives us a chance to get a little more comfortable with the discomfort in the middle on some things. so what do i mean by that? here's an example. one could hold at same time. two idea as you can walk and chew gum, we could be huge fans of the chinese people. we could be optimistic about the chinese country and government and find in its past and hope for in its future with good reasons. lots opportunity to collaborate while at the same time observing

what a so-called a hawk would observe a sphere this present threat backed up demonstrated by significant dangerous to behavior and spoken about openly by their government. sometimes it's okay when someone is acting against your interests, showing you that they're acting against your interests, telling that they're deliberately acting against your interests. sometimes okay to take them at their word, to believe them. that's okay. we can believe people. so we we can look at another middle zone. it is true it is good for everyone that the chinese

professional bureaucrat that's in their courts in their agencies, the courts and agencies that wrestle with important technologies like biotech we had a pandemic, a ai machine ai data science. we live in a high tech world and also low tech, lithium, copper and everything between these professional no commercial oriented tribute novels are becoming and very good and powerful ways, top notch, world class in the way they use rules and the way they use economic analysis and the way they function professionally as lawyers and judges and administrators and they're also becoming much more fair in the

sense that they in a typical lawsuit between and party be will these days pay much less attention to the identities parties or party b and favor one over the other, even one is a non party a or party b and the other is a chinese party or party b. well, that all sounds really great, but you could applaud all of that and still want to avoid tribunals like the plague if you do business outside of china and would like to keep your information your ip productive to you. why is that. well throughout the us europe and korean japanese, indian

central and south african, asian, middle east, north regions. that's a lot of the world court system and agencies operate generally to varying degrees of success. we are not perfect with a bunch of fairly enforced, reasonably enforced rules. for example, if a judge in a u.s. court while hearing a case between two parties learn that something about a or party b would relevant to the fda or the sec or even the doj that law clerk or that judge or that staff in the judge's chambers will in fact, be punished if they pick up the phone and call the other agency. if that judge or that law clerk

trades on that information, they can go to jail for that. and we have lots of cases where individual court employees are, in fact, called out by name and powerfully sanctioned for picking up the phone and doing that. but the chinese courts and the chinese tribunals under a a system of great powers, competition and under a system of civil fusion, are quite openly, demonstrably, powerfully reminded that. if they don't make that phone call, they go to jail or worse, and their family too and everyone they know and, you know, consequences tend to drive outcomes. so it shouldn't surprise us that generally in us court systems, court systems, french court systems and so forth, korean, japanese, there's less of that. but in chinese systems there's a

whole lot of that. so we have to live with those realities in our and not take personally and not make it personal. it's not that there is no opportunity for future positive engagement with china and courts and the chinese economy and chinese government. but we have be careful. we have to observe the real operating we are in with them and things they control and the behaviors they demonstrate and the words they tell us about those demonstrated behaviors it's okay to believe what we see and, what they say. yeah, totally think it's interesting, you know, dovetailing on your comments like bethany, it's not just what china's legal system is doing within china's borders. it's increasingly this

extrajudicial that xi jinping is applied to not just chinese citizens abroad. but the chinese diaspora, it's sort of abroad. and so i think the evolution that we've sort of watched in hong kong is really demonstrated relative of this. sometimes, sometimes fast sort of push and pull. and in your book, you do give a great chapter on sort of hong kong and extrajudicial question. how do you sort of see this policy inside of china playing out in practice in places? hong kong yeah. so the national security law when it was, it was the text of the draft the text of the law was released the same moment it was implemented shining example of democracy. there. and it was i can't remember it was june was it june 1st or may 31st. july july 1st right around there 2020. and it was midnight in hong kong, but it was noon in dc, which is where i was and it dropped right at noon for me.

and i remember through the that, you know, text of the law and being, you know, more and more alarmed at the the vague the the sweeping nature of, what it was making illegal, the things it was targeting, how dramatic it was how clearly political it was. but when i got to articles seven and 38, i mean, really, my dropped because those articles effectively say that any person anywhere in the world who breaks any of these laws can be legally targeted by this law. and so it doesn't matter if you're a hong kong resident or not, doesn't matter if you're hong kong or not. it was outlawing activism. so a hong kong activist, pro-democracy act, is that activism anywhere in the world? this was a pretty new approach because it was a chinese expert. chinese communist party is

extraterritorial up to this point, which would be the extension of chinese law or interests beyond its borders. was de facto was kind it was often covert. and the most extreme examples would be rendition. so kidnapings people from australia and some places, or the use of its or you know other like an unofficial de facto ways of doing that, you know, blocking whatever. but this was, this was de jure, this was taking all that stuff and just, you know, that they were kind of doing secretly and just it out like we're making this illegal a law. and why that was so particularly concerning right in that moment has proved to be so is because hong kong's courts have a reputation of you know at the time have reputation of of being really independent and being very prophetic. it was one of the highlights of hong kong one reason that made it such a great place to be based as a business or, you know, businessman, finance, executive or whatever or ngo and

hong kong is a financial center and some of the articles in the security law included a clear, almost us style kind of sanction. or if do this, you know, your assets will be frozen if you do this, you know there will be these financial consequences and it was so obviously alarming. it seemed to be an attempt by the chinese government to take this very prominent legal system take this very influential financial system and use it in a in a very offensive, you know, authoritarian. and indeed, that's what we've from the hong kong government. that is increasingly how they are attempt to implement this. now, having a goal of being able to do something and whether or not you can actually do that are two different things. but here. here are some examples we have seen that the there have been articles in the wall street journal published by the uk

edition or the us edition of the wall street journal. and then i can't remember specifically which hong kong government official, i think some some security official has actually written the wall street journal said this is this is a violation of the national security law. okay. what does that what does that mean? and you see people who have had their will. jimmy lai is a great example. he the first major person to have his assets frozen because of the that he's a media now in prison facing more more another court another trial his assets were frozen so using the legal system in the financial in hong kong to go after free speech and i i'm i'm still very concerned we haven't seen some of the worst possibility of this yet. so for example, you know using the national security law to force western companies in hong kong to essentially any

financial behavior that goes through hong kong and use the internet and international financial system in that way. but the us does you know because our dominance of the financial system we can use financial sanctions as a way to have a really strong effect against terrorist financing around the world or money laundering or nuclear nonproliferation, whatever we seen the chinese government be able to do that because they don't have this kind of dominance of the international financial system. but hong kong is a has a very prominent position. there's this question of if the hong kong authorities under the thumb of beijing, try use hong kong in that way, become very proactive in trying to any money that's flowing through hong kong banks. you try to freeze that to people or try to arrest people who are going just having a layover through hong kong. will that force out of hong kong or? is hong kong are people going to

still it as such an important place that they keep their businesses there, that they they keep that the hong kong remains an important hub and i would say that the government has correctly that there is almost nothing they can do besides sending in tanks and murdering people. there's almost they can do that will get people to leave hong kong en masse and in a way that that actually blunts the chinese instrument of power there. but i think that scott is much more of an expert on particulars of this than i am. and i really would just briefly on a completely different topic, i wanted to briefly say that what scott, about this, the difference between chinese people and the chinese government trying to make a distinction with that and how difficult then but important that is that is such a key point. and this is something that louisa wrote about very recently. it's a few months ago for foreign policy magazine. louisa, you've said it. you wrote it in that piece. michael auslan the best i've

ever anyone write it because you said there's a distinction between chinese people and the treaties government that's important. but many chinese people are also very nationalist and support the party. this is an extremely difficult and nuanced thing to to keep hold of. at the same time, we're dealing with with chinese people and a people to people way. so i wanted to throw that out there before i before i forgot. no, it was a great piece. i think that nuance is sometimes feels like it's missing from our discourse here in washington as sort of do i think as scott mentioned, identify the threat, but also sort of stay true to certain values that we hold dear and the language that we use is just so critical. and that nuance in that finesse and it just, you know, going back to the hong law, i'm reminded of seeing the 17 national security law for first time, too, and words like like there's there no bounding to any of the law. and so as you start to work through, i remember like article seven of that law is explicit

and your through and you get you hit this wall in the language in the discourse and you're like, wow, there is really no end to where this could go. and you can see quite clearly how it could be misinterpreted and sort of applied as a weapon. but it's in own words. matt pottinger, who's china chairman, talks about this a lot. he's like, just use the speeches, use the discourse, use the language. and as the american people see and learn about how the chinese are talking about these issues in their own. you can sort of develop, i think, a healthier understanding of how china sees the world but also particularly how the ccp sees world. so i mean, i think the focus on tech lies there that you guys focus on so much at the special competitive studies is really one of the biggest cleavage points that we're of witnessing right now. you guys call techno, economic, economic competition. and i think we have to start to use these words that surely

didn't exist during the cold war. i was a kid back then, but i don't i don't remember them now. i think we need to start to use these sorts of labels and the role of emerging and new technology is in this new competitive. how do you sort see that playing out today with china? and in a lot of the research you guys do and it's it's just so great you guys talk 2030 a lot is this important sort of marker why is 2030 important for emerging tech? what does that look like? well, if i can just go back to your last point, craig, and bethany's point on the importance of taking words seriously. i want to just add a couple layers to that, because i think it's really important when the ccp says something, we shouldn't necessarily take it, literally, because of course it's marxist propaganda. you have to have an of the meaning and, the context, but so don't take it literally, but take it seriously. however, there is kind of there are a lot of critics, however,

of those of us who do take what the ccp says seriously and they say, you don't get it, you're taking it out of context, you're, you know, overhyping certain things and reading the whole speech. so they're kind of criticizing our our textual exegesis. if want to put it that way. so think we have to have this iterative process of looking at their actions, looking at their words as kind of a guide to interpret the actions, and then look at the actions as a guide to interpreting the words. so you kind of mentioned a hair, the hair standing up on the back of your neck moment in 2020 when you read the national security law my awakening moment back in 2017, when xi jinping was coming before the ccp central committee for the party congress and gave his big speech that for me was a turning point in understood standing that had global ambitions, not regional

ambitions. so when he walked on to the stage said, it's time for china to move to the center of the global stage and lead the transformation of global governance, that kind of me up. i was in hawaii it was probably three in the morning because the time difference and so that i had been watching china for more a decade at that point i feel sort silly that it took me that long to kind of realize, oh, they're not just a regional power, they're aiming to be a global and the global power. so it was kind of a belated awakening. but then of course, their their actions had been pointing in that direction, their words or pointing in that direction. and they have continued to that ever since. but to get to your question, thanks, greg. at csp were founded on the premise that technology is really the central issue in the competition for technology changing everything about our lives, our security our economy,

our and the rate of technology because change is moving faster and so even as you have these trends, the battle between autocracy and democracy, the war in ukraine, you also have this rapid rate technological change. and i think the recent evidence, of course, is the generative ai revolution that we're witnessing right now that started seven or eight months ago. so at csp, we're really focused on asking the question, is the united states positioned and organized to stay ahead or in some cases we've fallen behind, like in in 5g hardware and drones get ahead in in collaboration, our allies and partners. and so what we're focused on doing is not just admiring problem because there's a lot of that going on in this city, but actually coming up, solutions, action plans and recommendations and so we're convening the private and the public together

and saying, where is the ecosystem naturally working just fine and we can leave it to the market to generate advantage in in technology and the economy. and where is it sick? does it need either organized national solutions, bigger investments or better, stronger, more agile public private partnerships? so really what we're focused on, just on 2030, when we started 2021, we looked ahead to the end the decade and said by around 2030 we should know one way or the other, either will continue this rapid upward trajectory, gaining more and more power, more and more dominance or trends could go on the other direction. it could be demographics, their economic slowdown, perhaps contingency, and taiwan election cycles or perhaps stumbles and budget cycle and other political didn't dynamics on our side either way, by 2030. we should know one way or the other. however our i think our has kind

of truncated and sped up particularly of events since we started like russia's attack on ukraine and then this this rapid rate of we're seeing in technology. so we're really focused on the next couple of years getting positioned and organized to win. no, i think it's a great perspective. we were talking about before we came on the panel you know, there's there's a lot of references to are we in a new cold war with china and? is that the right framing and for a lot of us cold war seems like a 30, 40, 50, 60 year sort of marathon. and i think increasingly the question have to ask ourselves is, are we in a sprint or maybe an ironman? but either we have to go faster now and maybe those windows we thought 20, 30 was appropriate, then 2028, 2027. i think we have to constantly be monitoring that and i think you guys do an excellent job of that. you know, shifting a little bit from tech to trade. then, though, scott, you were at the international commission. it seemed like in the intervening years since you were

there, trade has become a little of a four letter word. i would say that it's on all sides of the political. it's sort of like a hot potato. how do you think that evolving on free trade is either or maybe hurt america's position is is free trade dead? over to you? yeah. look, it's a great it's a great question i think i a few things just worth observing about all of that and again they're there observations that are a little bit complex but they're only a little bit complex walking and chewing gum at the same time. once again. so for example we like we like them within our society. we like them around the world differences. exist. different identities across

characteristics from race to gender to politics, sex to a whole range of preference, says attributes, capacities, talents, challenges and. the more groups of human permit to trade facilitate trade, the more each is. everyone's. it doesn't do me any good when i've got lots of apples to be around other people with lots of apples. but it really helps me if somewhere out there there are folks who want my apples and have different things that i'd like we can have gains from trade if we trade differences differences the presence of

differences and the rules and the norms and the activities trading across those differences can be a true win win positive sum happy future for trade can really be quite nice and it can authentically support a diverse and inclusive productive society set of societies. so one would think if it's all good, everyone would be psyched about it positively forever and. yet we know in our history and in our moment that's not always the case and it's not always the case across the political spectrum and around the world. here in the united states, we remember with that, there was a time at which we went to war with ourselves, the civil war and. we remember that it was in about

slavery. and we i think, all hope that that would have been enough to bring us to war with ourselves. but the second biggest driver of the civil war was trade. the north had one approach to trade. the south had a very different approach to trade. some would call one of those free trade modifiers are always challenging labels are always hard but they were different. and that tension led in part and powerful to the civil war. so we've seen this movie before. we have survived it. we can get through it again. but fighting with ourselves on the rest of the world over trade is not. i think ultimately our advantage. so i think we can observe that trade tensions serious. we can be nervous appropriate. the garden and engaged around

how to cope with some of the challenges and we can talk more about that but i don't know that -- for tat responsiveness or if somebody is saying to us we're going to zing them back and double zing back or more robustly zing them back. i don't that that will even help us even in the short term. and so another way of thinking about this, we want tools, our toolkit. but there's a really difference between a phillips screwdriver and a flathead screwdriver. there's a really big difference between those screwdrivers and a hammer and you can really mess up your phillips screwdriver if you use it as a hammer all the time because you really need those four prongs at the tip to the next screw, you're going to turn and you can really mess up your hammer if you use it a crowbar all the time you get yourself in trouble.

you use the wrong tool for the wrong mission. you know, at the itc, we i really enjoyed working there. it is a highly collaborative agency and its predecessor grew up in direct response that tension over trade in the civil war it at the time it was called the tariff and tariffs are of what it copes with but that's only part of its mission. we do see. even as china is robustly aggressive, engaging, we do u.s. courts and british courts, courts and agencies, dutch, german and french, korean, japanese and so forth, treating chinese data, chinese parties perfectly neutrally, the same as

they do us dutch, german, etc. so the itc, for example people sometimes look at it as a protectionist agency, but there are plenty of it's cases where chinese parties win. there are a number of u.s. agencies and tribunals that collect data from the world. most of them subpoena power at the itc it was set up to have that capacity, but it has chosen most of its existence not use it so chinese governmental bodies and bodies and global bodies, non-chinese non-u.s. and u.s. provide data to the itc willingly. why? because trust and have verified that their data is treated confidentially and limited the

u.s. for which it is provided. so we can have systems we we've done this before we in the united states and other of the world can build tribunal rules that can handle and facilitate rules based trading systems. but as as both of you have pointed out, we have to be careful with the rhetoric so as not to call each time particular party of a particular identity wins or loses don't just call that a response to that. parties identity. sometimes it will be that would be a bad outcome and a bad use of a tool, but sometimes it's actually a good use of at all because a substance to the analysis that is verifiable by everybody. so i think it's key in tribunals like the and it's not the only

one, but it is an agency that was set up with a very specific mission in mind to do that horrible thing among professionals, talk and listen to each professionally about the substance of the activity you're doing and you have to talk and listen specifically about substance. you can get all sorts of things wrong. we all make mistakes, but the people around you point them out and a feature not a flaw. yeah. so the mechanism by which adjudicate or determine drives outcomes, not just who wins. that's not what we should focus on, but rather do we all have trust? those systems. and so i think free trade or

rules based trading is something that i think will return we are it's out of fashion right now you're correct and we can talk more about how to how to get how to get it back the fashion but but the good news is there's broad support for it across the us political spectrum and around the world and even among chinese people. so the current chinese government doesn't use that strategy. that's their and their prerogative and we should acknowledge that and engage that seriously, but not -- for tat. sure no, i think i think you get sort of hammer home the point of trust and how important that is, you know, i think one thing that i loved about book bethenny right with you you didn't just study the beauty of the problem. i think that's a phrase that so many of us in government are so try to when we when we can but

you you do outline some really commonsense measures that are aimed at sort of re linking i think economic and democratic rights in the book and i guess, what do you think are some of those topline measures? and do you think possible in this political environment to reach that type of consensus? and my book, i have basically two types of recommendations, and one of them is in the national security sphere. so and and i think the thing about is that in the end, in large part because of liz's and many other people in government starting in the trump administration and through the biden administration, now a of these measures have in fact been implemented or in the process of being implemented. so this would be in the international space, you know, having an industrial policy or policies plural and working on resilient resilience supply chains and friend shoring and getting and partners to work together. the economic and trade sphere, you know, things that that liza has worked and now we now more

partners in the eu, european and in europe are are working on and these are that are generally national security based in some way or another and you know a huawei would be a good example of that so you know blocking from from 5g networks because it's an enormous national risk you know basically just opening the floodgates to let the chinese surveillance state into your into your country more or less. and so i feel, you know, there's been a huge amount of progress. and i can see that because i wrote my proposal in 2019 and it was in 2023. and so when i wrote the proposal, there were, oh, all these things need to happen. and of course, i don't you know, come up with them myself necessarily, you know, citing lots of people's work, think tanks, etc. and then as as the years went by, i had to edit book to be like this should happen. and then it's like this happened

like something that is more and more people are talking about that hasn't happened yet, but i think we're seeing some baby steps in that direction. is the creation of something like an economic article five or an economic neto or a mutual economic defense treaty, something like this some kind of mechanism between like minded, democratic partners so that when one of them either the country or a sector or a business is targeted by china's de facto, or does sanctions for political reasons for illiberal that those partners immediately kick into action with emergency assistance of some kind or punitive measures targeting china this kind of thing to help some of this authority and pressure that many different actors under. but there's i have another sort of side of my recommendations and make 14 separate recommendations in my book that are really very focused on re unpacking democratic guardrails

on behavior not national security guardrails democratic guardrails because we have on the hand, you know, a chinese that is absolutely committed to put to attaching they already have attached they're illiberal of their authoritarian goals to economic behavior. every single ceo in entire world who has any kind of interest in the chinese market knows that can't tweet about changing their employees, can't surveys that call taiwan a country, you know, all this kind of stuff. it's been one of the most successful pr campaigns in history. right. but on i would say on the us side, on the democratic, we don't really have that when we talk about the values we associate with trade in an actual legal and regulatory, its economic values, it's like, well, free trade. that's democratic, right? no, it isn't. it's just free trade. free trade is just trade. it isn't actually political. it's not actually a democratic value. it doesn't actually bring human

rights. and so i have 14 recommendation options that seek to to bring this this back together a little bit and some them are fairly direct and some of them are not. i think that we should sanction chinese companies that are complicit, deeply complicit in china. the chinese government's censorship in the chinese market. and i think that would create a halo of deterrence around us companies of perhaps for self-censoring on to to please beijing. i think we should have foreign registration acts in every state in the us to provide transparency about any kind of any kind of actor in this state to are basically lobbying on behalf of beijing. i think should have the power revering intellectual political controversial territory but i think we should have campaign finance reform and have a public campaign option, public campaign financing option or just make public financing the way to finance campaigns. this is totally within the realm of possibility and current u.s.

politics. but i think it would be much better for our political and help get rid of some of the probate lobby kind of thing that we have in dc. but i'll leave it there. i can keep going, but by my book for the rest of the recommendation, it's a good teaser. there we have about minutes before we shift to q&a from the audience. i'm going to turn every 90 seconds over to each louisa and to scott to talk a little bit about analyzing. you talked about some of these ideas in, recent testimony before the house select committee on china. i highly recommend folks a look at that. but what sort of missing from the policy response were opportunities space here if you guys can do about 90 seconds the peaceful shift to q&a. sure. to try to build a little bit of what scott was saying about how free trade works. you know, you need transparency and a level playing field and rules and laws that that people respect. and then what bethany has written about in the last two chapters, this democratic economic statecraft concept that i like much, i think there's emerging policy consensus.

we need both promote and protect so promote is this modern industrial strategy that act investing in our own competitive and essentially that's running faster and then protect it's the export controls investment screening the like either slowing china down or at least protecting ourselves. so i think what's missing is a third element that kind of gets to the trade piece that scott such an expert in and because i missed my calling as a baptist minister i'll with p pooling market demands so there's this missing piece that market demand is what companies nations need to thrive over the long and we've seen china more and more of these strategic industries and global markets share if that continues to happen there's less and less market share available for companies like ours that operate basically according to market and more and more going to china. so we need to be moving in the direction of of demand alliances, more trade and

investment with our allies and partners and less with china particularly not in everything not in soybeans, not in commodities, particularly in critical technologies let's agree on i'm all fan of alliteration i get yelled at sometimes by my boss for doing too much so i like it. bpp triple p come of three p we can like brand this signal. it'll be a whole thing. all right now and now i've got to stick with the p go with to build on what each of you craig, bethany and liz i've been doing. i'll, i'll stick with the p's. i'll i'll start the pink panther and the the pink returns movie. inspector clouzot walks into fancy hotel. a fellow up to him. may i have your hat? may i your coat? may i have your gloves? i the clouzot gives them those the nice man walks out the front door puts on the hat, the coat, the gloves, gets in a nice convertible, waves bye bye and drives off you can call that theft or you can call that being a little too gullible.

don't be the pink panther. that'd be. first recommendation. a little bit of self-help. if we, you know, we project as individual businesses into china a little more than maybe we should we shouldn't surprised when the nice man with our hat and gloves and coat walks out the door instead of giving them back to us. i think i think that we we should use other private law systems and private organizational systems to that we have used and other countries have used with great success for many years. and we can talk about how lawyers use those tools and managers use those tools and corporate can have you special committees and and and compliance operations there a

lot of ways at practical tactical level for civil society just up game a little bit just open its eyes a little bit more and we can as professionals whether professional or practitioners or professional educators we can educate each other and and businesses inside the united and among our our allies about how to use these tools. no, great. no, thank you so much. i to turn it over to the audience. i know that we have a few question questions here. there's a few that were submitted online. i'll turn it over to. thank you. hi michael. open with voice of america. i have a question for bethany and the panel about hong kong was really interesting conversation you had earlier bethany was saying that china realizes it can do pretty much

anything in hong kong short having the play murder people on the streets and have western american businesses continue to stay in and make money there. so my question is should american and western businesses stay and keep doing business knowing that that is the reality and would leaving help hurts the hong kong people and much of an impact would leaving have on how china behaves and what china's policy is in hong kong. thanks. those are great questions and i'm ask those questions about china in general. you know what if companies leave china or the chinese people better, better off or worse off? and i think that my typical of response or attitude towards is that the the fate of the chinese people in their lives and whether or not those are good or

bad are really it's really determined by the choices of the chinese communist party, the chinese government, and that if life is getting harder for them, that's entirely at the fault of government that controls their lives. and so i would say that the same the is true of hong kong that. there can be you know, if someone pushes a ball a hill and it rolls in and it hit someone and kills them, it's the it's the it's the fault of the person who pushed the ball down the hill. so, you know, if if the chinese government made the the situation in hong kong untenable, then and people leave because of that, that's beijing's fault. however. so i like to the question of should should companies leave? there's no mechanism at this time to force them to leave. so but to kind of my framework in the book democratic, economic statecraft, i think that there is a a myth, a mismatch or an

asymmetry of on the one hand, on the one hand from the chinese government, we get a lot more a lot more regulations, a lot more pushing, a lot more. you have to do this and this and this and this. and, you know, for for authoritarian and on the us side, we have a lot less of that and i think that what should happen is that the us and i, i don't have a specific necessarily set of recommendations specifically for hong kong. the specific question that the us government should become more proactive in having more guidelines by which, you know, companies need to operate. and i think that the that for example the biden administration is moving they took a few small steps towards like a reverse syphilis mechanism whereby an outbound investment mechanism. i think that's a great mechanism and i think that that should be bolstered, should be made stronger, more sweeping, and should also be combined not just with national security concerns, but also with human rights and

rule of law and democratic concerns. because only in that way, only if you have a push on the us side for higher standards for us actors or for actors deeply with the us economy only in that way are you making this a contest between between equals. because right now you have the government versus individual who is always going to win, always chinese communist party is always going to. it's so much bigger than any company in the world. if the us government has more regulations that affect the behavior, us companies and, beijing's not happy about that. it becomes a government to government issue and that that is a contest of peers and that is where we can have discussions and we can let that let our values that debate our democratic values, our human rights values and not simply shareholders and the bottom line i know i know that they're very 10,000 foot kind of answer for you. but that's what i have any other questions?

yeah. hi, my name is caleb. trevor. i'm with congressman corey mills from florida. thank you all for being here today. i really appreciate everything that you guys have said. i found it very. my question is about economic. and i'm just curious. we look at us-chinese economic in the view of cold sprint. as you were describing earlier. that's mine. that's mine. by the way. i want to see that. got corporate i think that that's a great way of framing and assessing the current situation. but if we if we look at present situations like russia's economy or now or during the cold war in the 1900s and elsewhere around the around the world, iran, you see that supposedly weak economies still sustain themselves and keep going for for decades without without

regime change, as you the bush era sort of is sort of famous for as you assess this sprint scenario, how do you china's economy, how do you the challenges facing china's economy with the housing markets, with the labor shortages and rates? i'm just curious how you assess that within that context. you are yeah happy to give that a shot there's been an amazing shift in hasn't there around the slowdown in the chinese economy and now that's in all the headlines everyone's talking about it. my personal view they are in the middle income trap and they're coming back to rapid growth. however, i don't think that's a reason for us to take our eye off the ball. they're a huge economy and. they spend as much as they spend on their military and we don't know how much that.

but it's it's a lot. it's small percentage of their gdp the same with their technology plans they're just so darn big already. and my view is that even at slower rates of growth, even if growth falls to zero, they can continue to fund these things are challenging us to play technology development a small percentage of their budgets and gdp. they can scrimp and pinch on social programs and keep the peasants down as long as they. that's the autocrats prerogative. so we can't let ourselves be distracted by the negative mood music coming out of the chinese economy. i agree that they will be able to kind of muddle through at least on these particularly problematic programs like. the military civil fusion strategy that are causing us so much harm. i couldn't agree more. i think i had wrote a piece this week two in foreign policy that sort of discusses like she

always knew that they would reach the zenith at some point and so he's been sort of battening down the hatches preparing this moment and they're in very rough seas. i don't think we need to throw them a life preserver. i'm not sure it's in our interests either. and so think there is going to be this strong push pull rhetoric in washington about how much of what happens in will impact and maybe boomerang on the states. i'd say right now economic and data suggests very i think we maybe need to divorce from this logic that i think prevailed a very long time, that if china's economy goes south as well, too, in many ways i think our economy's running too hot. i think most economists would agree that diversification in strategy and the french strategy, i think it sort of protests provides us with a little bit of a i think a protective blanket in this moment. but she she has a very long term. and i think i think his goal right now is a controlled economic contraction with the other side as a reformed a structurally reformed chinese

economy. it's party first, and they can get rid of what he assesses are these corrosive capital forces. he seems convinced he can do it. i think he's convinced in himself on a lot of things that maybe there there isn't much reason to believe that it's going to play out. i think, in this next election year in a way that i think there's going to be a need for a lot of really insightful analysis on it means for the united states. but another question, hey, hunt congressman andy barr. but either great job, when you kind of look at market access as a form of de sanctions from the prc, i guess, as we, you know, in congress, whether it be an outbound investment regime, sanctions regime generally, a topic that keeps being brought up is basically if the is dollar dominance, u.s. dollar dominance. so where we see in headlines, you know, prc, you know, doing

deals and non dollar denominated deals, do you see that actually occurring the line where, you know, currently right now the united states you know, has prevalence in that but then the prc being able to move in getting both where they have that market access kind of have a clutch on that within the yuan also now being used in international transactions kind of any thoughts from from your any of our witnesses i'll touch on that briefly and got to you i think maybe i'll just a few things in the military expert take it i think we're seeing some like some steps in this direction but i you know with things like, you know, the new digital r&b and you see some, you know, an uptick in done in r&b, you know especially since russia's invasion of ukraine. however i think the real countervailing force here is that the chinese government want to let go of control over the yen and that's that you can't have it both ways. you know, you can't you can't be the world's reserve currency while maintaining such control over the r&b. so i don't see the r&b replacing the dollar anytime soon.

maybe just a little bit around the edges. okay, scott? well, look, i i'll give an academic advertisement. we have a new research initiative that we are running out of the foggy campus over at gw, but it's a joint among academics at gw in d.c. and cambridge and england and yale up in new haven and we call it lit sat leadership international, trade and security from antiquity to tomorrow. boy, is that a mouthful. why do we say that? well, it's because we have found that if you look back and, you know, three, 400 bce on china, if look back in the same period in ptolemaic, egypt, if you looked back another thousand in the the area between the tigris and euphrates these are very

different people look very differently they worship very differently speak very different languages is do very different things to some degree but what are some big themes in every one of those systems around which we have actual textual proof they use legal rules around, property rights around management, around security, they use those tools in those different places across those centuries because they work good ideas are good because they're mine or yours or someone else's. they're good because they work. so it's worth that. people across time and across identity have faith in good

ideas. they're attracted to those good ideas. they want to use those good ideas. if we stay in as academics and the business of finding and reminding ourselves of those good ideas and then as professionals stay in the business of deploying good ideas that will go a very long towards answering that and other let's call them topics of the day. can i just add one one quick thing what we seeing i think is a is the chinese government to create ways have basically one off sanctions evasions have a you know, a useful channel for transactions that can evade sanctions and. i think that's what the for example in, the medium term any kind of international use of the digital r&b could could be useful for that. so i. but that's different from you trying to take over the international financial system than subverting it. and if may just as a brief

follow up, because that's a great point as individual businesses, as whether you're let's call it a u.s. or ally member business or, even your a chinese member business, you know, you still got to remember the pink panther. i mean, if you show up in that kind of system in that kind of monetary because what you think you're going to do is being. getting away with a convenient trading platform that avoids or avoids money laundering detection or avoids criminal worse risks. you can do that. you can hang out in that neighborhood. but bad neighborhoods are bad for a reason. people kill each other in those neighborhoods. people eat each other for lunch in those neighborhoods. and you can get for lunch in

that neighborhood. so i wouldn't go to that neighborhood and. i think part of what we want to do as individuals and, professionals is just remind people that that's what a bad neighborhood looks like. and it's not going to be safe for folks to go there. people are smart. they'll choose less of that, not more of that themselves because they don't want to get eaten. yeah, i think it's interesting. china talks openly about sanctions proofing its economy and now we're seeing this collaborative approach to sanctions with russia, iran maybe even north korea soon. and so what's so fascinating about weekend's g-20 summit, xi jinping's obviously not going vladimir putin's not going, but we're they're all going to be at the belt and road forum in china october, which you used to think about. belt and road is pure economic development, but now it's making this pivot, this transition to china centric global order. and i think that we have to start to weaken ourselves, to this idea that china doesn't necessarily need to be at the g20 to influential.

they're going to create these alternate structures and build on the ones that they already. you've talked so much about global security initiative, global civilization initiative. these are not just i think they are, i think intentionally amorphous, but things that we really do need to understand this. we're going to think through this, this alternate architecture that beijing's developing by, according to beijing's rules, we are, i think, wrapping up here. but i just wanted to thank everyone, bethany, going to stick around a little bit. there are books for purchase available in the back. you get a signed copy. i mean, how do you that? thank you all. folks that are streaming in and here if if you're interested in learning more about fdr program, go to npr.org. until then we'll you soon thank you so much for for stopping by and for taking time with us today and pick up your your edible version of the book. yes. i guess you can't beat it. there's a cookie with literally beijing rules. on the other hand, it for you. thanks so much,