Kenneth Rapoza - How Free Trade and Soft Power are making China the #1 World Power

Show Notes and Transcript

Journalist and 'China smartypants' Kenneth Rapoza joins Hearts of Oak to discuss China's impact on Western manufacturing post its WTO entry and the free trade's negative effects on job losses and economic disparities. 
We look at the challenges in competing with China's low-cost labour and its aggressive trade practices on other nations. 
Kenneth walks us through evolving views on globalization, power shifts between the US and China, and China's strategic expansion in key industries. We address concerns about social control in China and democracy preservation, emphasizing the need to understand changing power dynamics in today's interconnected world amidst China's global rise

Kenneth Rapoza is a seasoned business and foreign affairs reporter with more than 20 years experience. He was stationed abroad as a staff reporter for The Wall Street Journal in Sao Paulo and was a former senior contributor for Forbes from 2011 to 2023 writing about China, India, Russia, Brazil, Mexico and other developing countries.
After leaving Brazil in 2011, Ken started covering the BRIC countries for Forbes as a senior contributor.  He has travelled throughout all of the countries he covered and has seen first-hand China’s impressive growth and its ghost towns as recent as 2017 and 2018.
His editorial work has appeared in diverse publications like The Boston Globe and USA Today — where he was given the unflattering task of taking an opposing view in support of China tariffs at the start of the trade war — and more recently can be found in Newsweek and The Daily Caller. He has either written for, or has been written about, in The Nation and Salon in the dot-com years, and almost broke the Argentine internet after publishing a story in Forbes about the return of the International Monetary Fund before the government opened up about it.
Today, Ken does the radio and podcast circuit talking about CPA issues.
Having grown up near the depressed mill towns of Massachusetts, manufacturing as a bulwark of household income and sustainability is not merely an intellectual pursuit, but a personal one, too. He experienced the life-altering impact government policy has on manufacturing labor in his own family back in the 1990s. He considers himself an American “lao baixing.” He graduated from Antioch College in Yellow Springs, OH.
Ken lives and works from a small farm and beach town in Southern Massachusetts with his family.  

Connect with Ken...
X                         x.com/BRICbreaker
SUBSTACK        doubleplus.substack.com
WEBSITE            prosperousamerica.org

Interview recorded 15.4.24

Connect with Hearts of Oak...
WEBSITE            heartsofoak.org/
PODCASTS        heartsofoak.podbean.com/
SOCIAL MEDIA  heartsofoak.org/connect/
SHOP                  heartsofoak.org/shop/

TRANSCRIPT 

(Hearts of Oak)

And I'm delighted to have a brand new guest, someone who I've been intrigued watching their Twitter, and that is Kenneth Rapoza.
Kenneth, thank you so much for your time today.

(Kenneth Rapoza)

Thanks for having me on, Peter. I appreciate it.

Oh, great.
And people can obviously find you @BRICbreaker is your Twitter handle.

Ken is an industry analyst from the Coalition for a Prosperous America, former staff, foreign correspondent for Wall Street Journal and a senior contributor to Forbes covering China since back in 2011.

And there's so many issues we could discuss, but it's that issue of China which I want
to start with.

And I've seen a number of your posts, I think on Daily Caller.

One of the recent ones was on free trade.

I think free traders are wrong.

It's time to try trade a new way.

And you started off simply by a statement on a Daily Mail poll recently showed 54% of voters support Trump's proposal to put 10% tariffs on imports from China and elsewhere, which is obviously opposite to a free trade thinking.

Maybe start there.

Why do you think free traders are wrong?

And why do you think we need a new model for the future?

Well, the idea of free trade, right, of course, goes back to the British colonial days, right?

But in modern times, from our youth and what we recall, it really kicked off in its heyday, we could say, probably post-World War II, and then after the end of the Cold War.

It was the end of history, peace in the world, right?

No more Soviet Union.

We're all on the same page with trade.

Then it really went into high gear in 2001.

This is when China enters the World Trade Organization.

At that point, I would say, is the beginning of what some people have called hyper-globalization.

That was the Western world's manufacturing base being sucked out of their towns and cities and shipped to Asia.

It has been totally destructive.

Led to the different policies that we have today. You could even say Brexit in some degree was because of it.

It was an anti-globalization vote.

You know, because really what's happening is the Western leaders are saying, oh, they know the plebs are against globalization for the most part.

And they say, oh, you don't like it anymore.

You don't like globalization.

Fine.

We're going to import all those people that you don't want to compete with in the third world.

We're going to import them and we're going to pay them your job.

And we're going to pay them your wages that That you don't want to accept.

We're going to pay them that.

And that's the way it's going to go.

So, it's been a disaster for many people.

Brexit is probably one of the examples of an anti-globalist push among the populace.
And, of course, the Trump election was the creme de la creme of the anti-globalist push within the electorate.

So, you know, when you go back to the 80s, 90s, and of course, China joined the World Trade Organization, that was the globalization heyday.

And when what many people call a reverse globalization or a localization.

The language is still being defined on this issue.

But clearly, the populace of the Western world is against the old school globalization.

When I say that, that's 80s, 90s trade, the model, the way it was.

We're going to just import.

We're going to make things where it's cheap to make things.

And that's how it's going to be.

We're a consumer society.

We fill our garages not with cars.

We fill them with toys and trinkets and all this other stuff instead.

And it's going to be made in Mexico and Asia and so on.

And if you don't have a job anymore, well, you can learn to code, or you can go drive an Uber, or you can go, maybe if you're lucky, you're good at math, you can go work at Goldman Sachs, or you could become a nurse.

I mean, that's it.

And people have rejected that.

So, again, a lot of the people who are pro-free trade, they're guys who are older than us, and they came from the time when free trade was, globalization was becoming, was a topic, right?

Again, the post-Soviet, the post-Cold War era, and they're thinking they still have that mindset.

But there's nothing that shows that free trade has worked for the working class.
The blue-collar class.

There have been numerous studies showing that it hasn't.
It's been great for Walmart.

It's been great for multinational corporations, but it hasn't been great for workers because why?

They have to compete in the West.

They have to compete with labour in Mexico, with labour in Vietnam.

There is absolutely no way someone in Manchester City; in Newcastle, can make a car, can make a shirt for what they make it in Bangladesh for.

There's no way.

They can't do it.

They'll never, ever do this.

So, if you're going to have that kind of world, then you're just going to outsource forever your manufacturing to Asia or over here in this hemisphere to Mexico.
And I think that's where the backlash has come.

And I think that's where free traders really have their blind spot is, okay, it's great.
There's always going to be trade.

There's always going to be imports, but to what extent are we going to allow this so that your industry, whether it is in England or whether it is the United States, whether it is in Germany; to what extent are you going to allow it so that you have no blue collar workforce, you have no manufacturing base anymore?

That is the question of the day.

That is the biggest pushback.

In the West, we have globalism versus anti-globalism, for lack of a better word, you know and that's leading to a lot of political stress in the west.

I remember being out on the campaign trail for Brexit with UKIP knocking on doors over the years and anytime you'd knock on the door of someone who ran a business that was a multinational business their response would be of: I don't want Brexit.

I want cheap labour I want movement of goods and a cheap labour as low as possible.

That's all I care about, it's the bottom line, and is this a conversation about maybe globalization has not gone the way we expected.

That it's purely about the bottom line then removes the individual from it is that kind of the conversation that's beginning to now boil up.

Oh, absolutely it's beginning to boil up.

And again I think it started with Brexit and it started with with trump.
Look what's happening in the world today.

Look at look at Germany, primarily Germany.

You see the headlines in The Economist.

They're all worried about Chinese EVs coming in.

They're all worried in the Netherlands now about Goldwind.

Goldwind is the big wind turbine manufacturer that's taking market share away from precious Vestas.

Well, that's too bad.

But you want to make it all in China.

What do you think China is going to do?

They're going to say, well, I don't want to make Vestas.

I want my own company.

I don't want to make Vestas products.

I want to be Vestas.

Why wouldn't China want that?

Why wouldn't they want that?

It makes no sense that they wouldn't want that.

I mean, the UK is a bad example here, because the UK used to have Land Rover and used to have the Mini, right?

And now that's all Tata.

That's all Indian now.

I don't know who owns Mini, but I mean, certainly Land Rover and Jaguar.

These are British iconic brand, auto motor brands.

They're owned by Tata Motors in India now.

They're probably still made to some degree in the UK, of course, but the brand doesn't belong to the UK anymore.

It's Indian.

So, they're panicking and they're panicking because they cannot compete.
They will never, ever compete with low cost labour.

They'll never compete with China because China is not interested in the free market competition of the West.

They're interested in full employment.

And it's a massive nation run by provincial leaders who have different viewpoints of the world than Xi Jinping.

If Xi Jinping says, no, we just talked to Janet Yellen.

We just talked to, you know, whatever his name is, the prime minister of the UK.
I can't think of it right now.

Now, he said that he doesn't want us to overproduce anymore solar panels and wind turbines and EVs.

We're going to stop.

We got to play by the rules.

We can all be friends.

Do you think the provincial guy in Nanjing and Guangdong is going to listen to this guy?

He's got a million mouths to feed.

Millions of people.

Millions.

More than the UK's entire workforce.

He has in one province.

He's not worried about what Janet Yellen says what Olaf thinks.

To the Chinese, Olaf is a snowman from Frozen.

They're not worried about this guy.

So, this is something that they can't compete with.

And so they're learning now.

They're seeing it.

And they're worried now.

You see them worrying now because their precious renewable energy market is being taken over by China.

Well, sometimes China's out innovating them.

China just copied what we made here in the West.

But China can do it easier because they get the subsidies.

They got workers galore.

They got workers galore who aren't worried about, you know, TikTok videos and, you know, trying to rehearse for, you know, they want to be the next EDM DJ or they want to get on Eurovision.

That's their biggest dream.

And then these guys are just flooding the market with product.

You can't compete with that.

You'll never, ever compete with that.

But that's the free trade.

That's free trade.

China's saying, hey, you know, we're trading, we're making products.
And the West will say, well, yeah, but you're subsidizing or you're doing this.
Well, then the Chinese are going to say, well, you subsidize.

You subsidize your farmers.

The Inflation Reduction Act in the United States, you're giving huge tax breaks to produce.

So, you're doing it.

So, you stop.

There is no such thing as free trade.

There is no such thing as free trade the way people thought it would be.
And that doesn't mean that importing is bad or that you and I, Peter and Ken, can't start a business.

And we can't afford to pay $30 an hour.

So, we decide on our own volition.

We decide to, from the get-go, that we're going to make it in Mexico.
We're going to make our widgets in Mexico.

That's what we're going to do.

That was our plan from the beginning.

That's one thing.

It's bad when Ken and Peter were making a widget.

We wanted to make it in Newcastle.

We wanted to make it in Portland, Oregon.

And now we go, I can't do this anymore.

I'm competing with Mexico.

I have to close now.

You and I, we got to lay off 100 people that we work with for 10, 20, 30 years.
We got to tell them it's over.

And these guys are making $30,000, $40,000, $50,000, $60,000, $70,000, $80,000 a year.
But that's 10 times what the, you know, the average salary in Mexico, I think is $16,000.
In Vietnam it's nine.

So, I mean, it's okay.

Again, if Ken and Peter decided we're going to make a widget and we were always planning to make it in Mexico because of that wage variable, but then what happens when you and I were making a widget happily here happily, and now we cannot.
Maybe we're done.

Maybe you and I have finished, maybe we're finished.

But maybe all the people that we work with every day, they're done.
It's all over them.

But that's the free trade world that is being criticized now because you cannot compete with developing nations on wage alone.

Not only that, of course, in the US, we have a strong currency.
Think about how far my dollar goes in Mexico or China or Vietnam.
I could buy a mansion in Vietnam.

I could barely buy a trailer in the United States for $300,000.
Think about what I could do with that money in Vietnam or Thailand or Mexico, right?

So, not only do you have the wage issue, you have a strong currency here because we're such a financial market.

All the money from the world comes here.

You have higher taxes here than you do in other places.

So, you're competing on that level too.

So, there really is the argument of free trade was always something that was for the textbooks, something that the faculty lounge could discuss and economists could discuss in a dream world.

But in reality, it never came to fruition because it only was good for the big corporations who were transnational.

They had no allegiance to a nation.

It wasn't Peter and Ken making a widget.

It wasn't you and I making bikes in Oregon.

It wasn't that.

It was Walmart buying and selling a million bikes all across the continental United States.

We don't care about where we get the bikes.

If I can get it for $100 or $99 and sell it for $110, and I'm selling a million of them.
That $1 difference puts a million dollars a year in my pocket.

It's a big deal.

So, I mean, those are the guys who really benefited.

But the guy who made the bike doesn't benefit.

And for them, it's a huge blow.

And I think that is where we are seeing in the West today.

That's where the tensions are rising from the electorate against the established powers.

We can look at even the immigration debate.

What is the immigration debate about?

It's about why are we giving these guys all this money?

Why these guys are hurting our wages or these guys are hurting, you know, our ability to get jobs.

And so it's always it always relates to that sort of what I call the immigration debate in the West.

I call it forced globalism upon the people.

You know, again, like I said earlier, the conversation saying you don't want us to make a factory in Asia.

You don't want us to import goods because you all talk to your elected officials and cry because you want to make steel or whatever here.

Good.

We're going to import all of them here.

You know, they're going to make it for half your pay or we're going to totally stunt your wage growth forever.

You know, so that's always the stem of the issue in the West.

It's always this rush to globalization, creating this, you know, where planet Earth is the nation state rather than the UK as a nation and Germany as a nation or the EU is a block.

No, there's districts, like Hunger Games.

This is the district that makes this widget.

This is the district that makes that widget.

And then free capital moves throughout the world.

And that's a dream of the free trader, but that's not a dream of the person, again, Ken and Pete, who were making a widget, and now we cannot.

We cannot do that anymore, because we cannot compete with Mexico.

There is no way in hell we're going to do it.

We're not going to make it for the same price you can make it in Albania, for crying out loud.

It's all over.

And so that has something's got to give.

And there's a lot of politicians that realize that.

And there's a lot who are pushing back, obviously.

Well, in that order, you talk about some of the old understanding of the views on globalization are changing.

So, you talk about trade deficits don't matter or imports don't take American jobs.

I mean, those are two issues which will come home to roost for individuals because the U.S.
Massive trade gap, that has a cost.

And of course, if you're all getting your stuff from temu then actually uh no one needs to actually work in America to produce anything so, where are the jobs?

And is it a waking up to the damage that unrestricted, uncontrolled, mass-globalization causes in those two simple things of trade deficit and simple jobs.

Well yeah there is there is a waking up.

Look, I look back; In fact, I'm not an old guy.

So, I remember in the 90s, I was young, I was probably just starting to vote, when a man named Ross Perot was talking about this, what it would be like when the United States created the free trade area of North America, NAFTA.

And he said it would be a huge sucking sound of American jobs going to Mexico.

And at the time, remember, Mexico was a country that was in and out of default.

It survived on the IMF.

It was like Argentina.

It was basically Argentina of North America.

And of course, NAFTA saved it.

NAFTA saved it, but it became essentially the United States, the 51st state.
And what's happening now?

Let's talk about the free trade agreement of North America.

Let's talk about NAFTA for a second.

That idea was always to Mexico is our neighbor.

They're always in and out of a financial crisis or an economic crisis.

Let's help them with trade.

Let's help them do this.

And it was a success to a large extent, right?

I mean, it's still way poorer than we are here in the U.S. and Canada.

Way poorer.

You can't compare the wages between the two countries; it's just at least three times more here.

But countries, companies from around the world are going to Mexico now.

So, Germany is setting up shop to make electric vehicles there.

Of course, Korea and Hyundai make cars there.

But a lot of those cars are for sale in Mexico.

Those are big sellers in Mexico.

But I highly doubt that the BMW electric vehicle is a high powered vehicle, a selling vehicle in Mexico.

I don't think that's the market that is going to come here.

The Japanese have been making steel in Mexico.

That is coming here.

That's coming here duty free.

So, now NAFTA has become a trade zone for any multinational that wants to set up shop in Mexico.

It's helping the Mexicans and the locals and the Mexican workers, but it's really a multinational free trade zone.

If you can set up shop in Mexico and, of course, employ Mexicans and so on and pay Mexican taxes, you can sell your goods where?

Well, to the biggest consumer economy in the world, right?

You've got to sell them here.

You're not setting up to sell there, I mean, Mexico, tiny.

Your next door neighbour is right here.

So, this is a problem, but that's free trade.

That's the free trade topic.

That's the free trade model.

And people do not like it.

Clearly, they do not like it.

It doesn't mean they don't like free trade. Obviously, we want to trade.

Again, you and I have a factory.

We make a widget.

We want to trade with the world.

We do want to trade with the world.

And that's not a bad thing.

That's a good thing.

There's nothing wrong with that.

But again, if people perceive from the UK, from Germany, the United States; they perceive that their leaders were obsessed, that's changing, with this globalization model of one world kumbaya.

Everything's going to be made in Asia.

Everything's going to be made in Mexico.

And they cannot survive.

They cannot survive on that.

And so either you're going to have a city and town where you have marijuana shops and treatment centers, and that's going to be your new industry and casinos, or you're going to have a place where people can survive making things like kitchen cabinets or furniture.

And if you don't want that, if you don't want that, then okay, then admit you don't want that.

And what are you going to do to replace it?

Okay, then what do they say?

Well, we're going to have universal basic income.
So they know.

They do come up with solutions, but that's their solution.
That's their solution.

And I'm not convinced that people are on board with that for the most part.
I don't know.

Maybe there are some lazy people who are fine with universal basic income.
I'm sure there are people who would be fine with that.

But people are against this globalization model, and it's being turned on its head in the West, and it is a source of a lot of political problems.

And of course, China is the 10,000 pound gorilla, whatever that saying goes in the room.

And everybody, everybody sees that now.

It was Trump really that made people see that, but Europe seeing it now as well.
So, where that leads in the years ahead, I don't know.

People clearly do not like the setup the way it was pre Trump, let's say pre Brexit, where the goal was: hey, we're just going to make everything in China.

We're gonna make everything in Asia.

And that's it.

You can learn to become a new EDM DJ and you now train for Eurovision and maybe you'll get lucky and that's that's the extent of it.

Well, we've got UBI coming in Wales as a test bed but that's a whole other conversation with Wales; have found how you get free money which is a change in how humanity works.

I want to ask, you did another post looking at, I think the title was, U.S.

Risks Losing Its Status as an Exemplar of a Free Country with Laws.

And you talked about China's soft power slowly winning hearts and minds, see it in developing countries, in other countries it's not.

But there does seem to be that move from that kind of American dream, everyone wants to come to America to see the sights, the sounds, to see the miracle that's America.

That seems to now be moving towards China with a huge focus on it.
So, what are your thoughts?

Tell us more about that, about the US losing that position, having its soft power of influence worldwide.

Well, for starters, America is still seen as a place in Europe as well, as a place where people from developing countries want to go.

If we were seen as a failing society and failing countries, I would assume people from other failing countries wouldn't want to come here.

But, I don't know how informed these people are about what it looks like today in the streets of San Francisco.

How much it costs to live in New York City?

They might still believe that, you know, California is paved with gold and they can become, you know, Hollywood actors in a year or two, you know, singing and dancing on the streets of Hollywood and Vine.

Maybe they believe that.

They'll learn from Rude Awakening.

But that sort of vision of the United States may still exist in Latin in parts of Latin America.

I believe that is eroding.

OK, now on the China side with soft power, of course.

You know so soft power is defined as, you know, diplomacy but it's also defined as culture.

And it's also defined as corporate branding.

So, culture United States wins hands down.

Everybody knows Hollywood right: American music.

We got Taylor Swift.

China doesn't have the Chinese salesman, you know.

So, we have you know the rock and so on.

We have all these movies that's an immeasurable positive for the United States, culturally.

But in terms of diplomacy and just soft power in general.

Let's look at what happened recently.

So, you have Russia's war with Ukraine.

So, obviously Russia is part of the big four emerging markets.

It's part of the BRIC collective.

And these guys have been, these leaders of these countries have been talking and developing relationships for at least, I would say 20 years now.

When the West asked all these countries to support them in their view on Russia, to a man, none of them went along with it.

None of them.

This is completely different than what it was like in the 80s.

If you tell Brazil: hey, we need you to send some weapons to Ukraine.
Brazil couldn't say no.

Because the United States said, well, we're going to hold back that IMF loan.

We're going to hold back that development loan for that bridge you're trying to build, that dam you want.

Either you give, either you start putting out, make it look like you're on our side and start churning out some ammo for the Ukrainians or the money for that hydroelectric dam is off the table.

That's not a thing anymore.

That's not a thing anymore.

The United States has lost that.

So, when you see countries in the developing world that can say no to the West, say no to Europe and the United States, right, and ignore them.

That is a sign that the soft power of the West is eroding.

I'm not saying that's eroding in favour of China.

But it's eroding in sense of there is imbalance in the world, right?

There's a sense of that people in developing world, the leaders in developing world is saying, we don't want the unipolar view anymore, right?

Let's, let's, let's go more of a multi-polar view, Right.

Maybe that doesn't mean China's in the lead.

We don't know who the multipolar is going to be.

We don't know.

But there is a pushback against the United States way.

And I don't know.

I think there was a real severing of that with with COVID, honestly, because, everybody in the world saw how the West treated its people during COVID.
I mean, we saw what China did, right?

Locking people in apartments in Wuhan and so on.

We saw those things.

Saw that.

And who knows?

That could have, for all we know here in the West, that could have been just orchestrated to make it look to us in the West that this disease is so bad.

Look what the Chinese are doing.

They have to literally lock people in their homes or they'll die.

This is how bad it is.

So, that could have been a psy-op in a way for all I know.

But you had people in Canada losing their bank accounts.
You had people in the United States being arrested for protesting lockdowns.

You had people vilified for it, and so on.

While Black Lives Matter and Antifa were able to parade around.

Of course, they had their science-y masks on.

So, I guess that was all good.

And breaking things and knocking statues down and whatever.

And they were fine.

So that six feet distance didn't matter to them.

And people around the world see that.

I remember even the president of Mexico said, Obrador, He said, you know, COVID showed the Western world authoritarianism.

He showed that the Western world can be authoritarian, just like, what they always criticize us as a being, you know.

I mean, this is fascinating.

This is not a language that you would hear Mexico ever say about the United States.
You'd be instantly punished.

What does Mexico do to the United States to help us police the border?

What does Mexico do for the United States to help us stop fentanyl?

Do you ever hear about them beating up on Sinaloa or Jalisco?

I mean, unless like the DEA is involved, those guys just run around free like you and I, you know, going to get a sandwich in a local shop.

I mean, there's nothing happening there to fight it, right?

So, you know, and I think I look at that as being a sign.

That is a sign that the West really is no longer the exemplar on a lot of the issues that it was.

On issues like democracy, where all this talk about misinformation and control.
That there is sort of a severing of ties, if you will, from the developing world with the West.

And I'm not saying that China is going to replace it.

We don't want that.

But I'm also of the mind that there are many people in the West who really like the China model, and they wouldn't even complain if the China model replaced ours, because they love the top-down societal government control aspects of the CCP.

And many of them think in the West that they can just wrap it in the pretty bows of diversity, inclusion and environmental justice.

And all the urban educated classes will say: oh, that that sounds reasonable.
That sounds like a good way to go.

Within the eyes of the developing world.

It's very difficult for me to say that they are all going to agree with the U.S. on certain things.

That wasn't the case when we were kids.

It was not.

America was always the right, always in the right, always.

Now it's like, you know, they might not agree.

They're not going to go along with it.

No, you've seen in Africa, especially China using their financial muscle to go in to start massive infrastructure projects for the Belt and Braces.

And America seems to be very much hands off.

And it seems to be as the West is maybe moved away from parts of Africa, China has gone into to that vacuum and imposed itself.

And now is building infrastructure across the continent.

The west then scratch your heads and wonder why they have less power.

Well, it's because you've handed that industrial, that financial power, over to China and they are now the ones that rule, because of those tight contracts.

And they're the ones that get people from A to B by building a road or building a railway.
So, they're the ones that Africa need, and no longer the west.

Yeah.
And you know, where did they come up with this idea?

This was what the West did.

This was the United States did in the post-World War II, right?

The United States went to the world and said, we're going to help rebuild.

We're going to get you modernized.

That was soft power.

We're going to get you on our side.

We're going to get you to see things our way.

We're going to get you to be our political and economic partner.

And so we don't really see that as much anymore.

We don't really see that as much anymore.

I don't really know why.

Maybe it is like a late empire pirate type situation, right?

Where we're worried more about silly things, cultural issues.

That the other part of the world doesn't worry about.

I mean, I think that was something famously said by someone in Africa.

They said, look, China comes here giving us money to build roads and bridges.

And when you guys come here, you give us lectures on gender, or climate

change, right?

But that's not to say the Africans don't want American business.
I'm sure they do.

But that's not, in a lot of ways, that's not what the United States is in there for.

And I think only recently the United States has realized, oh, they've seen the error of their ways.

Because where I work, I get to sit in on a lot of these hearings in Congress.

And I know that they want to counter China in that way.

But it's a knee-jerk react to China.

It's a knee-jerk react to China.

It's not necessarily a long-term planning thing.

So, okay, well, how do we go to this country and propose this?

What else can we do?

Everything is a knee jerk.

And that is a problem, but at least they see that they've been caught on the back foot over the last few years.

Whereas China has in terms of soft power, diplomacy, getting their corporate brands all over the world that they see now, wow, we're losing.

We're losing a lot of that.

Think about it.

I remember my first time going to Latin America in the 90s.

I'm sure this was the case in the 80s and the 70s.

Ford, McDonald's, Hollywood, those were symbols.

Those are like the unpaid American ambassadors.

And so look today; you can probably count on one hand, unless you drive a German car, how many German item products you have in your, in your house.

You know, I have a Miele vacuum cleaner.

I think that's German, you know, but for the most part, your kid has TikTok on their phone.

You might have a Lenovo computer or a Lexmark printer in your office.

There's a lot of Chinese corporate brands that are very well known.

You probably, your kid probably buys clothes on Shein or, or you probably shop on Temu, right?

What's the European equivalent to that?

I don't know of any.

I can't name one big European app, honestly.

I just can't.

And even e-commerce, I can't think of a single one.

So, this is China.

So, this is the soft power.

These are very important issues for the United States that used to dominate that, for example, in Latin America.

And now they do not.

They do not dominate that at all.

It's China that is moving in; China is moving in the auto industry.

China is moving in big retail and in some areas even finance.

So, you know, I think that's an interesting look to see.

What's it going to be like in another generation?

China may be seen as a better partner.

And as I mentioned in Daily Caller, there was a survey by the Singaporean think tank run by the government that showed a small amount, I think it was 50.4%, so it's almost 50-50, of government leaders.

Not just men on the street, who said, strategically they felt it was better the dial was moving a little bit more towards China than the United States.

Even the fact that it's 50-50 should be worrying to the U.S., right?

I'm speaking as an American here, right?

It should be worrying that it's even 50-50, but it is.

And so that goes to show the power of China.

Not just militarily and all this stuff, but just doing business with China and then seeing things China's way in many degrees.

Well, it's true.

Then that report, Singapore report of the Southeast, it makes you realize that China doesn't actually need to use its military power, because obviously it is ramping up its military spending, wanting to actually impose itself on the South China Sea, make sure America is not there.

In one way, it needs to do that because I guess you've got Taiwan and Japan maybe as entities that are not pro-China.

But everywhere else, in one way, trade is actually building bridges with those countries.
There's actually less reason for China to spend all that huge amount of money on military power whenever soft power through trade and commerce.

That's actually winning over Southeast Asia.

Oh, absolutely.

They're more connected to Asia, more connected to China because of commerce.

A lot of Chinese multinationals, especially, have been setting up shop in Southeast Asia to make everything from LED light bulbs to furniture and so on, solar panels are huge in Vietnam and Malaysia.

Chinese multinationals are all there and they're selling it all over the world.

Most of the United States and Europe.

But again, China does want to build up its military because they see, and this is one thing I think the military worries about, is they see this.

They think the military is a good place for me to have an industrial base.

The military is a good place for me to make big products, big expensive items, maybe like a drone.

Drones are a big thing now.

Autonomous ships.

Autonomous aircraft.

China's big on that.

I don't know if Russia makes those.

So, who is the United States competing with a lot of times for like military contracts in Asia?

Russia?

So, India might buy, or Saudi Arabia.

So India might buy an F-15, but it might also buy a Sukhoi.

Might buy both.

Might buy a MiG.

Might buy an F-15.

But now China's saying, hey, wait a minute.

Why don't I also; so let them buy.

I don't know anything about China.

A China fighting tiger.

Now, all of a sudden the Vietnamese don't just have F-15s.

They got a Chinese fighting tiger too.

So it's very important for China to move into the military, not because they want to protect the South China Sea or get the U.S.

Military out of there, get that U.S. military protectorate agreement out of Asia because China sees this is my backyard, not yours.

And they're going to muscle in and give options.

But also, in thinking of the military as a product, I have autonomous boats.

Hey, Vietnam, you want to have a coast guard? You want to police illegal fishing?
You want whatever?

You want to place drugs in the Malibu Straits without getting your soldiers injured?

I got autonomous boats.

America makes autonomous boats, but we're even better at it.

And that's a big deal. That's a huge deal. People don't realize.

All of a sudden, who's competing with the United States? Who's competing with Lockheed Martin to make an autonomous boat? The Chinese.

Look, when you think of flying internationally,  there's only two planes you've ever been on. You've been on a Boeing and you've been on an Airbus.

But now China, I only know the abbreviation of the company, it's called Comac, has the C, I think it's called the C919. Yeah.

And that's an international wide-body jet that's going to take you from Shanghai to Paris.

Well, guess what?

So one day when that plane is seen as doing, in terms of safety record is solid and whatever, the airlines are going to buy that; going to buy a Comac instead of an Airbus, instead of a Boeing.

And guess what else is even more interesting?

Do you think that the Chinese are going to subsidize a Boeing jet or an Airbus plane?
No, they're going to subsidize Comac, so Comac can become the Vietnamese airline of choice carrier.

Maybe not Japan, because the United States would muscle in there, I'm sure.
Maybe even France would, too.

Maybe even Vietnam in the case of France and Vietnam.

No.

But other areas like Kazakhstan, Russia, for example, Aeroflot would probably be alright.

I don't even I don't even envision a future of Aeroflot in Russia using Airbus and Boeing.

I don't. I don't even see why they would want to if that Comac jet is safe.

Well, you know, Boeing planes, their doors fall off in mid-flight lately.

So, if the Comac is safe, why would Russia want to buy an American or a French plane?

The Americans and the French hate him.

I agree. I'm a plane buff, and I think I would rather fly on a Chinese aircraft than a Boeing at the moment.

The aircraft could be better.

I just want to finish on another issue.

I think one of your tweets was that the established powers of the West love the CCP model of social control and governance.

And you made the wrap it up in this diversity.

But this whole thing on the control that China have on their citizens, and obviously during COVID, the West suddenly thought, oh, we can now use this to actually control our citizens.

And then in the UK, you realize that a lot of our CCTV systems on the streets; and a lot of the CCTV systems used in shops are actually Chinese systems.

So, who knows where the data goes?

But it's interesting how the West looking at China, once again, it's China that will provide the infrastructure and the setup for the West.

The West kind of look at that.

They would like some of that control.

And China, again, are the world leaders. And once again, they provide what the West wants to control the citizens.

Yeah, they're sort of like a petri dish in a way, right?

The Chinese people of what the West would like.

Now, the Western world, because you live in democracies where people still have a say, people still have a say.

But that's changing.

Yeah, because they can vilify in the West and use the media and say that people like Peter who think that this way, they're conspiracy theorists, they're right wingers, they're fascists, whatever it is, they're transphobic, they don't believe in science.

The whole nine yards, the usual things, right? Right.

That's how they get the other half of society to sort of bludgeon you.

They shut. So the government doesn't have to do anything. Right.

The other half, the other half of polite society could say, oh, that Peter guy has a weird views of things.

What's wrong with surveillance?

He's not we're not doing anything bad.

So what?

Look, I'm of the mind that in the West, because we are a democracy and people still have a say, they have to divide the people in a way that when you are opposed to the regime, when you're opposed to the government, you're going to be a person who's spreading misinformation.

You're going to be someone who needs to be censored.

You're going to be someone who needs to be punished.

That is the way that they're able to corral people who don't want to be punished, don't want to be censored, don't want to be vilified.

And they can be on this team regime.

They can be on the side of the power.

So if you were looking at China, you'd be on the side of the CCP.

Why would China, why would an average Chinese person want to go against the CCP?

You see what happens.

So, in the US and in Europe, you're doing that with different laws, like misinformation, you're trying to shut down that debate, trying to shut down people, allowing people to talk about certain things.

So, you can vilify them or you can just end it at all.

But at least, at the very least, vilify these people so that the other half of society, whether it's a third or whether it's a half, I don't know, can say, yeah, you know, those people deserve to be punished.

Those people deserve to be ostracized from society.

[40:20] And that gives, of course, the government more control.
Because they can't control.

They can't just come out and say, we're going to do this.

We're going to give you digital currency and program what you can buy or whatever.
That's not going to happen.

That can, to some extent, happen in China.

It'd be very hard to do, do that in the West, but you know, I'm of the mind that they won't, they won't succeed at this.

I hope, I hope, I hope not.

I could, I could be wrong.

We can, we can tell what you can talk about this for hours.

You almost need a theologian to talk about some of these issues because, I think that people, because of all these alternative media people like yourself, Peter, right?

They've come out and they're, they're almost ahead.

That we're one step ahead of how the powers that be think, or at least we understand how they think.

We can analyze it and we can come out and say, this is what they could do.
Maybe we're wrong.

But if we're right, then it's almost like these guys can't do it.
You know what I mean?

Because now it's like, well, I know we said we weren't going to do it.
We did it.

But it is a good idea because.

And then when you keep having to do that, what happens?

What's happening in the West?

You delegitimize the system.

You delegitimize the institution because of that gaslighting.

Because you said you weren't going to do this.

The guys you said were spreading misinformation said you were going to do it.
You did do it.

And then you said, yeah, but it's good that we did it.

You can't keep doing that in society.

But that's the way that the West moves to a China control like model because they just can't do it.

We don't live in a dictatorship.

You can't just do it.

But that's the way that they move you in that direction.

But as long as people like yourself and others in media, and of course, you have a big star in the UK, Russell Brand, he's huge, he's big here in the United States.

As long as they're up ahead of that, then I think it becomes harder, because more people are aware, more people are curious about how the powers are trying to control things in their life.

And then it's less likely that they will succeed, you know.

It is less likely they succeed when more people are aware of what's at stake and more people are aware of what the planning is or how their thinking is.

As long as we want to be free people and don't live like the CCP runs China, then we know that the guys who perfectly fine with us living like the CCP.

We can be out ahead of them, then we can stop it, because they don't want to, they don't want to be embarrassed.

They don't want to look like fools.

In the worst case scenario, they will get more aggressive, more vicious and just keep pushing and pushing and pushing.

And I think that's, unfortunately, that's the, this, this, the place we find ourselves now in Europe, the UK, the United States and Canada.

And it's going to be very interesting to see what happens in the next few years.

It will be and we'll see how November changes things because we've little pushback in Europe so I think the U.S have a chance of some pushback in November.

You did have a big pushback with that farmer protest that was pretty serious.

I think that the farmer protest was really eye-opening for a lot of people.

I think, didn't it didn't disrupt some government in the Netherlands or Denmark?

I forget, but some somebody was overthrown or a political party that was in...

It overthrew the government of the Netherlands, in effect.

The issue is actually when you protest, you have media you highlighted, then you're looking for a political solution to come in on the back of that, and Europe haven't yet got that.

Now, the European Union elections will be interesting coming up in only months, and that could change things.

But yeah, whether the EU are able to remove themselves from China's pocket is a big question, just like it is from the state side, whether you guys can remove yourself from that and China have done well on, I guess, embedding themselves into all our institutions.

Look.

In Europe, I think the issue with the renewable energy side that they're talking about now and China really dominating that market, that might see them split a little bit with China.

So, that'll be interesting to watch to see how the Europeans, which promote climate change, want renewable, want a post-fossil fuel economy, and then go, oh, wait a minute now.

We want a post-fossil fuel economy, but we literally have nothing to make a post-fossil fuel economy.

Yeah, we have EVs, but we don't have an EV battery maker.

Yeah, we have wind, but we have no solar to speak of.

If we do, it's small little companies.

They're all dominated by the Chinese.

It's like Peter and Ken's solar manufacturing plant.

We employ a thousand people and we have a few rooftops in southern Spain have our product.

But we're not big players.

No one's afraid of us.

Maybe we're happily employing a few people and making some money until the Chinese come in and buy us out, whatever.

They don't have the infrastructure for that.

I think I'd be curious to see how Europe reacts to China within the renewable energy space.

And I see that as being where China really becomes, well, Europe really splinters off from China because they're not going to be able to compete with China in that market.

And they consider that to be, obviously, what Europe always talks about is climate change.

They consider that to be probably their most important market in the future.

Yeah, 100%. More solar panels from China will solve everything.

Yeah, the temperature will fall at least at one degree over the next 20 years

Kenneth, I really appreciate you coming on.

I've loved following your twitter and obviously your many articles on daily caller.

People can get in the description if they're watching.

If they're listening it's there as well now the podcast platform so thank you so much for joining us and giving us your thoughts on China.

Thanks for having me on Peter, appreciate it.