TPI Replay: Beijing’s Grand Strategy, With Matt Pottinger

Host James M. Lindsay sits down with senior advisor at the Marathon Initiative and chairman of the China Program at the Foundation for Defense of Democracies, Matt Pottinger, to discuss China’s ambitions and what they mean for the United States.

December 28, 2021 — 33:09 min
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Host

James M. Lindsay

Senior Vice President, Director of Studies, and Maurice R. Greenberg Chair Full Bio

Episode Guests

Matt Pottinger

Show Notes

Host James M. Lindsay sits down with senior advisor at the Marathon Initiative and chairman of the China Program at the Foundation for Defense of Democracies, Matt Pottinger, to discuss China’s ambitions and what they mean for the United States. (This is a rebroadcast.)

 

Articles Mentioned in the Podcast

 

Michael Beckley and Hal Brands, “The End of China’s Rise,” Foreign Affairs, October 1, 2021

 

Bilahari Kausikan, “In U.S.-China Standoff, Is America a Reliable Ally?,” Foreign Policy, October 18, 2021

 

Matt Pottinger, “Beijing’s American Hustle,” Foreign Affairs (September/October 2021)

 

Liza Tobin, “Xi’s Vision for Transforming Global Governance: A Strategic Challenge for Washington and Its Allies,” Texas National Security Review (November 2018)

 

Books Mentioned

 

Dan Blumenthal, The China Nightmare: The Grand Ambitions of a Decaying State, (AEI Press, 2020)

 

Rush Doshi, The Long Game: China’s Grand Strategy to Displace American Order, (Brookings Institution Press, 2021)

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Transcript

Jim Lindsay:

Hi podcast listeners. This is Jim Lindsay. The President's Inbox is taking the week off to celebrate the holidays and to give Zoe Collis a much deserved rest. In the place of having a new episode of The President's Inbox, we're airing a TPI replay. It's one of our most downloaded episodes of 2021. It's on Beijing's Grand Strategy. Last October, I sat down with Matt Pottinger, Senior Advisor at the Marathon Initiative and Chairman of the China Program at the Foundation for Defense of Democracies to assess the growing threat of China's dominance in Asia and across the globe. As 2021 comes to a close, we thought that this episode would be an especially timely one to air as a TPI replay. US-China relations are likely to be in the news in 2022. We hope you enjoy. Welcome to The President's Inbox, a CFR podcast about the foreign policy challenges facing the United States. I'm Jim Lindsay, Director of Studies at the Council on Foreign Relations. This week's topic is Beijing's Grand Strategy. With me to discuss China's ambitions and what they mean for the United States is Matt Pottinger. Matt is a Senior Advisor at the Marathon Initiative and Chairman of the China Program at the Foundation for Defense of Democracies. He is also a distinguished visiting fellow at the Hoover Institution. Matt previously served in the Trump administration for four years, first as Senior Director for Asia on the staff of the National Security Council, and then as Deputy National Security Advisor. Before joining the White House, he spent many years in China as a reporter, and then joined the US Marine Corps. In 2010-2011, Matt was the Edward R. Murrow press fellow at the Council on Foreign Relations. His article, Beijing's American Hustle, appeared in the September-October, 2021 issue of Foreign Affairs. Matt, thanks for speaking with me.

Matt Pottinger:

Jim, it's really great to see you and hear you and to have a chance to talk again.

Jim Lindsay:

It is a great pleasure to chat, Matt, and I want to talk about the argument you laid out in the pages of Foreign Affairs. I think we should just jump into it and I'm going to read to you what I take to be sort of the core argument you laid out, and that is that the West has been the victim of China's elaborate multi-decade hostile strategy. What do you mean by that?

Matt Pottinger:

So you know, it's hard to face the fact that we've been at the end of a multi-decade hostile strategy. Unfortunately, I think it's true despite our best intentions, our best hopes, particularly in the late nineties when we were working to bring China into the world trade organization, or in fact, it's, I think, December will be the 20th anniversary of China's accession into the world trade organization.

Jim Lindsay:

That will be.

Matt Pottinger:

I think we thought that China's entry would help liberalize China, or at least bring it into alignment with a more liberal set of rules. And I don't think we were under illusions about what that would mean necessarily for their politics. It's been pretty clear that the communist party has every intention of staying in power and keeping a monopoly on power. But nonetheless, we did see some very profound shifts during the Deng Xioping era and the Jiang Zemin era, the eighties and the nineties as China began to do sort of quasi privatization of property and to let people you know seek the jobs that they wanted to seek and to let the private sector grow and for the market really to be the traffic cop of the economy, not a bunch of central planners in Beijing, since that hadn't worked out very well for them in the late fifties and 1960s and seventies. But now that we are 20 years on from our great hope that we would've unleashed even greater market reforms in China and we've seen that the market reforms actually, that wasn't the starting gun for more reform. It was actually the finish line and Beijing never really did proceed with anything more than fine tuning in terms of market reforms. They really didn't deepen that reform for the 10 years that followed. And then for the 10 years we've just witnessed under the watch of Xi Jinping as the paramount leader, we've seen those reforms go into reverse. We've seen really the party reassert itself into all aspects of the Chinese economy into people's lives. Even the undoing of some of the political reforms that Deng had put into place, the more consensus-driven model that was upended. And now Xi Jinping has rewritten the constitution to allow himself to stay in, indefinitely, in power. So far from a consensus driven market economy, we're now seeing a dictatorship where the economy is increasingly being dictated by the leader at the top. The second part of it though, is that there's been a lot of interesting scholarship that's been done recently by American and other Western scholars who've looked at what China was thinking 30 years ago, when we embarked on our big grand assumption at the end of the cold war, that China would inevitably have to liberalize as well, if it wanted to prosper.

Jim Lindsay:

This is the policy of strategic engagement that if we were to interact with China, welcome it into the Western community, the global community, liberal international order, I guess you can pick whatever phrase you want, that we could make the Chinese and the Chinese would want to become the bar of Bob Zoellick's famous phrase, a responsible stakeholder.

Matt Pottinger:

Sure. I was a reporter at the time, covering those talks to bring them to WTO. I had high hopes. I was among those who thought that this was a good approach that we might be able to coax China in through strategic engagement to become, as Bob Zoellick had put it, the phrase responsible stakeholder. We now know, you know, interestingly, I don't think they ever even translated into Chinese, the phrase responsible stakeholder, the way that we intended it. They called it responsible great power. That was the literal Chinese translation. It was already clear from the start that they had something else in mind than what we were sort are putting on the table. We now know from going back in time and looking at documents that were never translated into English memoirs by Chinese leaders and ambassadors and others looking at some of the speeches that were given in the aftermath at the end of the cold war and the collapse of the Soviet Union. We now know that it really is fairly clear that China retooled its grand strategy to consider the United States as their primary external threat, but they were clever enough in their strategy to try to camouflage the fact that they viewed us as their top adversary. Remember, we were working with China to some extent, in the final closing decade or two of the cold war, working through triangulation against the Soviet Union as our common threat.

Jim Lindsay:

That was a marriage of convenience, I suppose.

Matt Pottinger:

It was a strange bedfellow. It was kind of a decade in that respect, but I think we got a little bit carried away in our triumphalism at the end of the cold war. I mean, we were triumphant. It was an incredible feat that we were able without having to risk or actually enter into a firing kinetic conflict and confrontation with the Soviet Union even though there were some close calls. We were able to bring the cold war to a soft landing and our system and our ideals prevailed and democracy flourished, and grew in the following couple of decades. Now, we've peaked and we're seeing authoritarianism reassert itself and democracies that are gradually waning around the world from what was an incredible high water mark in a decade or so following the end of the cold war. But the Chinese government decided that we would be their primary threat, ideologically, militarily, geopolitically, and therefore that they needed to hide their ambitions. But nonetheless work towards the ambition of eventually displacing the United States from the Western Pacific, from Asia, dissolving or at least badly undermining our alliances and our network of partnerships in the region, and then to contend against the United States on the global stage. That's the phase we're now in. Some would argue that Xi Jinping may have sprinted to this phase a little too early for his and the communist party's own good, because now it's a lot harder for us to kit ourselves anymore about what the game is.

Jim Lindsay:

There are two parts there. One is, what the Chinese are doing, and the second is why China's doing it now. I want to take that first question about what China is seeking. You write, Matt, that the meeting in Anchorage where Jake Sullivan and Tony Blinken sat down with their Chinese counterparts earlier this year, constituted China's move to openly declare its bid for world leadership. I have to ask you, what does world leadership mean in this context? What do you think the Chinese are trying to do specifically?

Matt Pottinger:

Well, I'd commend to you a piece by my old colleague, Liza Tobin, who, a couple of years ago, wrote a piece in the Texas National Security review about what Xi Jinping means when he talks about his vision of a community of common destiny for all mankind.

Jim Lindsay:

That's a mouthful.

Matt Pottinger:

It's a mouthful and it's the kind of thing that either causes your eyes to glaze over or causes a bit of confusion, but it's an incredibly ambitious agenda that sits behind that phrase. It is really about remaking global governance in ways that are hospitable to authoritarianism. That means taking the reigns of, or where they can, grabbing hold of the international apparatus, including through international organizations that were born in the aftermath of world war II, established the UN headquarters in New York. We had these incredible founding documents, our conventions on civil and political rights, on human rights with the idea of really building into the international system a kind of framework, a kind of software that ran on liberal values with the hope that we could avoid despotism that often leads to tragic wars around the world. What Beijing is saying is, "We're now going to assert ourselves in those institutions in ways that will remake the software to run on our system." Which is not to say that they're mandating or prescribing Leninist communist systems around the world. But what they're saying is, "We want to make sure that authoritarianism can flourish and be protected by the international institutions that we help build for exactly the opposite purpose."

Jim Lindsay:

Let me try you out on that question, Matt, because certainly a lot's been written lately talking about how Americans have turned inward. They've tired of the burdens of global leadership. You worked for president who campaigned back in 2016 on the argument that global leadership had done a great disservice to the United States. It had been a ripoff, I think it's a literal phrase he used to describe it. So from that point of view, what's the great benefit to the United States about global leadership. If it is a ripoff, why not let the Chinese get ripped off?

Matt Pottinger:

Unfortunately, if we look through history at countries that aspire to become democracies. I like to think of the case of Poland, for example, people forget, or if they ever knew at all. I didn't know until relatively recently when I was reading some history that Poland, right after our revolution, tried to repeat what we had done and to stitch together a constitutional framework that sought to limit the powers of government and really empower citizens to be the masters of their own country. And so, Tadeusz Kosciuszko, is the name of a Polish hero in our revolutionary war, that pantheon, like you visit Lafayette square across from the White House. Today, you'll see, of course, Lafayette himself and you'll also see a statue, on the Northeast corner, of Tadeusz Kosciuszko this great-

Jim Lindsay:

You know your geography.

Matt Pottinger:

But he was incredible, and he went back to Poland to try to do what we had done and what he had helped us do and what the French should've helped us do in achieving our own independence and working towards a constitutional government. But he was undermined, the whole enterprise was undermined by a condominium between nobility, Polish nobility, elites, who were happy with the old system working together with outside powers, beginning with Russia and Catherine the Great took the advantage of this basically invade Poland and to partition it. And it got carved up again a few years later.

Jim Lindsay:

This appeared from the map of Europe.

Matt Pottinger:

Exactly Exactly. And so the thing about democracies is, it's easy for foreign powers to try to interfere, and the way that democracies insulate themselves against that. One of the ways we do that is to have a very forward leaning sort of international policy, alliances, ensuring that there are costs that we're able to impose on authoritarian systems, whether they are the old monarchies of the Czars Russia period, or whether it's the new authoritarian systems under Vladimir Putin and Xi Jinping. We have to actually constantly remain vigilant against efforts to undermine sort of the network of liberal societies. Otherwise, we'll find that we're really an island off the coast of the world without the ability to exert influence or to protect ourselves from really being picked apart the way that Poland was picked apart. So, I know that we have these swings back and forth from isolationism to internationalism. President Trump's an interesting study because a lot of his rhetoric was some you could argue was isolationist. His foreign policy, interestingly, did a lot to turn around some of these negative trends in terms of particularly what China was doing at our expense. He was very tough on Russia, not in rhetoric, but in policy. He held up the gas pipeline. He imposed sanctions provided material support with lethal weapons to the Ukrainians so that they could stand up against Russian aggression. But he also understood, I think at an innate level, that stream, that vein, that's always coercing in our Republic, which is one of, "Hey, let's leave these problems to someone else to solve and hunker down, relying on our great friends, the Atlantic and the Pacific to keep us safe and insulated from the problems of the world." The problem is that in this century with cyber capabilities of our adversaries and so forth, the Atlantic and the Pacific are more like rivers rather than oceans now.

Jim Lindsay:

Let's talk about the second prong of your argument, which is the camouflage has come off. Why do you think, Matt, the camouflage has come off now? I ask, because when you think of the famous statement attributed to Deng about, abide your time and hide your brilliance. In some sense, it conveys, if you wait, the trends of history will bring things to you, so wait for them to arrive. But it seems as if over the last decade, if the Chinese leadership did believe that at one time, they no longer did, they're trying to hurry up the course of history. Why are things different now? Is it because of Xi and his personal characteristics? Or is there something more systemic that's driving the change in Chinese behavior?

Matt Pottinger:

Yeah it's a great question. You know, if I had to guess, my sense is that Xi is not departing from communist party orthodoxy, but he is accelerating the timeline. He's accelerating the strategy that really Deng Xioping laid out with respect to their geopolitical ambitions. And I would argue, and I think others would argue, I noticed an article today and I think it's in Foreign Policy by Bilahari Kausikan, the former senior-

Jim Lindsay:

Very smart guy.

Matt Pottinger:

... diplomat in Singapore, a very astute observer of what's going on in the world, but he argued in that piece and I would agree with him that it was a strategic error on the part of Xi Jinping to drop the fig leaf as it were to suspend or abandon the hide and bide aspect of Deng Xioping's strategy and to start competing openly in ways that are pretty jarring. And as to why he decided to do that, I guess certainly the 2008 financial crisis convinced many in the Chinese system that our system had stumbled. I think they underestimated the resiliency of our system. The beauty of our system is not that it's wonderfully efficient and so forth. It's that it allows us to recover from mistakes and redirect ourselves in ways that don't require revolution, which revolution is so disruptive and to course correct. But I think that they read into that, that this was the beginning of an inevitable decline in the United States. That kind of line is very much in vogue in Beijing. It's been in vogue for many years now. I think, if only they could dig up Mark Twain and have him paraphrase himself about our demise being greatly exaggerated. I think that they would be a little bit more cautious about their own sense now of triumphalism, that's a big part of it. I think that also the enormous success that China did have economically coming from an extraordinarily low base, from being the basket case of the world under Mao Zedong, with a conservative estimate I've read is that there were 35 million excess deaths in China under Mao's rule through his mismanagement of the economy, starvation.

Jim Lindsay:

Which was immense.

Matt Pottinger:

Yeah, and so I think that once Deng Xioping had the extraordinary strategy of unleashing limited market forces, the wind was really in their sails at that point because they were starting at zero. I mean, and so that wind carried them a few decades. And I think that they got a little bit carried away in terms of a sense of destiny, their own sense of manifest destiny. I think that the fact that they've become a full blown dictatorship, again, never augers well for the quality of analysis and boldness and courage of advice that people are willing to deliver to a dictator. We're seeing a lot of signs of that. That the people who are immediately around Xi Jinping, most of them, the closest advisors don't deal with foreigners. They won't even meet with foreigners, with the rare exception of sometimes meeting with the Russians, a couple of his standing committee members will meet.

Jim Lindsay:

They're in a bubble.

Matt Pottinger:

He's in a bubble. I think he's certainly in a bubble. The logic of their internal system starts to take over and feed on itself in ways that allow for grave miscalculation.

Jim Lindsay:

What do you make of the argument that's made most recently by Michael Beckley and Hal Brands that the reason we're seeing a more sort of aggressive belligerent Chinese foreign policy is because the Chinese realize that their era of rapid growth is quickly coming to an end, their internal problems are mounting. They've gotten old before they've gotten rich. They have significant energy problems, which based on the most recent numbers they're actually hitting right now, curtailing Chinese growth. And the Chinese realized that, in essence, the argument you're making that their effort to sort of surpass the United States, the camouflage has come off. Now, it's like their last moment to shoot for victory. Do you buy that argument at all?

Matt Pottinger:

I saw their piece. I thought it was very interesting piece, both Hal and Michael write really provocative and interesting stuff so I pay close attention. I think there is a good argument to be made in tune with theirs that we've seen peak China economically, but it can also be true at the same time that, my friend Dan Blumenthal at the American Enterprise Institute wrote a book about how dangerous China can be precisely because it may have already passed its expiration date in terms of its economic ascent. I think both of those things can be true at the same time, that we may have seen peak China economically, but we've not yet seen peak China, politically, and militarily. And that we've seen in history, at various points, countries that decide, "Well, if our advantages are fleeting, maybe we need to make the most of them in ways that lead to catastrophe," and we may be at such a moment-

Jim Lindsay:

In historical parallel that's invoked, and I know Hal and Mike invoked it in their article is Germany before World War I. Japan before World War II. There's historical precedent for the, now is our moment of opportunity and the doors soon going to close. Just sort of with this background, Matt, sort of looking out at things, what should the United States do about it? And I feel that you're the right person to ask because you just spent four years worrying about what the United States should do in response to China's ambitions. Now, I mean, the first part of the question is, is the Biden administration doing anything that you think is laudable and beyond that, what are the other things the United States should be doing?

Matt Pottinger:

I think the best area, so far of President Biden's foreign policy has been on China and it's been a policy of continuity, in many respects. He's not dialed back many of the significant steps that we took during the Trump administration. His US trade representative just gave a speech, showing that she's in no hurry to undo and unwind the tariffs that we put in place because those tariffs were put in place to impose costs on China for their rampant theft to the tune of hundreds of billions of dollars a year of our intellectual property. That problem remains so why would we take our foot off of some of the most-

Jim Lindsay:

I can already, Matt, hear my economist friend saying, "The reason you take your foot off the gas on that one is because it doesn't really penalized the Chinese." It hurts us here at home, but we don't need to have an argument or discussion about trade policy.

Matt Pottinger:

I'd be glad to have it at any point.

Jim Lindsay:

I take your point.

Matt Pottinger:

But President Biden also laud his recognition of the fact that we are in a struggle of systems when he speaks both extemporaneous speech when he's talking to reporters, but also in his prepared remarks, like the speech that he gave to a joint session of Congress earlier this year. He really framed this competition with China as one between democracy and authoritarianism and we have to be clear-eyed about that. Ideology still matters. We wish that it wasn't such a big deal at the opening decades of this century.

Jim Lindsay:

Let me ask you about that, Matt, because I have talked to a lot of people in our field who would describe themselves as realists and they actually criticized Biden on this point, trying to turn it into an ideological contest. Why are they wrong?

Matt Pottinger:

Well, if you look at the fact that what we're trying to defend our way of life, our liberal form of representative democracy and all of the rights in our Bill of Rights, you know, our faith, our commitment to human dignity and a rule of law, that these are not only the things that we're defending against a system that is actually quite hostile to all of those things, quite deliberately and explicitly hostile to all of those core values in our Bill of Rights. We have to also recognize not only that those are the things that we're trying to defend, but that they are also potent instruments in our toolkit because they have enormous widespread appeal, including in China itself among Chinese people. I mean, I've got a lot of Chinese friends, very few of them are terribly enamored of what the Chinese communist party today stands for because it basically stands for its own power. And increasingly, on the global stage, it stands for, you know, Chinese domination or at least heavy influence over the rest of the world, often at the expense of nation's sovereignty. So, given that this is about values, why would we want to sweep that under the rug when it's really what we're trying to defend, it's our objective to defend those values. But also those are very potent useful things for us to keep on the table and to be reminding ourselves and our adversaries and all of our partners and people in between of what it is that we're up against. It's not just a question of who can pour more money into foreign capitals in Africa faster to try to buy corrupt complicity with a strategy. That's not the way that we want the world to play out. We've already seen colonialism. We've graduated from that. We don't want to go back to some version of a kind of imperialism. And so for us to sort of leave under the table, leave locked in the toolkit, the nature of the competition only works to our disadvantage and it works to Beijing's advantage. That's why I think it's really important to still view this in ideological terms.

Jim Lindsay:

Well, I'll note on that point that the Chinese really don't like it when the United States talks about it in human rights, in democracy terms. I assume that's because it uses a technical term, cinches their shorts. But I want to get beyond sort of where you think Biden's gotten it right. What would you like to see President Biden, the Biden administration or the administration and Congress working together do specifically? What are the sort of the undone things on your to-do list?

Matt Pottinger:

We're now 10 months into this administration. I'm pleased that President Biden has framed the competition as he has. I'm pleased that they haven't rolled back the steps we've taken, but now it's time to show that this administration is willing to impose costs and to accept costs in order to ensure that we prevail in this competition. And, I haven't seen that yet. I'm hopeful that that's the direction that they're heading. But if I had to look at three areas that are really crying out for intervention by the administration in concert with Democrats and Republicans on Capitol Hill, and this is an interesting moment because you actually do have a decent semblance of a consensus right now on Capitol Hill, that this is a major problem for us, that we've got to tackle it. There's good will on this issue at a time when there's not a great deal of good will on Capitol Hill. I would like to see them tackle three flows, I would call them. The flow of US Capitol into China and specifically into its military and civil fusion enterprise, basically their military industrial complex and their domestic surveillance complex. I'd like to see a step on that hose and cut off the flow of money that continues to flow almost unabated to parts of China's apparatus that mean us serious harm and are the means to do us harm. The second area is in technology flows, it's related to the Capitol, but it's also a question of recognizing what Xi Jinping's strategy is. It is to monopolize all of the key technologies of the 21st century to make the outside world, including us, increasingly dependent on China, even as China selectively decouples on its terms so that it won't have to rely on us for its imports of high technology goods. And the first area where I would start would be to cut off the flow of equipment used to make semiconductor fabs. China's trying to build dozens of fabs so that it can achieve what he hopes would be independence in semiconductors and semiconductors may seem like a 20th century thing, they are, but they're also the building blocks for all of the 21st century technologies that we're talking about now. 5G and 6G telecommunications, synthetic biology, machine learning, synthetic materials, all of this is built on computing power, and we should not give China the means to independently produce all of that and much less to monopolize it so that we would become dependent on them for semiconductors. About a third of our economy touches semiconductors. We would not be in a good position if we allow them to reach that aspect.

Jim Lindsay:

Well, on that point, the realistic challenge for the United States is a lot of semiconductor production is based in Taiwan, which has been under increasingly intensified coercion from the mainland. And it seems to me, there's a big challenge there. How do you encourage semiconductor production elsewhere without sending a signal that perhaps your commitment or interest in Taiwan is weakening?

Matt Pottinger:

Well, for one thing, I think that if we were to, and I'm a free markets kind of guy. I just think that China has distorted the free market so dramatically.

Jim Lindsay:

Well, because it doesn't have a free market.

Matt Pottinger:

Right. And yet we're integrated in our supply chains in ways that, over the long term, are going to really hurt us. We learned that the hard way during COVID, when we were unable to get basic medicine and syringes and masks and PPE to protect ourselves because all that stuff was being made in China. So what we need to do is actually pass this CHIPS Act, the authorization, the actual appropriation piece of the CHIPS Act, to get some money flowing in ways that would allow cutting edge semiconductor makers to come make chips in the United States. I don't care if this is a Taiwanese company. If it's Taiwan semiconductor, I don't care if it's Samsung and I don't care if it's Intel, a homegrown company. We should allow them to compete for that money to start building fabs here. The second part of that is that we need to coordinate with our friends around the world so that as they, Europe and Japan are both inclined to provide subsidies to chip manufacturing in their countries. Let's make sure that we coordinate that so that we're not canceling out the support that we're providing through a taxpayer expense. Japan could do some logic chips, but could also do memory very well. They've got a lot of experience with that. Analog chips that remain incredibly important could be done in Germany or other parts of Europe while we work on things closer to the cutting edge of the logic.

Jim Lindsay:

This sounds a lot like industrial policy, Matt. It was, for many years, an absolute no-no in the American political conversation.

Matt Pottinger:

It's a no-no until we look at the exceptions that prove the rule that it's a no-no. The default is that it should be a no-no because governments aren't great at picking winners and losers. But when you're looking at a part of our economy that's so fundamental to our economic prosperity and security, even Ronald Reagan put his finger on the scale. In fact, in the same area, with the coordinating coalition, the coordinating committee for semiconductors and for semitech and other things that if we're really honest with ourselves, looked like a little bit of industrial policy was going on there. Even Ronald Reagan was willing to do it when the stakes were as high as they were then. And it worked to our advantage. It worked to our advantage because it was a critical industry that every other industry rests upon. And we couldn't afford to allow...

Jim Lindsay:

Just look at the automobile industry today, being curved.

Matt Pottinger:

And that's not even related to, I mean, that's related to other factors, but that's just a tiny little taste of the bad medicine and bitterness that we would be feeling if our semiconductor manufacturing remain wholly concentrated on the East Coast of China. And of course, if China's going to threaten Taiwan as it is, it could put the whole world into an almost septic shock if Taiwan were to be attacked and its semiconductor manufacturing capability compromised.

Jim Lindsay:

Let me ask you one closing question, Matt, and that is, where's all of this headed? I mean, where's the off ramp? I take the argument for why the United States needs to put more pressure on China to make it pay a price for some of the things it has done. But I also know from reading of history that if great powers don't give off ramps to rising powers, you significantly increase the prospects for conflict. I mean, are there areas where the United States can accommodate China's ambitions or is this simply going to be a, we can't accommodate China in any score unless it adopts the policies we favor?

Matt Pottinger:

Well you know, if you read, for example, the white house document that came out, I think it was in the spring, or maybe it was March or May of 2020. And it basically, it was a white house document said, this is what our approach to the people's Republic of China. Our in-state ambitions were actually quite modest. They were humble. What they said was we're not trying to shape China in our image anymore. We're not trying to do regime change. It's not about China. Let China worry about its own system and how that's going to evolve. That's not what we're trying to do anymore. We tried to leave the rather frankly, arrogant policy of two or three decades that said, "We're going to make you be more like us." We're going to shape you. This verb shape is I think, a rather patronizing verb to use in state to state relations, especially against a country as big as China. What we were saying is, we're not going to protect our interests and the interests of our allies. And that means that when you are harming our interests, dear Chinese communist party, we are going to impose costs. And it's going to be in the form of what we call reciprocity. It's a very simple, universal idea that people can get their minds around, that there's going to be reciprocal cost. Even if we apply the costs differently, there can be asymmetry there. We're not going to take hostages the way that China takes hostages, for example. But when China does things against our interest, we're going to impose costs. And we're going to try to coordinate those costs with other friends and partners and allies around the world. And in doing that, we set some boundaries. We're not trying to shape China's internal system. What we're trying to do is say, "It's going to hurt you if you're hurting us and we're not going to give you the benefit of the doubt anymore. We're not going to give you a down payment. We're not going to say we believe that you're eventually going to be good. So we'll just wink an eye at the bad stuff you're doing at us now." That was our policy for 20 years, 25 years. And so we are going to impose costs reciprocally and not apologize for it. I think that that is a recipe for a modus vivendi over time. I don't think we're overreaching in doing that. I'd like to quote the Chinese premier, back in the late nineties who brought China in the WTO, Zhu Rongji, who famously once said, he said, "US-China relations are never going to be very great, but they also don't have to be terrible." I think that, that's a modest, humble, realistic goal to aim for. We muddle through, we recognize that China is a reality, but we must be very quick to impose costs, but also to work with our allies to building resiliency into our economic systems that requires us to decouple, to some extent, just like China's already decided that it wants to decouple from us on its terms. We should be doing it on ours.

Jim Lindsay:

On that note, I'll close up The President's Inbox for this week. My guest has been Matt Pottinger, Senior Advisor at the Marathon Initiative and Chairman of the China Program at the Foundation for Defense of Democracies. You can read Matt's article, Beijing's American Hustle in the September-October, 2021 issue you of Foreign Affairs. Matt, great conversation, a lot more we could have discussed, but again, thank you very much for joining me.

Matt Pottinger:

Thanks, Jim. It's been a real pleasure to be with you.

Jim Lindsay:

Please subscribe to The President's Inbox in apple podcast, Spotify, wherever you listen, leave us your review. They help us get noticed and improve the show. As always, opinions expressed in The President's Inbox is solely those of the host or our guests, none of CFR, which takes no institutional positions on matters of policy. Today's episode was produced by Zoe Collis with senior producer, Jeremy Shirley. Zoe also did double duty as a recording engineer. Great work, Zoe. Special thanks to Margaret Gach for her assistance. This is Jim Lindsay. Thanks for listening.

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