Episode 54- China Policy with Robert Greenfield and Aaron Boesky

Brian Kruger:

Welcome to the podcast The Common Bridge with Richard Helppie. Rich is a successful entrepreneur in the technology, health and finance space. He and his wife Leslie are also philanthropists with interest in civic and artistic endeavors, but with a primary focus on medically and educationally under-served children. My name is Brian Kruger, and from time to time I’ll be the moderator and host of this podcast.

And welcome to the Common Bridge. I’m going to turn this right over to Rich, but before I do, I just want to let you know that technology is crazy today here at the Common Bridge, our guests are coming from Hong Kong, China and Perth, Australia. And of course, Rich is here in the United States in Michigan. So anyway, without any further ado, here’s Richard Helppie.

Rich Helppie:

Well, welcome to the Common Bridge. I am extremely excited today because we have not one guest, but two, we invite back to the Common Bridge, both Robert Greenfield and Aaron Boesky. These gentlemen are both experts on China. You’ll hear a little bit more about their backgrounds and their full bio is on the website, RichardHelppie.com. Both are broad thinkers, both have very substantial firsthand experience living, working, doing business, understanding the politics, the culture of the East, and particularly China-so that strategic look and firsthand knowledge. Robert and Aaron have never met, and they have not had a conversation before today.

So gentlemen, welcome to the Common Bridge. And Robert, do you mind giving a short intro, perhaps a little bit of your background, and then Aaron, invite you to do the same and you guys can greet each other in whichever language you choose. And please.

Robert Greenfield:

That was very clever, Rich. Hi, this is Robert Greenfield. Thank you for letting me go first. I’m the senior guy here. I’m the oldest-age before beauty for you guys. I’ve been in the Asia Pacific for over 40 years, 47 years. Most recently I moved back from China from Shenzhen. I’ve lived in Beijing/Shenzen like Aaron who’s about to speak. I lived in Hong Kong for many years, as well as many years in Singapore. I speak Mandarin. My first time I was in China was in 1982. My approach to this, and my background is one about policy and where the United States should go with it’s allies in the future.

Rich Helppie:

Great. Welcome back to the Common Bridge, Robert. Aaron, do you mind a quick thumbnail of your experience and your background?

Erin Boesky:

Sure. My name is Erin Boesky. I came to Asia about 20 years ago with a specialty focus on China. I launched a Shanghai stock market hedge fund 17 years ago. I also am fluent Mandarin. I’m also a China specialist in many of the same ways as Robert, but not with the same tenure. And that sort of speaks for itself. I’ve lived in Shanghai, Beijing, mostly in Hong Kong though, where we run our fund. And my interests are Chinese politics, economics, and general East meets West concepts.

Rich Helppie:

Well, Aaron, welcome back to the Common Bridge. Secretary of State, Mike Pompeo gave a very pivotal speech last week at Yorba Linda, California. It’s on the 50th anniversary of the trips of Henry Kissinger, one of his many predecessors to China during the Nixon administration. Nixon administration of course had a goal to induce change within China, by engaging China and making them part of the family of nations. The secretary covered the Chinese Communist Party’s aims for hegemony, that he cited some threats to the world economy, threats to our liberty, threats to free democracies around the world, a number of threats to our security. He spoke about the repression in Hong Kong, which is where Aaron is today. He talked a little bit around COVID-19 and we’ll talk about that. And he did make mention to the physicians in Wuhan that were killed or missing, the military that’s growing. And he said blind engagement with China won’t get it done. He was critical of the United States self-censoring by taking Taiwan off corporate websites, that our entertainment industry avoiding anything that might be critical of China. And he made mention that we have a NATO country who won’t stand up to China. And he says it’s affecting us every place-in markets and supply chains, universities. We’ve talked about the theft of intellectual property. I know some of that’s very close to Aaron’s heart. State sponsored entities, such as Huawei. And then other matters that I know will we want to talk about the secretary specifically didn’t mention, but Hong Kong and the immigration going to the UK now, kind of similar to people fleeing East Berlin. And one of the things that he made distinction about is that the Chinese Communist Party is different than Soviet Russia because Soviet Russia was there, but the Chinese Communist party is actually within our borders and we have a lot of overlap.

He was very complimentary of the Chinese people. He said they have talent, they have energy. Do they want freedom? He talked about the Uyghurs and Tibet, and his conclusion, to sum it up, says watch what the Chinese Communist Party does, not what they say. He said that the policy needs to be to distrust and verify. And he also said that the free world is still winning, he said, we just don’t know it yet. And that what we need to think about is policies around transparency and reciprocity.

So with these two gentlemen that are on with us today, I do anticipate some education and perhaps some policy ideas. I know I expect to learn a lot. Robert, if I might start with you, just how important is China today and of all those many matters that the secretary covered what ought to be the ones we need to focus on or are they all intertwined?

Robert Greenfield:

First of all, Rich, again, thank you for inviting both of us on here today. I think that your introduction was a really quite broad and inclusive and stated the position of Secretary of State Pompeo very well. I would like to start from the outset by saying Secretary of State Pompeo, I’m just going to call him Mike for the moment as we move through this, just to keep it short. But Mike is really quite different from all of the previous diplomats who have stepped into his position. There’s been a lot of criticism. Of course, there’s the usual suspects from the left hand side. Brookings Institution yesterday called it delusional. There was of course the Chinese side. I’m sure Aaron knows, probably may know this gentleman, Professor John Quayway, who was very critical of Pompeo. My view is this, that Pompeo is the first guy in a long time, maybe ever, that’s finally said enough is enough. And I think we’re going to have broad agreement on that. Today I think the question that’s going to come up here as we move forward is what are the next steps. But just to open it up by saying it this way, Rich, I think that Secretary of State Pompeo is somebody who has made a decision. I think he made that decision on behalf of, not the Trump administration, but on behalf of his own…what he feels his patriotic duty. And he definitely drew a line in the sand now. He’s been talking about it for some time. But I think what I like about Pompeo is that Pompeo is a guy who really focuses, as he said on actions, which you highlighted in your speech. So in the 47 years in Asia and the 38 years for me in and out of China, I have never seen a moment like this, and I don’t think it’s too late.

Rich Helppie:

Great. Aaron your perspective, sitting today in Hong Kong, how important is China and what are some of the chief issues that we need to address?

Aaron Boesky:

First off I do feel very similar to Robert in the sense that there is a genuine, authentic patriotic aspect to Pompeo, that his intentions are true, so to speak, they’re not aligned for votes or necessarily along party lines of any kind. It does appear that he is very focused on what he believes is best for America. And I respect that a lot because, as Robert had mentioned, it’s been a while since we’ve seen someone in this role being this forthcoming and decisive. I do think that it’s been well known that from the moment he stepped into the position, that he didn’t have a lot of background on China, that he was relying on information from a panel of specialists that he put together to educate him. And when I look at the policies and approach that he’s laid out, I just feel that there’s a lot of rookie mistakes in there in terms of different aspects of his approach. And just things that you can’t get, unless you’ve been like Robert or myself and lived in China and know the region for a few decades. So a couple of things stick out, the attitude and approach towards Hong Kong in particular, I lived in Hong Kong, I’m here now, I’ve lived here for 17 years. I think that there should be more of awareness publicly by Pompeo and others that Hong Kong belongs to China. They leased it to the British that lease expired in ‘97. And then they turned around and gave the local Cantonese population here in Hong Kong, a 50 year autonomous lease, but still maintained ownership of Hong Kong. So you can think of it as the local Cantonese government and people here are tenants renting, effectively, from China for a 50 year lease. And I felt that, we’re halfway through that now, so there’s a building anxiety about 2047 when Hong Kong’s lease runs up and it reverts back to China because what we’ve seen here in Hong Kong over the past five years is a massive amount of infrastructure being built: trains, tunnels, bridges, to connect Hong Kong to Shenzhen and Macao. And there’s a plan to make it all into one super city.

Rich Helppie:

So that integration of bringing Hong Kong back to China after what will be 150 years that you’re living that history. And Aaron, if you think about the Chinese Communist Party and the Chinese government, and as it relates to the United States, Secretary Pompeo talked about threats to the economy, threats to liberty. Is it a straight up fair competition, or what do you think he means by threat to the economy and threat to liberty? And do you concur?

Aaron Boesky:

Okay. There’s a lot of things I concur with that statement. If you fast forward to an end game, so to speak, what would the world look like if China had its way? And what would the world look like if we had our way? And those two paradigms are different. It’s not a matter of necessarily, which one’s better or worse, but it is conflicting. There’s no question about that. What laws China would enact if they ruled everybody in the world would be quite different than what we would. So there are significant conflicts. The Chinese as a people-and historically it’s always been very similar to what it is today-a one party rule. That’s what all the dynasties were structured, very similar. There’s really nothing different about China today than it ever was. And this is the structure they’re comfortable with, and they are totally comfortable with giving up freedoms in exchange for structure, for security and all sorts of benefits that come with giving up your freedoms to the state. And they believe in that system.

Rich Helppie:

And I would venture that the roots of the United States of America is, we threw off a monarchy, we threw off a king and we said, we’re going to deal with self governance. So Robert ,as you think about some of the things that Mike laid out, and I’ll use your nomenclature, the threats to the economy, threats to liberty. And I know you’ve got a great view around supply chain and a long history of doing business in China. What things as an American concern you, or what things do you think perhaps shouldn’t be that concerning?

Robert Greenfield:

Okay. Well, first of all, I want to agree with Aaron on-I wouldn’t call Mike rookie mistakes-but yes, you’re absolutely right Aaron, he made grand assumptions about what the Chinese people are like. I have written extensively on this, and I agree totally with Aaron that China does not have a history of democracy. And to imply that a little bit of freedom, that they would want to change that is a stretch, to say the least. I think that we all should note that the Chinese people, at least in my view, having lived there quite a bit like Aaron, they really are very patriotic and they have been fed, and I’ve written about this to you Rich too, for the last 30 years since Tiananmen Square, they have been fed consistently that there is an inevitability of their becoming the global leader across a wide variety of technologies. Xi Jinping is basically is just voicing that and he’s voicing it loudly and he’s very clear about it. So in my view is that by Xi Jinping coming out and saying, what are you just said, which is, we want to be number one at this, this and this. We want our Belt and Road Initiative, which is essentially leading out from China to Asia and Europe primarily, as well as the middle East. What he’s done is he’s basically laid out what he sees the future to be. And including in that, is the takeover of the South China Sea.

So I think from America’s point of view, when we talk about supply chain, things like that, because now to switch back to what you asked, the question, Rich, which is this, there’s a lot of discussion about on-shoring as well as decoupling from China. That’s a very complex subject and not easy to do. There are books now being written on it. My personal experience has been in China, on outsourcing manufacturing in China for a long time. I grew up in Detroit as Rich did. We know what supply chain is all about. And once you disrupt that supply chain, it’s very hard to get that back. So I don’t think that what we’re going to see here is a traditional return to traditional industries manufacturing, definitely not in the low cost area. I think what you’re going to see is is that investment-and Aaron, being in a fund, you might want to speak to this-I think you’re going to start seeing investments in the rest of Asia could even be investments that someone like Aaron, maybe participated in that has Chinese companies that are moving outside of China and putting in factories and locations such as Vietnam, Bangladesh, et cetera. So there’s going to be the low cost stuff that’s all moving out of China. I think the interesting part here Rich, is the heart of the matter is the high cost stuff, is the intellectual property. So I’d like to leave it there for a moment, open it back up to Aaron, because I know that this is his area, which is IP. Of course we could talk about what China has done. I’ve personally been forced by the Chinese to give up IP. I’ve worked for Autodesk, which has 2,500 employees in Shanghai, developers. And they’ve got a major problem now because their development global hub is in Shanghai. So there’s a lot of issues surrounding IP that are not simple issues, but I’ll leave it at that. And I’d like to hear what Aaron has to say.

Rich Helppie:

Great, look, there are, let me also make sure that when we talk about intellectual property, which I know you have a very deep history in and we talked, when you were on the Common Bridge earlier, about how the Chinese companies are audited. And at the same time we hear secretary Pompeo say that, Huawei as an example, is not just a company looking to find customers and serve customers. And we’ve heard TikTok saying that they’re collecting personal information. From your view, how does the markets and the competition and the on-shoring and off-shoring work, given those perhaps conflicting missions inside some of those very companies?

Aaron Boesky:

These are great, great points from both of you there. First of all, I want to be clear about a couple of things on intellectual property, which is the US’s main competitive advantage globally. It’s our recipe to success. It’s what is putting food on our plates, generally speaking, and keeping our wealth and our nation strong. And we shouldn’t always prioritize our competitive advantage when we speak economics. And the reason we have an innovation competitive advantage is we were the first nation to protect ideas with patents and the entire idea of protecting businesses and individuals and rights. That’s all American innovation right there. And that is the background recipe that has created the greatest century in all of human history, as far as innovation from America. No nation compares, not even close. So with that in mind over the past 30 years, the stance of the US with China regarding our technologies and innovations was that we were trading our innovations and essentially allowing them to copy them in exchange for them becoming more free market, Americanized, leaning to us rather than leaning towards a future of a communist, Russia aligned China. And so the trade was we’ll kind of let you-we’ll turn our cheek while you copy our tech, as long as you basically ally with America instead of Russia. And that was reasonable. Every everyone was on board with that left, right, center. And that was good for quite a long time. But as Robert mentioned in recent years, it’s gotten to a point with China where they’ve gotten enough, we’ve given enough. And it’s almost to the point where it feels like they wanted too much. That the demands for the technologies started to get more and more brazen. And in return, they were snubbing all of our efforts to do business in China to sell the Chinese things. So it really started to become unfair, as far as we’re concerned. And I do think, as I think any China watcher, or anyone like Robert and myself knows, there needed to be a complete restructuring of the relationship.

Rich Helppie:

Aaron, that is very interesting. And you talked before about the intellectual property, that China knows they’ve been stealing it. And that…

Aaron Boesky:

Let’s say copying, because honestly we were allowing it to occur, truthfully. So I wouldn’t quite call it stealing.

Rich Helppie:

Alright. Well, they were, so copying it, for free. And now it’s a question of price and we’re going to get to 5G, and I’m going to turn to Robert because one of the arcs that is really fascinating to me is the arc from raw materials, particularly minerals that are in short supply, and what the Chinese are doing in that very basic end of the economy all the way through where we’re going with 5G. And time permitting we’ll talk a little bit about how that ties in militarily. And just to narrow the question a little bit, Robert, we’ve kind of got China up and running and now we’re turning to them and saying, you’re now grown up enough, you’ve got to play by the rules. Are they capable of playing by the rules, given the vast differences in culture and expectation?

Robert Greenfield:

I want to add one point if I could, Rich. First, on Aaron’s comment. I like what Aaron said, it is about copying, it’s not about stealing. It is copying, mostly. There is stealing, there’s definitely-that’s hacking, there’s a whole kind of Chinese hacker government wing. But in general, from a company point of view, and I’ll be very specific-we all know the famous product AutoCAD, made by Autodesk, and Autodesk has pursued what’s been called a harvest strategy. As I mentioned the last time, in China for the last 30 years, basically everybody makes their number by gradually moving down the food chain in China. First, they got the international companies to legalize. Then they got the large Chinese state-owned, then the large architectural firms. And we’re talking 5,000-10,000 licenses at a time. So what’s happened-and Aaron’s absolutely right-Autodesk allowed that to happen. They, along with others, they allowed to be copied and they’d been just harvesting and collecting money for the last 30 years. There’s also a sign, and I don’t want to pass it by, which is what I mentioned with Autodesk and other companies. And I think it’s important for all of us to remember, the outsourcing strategy by the United States is not just about making toys and cars or anything like that, or TVs. It’s also outsourcing development of IP. And there are two choices for that generally in the world, it’s India and China. Some people chose India, some people chose China. And those companies now have a huge problem because that development has been done there. And it’s not easy to say, I’m going to switch 2,500 or 5,000 developers from Shanghai over to Bangalore. So it’s a very specific thing.

When you start getting into the weeds Rich, it becomes quite complex. To answer your question about the resources. Resources, as you know, I live in Australia, I live in Western Australia, Perth. We are the home of resources, and there are the minerals that you’re talking about, rare earth minerals, other things as you and I mentioned last time. In general, the Chinese strategy, and I think it’s something I would like to hear Aaron’s position on also, I think China, at this point is a multi-pronged strategy. It’s not just the control of AI and Huawei and 5G, which I think regardless of whether people say Pompeo has proof or not, I think there’s enough there to block Huawei absolutely. And Pompeo has done a brilliant job of going to places like Australia, UK, et cetera, and essentially saying what you also spoke about Rich, which is speaking to the national interest of Australia, speaking to the national interests of the UK. Do you want to take the chance that a Huawei is going to take your data and control your 5G network? So that’s one part. The other part, for China, is their rapacious quest for resources. And I think that’s what’s taking and driving them around the world. Sure there’s a lot of construction going on, and useless high speed rail in Kenya and other places, but really the real driver for China, in my view, and the reason why they continue to play ball with Australia is they want those resources. And that is something that they must have because China is resource poor. So I don’t know, what do you think about that, Aaron?

Aaron Boesky:

Well, I think that that’s a really good topic. And that points to the first most obvious point of contention. That it’s obvious that China is going to be hungry for every sort of resource from water to gold, to oil, to iron ore, anything anyone has, they’re going to need it. They’re the biggest market on earth for everything and the biggest population. It’s insane the amount of resources that are needed. But when you start looking at, how does that end up being a problem for anybody? Well, the first thing that’s come up, which many people have probably heard about, is the South China Sea, which beneath the South China Sea, there’s apparently a couple of major oil reserves that can be drilled. And the South China Sea is very close to the coast of China. It’s not far away. Yes, it’s also closer perhaps in parts to Vietnam or Taiwan. It really depends what location. But there’s been tremendous military contention between the US, Vietnam, Philippines, Taiwan, Japan, and China over this stretch of water and the oil that’s beneath it. And frankly I’m squarely in China’s camp on this particular conflict. I mean, it would be like China coming over to the US and saying, why are we drilling so close to Mexico in the Gulf? It’s really silly to think that China’s not going to drill the South China Sea. I mean, the Filipinos and the Vietnamese are so far from having ocean rig technology or the capital to finance that drilling. There’s no reason the oil should just sit there under the ocean while the Chinese are in dire need for it. It’s much worse if we force them as buyers into the middle East market and drive up our costs and our inflation. I don’t understand why we’re fighting them drilling a part of the ocean that no one’s currently drilling. I mean, what’s the point? Why not just let them suck the oil out? I don’t quite understand what everyone’s so up in arms about China grabbing the oil there.

Rich Helppie:

I’d love to hear Robert, whether you’ve got a countervailing view or some enhancements to that. And again, we’ve talked about the area and the amount of aircraft carriers that China wants to build. I don’t know if that ties in or not, but Robert, what do you think about Aaron’s view?

Robert Greenfield:

I think you know that I have enough of a different point of view. I’m going to take it from the Pompeo doctrine. The Pompeo doctrine is as follows, which is each country should have its own national interest. In the United States a role in that is to support them militarily where they cannot do it themselves. However, each country should make their own choice. I would note Lee Hsien Loong, who is the prime minister of Singapore, recently said that they need the United States in the South China Sea. They need the United States to support ASEAN, that he and the rest of the ASEAN members, who by the way together probably are 500 million people.

Rich Helppie:

Can you define that term for us please, the ASEAN members.

Robert Greenfield:

Okay. ASEAN is the Association of Southeast Asian Nations. It’s a group that is an economic organization, primarily, it’s not military. It includes Singapore. It does not include Taiwan, because obviously Taiwan is a bit outside the loop on a lot of these things, but it includes Singapore, Indonesia with 260 million Muslims, by the way, the largest Muslim nation now in the world, surpassing India. It includes Malaysia, 30 million plus people. It includes Thailand, 70 million people. It includes Vietnam, Philippines-117 million, Myanmar, another 60 million, little Brunei is also thrown in there. So this grouping of nations has created a very positive economic area, which by the way, under the Obama administration, helped put together a deal called the TPP, the Transpacific Partnership. That association did not include China. And it was very much supported by US business interests. It was a nonpartisan thing. Unfortunately Trump pulled away from that. So there has been, in the last 30 years, a way of cooperation led by the United States. Of course, military is the first and foremost, but to keep this organization, and to keep the South China Sea an open area, I personally don’t have any problem with-and I don’t think anybody in their right mind-with China drilling in the South China Sea. However, I do have a big problem with China basically saying they own the South China Sea, and that’s what they say. They’re not just drilling, they’ve got military bases, they have the artificial islands off the coast of the Philippines. They’ve sunken some of the boats, and they’re, of course, very good at buying off local politicians, such as in Indonesia, where they’re putting in a road, a new rail up to Bandung, which is pretty useless type of thing, but some people are going to make money on it.

So I think the challenge here for the United States is exactly as Pompeo has outlined, which is this, that there are organizations out there like ASEAN, and our role, until there is either a change of administration or a change of heart by Trump, which is kind of an isolationist approach outside the military support, our rule is to make sure that China does not bully people. And I believe that China is by far, the world’s worst bully. And if you look at the difference between the United States and China, I think it’s essentially this and people ask this question all the time. I view the United States as being a benign presence that has, as Aaron has pointed out and you also have, Rich, the greatest century that the world has ever seen. That doesn’t happen if you are a bully. That doesn’t happen if you are being forced to buy stuff from the United States. I mean, let’s be honest-the US has long since lost it’s refrigerator, TV markets to Japan, then Korea, then to Singapore. So it doesn’t matter that a lot of that stuff has gone too. That has meant that other people and other countries have gone from being abject poor to very well off. Singapore has a higher per capita income than the United States. I know it’s small, but other places in the region have also done quite well. So my view is this, the United States needs to maintain itself in the lead role and not allow China to control the South China Sea.

Rich Helppie:

This is fantastic gentlemen. This interconnected global economy is really the thing that we’re tussling over at this point. Those of us that grew up in the baby boom era, the Post World War II economy, enjoyed an American dominance and a rising middle class because of the economy and the rising manufacturing that we’re doing. Robert, I think you made a great point about that fundamental manufacturing going to other countries, and they’re having their turn for a rising middle class. And I know there are segments of the US population that sees that as a loss versus a view of where we go in the future. So we’ve talked a little bit about some of the basic building blocks of the economy: minerals, particularly oil, we talked about where we’re manufacturing and supplying consumer goods from toys to refrigerators. I think everybody believes that the future is going to be around technology. It’s going to be around 5G. And at that point it seems like we’re on a collision course. Aaron, I know you spend a great deal of time looking at where chips are manufactured. And I’d take note that in recent days, the United Kingdom has said, they’re going to be banning Huawei technology from its 5G network. And that they’ve set a deadline that they’re going to take it out at a cost of some 2 billion pounds by 2027. They’re pressuring British Telecom and Vodafone to do the same thing. But also some of the members of parliament are saying that they don’t want to wait to 2027. They want to see Huawei technology removed from 5G plans by 2023. So three years away. Aaron, if we’re talking about that competition in that next economy, how do things line up today with the US and Western presence versus Chinese and their interests?

Aaron Boesky:

Alright, well, look, when it comes to the telecom industry, I don’t think that any nation should allow another nation to build or manage or control components of that critical of a piece of infrastructure. I don’t think we would, I don’t think Mexico would want Vietnam controlling their telecom. I know Mexico has, and what’s the name of their telecom-Telmex. And China has their China mobile and China telecom. And we have ours. Everyone has control of their own communication networks. I think that the idea that Huawei would successfully, effectively build out and manage the language and standards of 5G in other countries was far too ambitious and was destined to get crushed just the way it has. I don’t think this is about freaking out that the Chinese are getting my data, at anybody who’s controlling your computer internet or your phone. They’re all collecting data. This was more about, are we going to allow another nation to control the standards? The inter component language that’s now developing within 5G-when your computer is talking to your television-there’s a language of standards, language that these components are going to be using, that we don’t speak that language, it’s a component to component 5G language. And that standard, we can’t allow that to be developed by China. It’s no offense to Huawei. I don’t know why this has become so political when it’s so obvious to me, and it should be to anyone. There’s just no reason to allow another nation to be a part of that. So I’m completely on board with blocking Huawei. And I don’t think the Chinese should be at all insulted because Robert knows, there’s zero chance-zero-that one of our telecoms are going to go into China and build out their telecom infrastructure. It’s a 0%. So why should they expect that from us?

Rich Helppie:

That’s a great point. You’re not going to see Verizon setting up shop in Beijing to provide that infrastructure. And the point that you made about the data and who has our data, yesterday, the heads of the major US-based tech firms gave testimony on Capitol Hill, and in an upcoming episode of the Common Bridge, we’re going to have a law professor who specializes in antitrust, particularly that failure to fight it, and its relationship to fascism as either an enabler or as a means to get to a fascist state. So everyone stay tuned for that as well.

So, gentlemen, it looks like what we’re talking about here is a fundamental global realignment is well underway. That we have on one hand, the great American experiment that we’re all familiar with. We’ve looked at a couple of presidential administrations. I know on previous episodes of the Common Bridge, we made mention that president George W. Bush was really focused on Afghanistan and Iraq. That President Obama perhaps didn’t know how unbalanced things had become with China. And on earlier broadcasts, both of you agree that President Trump has been very tough on China and likely-right, albeit with all of the normal criticisms that accompany this president, of which there are many and time does not permit us even to list them. So, as we look forward, the Chinese Communist Party, because of that history that Aaron so well articulated, universal rights, global liberal norms and principles of open markets-not really in their DNA. So gentlemen, two questions, where do we confront China? And how? Are we going to look at freedom of the seas? Are we going to look at the further free copying of intellectual property, rallying the people of China, treatment of Hong Kong and Taiwan, trade, resources, minds, intellectual property, if we’re going to agree that there’s a fundamental global realignment and that we are in a competitive posture with China, where and how do we confront China? And if you wouldn’t mind just dropping a little bit into some policy, if you were an advisor to the president or the next president, what might you tell him? And Robert, if you don’t mind leading off, I would appreciate your thoughts on it, it’s a fairly broad question.

Robert Greenfield:

Okay, thanks. Thanks for getting there. My view is this, that what Pompeo is doing, again, Pompeo doctrine is-and I think Aaron and I have gone back and forth with this today-which is this, I call it Team A. The first thing we need to do is get our team together. Policy by unilateral single country policy does not work. I think with Trump on the tariffs, it was not a great success. But that doesn’t really matter. I’m not, I don’t want to criticize anything about what Trump has done. You’re right, Rich, he has actually stood up to China and even though he has all these other hits and misses, he does have an excellent man in Pompeo who’s got a very clear vision, and I like the vision by that. Remember I live in Australia, I’m an Australian and an American citizen, both. Grew up next to Canada. And here’s the alignment that Pompeo’s looking at. And I think is correct. The A Team or Team A would be something like this:  United States, UK, Canada, Australia, and New Zealand. Those are the guys-and I think Aaron and I would agree on this-those are the first core team that needs to begin to focus on each other and trade. Britain has its problem with Brexit. They’re looking at things like special economic zones.

So from a trade point of view, there’s a tremendous amount that can be done to essentially bypass China. So my view is, is that those countries get much closer together. That’s number one. Number two is I think that we need to have our second team or second tier in concentric circles, which is, I think that the Pacific rim countries, I think we should revisit that again from a trade point of view. Again, trade. Remember Japan, and Korea in particular, got a lot of high tech that can be used. I’m very much in favor of Foxconn being incentivized, not to go to the US, but to go back to Taiwan which is where they’re from. I agree also that Vietnam and other places can be very key parts of this from a production point of view, as well as-and I don’t want to use this kind of cold war term-but kind of a ring fence or containment of China. So that’s kind of our second tier.

Then you have some other interests, which are not necessarily military and not necessarily high on our list. And I’m not going to talk about the middle East because that’s a very special and different thing and it would take a lot of time to discuss. But I’m talking about places like Africa, where we need to end…South America, central America, where we need to get back to doing development work, where we are doing more hearts and minds in helping those economies grow and not allow China to go in there to dominate. So I think that that type of strategy is a strategy that will work. It will work without a lot of military innuendo. We can dial that back just a little bit and we can focus on what the United States is great at, which is technology and our values.

Rich Helppie:

Aaron, when you’re thinking about this global competition global realignment and where we’ve been from a policy point of view, what are your thoughts?

Aaron Boesky:

Well, I think that it’s a major watershed shift moment and a lot of people, including Pompeo, everyone on this podcast. There’s a lot of change right now with China becoming a true stand alone competitor, number two contender. And, firstly, I’d like to say that competition is absolutely good for everybody. In most cases, it’s what drives progress. It’s what creates jobs and, and makes everything better for everybody. I think America has proven that. So in that sense, I think it’s really good for everybody that China is now a real competitor. That having been said, I would like to see the US win that competition, if possible. And I think that if nothing else, making sure that we don’t lose-quote, unquote-would be nice. So, I think with that in mind and in step with what Robert said, I do think that we need to be looking at our alliances and focusing on the English speaking nations, again, Canada, the UK, Australia and New Zealand, and going with our natural allies cultures that agree with us on many levels.

And we really, at this stage, we don’t need to necessarily bring offense to anybody because we have everything that we want. No one’s going to encroach on us physically with the amount of nuclear warheads and the practice military that we currently have. And so long as we have everything that we need as a group, which would be a labor force, which we absolutely have being the third most populated nation on earth, along with our peer English speaking nations, we have almost infinite resources, if you’re looking at Canada, Alaska, Australia, in parts of allied South America, there’s just very little that the US really needs to be so concerned about. Why fiddle and fuss with China over stuff that’s really their backyard? Look, Taiwan, it’s a sticky issue. There was a civil war in China, the losers retreated to Taiwan, they’re bickering with China. They’re all Chinese fighting with each other. The same thing is going on with Hong Kong. It’s really not our fight, I don’t feel. I do, of course, think it’s always good to have friends. And there are some benefits from aligning with other nations, but frankly, I think the US is stand alone. The greatest experiment in empire, in history thus far, or country. And I think that we should be happy with that and focused on ourselves and what we do best-and protecting our IP, absolutely protecting our technology and ensuring that no other nation encroaches in our interests. But the days of being reliant on middle East oil and needing a presence there or African phosphorus or whatever, those days are long gone, we have now become self sufficient. And if you throw in the other English speaking peers and neighbors, I just don’t understand why the policy isn’t more focused on making us great, not worrying about our number two contender. Frankly. I don’t think the Chinese are actually going to be able to contend long term. They’ve had an amazing meteoric rise to the number two spot, but I don’t think it goes much further than that because I think they do fall short when it comes to having a recipe and a structure that’s going to create innovation. In this century you need to be progressing, adapting and innovating if you want to stay ahead and no one can do that.

Rich Helppie:

Those sound like very American traits, particularly the innovation. So gentlemen, before we wrap up here, I’m going to go into a quick lightning round and a lightning round says, can we compress our responses to someplace between 20 and 30 seconds? And our producer, Brian Kruger, is out there with an air horn if we need to bring the time in. And these are meaty topics so this is really going to be a challenge, fellas. COVID-19 and how COVID-19 has affected our relationship with China from the early days and the communication to the interaction with the World Health Organization, to the notification they gave us, that there’s also allegations they were buying up all the personal protective equipment before people realized where this pandemic was going, travel bans that have been put in place, taken off. And now we’ve got a near nationwide mandate on mask wearing. And I know Aaron, you have some experience with that. So Aaron, let me turn to you, first question in the lightening round-COVID-19 how has this affected our relationship with China?

Aaron Boesky:

No matter what you believe about COVID-19 in China, there’s no question it’s their fault. Period. Either they were mishandling wildlife, and eating and trading in illegal wildlife, which is not a good thing, or there was another thing going on, whatever it is, it shouldn’t have happened. And frankly, I think there should be, at least, an apology on their part and an acknowledgment. I don’t think there needs to be massive reparations, but it would be nice if China stepped forward and said, look, we messed up. We’re gonna do our best to clean this up, let us do something for everybody. I haven’t really seen that. A little disappointed on that.

Rich Helppie:

You go out to dinner in Hong Kong, you wearing a mask?

Aaron Boesky:

Oh, let me tell you, masks is the only thing the world needs. You don’t need lock-downs and crushing our economy. It, none of that needs to occur. The fact of the matter is that all of Asia wiped this thing off the face of the map, simply by wearing masks. In Hong Kong, everyone was masked up. The second any news of a new virus came out every single person was wearing a mask. And because of that, we’ve only had like 800 cases here, maybe. We’re lucky if we see 10 cases in a day or something.

Rich Helppie:

And that’s what, 8 million people basically living on top of each other.

Aaron Boesky:

So Hong Kong is the densest population of humanity in the world. And so the fact that we are not experiencing this pandemic is just proof that wearing masks works, period. It’s not a political thing, it just works. And I do believe that this whole thing is going to be over by January. We’re going to have vaccines. It’s going to be done. But next pandemic, just mask up. And none of this lock-down, destroy everybody’s life stuff, it just was, it was horrible the way it was run.

Rich Helppie:

Okay. I’m going to switch to Robert. Lightning round-COVID-19. How has this affected our relationship with China?

Robert Greenfield:

I’m going to take it from a different tack, my view is this, that it is a part of the wake up call to the United States. While I agree with Aaron, he’s already covered it. So let’s let that just sit. As we all know, everything from PPE to generic drugs, to the compounds that go into generic drugs, are coming from China. So while the generic drugs themselves may in large part, come from India, actually, they are beholden to China for those ingredients. So I think what we’ve got here, Rich and Aaron, in my view, is that this is a massive wake up, that from a dependence on China, on even basic basic things such as masks, it cannot happen. And so while we can all make money, there is an investment that we need to make in our own protection. And I don’t think that China is necessarily withholding back masks or anything else, but it’s people are going to cover their own country’s interests first. And when those are needed in China, they will be used in China. And there’s also been a lot of profiteering that has come out of that itself. So my view is that the biggest effect is for the United States to wake up in that the United States needs to start taking a little bit more control of its strategic destiny.

Rich Helppie:

Robert, next question, on the lightening round. I hear a little implied, we’re going to have your population put pressure on you, when I hear secretary Pompeo talk about the Chinese people. Certainly during the cold war Voice of America, Radio Free America, us broadcasting into Cuba, into other countries behind the iron curtain and trying to influence their internal politics. The thought also occurs to me that China can play the same game with us. I’m a little naive about this aspect, frankly, but can the Chinese appeal directly to our populace or can they foment disruption?

Robert Greenfield:

That’s a complex question. If you look at it historically, you’re absolutely right. The US had Voice of America. That’s a very small, almost nonexistent organization now. My view is this, that the privatization of the United States IT segment and media, means that we already have a global presence. I think what we should do is push China to allow an openness to that all of the American media can at least broadcast there. That, I think, is important. By the way, I get Chinese TV in Australia. So I’ve got 160 stations of Chinese TV. Nobody blocks me. But in China, you’re blocked. So again, it’s all a one way street. So I think the biggest thing that we need to have here is that the United States needs to hold the line on this, that we need access in terms of media, to be able to talk to the Chinese people, not directly as in a VOA, we’re the best, but we show that we are open and a free society. And that we talk about things. China needs to open up in sense, which is to allow people to be able to have other points of view. Then the Chinese people over time can make their own decisions. I don’t believe right now, after 30 years of absolute propaganda on the Chinese side, that the Chinese people have a clue what’s going on in the rest of the world.

Rich Helppie:

Aaron, what do you think? Can the Chinese influence our population positively or negatively? And what kind of influence do we have on theirs, if any?

Aaron Boesky:

I think the Chinese have a 0% chance of fomenting or influencing us in any way. Our people are extremely savvy when it comes to being told what to do or told what opinion they should have. It would take significant fluency. And I mean, we are by far way beyond their capability in terms of them changing what we think. They have a hard time, even at the very top levels, just translating simple ideas of ours. It’s out of the question that they would tamper successfully. They might attempt it, but they would not be successful. Russia on the other hand has locked horns with us for many decades. And that, I wouldn’t be surprised if Russia has successfully tampered or not. I don’t know, but I do know that the Chinese wouldn’t have a chance.

Rich Helppie:

That’s actually my final question on the lightning round, before we go to a wrap up. As I was listening to the recitation from you learned gentlemen about the roles of various countries, I was struck that we didn’t talk about Russia or India at all, and we can come back if that’s a deeper topic on another edition of the Common Bridge, but in this global tussle between the United States and its allies and the Chinese, what role do Russia and India have? Go ahead Aaron.

Aaron Boesky:

Well, look, Russia has a chip on their shoulder. They have a grudge and an ax to grind because we defeated them, so to speak-socially, culturally, economically, politically. They went head to head with us in the middle of the greatest bloom century any nation’s ever experienced, they really didn’t have a chance, but they put up an amazing fight. And I don’t see what the grudge is about. I think Russia put up an amazing challenge to the US given how successful our recipe as a culture really turned out to be. But there’s no question that Russia wants some pound of revenge on us, and that has not changed. They are openly a threat. And I think that we should be less worried about the Chinese, who are really just focused on themselves. They don’t have an ax to grind with us. And we need to be looking at nations or groups or concentric circles outside of the US that are actually intent on harm or destruction of our politics or economy. And those nations are very clear. You’re looking at Iran, Russia, parts of the Islamic world, the radical elements, the traditional enemies. I think that this re-focus on China is de-focusing on who we really should be concerned about.

Rich Helppie:

So Robert, any commentary on Russia and India?

Robert Greenfield:

Yeah, I think Aaron did a brilliant job on Russia. I’d like to add though, something on India. I have spent time in India from 1973. I don’t want to say I’m like an expert on India, but I have been there countless times, done business over the decades, watched India rise from a very sleepy kind of place to an amazing place for IT, and yet they still, of course, have a huge population that has not yet come out of poverty. I think that the United States is missing an opportunity-the number one opportunity in the world, because when we talk about the five Amigos-the Canada, Australia, US, UK, New Zealand, that’s an easy thing. I swear Pompeo could wrap that up in a week easily. But India is something that if cultivated correctly, and don’t forget, and Aaron I’m sure would back this up, that India used to be non aligned, and in fact was quite close to Russia for a long time. India feels threatened by China, and the natural way that India wants to go is with the United States in every possible way. Everything from immigration H-1B visas, et cetera. And by the way, as a former British colony, the English level there-about 500 million people speak fluent English. So we’re talking about something that the United States should spend a heck of a lot more time with. There’s also the Indian Ocean, which I happened to live on and India has airports out. China has South China Sea, well India has the Indian Ocean, and we should be aligning with them to make sure that that remains a neutral and open place for shipping. So, yes, I think that, I’m glad you brought that up. Rich, thanks for that. And I think the biggest opportunity that we should have to work closely with in the future is India. And by the way, to also keep them on the straight and narrow, to make sure that they don’t become too authoritarian and suppress their own Islamic population.

Aaron Boesky:

That is a huge opportunity. I couldn’t agree more Robert, about India, that they clearly, and this was evident when Trump went to India, it’s really clear that they would prefer to align with the English speaking block. It’s really evident. And their current tensions with China are pushing it even further in that direction. And Pompeo, Robert, you and I should draft something up and just advise-I’m not joking. I really believe that what you said is true. He could wrap up a block of the English speaking nations plus India right now, right now.

Rich Helppie:

Aaron, what you said right there is a clear reason that we do the Common Bridge. It’s about a policy perspective. And as secretary Pompeo said, we have the tools, do we have the will? So if we can wrap up today on your view on what would be the best thing we could do, or the worst thing we could do from a policy perspective. And if it’s something we can maybe tee up for another time, what didn’t we cover that perhaps we need to come back to at another time?

Robert Greenfield:

I think the first thing is, is that we should-I agree with Aaron on this-we should not isolate China too harshly. I think though that I like the Pompeo point, which is action, not talk, not looking in the eye, not shaking hands, but actually showing China that we are serious. It’s not a military thing, I think that. So the worst thing that we would do is to push them towards confrontation. I think the best thing that we can do is start getting back to what our values are, which is our the English speaking people plus India, as we just talked about, I think India would be thrilled to join that group too, Aaron, I think well said. I think that’s our approach for the future. I think that for us looking forward as as a people, I think the United States, if it reinvigorates itself as in this leadership position, I think Aaron’s absolutely right. We have all the tools. I’m the person who always says we have 330 million hardworking people in the United States. We just need a sense of purpose and that purpose cannot just be about the United States. That purpose needs to be as a leader, that needs to be living and showing our values. And that is the alternative to China.

Aaron Boesky:

Adding to that, I would say that first of all, the one hope I had coming on Common Bridge today with Robert was that we would come to some policy conclusion and I couldn’t be happier with the conclusion being that we need to form our own much tighter block with the English speaking nations plus India. That’s a perfect opportunity with Brexit occurring and India, China problems. This is the moment to do that shift. So I doubled down on so happy that that has come out of this. And the second thing on the China situation is just, we need to focus on winning, which is innovation. And having them as a competitor is going to invigorate us if it hasn’t already. Knowing that there’s someone hot on our tails, it’s healthy and it’s time to get our butts in gear.

Rich Helppie:

Gentlemen, you have been very informative today. I know that I’ve gained a lot. I really appreciate you pushing forward the policy ideas. You’ve really epitomized what the Common Bridge is about. I thank you very, very much for being here. We know that in the United States today that our political parties have developed a core competency of attacking each other. They are not spending as much time, it seems, on the policies that will help us address the issues of the day and seize the opportunities of the moment. That, coupled with a reporting industry that wants to work things in sound bites, emotionalism, hysteria, without any depth. And that’s what the Common Bridge is designed to combat. And I thank you for leaning in and helping.

This is Rich Helppie. We’re signing off on the Common Bridge today with Robert Greenfield, from Perth, Australia, and Aaron Boesky from Hong Kong.

Brian Kruger:

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