Today, Elizabeth Economy speaks with a seasoned former diplomat about what might happen during and after the ongoing summit between President Trump and Xi Jinping in China; Niall Ferguson explains why Taiwan remains the central issue in the US-China relationship; and Drew Endy and Erik Malmstrom share experiences and takeaways from a recent Hoover summit on biotechnology leadership and security.
Confronting and Competing with China
For the latest episode of China Considered, Senior Fellow Elizabeth Economy sits down with Sarah Beran, a veteran US Foreign Service officer who served across six administrations, most recently as senior director for China and Taiwan at the National Security Council under President Biden. Beran traces her career from post-9/11 stints in the Middle East and South Asia to today, discussing how working outside of China early in her career gave her a sharper sense of how third countries assess their own interests when caught between Washington and Beijing. With experience across multiple administrations, the two touch on the contrasts between Republican and Democratic approaches to China policy, with Beran arguing that the ideal sits somewhere in between. The two conclude by considering the Trump-Xi summit and what possible outcomes we may or may not see.
What the Trump-Xi summit could mean for the US-China relationship.
Writing for The Free Press, Senior Fellow Niall Ferguson explains why the central issue at the ongoing summit between President Trump and Chinese autocrat Xi Jinping will be Taiwan. Ferguson draws on his Hoover colleague Eyck Freymann’s new book Defending Taiwan: A Strategy to Prevent War with China to explain how the United States can sustain deterrence against a Taiwan invasion by China. Ferguson warns that with US munitions stockpiles depleted, Xi may choose to move on Taiwan before the much-discussed target date of 2028. Ferguson also suggests that US leadership in AI technology could encourage Xi to act sooner rather than later, as US offensive cyber capabilities may continue to outpace China’s defenses. Ultimately, the historian concludes, much depends on “how close to the brink” Xi Jinping is willing to go to forcefully incorporate Taiwan into the People’s Republic of China.
Why Taiwan is the central issue hanging over the Trump-Xi summit. [Subscription required.]
Biotechnology
In a new interview, Science Fellow Drew Endy and Veteran Fellow Erik Malmstrom discuss a recent conference convened by Hoover’s Bio-Strategies and Leadership Initiative, which Endy heads. “The Bio Leadership Summit was an opportunity for us to convene 350 biotechnology leaders. It’s the first time we’ve held such an event at Hoover. It is an unbelievable event,” Endy said. The gathering also featured a live biosensor demonstration monitoring the air for pathogens. Explains Malmstrom, “Right now, when you go into a building, you do not know if there are pathogens floating around. We take 25,000 breaths a day and breathe 2,000 gallons of air per day. Not knowing what we’re breathing is problematic and unacceptable. Our biosensor is intended to break this black box and provide a rapid, autonomous, accurate way of detecting pathogens in the air. In layman’s terms, it’s like a smoke detector for pathogens.”
How biotech can serve as a form of intelligence for both civil and military purposes.
Answering Challenges to Advanced Economies
At Defining Ideas, Research Fellow David R. Henderson argues that it’s premature to panic about predicted job losses caused by artificial intelligence that would lead to demands for a universal basic income. Such a government-issued basic income would not only be ruinously expensive but would also deprive the future of the creative industry of vast numbers of workers, he writes. Referring to a key insight of economist Frédéric Bastiat, he points out the folly of responding only to what is “seen” and neglecting to analyze what is “not seen”: in this case, the products and services that would never exist if workforces were idled en masse. Familiar economic transformations of the past—the shift from horses to tractors, and from hand weaving to industrial milling—dovetail with very recent examples, he says, citing the fact that software jobs, instead of being wiped out by AI, have grown. Starbucks is pulling back from automation to restore the human touch, Henderson adds.
See why Henderson thinks a universal basic income isn’t the policy solution the AI transformation will demand.
The effects of minimum wages have been studied for many years, and research strongly indicates that low-skilled workers feel the sharpest effects of being priced out of the labor market. New research focuses on the disproportionate impact of minimum wages on low-skilled black workers, economist David Neumark explains in Freedom Frequency. In fact, after an analysis of federal, state, and local minimum wages, Neumark finds that “minimum wage effects not only are ineffective at closing race disparities but they make them worse, as the adverse effects of minimum wages by and large show up only for blacks, and not for whites.” He says the effects of these disparities spill over across communities with a largely black population: “Low employment in a neighborhood could lead to harmful effects for all residents—not just for the workers without jobs.” Neumark adds that he does not believe minimum wage laws are meant to discriminate against black workers (nor did Milton Friedman), but that “blacks appear to bear the cost” of carrying them out.
How minimum wage laws can carry unintended consequences for the very income groups they are meant to help.
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