Beyond the Headlines in China with Lingling Wei

- Welcome to China Considered, a podcast that brings informed insight and discussion to one of the most consequential issues of our time, how China's changing and changing the world. I'm Liz Economy, Hargrove senior fellow and co-director of the program on the us, China, and the world at the Hoover Institution at Stanford University. Today, I'm delighted to welcome Ling Ling way. She's the Chief China correspondent for the Wall Street Journal, the author of the award-winning Wall Street Journal, China newsletter, and co-author with Bob Davis of Superpower Showdown. Welcome Ling Ling.

- It's great to be here, Liz. Truly, my honor.

- So, Ling Ling, you know, you are known for breaking big China stories and you know, most recently you had a blockbuster story on the Ouster of Jane Yosia, who is or who was second in command only to Xi Jinping on the Chinese, on the Central Military Commission, which is the top party body that oversees the People's Liberation Army. For those who don't know the story, can you walk us through what happened and what you think the implications are, and start with how this first came to your attention?

- Sure, Liz, before we dive in, I'd like to say that in Chinese politics, silence is often as loud as words because of the internal workings of the party, usually so guarded. We are often reading tea leaves and, you know, doing the kind of reporting that not commonly known to a lot of our readers. But I, I'm very happy to share my reporting and my perspective with you on the current event evolving. But I do so with the humility that comes from really studying, researching, and reporting on a system that is intentionally built to keep the outside world guessing. So what really happened was in the past couple weeks, there have been a lot of rumors about Jia being put under investigation. Jang is someone that really stands out in the PAC because he's not just some random high ranking official. This guy is a long time friend of Xi Jinping's Ally, you know, and he really, over the past few years, over decade actually, he has been a key architect in Xi Jinping's effort to modernize the People's Liberation Army. So his importance cannot be exaggerated, both in terms of his political ties to Xi Jinping, his importance in Chinese Army and Chinese politics. So the rumor really started among the overseas China watching community and couple of, you know, well-known social media accounts. You know, they were the first one actually to, to break some sort of story on's, disappearance, and likely detention by Xi Jinping. We really started digging right after a study session held in mid-January. That study session was presided over by Xi Jinping and every, that's one, that's the kind of meeting that you do not miss. And for someone like to miss that meeting, that was a huge, you know, sign that we shouldn't ignore. That's an important sign we shouldn't ignore. So we really started digging, and here's a little bit scoop for you, Liz. We actually got the story nailed down as recently as Friday, basically a day before the official announcement. Wow. But just because of the significance of, we decided to be really, you know, more cautious than usual, I told my editors, let's wait for one more signal that in signal would be the upcoming poll bureau meeting meeting. And I told him, if were to miss that meeting again, let's file away the story because we just wanted to exercise, you know, the, the, the maximum caution when comes to story like this list. However, my caution didn't really pay off for us because, you know, we sent our request for comment to the defense ministry and other relevant Chinese authorities for comment Friday night. Little did we know that the next day, Saturday afternoon, Beijing officially announced the investigation of John Yosha, along with the joint joint, the chief of the joint staff de department Li John Lee. And I was, of course, you can imagine my reaction. I said, damn them, them and shit so many times that even my sons thought I was totally disgusting. So, so that's really

- How, but why, but why you were the first to break the story. Why?

- Oh, no, we, we didn't break the story about investigation. We broke a story about the internal briefing attended by senior military officials. So what happened was the official announcement involving John's investigation came out in the afternoon of Saturday. In the morning of Saturday, the top leadership had internal briefing with senior officials of the PLA during the internal briefing, a a number of very quote, serious allegations were laid out against Jania. That's the story that we wrote, you know, the, the story you, you were referring to. So of those allegations included decades long scheme by to form so-called political cliques to garner influence in the system. And also, you know, the taking bribery from people like the former defense minister, Lee Shung Fu. And of course the most shocking of all was the allegation that he somehow leaked nuclear secrets to the United States. So those are the allegations that were made during the internal briefing, that internal messaging to basically the elite party military and party elite, that those allegations were not so far, haven't been publicly announced by the government or any kind of authorities. So we felt like we should report on that internal messaging. Yeah. We do not know, we do not know whether or not any of those allegations are real for sure. And in the story we also mentioned that oftentimes such internal messaging doesn't really reflect the true or or complete motivations for a political action. So, so that's a grain of thought we, we really try to instill in into our readers. When you read the story, please take it as one data point, right. When you are trying to figure out exactly what's going on involving John. So we haven't had our independent reporting verifying any of those allegations.

- Right. I mean, since then of course the official announcement has included language that seems to suggest that somehow Jania was undermining Xi Jinping's authority. Right, right, exactly. And that there were differences also of opinion, it sounds like, potentially around how they viewed the military. Even possibly people have speculated around whether or not the pla LA would be ready to meet Xi Jinping's deadline of 2027, you know, to be ready to be able to take military action against Taiwan. I mean, taking off your reporter hat and putting on your analytical hat, you know, what, what do you think is most likely behind the, the ouster the investigation at this point in

- Time? Yeah, and, and, and thank you for, for saying that. Now I'm really wearing analytical hat, not not reporter hat, because for a reporter to say what I am about to say, I would have to have, do way more reporting and verify it. But just based on Liz, you know, what I have read so far, the conversations I have had with context, both in China and here who have talked to Chinese officials, the, the feeling that I got is that the, is the political purge, no question. And the timing is really interesting, right? It happens at, as Xi Jinping is starting to prepare for next year's party, 21st party Congress that expects to be held in Beijing later next year, probably late October or November. Again, as you know, well, a hugely important political event in China, you know, and she definitely has the desire to make sure that he calls a shot in, in terms of personnel decisions, in terms of the overall strategic decisions. He is the only thing, he's not just the chairman of everything. He wants to make sure he is the only thing. So based on our understanding, he has been highly respected in the PLA, the guy has combat experience, right. And he played a crucial role helping Xi modernize the army. So, you know, after, especially after Xi Jinping had purged other senior ranking military officers, like, and you know, he basically, up until recently, Jean yo sha have been the last man standing in the military, and arguably the only man who could theoretically say no to she on on matters, both strategic and personnel related, and arguably only person who can sort of pose any sort of perceived or real challenge to, she, you know, as you know, well, strong men leaders like she, they do not like that they want to be able to completely call the shots so ahead of the very important party leadership transition next year. She probably felt like, you know, he should start making the move now to clear all the obstacles in her, you know, in his way to next year. And those obstacles could be real and could be totally perceived by him. Right. So I, I felt like that is a crucial, you know, context. We should bear in mind when we analyze the whole thing, the, the what was China's own political calendar. And I've seen really soft provoking reports from analysts like those from at the Jamestown Foundation Yeah. About the policy disagreement over went to a, a tact Taiwan. I think, you know, the analyst really laid out pretty thoughtfully the, of his analysis of the official records. And I, you know, I I I don't disagree with that. I, I do feel like if there indeed is, is a policy disagreement that, you know, at least that wouldn't have put in Xi Jinkins favor in any way, probably another data point she would consider. Oh gosh, not only, you know, I, I don't want this obstacle in my past, you know, he also disagrees with me over crucial policy matters. And the, I I did talk to the Jamestown analyst, Tristan Town, very smart young analyst, you know, he made a really good point. He said, you know, that kind of policy matters is politics too. I I do agree with that, you know, but it's hard for me to definitely confirm or verify such a disagreement existed. But I, I wouldn't be surprised. Look, the PLA when you decide to invade Taiwan, the PLA would be on the frontline doing the battle. I mean, if there were disagreements between those two, I wouldn't be surprised.

- Yeah. Yeah. I I I tended to be persuaded. I thought that was a very good piece as well. You know, I think the idea that he's an alternative, potentially an alternative source of authority is also compelling to me. Actually, when I was reading that, I thought back to Jack Ma and, you know, Alibaba and, and the fact that he, in his own way was also an alternative source of authority being so popular, you know, within the country, among so many of the young people and the sort of the tech world and everything that, that was also probably, you know, put him in the cross hairs of, of Xi Jining. I, you know, the one thing about removing him ahead of the next party congress is he could have just retired him. You know, John is 75 and she kept him in 2022. He kept him on right past the point that he should have been retired past the point of retirement age. And so that to me suggests there's some real point here that made it necessary to do this now, you know, among the many different sort of reasons that you laid out something around a policy decision, you know, the secrets, we'll put that aside, you know, if it's true, it would be certainly, you know, blockbuster. But, but, but really there must have been some actual issue, I believe that signaled this needed to happen now. But in any case, it's a, you know, it's a fascinating, you know, story and moment. And, you know, as, as you know, this leaves the Central Military commission at this point, I think with only two people, right?

- Absolutely.

- That usual six or seven that they, that they have. And I mean, it is astonishing at, at this point.

- Absolutely. And, and Liz, I I wanted to just follow up on the two very good points you made. You saw the parallel between what's happening now to Jack Moss downfall, you know, for the lack of better word, many years ago. Absolutely. And we also saw the disagreement between Xi and the, the former premier. Right. You know, they had fundamental, fundamentally different right visions for how China's economic economy should be wrong. Right. It's, it's not rare at all that she, you know, this is not the first time that she has taken down people who disagreed, dared to disagreed with him. So I definitely agree with that. And another thing, you know, is I, I totally get your point about, you know, he should have, he could have retired him as opposed to just totally, you know, taking him down. I guess, you know, one plausible explanation would be, you know, if he were to allow retire peacefully, he would still remain as sort of like a, a potential troublemaker for she Mm. Right? He would be out there because of the respect he's garnered from the senior ranks of the PLA, he would have been, would still have been a force. Yeah. So, so that, that would be the,

- That's a, that's a good point. I mean, it's a good point, especially if you think some of the finance people that have been retired out continue to weigh in, you know, at certain moments on policy in ways that seem to be at odds with what Xi Jinping is doing. And so having those senior people out there to sometimes offer perspectives No, I'm sure that's not appreciated, right. By he, so, right.

- So Right. And as you know, there have been rumors about a coup by, I guess that probably, you know, is the least plausible explanation. Yes. I mean, at least so far, I haven't found anyone who could give any kind of evidence that a coup actually happened. So Yeah. You know, what we understood was, you know, the Jania was arrested on his way to the Central Party school where Xi Jinping was holding that major study session, the meeting. So that was, you know, one version we had heard.

- So I wanna, you know, get your thoughts on, like, you've done a lot of writing on the US China relationship as well as sort of the Chinese economy, and I wanna get your thoughts on all of those things. But first I do wanna get a little bit of your own story because you've, you know, been at the Wall Street Journal for most of your career before that, at the Down Jones Wire Service. But before that, you were educated at Udan and you decided to become a journalist, right? This was the 1990s. Why, why did you decide to become a journalist, you know, not an easy thing to do, and you started off, I think, at a, at a state run newspaper. What, what made you decide to study journalism, pursue that, pursue that path?

- Oh, it all, thanks to my mom always listens,

- Okay.

- To your mom. She always, you know, my mom was a doctor in the military, but her dream job had always been a journalist. But her idea of this journalist, you know, she always stating in China her entire time, so in, in her thinking that journalists, you know, such a glamorous job, you know, and she also, she's a very good writer. You get to, you know, write. So she picked the major and profession for me. I didn't have any input, really. No. Wow.

- No, not lucky, but lucky you. Because I think most Chinese parents would not pick journalism, right? They would pick engineering or something, some science or something, or something business that would make a safe, a safe career for their child. Journalism is totally different,

- Liz, because I sucked as mess. I'm very, I'm Chinese in that regard. I was so terrible. Then my mom really, really like, very, like, embarrassed, you know? But, but I, I always, I, I did well at, you know, in high school English and Chinese and writing.

- Yeah. - And I love to talk, you know, she's, she's do journalism, do journalism.

- She was right. She was right for sure.

- Oh, but thank you so much. But I, I just wanted to say that I benefited so much from golden era in China. It was a time when China was really opening up, as you know, thanks to ing, I, I really, you know, we, people in my generation we call ing, you know, it's like very endearing term, respectful. And, and he really not, obviously we never interacted with him, but, but he really changed China for the better and paved, created opportunities for people like me. So, so I benefited so much from that golden era of opening and reforming, opening, and from a very good, at least stable and positive relationship between China and the United States. Had it not because of, you know, that era. I, I wouldn't have come here, you know, have had the kind of career I'm having now. I probably would be a typist in Beijing for newspaper somewhere.

- Oh, I'm sure you'd do something more, more, you know, using your mind more. But, but, but in any case, so you studied journalism at Udan?

- Yes, yes. And that time we had Fulbright scholars, they were either practition journalists or retired journalists, you know, coming over, teach us and remember at Udan that, I think that's the mid nineties, had a brand new American studying study center that was funded by the American government. And we all, we would often go there, you know, because they were like newspapers, the American newspapers, the Wall Street Journal, the New York Times. It would be like weeks late, but however, we're like reading like voraciously. Oh, that's beautiful. Writing and storytelling. Oh my gosh. That was just like, yeah, it just always got us real. Whenever I, you know, me and my classmates, we, we, we sit down at the American Studying Center. That was the mood and the sentiment back then.

- So were you inspired then to, you know, come to the United States? I mean, you spent a couple of years, right? Still in China as a journalist?

- Yes. I worked in Shanghai. I covered the development of the Pong, the pong new area, and the, you know, the, their version, you know, aspiring to be China's version of Wall Street. Right. So I covered Pong for a subsidiary of the China Daily, but I was based in Shanghai. And it was really in, during that time, that made me feel like, you know, what I was doing was not journalism. It was, it was very, you know, I mean, it was still open era, but relatively to today. But you are only journalist to the extent the government allows you to be. Right. And I got stories killed just because, you know, I wrote stories about laid off textile workers having trouble finding jobs And, and, but, you know, people, editors didn't like that kind of reporting. So, and I also interacted with some foreign correspondents in Shanghai at the time, and I saw their work. They were able to do story, not just about, oh, every China's rising power, the great greatness. And they often went behind the policy and found out, you know, they're actually the other side that people didn't know, but also important for people to know. So that's the kind of journalist I really want to be. And, and my and my editor also felt like I, I am a troublemaker of sort at that time because my story was always, always like,

- Always had problems.

- Yeah. Always had problems. And she's like, why don't you apply for, you know, you know, graduate programs

- Outside, outside the country. Exactly. And then why don't you stay

- There? Yeah. Say there don't ever come back. Don't come back. Yes. Yes, yes, yes. So, so it was, it was a period of really, you know, struggle. A lot of learning for sure. A lot of learning, but a lot of also struggling and trying to really figure out what is it that really want, want, you know, as a journalist, or do I want to be a journalist for people's daily, or do I want to be a journalist that can really write things of real interest to the public? Yeah. And, and I felt like it's really great that I got opportunities to apply for graduate programs in the United States, and I was rewarded of scholarship at New York University. That how I, how I was able to come here in 99. Gosh, I'm showing you my age. This

- Oh, you, I mean, you're not, you're not that old. So older but not old. So, so, okay, so you ended up at NYU and then obviously you decided to stay in the United States. Right.

- I wanted to learn the craft to really practice journalism before I earned my right to go back to work for the journal. That's really the very, very goal that I had in mind at the time.

- So you always wanted to go back and be a journalist for an American or a foreign newspaper, but, but in China, that was the objective

- For China correspondent for the Wall Street Journal. That was my dream job.

- And and you got it right. And you got it. So when you returned to China, you know, then you were an American citizen at that point, right?

- Right.

- So what was that like going back, being, you know, Chinese native, now an American citizen, going back to be a journalist for an American newspaper? How did the people in China react to that? How did government officials react to that? They didn't know their job easier or more

- Difficult? Well, first of all, they didn't know how to react because they never dealt with someone. Oh, you're Chinese. Oh, but you are work working for the Wall Street Journal. Are you sure you're not a researcher? That's always the first question I got. I'm like, damnit, I'm a Chinese. I still can write for the Wall Street Journal, just believe it. All right. But, but I underestimated list. I have to say I underestimated the reporting challenge when I first got back, you know, before I got back, I was full of excitement, full of hope. Oh my God. You know, China's opening up, you know, my first assignment actually was to write about the globalization of the B because at the time, our editor, some editors of least had this, this, this, this vision that China would open up the financial account and really be more like the us. You know, some of us do, did have that vision. Yes, yes. And my job was just write about rein B, just go back and write about rein B, you know, it's going to be really important, blah, blah, blah. And I really believed that. And as soon as, and I found I have nothing to write about because, And, and, and my China bureau chief at the time, Andy Brown, you know, just gave, oh, I

- Have

- A really good lesson that, you know, helped me understand to actually loosen control over cross border capital flows, you know, would have meant, you know, the whole party turning its hat basically it turned, turning its old model to, to its hat. Right, right. Completely changing the control centered model. So, you know, I was so naive, you know, I didn't know, but it's, it's really learning by doing. And gradually I moved from just covering the currency, which I probably produced one or two stories a year to gradually writing about the financial sector, the overall economy, and to later on the intersection politics and business, and then us China relations.

- Do you have a story from that time that you are particularly proud of? One that you look back and just think, I'm so glad I was able to write this story at this time. It really sort of opened up the aperture, the lens of understanding.

- Sure. I do have one actually, and I still remember it was, I think that one was right after Xi Jinping came to power. So at the time, a lot of tension was on who was moving up, right? Who was getting promoted, blah, blah, blah. And, and that story I did jointly with my mentor and a good friend Bob Davis. We focused on the, a guy who didn't get promoted, who got passed over. And that guy was the head of the industrial and commercial Bank of China ing as you know, Liz, it's the biggest bank in China. And Jing was well con, well regarded in the industry. He ran R-A-C-B-C really? Well, ICBC had highest profitability, the lowest, you know, just default ratios. So, you know, by all Western standards, right. He should been moved up.

- Great candidate. Yeah,

- Exactly. However, the story, it was both a scoop of insight and scoop of news. The, the story basically said, no, he was not going to get the central banker job, the top central bank governor job, because even though he ran ICBC, well, commercially, he didn't do X and Y and Z politically. Ah. So, I mean, reporting on that story list was eye-opening for me as a reporter, because it gave me a chance to really, really understand how the Chinese system works. It doesn't matter, you know, how well you run the corporation based on profits and blah, blah, blah. It ultimately, what decide your fate and your career trajectory was the political connection and whether or not you accomplished what you were told by your party boss.

- Yeah. I mean, it's the, the triumph you know, of, of politics, right,

- Exactly.

- Over in some ways over competence or expertise. Absolutely. I mean, the red versus the expert, and I think for many people, Xi Jinping represents the reddest of the red.

- Right. Perfectly said. Yeah. Just look at the people he's promoted, right? Over the past few years, you know, the technocrats are almost gone from the very high level decision making level. Right. But the midlevel, you, you can still argue they're technocrat competent technocrat, but those people don't matter. Right. They make recommendations ultimately, who calls a shot or the, the, the, the people who have the political currency to she as well as she himself.

- Right. So in March, 2020, Beijing expelled you along with, you know, many other American journalists from, from the Wall Street Journal and the New York Times, and the Washington Post. What, what precipitated that, you know, did you anticipate it and, you know, what did it mean for your career and are you and the other, you know, previously expelled journalists? Can you go back? Do you have a hope that some point in the future you'll be able to go back to China?

- Thank you for asking that question, Liz. That was, I have to say, that was the most difficult time in my, in my life, not just in my career, but in my, my life as well. I, I didn't see that coming, I have to say, even though there were signs that there were cracking down on journalists, not just foreign journalists, but independent Chinese journalists, and the official reason given was the Chinese were retaliating against American expulsions of Chinese journalists.

- Right.

- The official reason. But of course, I was also told later on, I was singled out because of the critical coverage I had written about China's economy, the debt problems, and you know, in particular also the US China trade negotiations, we got a lot of scoops and, you know, obviously people were worried about some, someone like me who actually could get inside of the system. So I, I, I thought about quitting, Liz, I, I wouldn't lie I thought about quitting because my family, my parents, they were, they're, you know, coming, going up in age. And I felt like the right thing to do as a daughter was to quit and stay. But my, my mom and my, my dad, both of them said, you know, be disastrous for us if we were to stay because they knew how seriously, like, nobody wants you there. I know, I know. Nobody, not even my parents. No. Well, yeah. You know what I mean, right? I do. I I do, I know where my heart is and they, they don't want me to, to think that I had to stay for them. I should, I should just go pursuing where my heart is. So that's, that's always the principle my parents have given me.

- So, just to be clear, Ling Ling, you could have resigned your position and stayed in China.

- I don't know, actually. I didn't know at the time, but I thought maybe I, I was thinking, but, but at the same time, I also got tremendous support from the Wall Street Journal. Everyone reached out and not a jour, not only journal, but also some, some people at our art competitor in the New York Times. So everybody was reaching out and just like trying to really, like you, you, you have to keep going. If you were to resign the part, the, the regime wouldn't have liked anything better than that. So once I got the, the, you talk from, from my, my parents as well as the editor in chief of the journal at the time, and my colleagues and people like Bob and Charles Hustler, my former boss and some other really good friends and editors, I decided to just keep going and I decided to come back to New York. I, but I had no idea if I could keep doing what I do. It's just really feeling this crossing the river by failing the stones. Yeah. Yeah.

- So, and, and obviously you've made it work. I mean, I think you're really one of, you know, a few of the sort of elite China journalists who've had just, you know, great exposure inside China and can write compellingly about domestic internal issues, and at the same time talk about China on the global stage and US-China relations. So let's talk a little bit about both of those. Thank

- You.

- You know, and I wanna get your, your sort of sense, again, as an analyst, not, not necessarily as a reporter about the state of the US China relationship. You've written a lot actually about the relationship over the past year. You know, when you look back, what, what do you see? Or first, you know, what do you, how would, how would you define the relationship at this point? You know, and, and what do you see as the major inflection points over the first year that have kind of shaped where it is today?

- Thank you, Liz. That's a great question. And you know, many really smart experts like yourself have talked about the state of the US-China relationship. You know, I, I think I, I agree with a lot of people right now. We're, we're in a tactical pause, right? Both sides have the desire to keep the status quo, meaning, you know, let's, let's not, you know, get into this escalate to dis escalate cycle anymore. Let's, you know, for both sides have the desire to build up their own capabilities for the purpose of strategic decoupling. I think both sides have accepted strategic decoupling, not, not full decoupled. That which was, is, is impossible to do from China's po from from China's perspective. And you, you know this better than I do. I mean, look at how much money they're, they're spending on semiconductors, on energy, on agricultural, basically everything to fortress the Chinese economy, right? And to, you know, I talked to a senior Chinese policy advisor just a few weeks ago. He used to term war footing. China is trying to build economy, make it on war footing, and, you know, war in terms of, in the sense of not just trying in China, you know, act proactively, you know, seeking a war, but, but they're preparing for war, right? A potential conflict, you know, especially in, in light of the situation over Taiwan. So, so that's very, that pretty obvious. And, and from the US side, you seeing the initiatives really getting beefed up in terms of getting alternative sources of rare earth and other supplies, critical mineral price, and also making sure to ring fence China, the US own supply chains, not, not make it too dependent on China. So effort, I mean, in the past there was a lot of talk seemingly, but, but it seems like in recent months, a lot of extra efforts are, are really being increased in, in that front. So, you know, we, we, we have seen that both sides have the desire to strategically decouple, and especially on China's side, they're doing concrete, taking concrete actions for that purpose, but at the same time, they want less, less, let's, let's manage divorce. Let's, let's not make it too messy for, for, for either of us. So that's, that's where this tech, the trade truth comes in, right? Let's not fight for now, right? Both sides are buying time.

- Maybe it's like separation as opposed to the actual divorce.

- Oh, yes, absolutely. Right. Yeah, yeah. Separation.

- So in that context though, how do you understand the White House's decision to reverse basically this decision on the H 20, the H two hundreds, and, you know, allow Nvidia and also, you know, a MD to sell, you know, fairly advanced semiconductors to China?

- Oh, that's a such a great question. You know, a lot of analysts have, you know, analyzed that, and we have done stories mainly looking into the, the, the huge lobbying efforts by people like hu from Nvidia. It does look like the, the tech industry overall has had quite a sway with President Trump. And, you know, he really listened to them. And, and it, I, I haven't got a sense that President Trump is someone who, who's tech savvy, who actually also even interested in knowing the ins and outs that, that make, you know, of controls essential for Chi for the US national security. So, so one can argue he might be easily persuaded on something like that at, you know, when he's billionaire tech pro, you know, friends, you know, are, are, are, are intent are doing so much to try to persuade him. So that, that's really interesting. But, but on the other hand, you see the, the action in Congress, right? And, and, and also, you know, within, even within the administration, there's still different voices. So the, it's really still so far hasn't been smooth sailing for Nvidia in terms of it, its desire to sell H 200 to China,

- Right? And it's, it's partly not been smooth sailing for Nvidia because of the Chinese reaction.

- Yes, absolutely.

- Reaction, right? I mean, I think that probably came as a big surprise to, you know, people in the White House and, and maybe to Nvidia as well, you know, when Xi Jinping and, you know, many people in China were just like, well, we don't actually want the age 20. Certainly

- A absolutely. And,

- And I think that was a, a wake up call of course after Secretary Lunik said, you know, we're trying to make China dependent on our tech stack. And by the way, like the fourth best chip one would imagine the Chinese would be less than interested, right? In those chips. That's, that's not a huge selling, you know, effort, I think on the part of the administration. But, but how do you think China is looking at the United States these days? And, you know, maybe you can define China, either Xi Jinping or, or more broadly the people that you speak with who are, you know, somehow in the Chinese government or are senior, you know, foreign policy or domestic policy analysts. What, what do you think is, is their outlook on the United States these days and what's going on with the Trump administration and the administration's China policy?

- Right. So, you know, purely based on their statements, and it does have a feeling that China, oh, thinks the US is in chaos. Not as strong as it used to be. You know, there's some truth to that. However, I also do think China still thinks the United States as a very formidable competitor, you know, the recent capture of the Venezuela president Certainly is not lost on Hai, right. And how Trump has been doing in Middle East, the Western hemisphere overall, the hard power, the projection of hard power from this administration is not lost on the Chinese leadership. The sense is that the US you know, can make, still can make hard decisions. I think that's an important realization for the Chinese. It can bring them in from being in their view, needlessly aggressive, especially when it comes to the Taiwan Street and, and other hot hotly debated territorial areas. So that's, that's one thing I would say. And then, you know, the other thing I would say is that compared to the Xi Jinping leadership that dealt with the first Trump administration, this current government, current Xi leadership is way, is feeling way more confident than 10 years ago, because the first time around they were very tentative. They didn't really know what to do. And, and as you know, you know, talk to people like Leo Hu, you know, he, he still had a desire to mend the fences, get the relationship back on track. And this time around you talk, you mentioned the inflection point. I would say one inflection point would be April last year when China decided to hit back at the United States with such strong export control measures on rare Earth. That's an inflection point, and that's a reflection of how much more confident Beijing has become when dealing with Trump 2.0. They felt like they're appear equal to the United States now, and they're not afraid of using the most lethal weapon, trade weapon to hit back.

- Yeah. I mean, I do think that was a miscalculation on the part of the Trump administration, which I think believed erroneously obviously, that just because, you know, we imported so much more from China than China imported from us, that somehow that gave us greater leverage over China. Failing to think through the fact that when it comes to, you know, sort of more single source dependency, we have much greater single source dependency on China for things like rare earth elements or active pharmaceutical ingredients than China does on us, right? Right. And so I think that's, that's really the, you know, the lever that China's been able to pull and, and something that I think if the Trump administration had had probably a more robust policy process leading up to the decision making around the tariffs, they might not have made the choices that they made. But, but in any case, we are, we are where we are and where we are is, you know, just a couple of months presumably away from a she Trump summit and everybody wants to know what's going to happen, you know, is there going to be some big breakthrough, some new Nixon Mao moment, or is it going to be just a series of, you know, one-off sort of small deals or maybe not so small deals. What's, what's your sense? You know, are you hearing anything from the Chinese side or the US side about what they're putting forth or what they'd like to get out of this meeting?

- Sure. That's a very timely question. As recently as a couple days ago, you know, my sense is that no official planning has, has started for the summit in particular, the Chinese side are, is, is is quite anxious because you know, as you know, the Chinese love to plan months ahead of time. And I guess, well,

- For a summit there should be planning months ahead. This is not, I have to say on this side, I'm, I'm kind of with the Chinese it, you know, a summit is not something that should just be try, you know, try to put together, you know, a few weeks ahead of time. That does take, if you wanna have real substantive outcomes, it does take a lot of engagement upfront, so,

- Right, right. I mean, we know that secretary best met with in Davos, but didn't sound like that was a substantial discussion about planning for the summit. But the Chinese side again has been complaining that, you know, they, they had tried to engage with their US counterparts, but so far haven't got much luck. And they thought, you know, probably because President Trump has been very distracted by Venezuela and the other matters. So, but anyway, that's aside on the other hand, in, in terms of informal channels, you know, things are happening, you know, the business side, you know, they probably are, have already given both sides some recommendations in terms of deliverables, you know, what's on China's table, you know, Boeing planes potentially more energy purchases, agriculture. And you know, some people also talked about the reopening of US consulate in China and vice versa. And also, you know, obviously Xi, president Xi will use upcoming meetings whether or not the, the, the first one in April or the ones down down the road this year to try to get, you know, some transactional statements from, from President Trump that could, you know, shake the confidence in Taipei. You know, so, so absolutely. I mean, it, my sense is that the scope for a real deal, it it's quite narrow. Yeah. You know, Les, you were involved in those negotiations in the past the US China talk about market access.

- Yeah. - Who, who's talking about that anymore, right? And getting China to reform, you know, is, is is the economic model. I mean, it's, it's crazy. I mean, these days just just to show how much the relationship has changed though, we talked about, oh, it's, it's more like managed trade, like how buy more with fixed amount within certain timeframe, and, and you do this, is it's very managed, very managed, just as we discussed earlier, to make sure it's not too messy separation.

- Right, right. The ambition is not there to strike, for example, a new investment agreement, right? I mean, there is a lot of talk in the US Yes. In the China circles about whether or not there's an opportunity to sort of structure some kind of framework for encouraging Chinese investment in the United States. I mean, certainly it's tricky given all of the restrictions that, you know, administrations won after the other, since, since the first Trump administration have been putting on that kind of investment. And I think the overall landscape, political landscape among governors, et cetera, they're very wary of certain kinds of Chinese investment. But nonetheless, that's something that if people were interested in having a slightly more ambitious, you know, discussion set of negotiations, I think that could be, you know, on the table along with dealing with China's export of its over capacity. But for that discussion, I think it requires, you know, much more than just the United States and, you know, working with a lot of other countries. And I don't think that's probably a place that we're, we're in right now to try to lead those kinds of discussions among our allies and partners.

- Right. Absolutely. That, that's a great point you just made on investment. I'll look into that as well. Okay. You look

- Into that. Okay. So, so let me, let me finish up with, with coming back inside China, because even though you're not there, you still do a lot of very excellent reporting. What's going on inside China and one of your areas of expertise that you've, you know, developed over the past, you know, decades really is on the Chinese economy, and it is an area where a lot is said, but somehow the more that's being said, the less clear things seem to be. And there does not seem to be a consensus, I would say certainly in the United States, among all the experts, whether they're business or, you know, economists or China specialists can't seem to get their arms around the real estate of the Chinese economy. What, how do you think about it? Like, if you were just going to advise our, you know, viewers, like how they should be thinking about the Chinese economy, what, what two or three sort of recommendations would you make if you were kind of design your own framework for understanding what's going on?

- Right? Yeah, absolutely. Those are such excellent questions and, and I'll try my best to give coherent answers. So first of all, you know, obviously we have established that the only one that matters when it comes to China and how China's economy is being wrong is one guy who is Xi Jinping. And he, his vision for China's economy is that he wants a total reset. The old model that's driven by real estate is, is done. He wants to replace that with the new model driven by ai, semiconductors, quantum computing, you name it. However, the problem is the new mod, the new sectors not enough, nearly enough to replace the whole left open by the real realistic collapse. So I definitely would, you know, look at not just, you know, how much progress China has made in certain sectors like AI and semiconductors, but also the overall economic picture, the economic malaise, as some of us have written about just a few days ago, a well-known Chinese economist told me a stunning figure, Liz, he told me that now every year there are 1 million Chinese families who are losing their homes to defaults. Wow. Right? So that just shows the strain on the Chinese households, Chinese middle class, I mean, talk about the people who left their hometown to big cities and made living and saved enough to buy a house. And now they have to give that all away. And I've heard stories about banks selling foreclosed homes at really low prices because they just need the money, not not too much loss of loss to record on their books. So the, the economy is rotting the, the, the, you know, the real estate sector because of the real estate sector and the, the collapse and local governments, they're running out of money. Xi Jinping, one of the ing dogma is that money must, must be repaid. So that lead to local governments keep buying, keep borrowing new debt to repay old debt that has led to further acceleration in China's debt levels. And the same time they're struggling to really bolster local economies. So all the macro indicators, I mean, the real indicators are pointing to really deep slow down in, in China's growth. But at the same time, we definitely have seen, you know, enormous impressive progress being made in ev cars. You know, our tech columnist today just wrote a really fun column about how she loved driving xmi, you know, car versus her, her, you know, Ford car. It was, it was hilarious, but, you know, but you know, the Chinese have got a lot better with that kind of stuff, right. However, an economy that's built on that kind of stuff and, and, and, and, you know, a lot of people making the same products but not making really money. I I don't know that that's calling into question how sustainable this is. You know, you cannot expect everybody to be high tech, right? You cannot expect any, everybody to make trips or EVs or batteries. People need other stuff to live. So, so I I I am very concerned about, you know, the, the, the economic, you know, malaise getting even worse over time.

- Yeah. I mean, I will say, since you mentioned Xiaomi ev when I was last in China at the end of November. Yeah. One of the things on a small delegation, you know, we visited Xiaomi ev factory, right side Beijing, and Wow, was it impressive, you know, 750,000 square feet, only a couple hundred people working on the floor because everything is automated. They're gonna be producing up to 300,000 EVs a year. I mean, the, the colors of the cars are spectacular. They're, it's a really smooth ride. And I mean, the factory's so clean you could literally eat off the floor. So I have to say it was very, very impressive. But to your point, not everybody can be part of, of this 21st century economy, just like in the United States,

- Right?

- I need the training and the education, and my sense is that China, a little bit like the United States is not doing a very good job of ensuring that the majority of its people are actually getting the skills and training that they need to participate in that 21st century economy. And I think, you know, a huge portion of, of China at this point in time, you know, as, as much as I, you mentioned Leika Chang and you know, back his statement about, you know, half of the population basically at that point living on $150, you know, or less a month. I mean, that was shocking. That was a wake up call. And I think now it's up to like $300 a month, but still that's not enough. Right? And so I think it is, it's hard to, to sort of square, you know, what you see, you know, in these factories and that technological progress, and it's just extraordinary. And then at, at the same time, you have this, you know, vast portion of the populace that really can't either enjoy the fruits of that because of the way that the resources are distributed, right. And the absolutely give you lack of a social welfare net, nor can they participate in, in advancing it, right? Right. So, so I think that's, it's hard. It's, it's really, I think, hard to, to figure out how those two things move forward Yeah. And what that looks like in 10 years.

- Exactly. Exactly. Sometimes I try to think of, you know, those well performing tech sectors as sort of like states within the state, right? Yeah. So of course for a state, it's not all great. There are certain areas that really still doing well, and those are the tech sectors. But the question is, when the rest of the state is rotting, how much stronger can you continue to be going forward? Yeah.

- Okay. So now I, I always end with a couple of really just quick questions to, for you to share, you know, your advice with our viewers. So if you had to recommend a book or an article that you think people should read that you think gives a particularly important insight, you know, into China, what, what would you suggest?

- The first book and person that came to mind is our friend m Xpe. Okay, great. He's, yes, he's new book, the Broken China Dream, basically, you know, he's arguing that Xi Jinping's rise is inevitable and the China's embrace of capitalism or state capitalism in the pre in the previous decades actually had help harden the country and give the rise of someone like Xi Jinping. So very thought provoking book.

- It is, it is. And actually it's good. I just reviewed it for foreign affairs, so lemme out in the next issue of foreign affairs. I agree with you. I think it's a, it's a terrific book. So, good, good suggestion.

- Thank you.

- And what, what issue do you think that we don't understand or, you know, we don't understand, but, you know, for the larger American public, what don't we know or what should we know more about when it comes to China?

- I think it speaks more to things I wish I could report on these days just about what's happening within China. You know, obviously, you know, the societal change, you know, the, the struggle of everyday Chinese. I felt like that's a topic that because various reasons and hard constraints on reporting power. Right. You know, I wish we could, you know, have more people and, and reporters and time to dig into that. 'cause it's also important, you know, China is not just Xi Jinping, right? Yes. And so, and you know, China has gained a bad name of the past decade or so because various things the government's done, but as Chinese people like that, no. And that's, that's also hear their stories, their struggles under the regime, not just, you know, the, what the government is doing.

- Yeah. I think that's a really important point. And you know, there have been a number of books that have come out that have looked at individuals within, you know, the Chinese system. In fact, I just was finishing one called Wall Dancers that deals with, you know, a set of, of Chinese young people and how they sort of came of age through the internet and, you know, their lives were transformed in different ways. And it's a great book, I'll say, you know, about these books, you know, first is that, you know, they focus on individuals, which is you, you know, you get these in-depth portraits, which are great. You don't necessarily get a sense of the whole of Chinese society like you're talking about. But also, inevitably the stories end in a sad, in a sad way. Yeah. You know, and, and I'm not sure why that is, but you know, you finish these books and they're fascinating books, but, but each one of the people that's been sort of tracked their lives and, and it's true whether they stayed in China or where they've ended up living abroad, there's just this melancholy somehow about, you know, where their lives have ultimately taken them to this point. I think I should recommend that the next people, they interview you, I think, I think I think maybe they get a different sense of a, of a trajectory of, of, of somebody from China offer a different kind of story with a, with a happier midpoint, midpoint ending.

- Yeah. Yeah. De yeah. I also, you know, hope for more happiness, you know?

- Yes.

- In our lives in the world. For sure.

- Yeah. So Ling Ling, I want to thank you. I've, I've taken thank you too much of your time and we've gone well over my usual podcast time. Amazing. But just, you know, offered so many fascinating, you know, insights and, and thoughts and, you know, really just your expansive knowledge I think is, you know, very difficult to replicate and really appreciate your taking the time to share it with us

- Entirely. My pleasure, Liz. You know, I always learn so much just by talking to you and your work has been tremendous and really, really thank you for the opportunity. All

- Right, well, we'll have to do it again, you know, and maybe six months or, or certainly by the time of the next party Congress, and get your thoughts about what, what that's going to to look like. So if you enjoyed this podcast and like to hear more recent discourse and debate on China, I encourage you to subscribe to China considered via the Hoover Institution YouTube channel, or the podcast platform of your choice.