Cold War II—Just How Dangerous Is China?

Wednesday, April 7, 2021

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Peter Robinson: China, 1.3 billion people, an economy projected to become larger than ours in just a few years, and a rapidly growing military. How much trouble are we in? Former White House national security advisor, HR McMaster, and former White House deputy security advisor, Matt Pottinger on "Uncommon Knowledge" now. Welcome to "Uncommon Knowledge." I'm Peter Robinson. Herbert Raymond McMaster graduated from the United States Military Academy in 1984 and later earned a doctorate in American history from the University of North Carolina, where he wrote a thesis on the performance of the American military leadership during the Vietnam War that became a best-selling book, "Dereliction of Duty." General McMaster served in the Army for more than three decades, including a year and a half as President Trump's national security advisor. In 2018, he retired from the Army with a rank of lieutenant general, becoming a fellow at the Hoover Institution. Last year, General McMaster published "Battlegrounds: The Fight to Defend the Free World." After graduating from the University of Massachusetts at Amherst with a degree in Chinese studies, Matthew Pottinger first devoted himself to journalism working for Reuters and the "Wall Street Journal" and spending some seven years reporting from China. In 2004, he joined the Marine Corps, where he served as an intelligence officer in Iraq and Afghanistan. After leaving active duty, he worked for a time in finance on Wall Street. In 2017, he joined the Trump administration where he served on the staff of the National Security Council first as Asia director, serving under HR McMaster, then as deputy national security advisor. Matthew Pottinger is now also a fellow at the Hoover Institution. HR and Matt, welcome.
Matt Pottinger: It's great to be here.
H. R. McMaster: Great to be with two great friends. Thanks.
Peter Robinson: Two quotations, gentlemen. The first is from the late Hoover fellow policy analyst, economist Harry Rowan. I've been at Hoover long enough to have known Harry. I don't think either of you met him, but this is Harry writing in 1996. Quote, "When will China become a democracy? The answer is around the year 2015. This prediction is based on China's steady and impressive economic growth, which in turn fits the pattern of the way in which freedom has grown in Asia and elsewhere in the world," close quote. That sounds almost risible now, but that was a serious point in 1996. Here's the second quotation, President Xi Jinping of China. And since he has eliminated term limits, we should call him perhaps President for Life Xi Jinping of China. Quote, "There are people who believe that communism is an unattainable hope, but facts have repeatedly told us that Marx and Engels' analysis is not outdated. Capitalism is bound to die out," close quote. I can remember it from the Reagan administration. For decades, it was American policy to encourage economic growth in China and to welcome that nation into the world trading system on Harry Rowan's theory, that economic growth would lead to political freedom. Political freedom would make China our friend and ally and cooperator in a new increasingly democratic world order. Economic growth has sent China in the other direction. We now see in some ways, because of the advent of technology, the most repressive regime, the most repressive regime of a large country in all human history. What went wrong, HR?
H. R. McMaster: Well, I think you set it up perfectly, Peter. With the second quote from Xi Jinping, we under estimated undervalued the degree to which ideology played a role in how China would evolve over time. China didn't fulfill our hopes that we had placed on China, and we clung to this assumption that China, having been welcomed into the international order, would play by the rules and, as it prospered, would liberalize its economy and liberalize its form of government. And of course, that didn't happen. And by the time Matt and I worked together on the NSC staff, it was a painfully obvious that we had clung to these assumptions for too long, and then we took on this effort to deliberately shift the assumptions on which our policy was based, and there's nobody who's more responsible for accomplishing that then Matt Pottinger.
Peter Robinson: So Matt, I'd like to ask this question explicitly, and you're the right man of whom to ask it because you reported from China and then joined the Marine. You've been studying China since you were an undergraduate. Were we right? Was there an original trajectory in China that has since shifted toward democracy and now back toward some much more rigid form of ideology, or were we just wrong all along?
Matt Pottinger: Yeah, I, over the years, have come to believe that we were actually wrong all along, but it's useful to be a little bit humble about all of this. And remember back in 1996, when Rowan made that comment, by the way, I once had the chance to meet him
Peter Robinson: Oh, you did know Harry.
Matt Pottinger: years ago. Yeah, yeah, just a little bit, and I would've agreed with him at the time in 1996. If we're honest with ourselves, it was a bold and optimistic but still realistic seeming idea, especially after the fall of the Berlin Wall, the collapse of Soviet communism, that inevitably, the same thing was gonna happen in China one way or another.
Peter Robinson: And South Korea and Taiwan went well.
Matt Pottinger: South Korea and Taiwan went well, but of course, I now heavily weight the fact that they were smaller countries that were American allies that had security treaties and were protected by the United States, and that gave us enormous leverage to push those countries in that direction. When you really start to then read what the Chinese Communist Party has been saying in its own language to its own members all along, you start to realize that we deceived ourselves. Really, the great contribution, if you will, to Leninist government systems that China made was to camouflage their intentions. And they studied very, very assiduously what went wrong that led to the collapse of the communist party in the Soviet Union. And they said, "We just need to tack a little closer to the wind and allow enough of these market forces to buffet our system, to raise standards of living, to make us wealthy and more powerful." But I now believe that, as a Chinese businessman who's a friend of mine told me, and he was someone who was always hopeful that China was gonna continue on this liberal trajectory, he now believes that it was inevitable that they were gonna tack back to an increasingly authoritarian direction.
Peter Robinson: So one work, I wanna come to details, in particular details of the relative correlation of forces. You two guys are both military professionals, and when I say, "How much trouble are we in," I really would like to know in some detail. But one more large but really, I believe, important question first, and that is what does China want now? What does China want now? The background in my mind is in the old Cold War, there was a debate that never really ended among Americans. To what extent are they behaving like a great power? If the czar had never fallen, the czar would still want to expand because that was what the Russians did. They had their interests. They wanted to pursue them. And to what extent were they behaving out of ideology? By the way, our Hoover colleague, Stephen Kotkin, the historian, I asked him once after three decades of studying Soviet archives, what's the main finding? And he said, "They were communists. They really believed it. They were communists." And you hear it in the air. "Oh, no, it's just Beijing. They're trying to reassert their authority as an Asian hegemon. They have the mandate of heaven. Their immediate neighbors must kowtow to them. They are trying to reassert the imperial system." As against no, no, no. They're communists in one way or another. It sounds like a crude phrase, but they really do believe in the worldwide triumph of communism. Which is it, HR? How do you weight those two?
H. R. McMaster: Well, I'll be brief, and we can hear from the real expert here, Matt.
Matt Pottinger: No pressure, Matt.
H. R. McMaster: I think that we have to say that that the party is obsessed with control, right? And I think this is really important to understand what explains the behavior of the Chinese Communist Party leadership. And I believe that they are driven mainly by fear, fear of chaos, fear of losing the party's exclusive grip on power. And what that drives is a whole range of activities and behavior internally to stifle human freedom, to build the firewall higher and higher, to engage in genocide in Xinjiang, to mobilize people's social and family networks against them, to police the people's thoughts with this
Peter Robinson: So HR, with that-
H. R. McMaster: Orwellian police state.
Peter Robinson: Have I left out-
H. R. McMaster: But it's also-
Peter Robinson: Have I left out a piece of history here that's important? So on the one hand, they don't wanna surrender control because they saw the collapse of the Soviet Union. True as far as that goes. But they also witnessed, they all lived through the cultural revolution when even Mao lost control, and students were rampaging through the streets, and it was mob violence across this huge country. That's what they're afraid of. They're afraid of their own people. Yes, no?
H. R. McMaster: Well, yes, and this is why the party's also really determined to manipulate history because any kind of question about the party that arises from that utter disaster of, first, the great leap forward, which was a great leap backward, and then the cultural revolution in which the party murdered its own citizens to ensure the party could stay in power. Then that's skipped over now, right? What's the Orwellian phrase? "He who controls the present controls the past, and he controls the past controls the future." And so that what the party really wants to do is give a version of history that highlights the party's great virtues and highlights the party as responsible for helping the Chinese people achieve this vision of national rejuvenation. So it's fast forward from the century of humiliation to now China taking center stage in the world, and China's aggressive behavior externally is also tied to this desire to maintain the party's exclusive grip on power internally because it's really through this nationalist sentiment, this sense of pride that the party is deliberately generating about getting over the century of humiliation and taking center stage in the world. But I really wanna hear what Matt's thoughts are about this, but I would say that the party's driven by a combination of fear and ambition and aspiration, right? And these emotions are mutually reinforcing in terms of explaining the party's behavior internally as well as its increasingly aggressive behavior internationally.
Peter Robinson: Matt.
Matt Pottinger: Yeah. I agree with HR, and you put your finger on it, Peter, by saying that they fear their own people. I think there should be no question that the thing that the Chinese Communist Party fears most is its own people. And you can see that even if you just look at their budgets. They spend more money on their internal surveillance apparatus, their internal security than they spend even on their military, and their military spends more than the rest of Asia combined, second only to the United States worldwide. It is what they fear most. And the more tightly they tack toward the wind, the more they realize that they would eventually lose control. And so that's why you've seen a recentralization of power into the hands of the central government, into the hands of, really, of one man, even on economics. The one thing that has allowed China to succeed in ways that the Soviet Union never could was on the economic front because they were willing to get out of the way of their own people to some extent. But now they're tacking back. They're saying, "We can't afford to do that. If we continue on that track, we're gonna lose our grips, so now we have to use heroic measures." And I use that term ironically. My God, they they've just crushed Hong Kong, which was the golden goose.
Peter Robinson: I was about to ask you. When Jimmy Lai appeared on this program, he said, in effect, this would be about a year ago now, and if not quite a year ago, actually, he said, in effect, "They can't afford to move against us. 60% of foreign capital is invested in China through Hong Kong because foreigners want the rule of law. They want to deal with Hong Kong banks that Hong Kong is of such economic importance, we're okay. Our economic importance gives us cover to press for democracy." And Jimmy Lai has just been sentenced to jail. They crushed Hong Kong, and that's a straightforward calculation. I'm asking you this. Beijing understood the economic importance of Hong Kong and said, "No. Control is even more important. Crush them." Something like that? Some sort of calculation like that?
Matt Pottinger: Absolutely. I think that in his heart of hearts, Xi Jinping believed that he did have to crush Hong Kong in order to maintain party control. And so you have what looks to be in an extremely non-pragmatic approach to the world, in contrast to the way that Deng Xiaoping ran his affairs and his immediate two successors ran their affairs, but it may be that Xi Jinping does understand something that Joseph Stalin understood as well, which is that it's not so much the content of the ideology, although I love Stephen Kotkin's observation. As he went deeper and deeper into this, into the archive, he found that the more intimate the conversation among the top members of the Politburo, they still sound like communists. It's not a joke. And so they're pickled in their own ideology. And even as the ideology starts to take on strange chimeric features, it is still ultimately that Leninist idea. It is about power, and it is about the single party rule. And it is taking on chimeric aspects. The Chinese ideology today is not purely communist, even though it is very much a purely Leninist communist party. They're grafting on elements of nationalism, old imperial ideas about a hierarchical and also racial supremacist sorts of overtones that are being introduced into the ideology. But what will remain constant is the party will, at any cost, any cost maintain its power.
H. R. McMaster:: I would just say, Matt. I was gonna ask you, don't you think the argument that they're making for socialism with Chinese characteristics is more and more strained, right? I'm thinking of the recent speech that Xi Jinping gave on rule of law, which is really a speech about the opposite of rule of law, right? So you have now, really, these extreme examples of an Orwellian reversal of the truth, right? And I guess the question I would have is how's that playing out inside of China? That's the question I always get asked, and I have no idea, right? How are the Chinese people reacting to Xi Jinping Thought, the mandatory studies, the apps that everyone has to spend time on so that their social credit score stays high and they wanna do well on the quizzes on Xi Jinping Thought. How are the Chinese people responding to this, Matt? And do you think it's sustainable? Is this strange, perverted ideology, is it sustainable?
Matt Pottinger: I don't think it is sustainable, and I think that the communist party knows that it's not sustainable. Even Xi Jinping himself believes, and this is what makes this moment so dangerous, he believes that if he doesn't leverage all of the the amassed power and advantages that they currently have to expand their reach and influence overseas, that eventually, all of the failings of their system, all of the weaknesses and vulnerabilities of a centrally planned system are going to start expressing themselves much more blatantly. And so he knows that he's got momentum before this car starts to really lose speed, and then eventually, it's gonna have to actually try to go uphill as well and defy physics and help an economy that's centrally planned, a totalitarian dictatorship, to escape the middle-income trap. That would be quite a trick and quite a feat. So he wants to lock in as much influence globally, including territorial. The fact that he's killing Indian soldiers, crushing Hong Kong, threatening to annex Taiwan. Taiwan has been the main source for much of this period.
H. R. McMaster: The maritime militia parking -
Peter Robinson: Okay, boys. Gentlemen, if I may just offer to reassert control here for just a moment.
H. R. McMaster: I guess, yes.
Peter Robinson: Speaking of control, I've been trying to read up a couple of documents for which I know Matt is responsible, and I've been reading Pentagon documents. Listen, you military guys, who has what weapons? This is really confusing, honestly. I've tried. And so I'd like to have the two of you take me through this briefly, but just take me through, so to speak, the correlation of military forces. And I thought, as a framework, I found this quotation from President Xi Jinping. This is a speech he gave in 2017 in which he established goals for the People's Liberation Army. "To achieve mechanization by 2020," last year, "to basically complete modernization by 2035, and to transform the PLA into a world-class," who translated this, I don't know, but these are the terms that the translator used, "into a world-class force by 2049," which of course will mark the one-century anniversary since Mao took control. So can we go through that briefly? Can the two of you provide a primmer for the layman? Item one, what did he mean when he said that the PLA needed to achieve mechanization by 2020? What did he mean, and did they do it? HR?
H. R. McMaster: Well, it was it's partially mechanization, which means you have to acknowledge the automotive revolution happened. And of course, the PLA, all the services are the People's Liberation Army and then People's Liberation Army Navy or Air Force. But the Army is the dominant culture, and mechanization really also means improving the qualitative aspects of the Chinese Army, the PLA. By downsizing it, it actually got smaller, but it got more capable and was provided with much more advanced weapons systems, including Chinese-designed and manufactured tanks and personnel carriers and self-propelled artillery and then also some very other important capabilities, long range missiles, for example, electronic warfare capabilities, and then also some advanced cyber-offensive, cyber capabilities, counter-space capabilities in the PLA Air Force. So by mechanization, that's shorthand for major qualitative improvements based on a very ambitious modernization program, Peter. This is the largest peacetime military buildup in history is what we're witnessing, I believe. And it's a story, and I hate to make comments like that, like the most, but they have increased their defense spending 800% since the mid 90s.
Peter Robinson: If I understood this correctly, and again, I was at sea among statistics, but I was struck that after the downsizing, they have two million men. I think in their case, it is exclusively men or overwhelmingly men. They have two million men under arms. And as I recall, that's roughly the number we have under arms as well. Matt, do you look at their Army and say, "Whoa"? If you establish the imaginary planes of Armageddon, put us up against them, is it an even match?
Matt Pottinger: Well, remember-
Peter Robinson: How good are they? On a scale of 10, where 10 is us, how good are they?
Matt Pottinger: Look, I would not underestimate them, although they're not battle tested. But they're training, and they're putting a huge emphasis on realistic combat training, and that can compensate up to a point for a lack of actual combat experience. You have to remember what they've been planning since they witnessed the first Gulf War, where HR played a heroic role in the last major tank battle of the 20th century, they watched us and our capabilities using smart bombs and what the digital revolution had done for our ability to do precision targeting and had advanced our ability to conduct maneuver warfare to really, we were unmatched, unrivaled. And so they've studied very carefully how to try to offset the advantages that the United States has accumulated is the best conventional military in the world. What we now have to do is help complicate their own offset with an offset of our own, and that means changing doctrine. It means different types-
Peter Robinson: I'll come to that. First, the little layman here needs a continuing education. I promise we'll come back to what we need to do. What we can do to them as the second question. My first question is what could they do to us? Here's, to me, the central conundrum, the piece of this that I, as a layman, have trouble understanding. We spend well over $700 billion a year on defense. Even now, after all this huge ramp up, China spends only about 1/3 of that amount. And yet, according to the Congressional Research Service, one of the dozens of reports I found, "The PLA has already achieved parity with or even exceeded the United States in several areas, including shipbuilding." Okay, look at a couple of charts, if you would, please, just two. Here's the first one, and that shows the Chinese military spending is in red. Ours is blue at the bottom. We continue to spend more than anybody else, but you can see the Chinese spending increasing over the last 30 years or so. And you can see that even though it has increased dramatically, it's still only about 1/3 of what we spent. Here's the second chart, which comes from Nick Kay. And this chart shows, suggests, even if it's only roughly accurate, even if the estimates are only roughly correct that in Asia itself, we spread our spending across the world. They devote their to Asia. They've got us. We're outnumbered in fighter jets, bombers, warships, hugely outnumbered in warships, submarines, hugely outnumbered in submarines, outnumbered three to one in aircraft carriers in Asia. So I think to myself, "Well, that's the old story." When you're on defense, you have to cover your entire perimeter. But when you're the aggressor, you can concentrate your forces at places of your choosing. Is that accurate that, in Asia, they already dominate us in some important way? Listen, by the way, fellas, I didn't state this explicitly. Maybe we should have had a conversation before we started recording, but your job is to make me feel better.
H. R. McMaster: Well no, we don't wanna feel good about this, right? We have to recognize that we were complacent for too long. We had bought into not only the assumption we talked about at the outset that China was gonna liberalize in its form of governance, and then there'd be this great power condominium between us. It didn't happen, right? So this was a period of time during which we were complacent, and I would say, this goes back, as Matt said, to the Gulf War. And what the Chinese Communist Party did, the PLA, the People's Liberation Army, did is they did studies very closely, and they didn't try to replicate our exquisite capabilities. They tried to figure out what capabilities can they develop to take our differential advantages apart. So we kept investing in fewer and fewer more exquisite, more expensive systems. What China did is they developed countermeasures to those systems with counter satellite capability, tiered and layered air defense, long-range missile capabilities, electronic warfare capabilities, swarms of drones, and undersea drone capabilities, and, as you mentioned, a large number of much smaller attack submarines. All of this is meant to keep us out and to establish exclusionary areas of primacy, and why does that matter? It matters because that combined with what they're doing economically is meant to reestablish a tributary system and servile relationships with countries across the Indo-Pacific in a way that will make the world less free, less prosperous, and less safe. And so what we need to do, as Matt already mentioned, is counter that. Now, one of the reasons why our defense budget is so much higher than there is, first of all, they obscure
Peter Robinson: Oh, is that so?
H. R. McMaster: a lot of their defense investments. And so what you see in terms of the Chinese defense budget, that's not the full picture. And our budget is expensive in large measure because of personnel costs. We're not buying as many fighters because we're paying people better and we have more civilian employees and so forth. So there needs to be reform in all of these areas, and what I'm concerned about is if we keep on the same path of modernization we're on, we could be on a path to exquisite irrelevance because of the countermeasures that China's developing. We need to really rethink the types of weapons systems, the types of organizations we have in our military because we are building a force that could be prone to catastrophic failure when, in fact, we need forces and organizations to degrade gracefully like we are, Peter, at our age, rather than fail catastrophically.
Peter Robinson: I'd like to say, "Speak for yourself, HR," but I know I can't get away with that. Matt, I just heard a lieutenant general career United States Army officer, graduate of West Point say that, "We have been complacent, and this is serious." It has gotten serious. I wanna come to Taiwan in just a moment. You raised Taiwan already. I wanna get there. But is your former boss correct about that?
Matt Pottinger: Yeah, unfortunately, he's spot on about that. And our allies have been too complacent as we've watched some of those metrics like that chart showing Chinese spending increasing so dramatically, the fact that much of their budget is hidden, the fact that they don't have to do as much research in development as we have to do because they steal the fruits
Peter Robinson: They steal it!
Matt Pottinger: of our research and development, right? So I don't take any comfort from the nominal figure that their defense spending is only 1/3 of ours. I don't think that's true. The ways that we need to be countering them have to also incorporate in our strategy elements of national power that are nonmilitary. And we still maintain a massive advantage in terms of our capital markets. We still have a much better innovation base than China has. I think that if China were fully cut off from American innovation, it would die on the vine quickly. And we can talk more about that, but-
Peter Robinson: I wanna come to that. I certainly wanna come to that. You can't sit here in Silicon Valley as HR and I do, and as we're hoping you come join us, at least from time to time. You can't sit here over the years and fail to see all the Chinese investments in tech, and it's unnerving at a minimum. All right, Taiwan, population about 24 million, a high-tech hub, the world's leading manufacturer. This is important. The world's leading manufacturer of microchips and other items essential to high-tech. Incidentally, it's not as if we do all the design and flip it over to them for manufacturing. They're right at the cutting edge of R&D and all kinds of sub categories in tech. Mao triumphs on the mainland in 1949, and the defeated forces under Chiang Kai-shek go to Taiwan, which has since become unambiguously, straightforwardly, and successfully a functioning democracy. As a result of the opening to China under President Nixon, the United States ends its formal recognition of Taiwan, but we have remained committed to its defense ever since, supplying the country with a constant supply of weaponry. There's the background. Now listen to this exchange which took place when Admiral John Aquilino, you guys know him. I'm sure I'm mispronouncing his name. Did I get that name correct?
Matt Pottinger: Mm-hmm.
Peter Robinson: John Aquilino. John Aquilino is the commander of the United States Pacific Fleet, and he testified last month before the Senate Foreign Relations Committee. Senator Tom Cotton questioned, "Would Beijing desire to have Taiwan annexed to the mainland?" Admiral John Aquilino, answer, "They view that as their number one priority." Well, gentlemen, we made our commitments to Taiwan, which is just across a narrow strait from mainland China. We made our commitments to Taiwan when China was dirt poor, feeding their people was a problem, and the People's Liberation Army was a peasant army. Things are different today. Are we overextended? Can we keep our commitments to Taiwan? Speaking of things getting serious, those questions are serious. Matt?
Matt Pottinger:Yeah. The truth is that dominating Taiwan, as Beijing hopes to do, is a much taller order than I fear Beijing thinks. And so there are matters of-
Peter Robinson: That's first thing you've said today that has cheered me up. Keep going.
Matt Pottinger: Look, the people of Taiwan do not wanna be dominated, and over time, that sentiment has only increased. People identify increasingly as Taiwanese first, Chinese second, and the geography is extremely difficult. Both the shallow straits, the very stormy seas of the straits, there aren't many places to land an invading force. It is a compact little fortress of an island. It's got the tallest mountain in East Asia, taller than Mount Fuji on this little Island, a lot of rural as well as difficult dense urban terrain. And so I think that to the extent that Taiwan, with our help in Japan's help and the help of other countries around the world, can help the Chinese decision makers in Beijing understand that this may not be a fast fight the way that they're planning for it to be. They want it to be a fait accompli, finished in a matter of weeks-
Peter Robinson: Can I just say military planners. I'm sorry. I don't mean to compare these two regimes, but just as a military question, again, to help a layman get a grasp on it. The German military planners at the beginning of World War I draw up plans for the invasion of Britain. Presumably, the PLA is drawing up plans. We hope they're never executed, but they're drawing up. Who has the harder military problem? Is it harder for the Germans to invade Britain, or is it harder for mainline China to invade Taiwan? As a military matter, which is the problem?
H. R. McMaster: Well, it's analogous, right? It's analogous. Operation Sea Lion didn't happen because, of course, the Nazi regime said, "Hey, this isn't gonna work." And when you have an obstacle like a narrow strait, like the channel, the problem is you might be able to get some forces there. You might be able to sustain that, right? You need to really achieve a degree of mass that allows you to be able to sustain that force and get the logistics in behind it. It's very complicated. Matt, I don't know what you think, but it's probably more complicated today, right? Because if Taiwan undertakes the reforms under President Tsai Ing-wen to develop some of these asymmetrical capabilities, in particular, long-range surveillance and detection and radar that can be paired with precision systems, short ship missiles, for example, and sophisticated tiered and layered air defense, hey, really, that's gonna make it tough, and that's really what you want is you want to achieve deterrence by denial in Taiwan. You want the PLA to conclude that it cannot accomplish its objectives through the use of force.
Peter Robinson: Let me quote to you both. I'll come back to you, Matt,
Matt Pottinger: Sure.
Peter Robinson: after this one. Our Hoover Institution colleague, Neil Ferguson, Neil wrote this just 10 days ago. "As a student of history, I see a very dangerous situation. The US commitment to Taiwan has grown verbally stronger even as it has become militarily weaker." This is the nightmare. "Perhaps Taiwan will turn out to be to the American empire what Suez was to the British empire in 1956, the moment when the imperial lion was exposed as a paper tiger. Losing Taiwan will be seen all over Asia as the end of American predominance. It would cause a run on the dollar. It would be the American Suez," close quote. Matt?
Matt Pottinger: Yeah, well, look, I don't even want to indulge in a scenario in which the US fails to come to Taiwan's aid and fails in providing a sufficient aid to prevent Taiwan from being annexed-
Peter Robinson: You don't feel any impulse to say, "Neil, Neil, Neil, calm down, calm down. That's a good concept for a column, but we're not there yet." You don't feel an impulse to say that? In, of course, a respectful way to Neil.
Matt Pottinger: I'm one of those that feels the situation is actually quite urgent. I agree with Neil on that. I do agree that it would be that, were that outcome to come about, it could be quite disastrous. But at the same time, all of our allies in Asia, who else have they got, right? There's not another United States waiting in the wings the way that the United States was there to pick up where the United Kingdom left off as a great ally of the United Kingdom. But to the question about invading, I think HR's right that it is analogous. It's analogous in other ways, Operation Sea Lion versus whatever operation the PLA is cooking up. It's analogous in another respect. Remember that the Nazis started by targeting, from the air, military targets in the UK. And when that didn't work, they turn to terror bombing. And when that didn't work, they pretty much run out of cards to play. They did not think, and I think rightly, that they were gonna be able to pull off the invasion of the British Islands. In this case, some things have not changed in warfare. It's extremely rare, if not unprecedented, for a country to subjugate another country purely through air power, and China's formidable missile arsenal is just another form of air power. It's precision.
H. R. McMaster: If I could recommend a book here, Conrad Crane's book, "Bombs, Cities, and Civilians" makes this point very clearly. Go ahead, Matt.
Matt Pottinger: Yeah, that's it exactly. And so what it does is it does not achieve the strategic military effect that air power sets out to try to achieve first, and second, it doesn't achieve the strategic political effect it's designed to subjugate and cow at people. It usually gets their backs up and makes 'em wanna fight all the more, and the will to fight, which is the main key variable in the outcome of a conflict, including in the Taiwan Strait, the approach that China's gonna take could end up actually increasing the will to fight, not only among the people of Taiwan but among the people of the United States, the people of Japan, and people from farther flung places as well.
Peter Robinson: And Matt, would you maybe also make a point about how what China has done in Hong Kong has also bolstered the will of the Taiwanese people? That had the opposite effect as well.
Matt Pottinger: I think so.
Peter Robinson: Could I just ask? Speaking of what China did in Hong Kong, again, I'm a layman and I'm about to take a whack at an administration in which the two of you serve. So if I'm missing things, whack me back. But China threatens and blusters in Hong Kong, and we use some diplomatic language saying how much we'd object, and then they roll in and crush, well, excuse me, the first thing they do is round up central democratic activists, including Jimmy Lai, who's appeared three times on this program, and Martin Lee, and we use some diplomatic language. And then they crush the democracy movement, enacting a new law, rounding up the remaining activists, reaching down, not simply to the famous figures but down to the kids, the organizers. People are in prison. It's over for Hong Kong. It's over. And between the Trump administration and the Biden administration, the American response was, "Oh, what a pity." And I just think back to, again, the old Cold War. Henry Kissinger used to say this, and so did Aleksandr Solzhenitsyn in his famous address at Harvard University that absence countervailing force, the internal dynamics of the Soviet Union were such that it had no choice but to expand. We simply say, "What a pity about Hong Kong," and the internal dynamics in Beijing are, hey, Xi Jinping. They're not pushing back on Hong Kong. Now Taiwan. Now the big event. Yes, we supply military aid to Taiwan, but did we just screw up? Couldn't we have said something more? Couldn't we have done something to register a much more serious objection to what the Chinese just did in Hong Kong? Did we just weaken Taiwan's hand by failing to perform, failing to do something in Hong Kong, or have I got that entirely wrong, which I very may well?
H. R. McMaster: Well, I'll ask Matt 'cause the administration did do quite a bit in response to Hong Kong. But as Aristotle said, "It is only worth discussing what is in our power," right? So I think what we have to do mainly is learn from what happened in Hong Kong and make sure we maintain our strategic options and we keep our deterrent capability strong in the region. There are those today, Peter, who say, "What are all those forces doing overseas," which are actually historically low levels of US forces are employed abroad these days and are making the case for bringing everybody home to the continental United States. Well, hey, China would like nothing more than that because it is forward-positioned, capable US forces, as Matt mentioned, in the context of alliances and partnerships, that turns what China would like to say is denied space automatically into contested space, right? So I think it's important for us to recognize that we have to maintain a strong deterrent, which we didn't have, obviously, vis-a-vis Hong Kong, but also preserve more options if there is a crisis. But Matt, I think your best position to discuss the reacting to the aggression in Hong-
Peter Robinson: And I'm entirely open to the possibility that I just have it all wrong here. I'm just a layman reading the paper.
Matt Pottinger: Well, I think that the effect we did, it didn't get much coverage, but President Trump actually gave a powerful speech in the Rose Garden in May of last year when it became clear that China was gonna move forward with this national security law. He unveiled a number of concrete steps designed to impose direct costs on the Chinese Communist Party as a result. If those had been amplified not only by our own media but also really by European powers, it would've had a stronger effect. I don't think it would've stopped what the leadership in Beijing had clearly already set out to do, but it would've, I think, reverberated more powerfully in ways that would harden others around the region, including Taiwan. I think the effect was a backfire in terms of China's Taiwan policy. It was after that that-
Peter Robinson: By the way, you reported from Asia. You know it well, and HR, you were on airplanes for 30 years. You've been everywhere in the world talking to leaders. Now that we've gotten going on this analogy, Churchill was the singular figure who stepped forward at the very last moment to defy Hitler. Taiwan has one major figure after another insisting on defying the mainland Chinese. The population of Taiwan itself votes for people who were on the independence from China, not perhaps official declarations but who want to create... Not to use old-fashioned terms, but that island is filled with courageous people. Listen, if I had them buzzing my airspace every two days, I'd get on the phone and say, "Fellows in Beijing, could we talk this over a little? Exactly what do you want?" And that is not what the people of Taiwan are doing. Have we got an ally who's just impressive there, unusually impressive as human beings go, Matt?
Matt Pottinger: Well, yeah. Taiwan is a pretty amazing society. I remember when I went there as a student to just to study Chinese for a year in Taipei after I had spent a year in Beijing, and I was just blown away by the difference. They had preserved incredible aspects of traditional Chinese culture much better than, of course, the communists had. There was a vibrant religious life, respect for historical artifacts, and traditional Taiwan culture and traditional Chinese culture but in this very democratic, outspoken, political context, which was really a revelation for me. Where they need to do more is, in order to demonstrate the will that I think is there that you're touching on that, the will to resist,
Peter Robinson: They're tough, yes.
Matt Pottinger: it is to show that that will actually translate into operational capability in the form of a civil defense corps, reserve corps, special ops forces, others that are willing to fight for every square inch of territory in Taiwan. And the previous government in Taiwan, the KMT government that was in place before Tsai Ing-wen was elected in 2016, did a lot to dismantle some of the elements of compulsory service that I think are essential to any analogous type of country, whether it's Israel or Singapore. You don't say, "Don't worry about military service." You actually expand military service so that your adversaries understand that everyone's capable of fighting and has the will to fight. There's more that needs to be done in that respect.
Peter Robinson: All right, so that's for Taiwan. What do we need to do? Again, let me offer you a few notes from my reading and then just toss it to you. So here's what the Pentagon has requested, something called the Pacific Deterrence Initiative that would focus on forward deployment. That is placing military assets over there in Asia where we might see them, Guam, Micronesia, Palau, Marshall Islands, and so forth, $8 billion. Citizen of the United States reads that and says, "Wait a minute, we already spend $700 billion a year. Now they're asking for eight billion as a supplemental to do their job, which is to, a Pacific deterrent is something they should have been planning on and budgeting for years." What is going on across the river in the Pentagon. HR said, "Complacency." Okay. I read something like that, and I feel sympathetic. These accounts of President Trump, forgive me, becoming exasperated with the generals, I think to myself, "Maybe he had a point." Okay, so there's that, and then we read the strategist, David Ochmanek, if I'm pronouncing that name correctly, of RAND. "Big airbases on land and big aircraft carriers on the water turn out to be big targets. Things that rely on sophisticated base infrastructure are going to have a hard time." So the Pentagon says, "Let's put objects out there," and strategists say, "Well, I don't know. Those things like that are easy to hit." There's a military reporter called Joseph Trevithick. Again, I hope I'm pronouncing his name correctly. And he writes for Reuters. This is just a couple days ago. "Reports have already emerged that many American allies and partners in the Pacific, such as Australia," Australia are out. They were with us in Vietnam. "Australia and South Korea do not appear to be inclined to offer to host any of these new weapons," close quote. So I look at this and say, "What a mess." The Pentagon hasn't been budgeting for, they're waking up now and ask for more money. Well, the generals are very good at doing that much, at least. Are they doing the right thing? Do we need to rethink our strategy? Are we already losing our grip on our allies? What do we need to do, HR?
H. R. McMaster: There are a whole series of forms we have to undertake, and this isn't the generals. Not to apologize for the military, but this is the way that you budget.
Peter Robinson: I'm sorry, HR. I owe you a shoe shine. I'm sorry. I don't mean to take a swipe at you or your colleagues.
H. R. McMaster: Oh, no, no, no, no.
H. R. McMaster: It's a great opportunity to play this. The way that we do budgeting, we don't do multi-year budgeting in defense, which is crazy, right? It's crazy because without a predictable budget, you can't develop systems in a way with the predictability that you need, and you can't get rid of legacy systems and replace 'em with new systems, and so you wind up incurring more costs. You can't innovate effectively within the cycle of technology. So we need to budget differently. We have had this lodestone around our neck of the Budget Control Act and defense sequestrations, which really had us keeping a legacy systems longer rather than modernizing and investing of older systems. And so there was a huge bow wave of deferred military modernization that the Trump budget increases just took a little bit of a dent in. It really didn't even do much good because, again, of this complacency for so long. In terms of the forward positioning of forces and where they are, I think it's important to have a number of basing options available, and the way you deal with the long-range missile threat to those kind of fixed sites is you hop around between multiple sites because you also need to be there inside of what your enemy would want to be this exclusionary bubble so that you can turn that into contested space. Now, the weapons-
Peter Robinson: That much, at least, I think I grasp.
H. R. McMaster: And the weapons you talk about in Australia-
Peter Robinson:  We cannot let them push us, roll back our forward line.
H. R. McMaster: Yeah, and Australians and South Korea, some of these weapons are gonna be more controversial because they're long-range, conventional missile capabilities. But I think once the threat from China becomes obvious to more countries, they're gonna want those capabilities there. But it's important to know, war and fighting in this kind of environment against the capable enemy, it's the children's game of rock paper scissors. There is no single capability that is going to be decisive. You need a range of naval and aerospace and cyberspace and land-based capabilities that can be used in combination and that are mobile such that you can gain advantage through surprise temporal advantages associated with the pace of events you can impose on an adversary, and it's really how you integrate all of those capabilities. That's our greatest strength as a military is that we do that better than anybody. Now, we can't be complacent about that either because the People's Liberation Army and the People's Liberation Army and the People's Liberation Army, Navy, and Air Force, they're aspiring to that jointness that we have. But yet you have to work at it continuously, and we have a very strong professional military that does that. But even though you can say, "$700 billion, it sounds like a vast amount," when you look at that budget and how much is actually going to procuring systems and paying for the kind of training and forward positioning that you're talking about, it's a relatively small amount of that budget, sadly.
Peter Robinson: All right, Matt, this is you in the "Wall Street Journal" just last month. Matt Pottinger in the "Wall Street Journal." Quote, "A favorite analogy in Beijing and Washington is that our countries are running a marathon, and only one contestant will win. It's closer to the truth that we're in a 400-meter dash that we have to win to qualify for the marathon," close quote. What does the Biden administration need to do to win that 400-meter dash?
Matt Pottinger: Yeah. Well, for starters, we have to recognize that the center of gravity for the Chinese Communist Party, really, for their strategy is continued economic growth, right? All of the problems we're facing with their growing military and those capabilities, their debt diplomacy around the world, more ships patrolling the South China Sea, really, you name it. All of that derives from their economic strength. We're in a very perverse situation right now where the United States is actually funding China's expansion of its empire. We have $1.1 trillion in equity investments in China and growing, $100 billion of Chinese debt that Americans have bought, a lot of that has been made possible through so-called passive investment, where Wall Street creates these new products using indices that lead to American pensioners, really, to unwittingly have hundreds of billions of dollars of their savings funded into China's military and industrial complex. That has to stop. It has to stop. And if it does, you'll find that we're no longer the scaffolding under this creaking system in Beijing, a centrally planned economic system that's increasingly showing worse inefficiencies and less productive value. We're the scaffolding under that. We're the crutch right now because we're putting so much of our money into investing into Chinese monopolies.
Peter Robinson: If I may, I'm thinking of a major investment firm here in Silicon Valley. A couple of friends of mine work there. I don't know about last year, but I had lunch. It doesn't matter. For several years now, this was two years ago, 90% of their investments, $9 out of every 10 that they raised, and these people oversee billions, was invested in China. You're saying that has to stop?
Matt Pottinger: Yeah, well, you're describing the flip side of us funding Chinese empire. There's the passive money that goes in to compensate for the incredible inefficient allocation of capital by Chinese state institutions. Then you have American smart money, which I think is what you're describing, which is where there-
Peter Robinson: Well, these guys are very smart. I would call this smart money, yes.
Matt Pottinger: Very smart.
Matt Pottinger: Well, it's a little bit of money that goes a very long way because Silicon Valley is able to do what no European really can do as well, certainly no Chinese investor can do as well as our Silicon Valley venture capital funds and strategic funds, which is they know how to cultivate incubate and cultivate high-tech firms that will be successful. And I think that money needs to start going to other places as well.
H. R. McMaster: And I would just point out that venture capital firms invested more in Chinese artificial intelligence technology-related companies than they did in US artificial intelligence technology-related companies.
Peter Robinson: Thank you, HR, for taking the heat off me. I said that, and then I thought, "Woo, I'm not gonna get that lunch again."
Peter Robinson: I'm gonna say, "No, it's HR put that idea in my head," but it's true, it's true.
Matt Pottinger: And this is not because these Chinese entrepreneurs who are on the receiving end of that money are not brilliant people or good people. They are. The problem is they are increasingly obligated through no choice of their own to serve the interests of the ruling communist party, which is a totalitarian surveillance state that makes no distinction, increasingly, between private or public or what's military and what's civilian. It all must serve the party's objective of military civil fusion.
Peter Robinson: Okay, two last questions here. You guys have been very generous with your time. Here's one. It's a scenario. You're back on the National Security Council staff. You're back in the White House. Here's a report that comes in from Taiwan, and I'm not making this up. I'm about to read to you a report from Reuters, one of Matt Pottinger's old employers, that, as we tape this, is just a few days old. Quote, "China sent more fighter jets into Taiwan's air defense zone on Wednesday and has stepped up show of force around the island Beijing claims as its own, and Taiwan's foreign minister said it would fight to the end if China attacks." Three more paragraphs. "The democratic self-governed island has complained of repeated military activities by Beijing in recent months with China's Air Force making almost daily forays into Taiwan's air defense identification zone. On Monday, China said an aircraft carrier group was exercising close to the island." Last couple of paragraphs. "Taiwan's defense ministry said 15 Chinese aircraft, including 12 fighters, entered its air defense identification zone with an anti-submarine aircraft flying to the south through the Bashi Channel between Taiwan and the Philippines. Taiwan's Air Force sent up aircraft to intercept and warn the Chinese away, administry added," close quote. And a report like that comes to you with the National Security Council staff, and you say, "Oh, that sounds routine." We've reached the point at which this is routine, or you say, "Oh, the commander in chief needs to hear about this within the hour"? HR?
H. R. McMaster: Yeah, this is the greatest flashpoint in connection with China. And we should remember we've clashed with the People's Liberation Army in the past. The Hainan Island incident is one incident. And one of the things that concerns me, I'd love to hear what Matt thinks about this, is what if the People's Liberation Army is believing their own propaganda? What if People's Liberation Army commanders think, "Hey, this is what this is what Chairman Xi wants me to do," and then precipitates a conflict that can escalate quite quickly. I think we are at a point of maximum danger, and that danger will actually, we're on our way up. And I think the most critical period of time will be after the Beijing Olympics and after the Chinese Communist Party Congress in 2022. And I think you're seeing a range of activity that is meant to desensitize us to this military intimidation, but what you don't see is, and Matt can maybe talk about this, is a range of other activities that are aimed at subverting Taiwan's will from an economic and informational perspective cooptation of elites and so forth. So this is a very sophisticated and deliberate campaign, but even though the Chinese Congress party may not wanna go to war right now, they may be at risk at this moment of precipitating an incident that could lead to war.
Peter Robinson: Well, Matt, as a layman, I looked at that. Whoa, whoa, whoa, this last sentence here. Taiwan's Air Force sent up aircraft to intercept and warn the Chinese away," and I thought, "That sounds dangerous." Some kid-
H. R. McMaster: Well, the drones in the last few days, too, and now Taiwan saying they're gonna shoot down the drones if they come back to these islands, so-
Peter Robinson:  One mistake some 24-year-old pilot up there misunderstands an order or makes a mistake or frankly panics. And, okay, so this is routine? We have to learn to live with this, or we have to somehow or other find a way to back this down? You're back in the White House. What do you tell the chief executive, Matt?
Matt Pottinger: Yeah, you put it in the context, as we often did, and President Trump spent a lot of time on Taiwan. You put it in the context of a campaign that is intensifying, that is creating a higher threat of danger and of miscalculation. In a way, it's incredible that you haven't had more incidences like what we had 20 years ago with our EP3 aircraft that got rammed by a hotdog PLA Air Force pilot. When you look at the number of sorties that China is sending out into-
Peter Robinson:  Or you go back 20 years before that to the KAL 007 when the Soviets shot down a Korean passenger liner, clearly by mistake. Clearly the chain of command broke down, but it happened. Sorry.
Matt Pottinger: Yeah. No, you're right, and part of that is what HR talked about, which is believing their own propaganda. It's an overconfidence in their operations and their capabilities and in their pilots and that belief that human error has somehow been squeezed out of the equation, which we all know those of us who've been under arms.
Peter Robinson: So
Matt Pottinger: The human factor-
Peter Robinson:  I'm playing President Trump right now. Don't judge my performance. He's inimitable. But I'm playing President Trump, and I look at HR, and I look at Matt and say, "Okay, guys, what are you telling me I should do?"
Matt Pottinger: Yeah, I would dramatically pick up the pace, and it did pick up over the course of the administration of, first of all, what I'll call the substantive engagement with Taiwan, which is helping them with their capabilities, helping sell more relevant armaments to them, stockpiling those armaments so that they're already on hand in the event that there is a crisis so Beijing has to take into account the fact that Taiwan doesn't need to be resupplied instantaneously in order to threaten those forces. I would also get the rest of the world talking about the fact that Beijing's actions are destabilizing to our collective security. And so imposing a symbolic cost, a diplomatic cost while also providing concrete capability.
H. R. McMaster: I'm sorry, one more. I keep saying, "Last question, last question." This one isn't the last question. I have a question I do wanna ask, but this is the next to last, I promise. The psychological point strikes me as probably very important. It is very easy in a casual way, I believe, for a senator or a member of Congress or a layman to say, "Look, we made these commitments to Taiwan a long time ago. China's 1.3 billion people, and Taiwan is just across a little strait of water. I don't know what form it'll take. I hope it happens peacefully, but this is inevitable." That could be very easy just to seep into the air like ether. On the other hand, Hitler never invaded Britain because it turns out to be hard to do, and still more new parallels coming to mind, and what I'm asking fundamentally is whether this is a fair analogy or a useful analogy or whether, yet again, I'm wrong. Israel has survived and not only survived. Israel has thrived. So it is not inevitable that a small democracy surrounded by hostility needs to make its accommodations. We and they can pull this off. Is that true? Is that fair?
H. R. McMaster: I think it's fair. So many other analogies are leaping to mind now. How about West Berlin, for example?
Peter Robinson: Yes! Okay.
H. R. McMaster: So I think one of the reasons why the Chinese Communist Party is obsessed with Taiwan is that Taiwan gives the lie to this idea that the Chinese people are culturally predisposed for not wanting a say in how they're governed, right? And so now this is why one of the main reasons why Taiwan, I think, deserves our support. I would just say that we had a great deal of obviously bipartisan consensus about our support for NATO and by connection West Germany and West Berlin, and I think you see that same degree of bipartisan support right now, I think, thanks in large measure to Matt Pottinger and the way he cultivated that bipartisan support. And what we've seen is the Biden administration really continue the policy of the Trump administration vis-a-vis Taiwan and more broadly the China policy. So Matt, what are your thoughts on this, and how do you address-
Peter Robinson: There's nothing inevitable. There is nothing inevitable about Taiwan's buckling under China. They don't have to-
Matt Pottinger: It's not inevitable,
Peter Robinson: All right.
Matt Pottinger: and it's absolutely not inevitable, and the con that is at the heart of every Leninist movement is that the future is ours. So make your adjustments now. Don't make it hard on yourselves, and this is all part of-
Peter Robinson: We can do this the hard way or we can do this the easy way, right.
Matt Pottinger: This is all part of that, and in fact, we do ourselves a favor when we remind ourselves that actually, it is China that is defying history right now and is defying gravity with the residual success of that period when they came from having 50 million of their own people starve to death or get killed under purges. That was in my lifetime. That was going on.
Peter Robinson: Young as you are.
Matt Pottinger: Exactly, early 70s. So the cultural revolution was still going strong. And so really, they were starting from such a low starting point that, of course, to the extent that the party was able to get out of the way its own people for a spell for a few decades, China was gonna succeed. The Chinese people are gonna succeed when they have free will.
Peter Robinson: That's another important psychological point. It must be understood that the Chinese Communist Party did not lift half a billion people out of poverty. It got out of the way while the Chinese people themselves lifted themselves out of poverty.
Matt Pottinger: Totally right.
Peter Robinson: Is that correct?
Matt Pottinger: Couldn't say it any better than that.
H. R. McMaster: And the Chinese people deserve full credit for it, but with the assistance of a lot of American financiers and businessmen and entrepreneurs and so forth.
Peter Robinson: All right, fellas, this really is the last question. HR and Matt. Two quotations. They're a little on the longish side, but I think they both pay off. Here's the first quotation. This is the diplomat George Kennan at the beginning of the last Cold War. Very seldom quoted. I'm bracing myself because it's moving in a way. "Surely there was never a fairer test of national quality than this. The thoughtful observer will experience a certain gratitude to providence, which, by providing the American people with this implacable challenge has made their entire security as a nation dependent on their pulling themselves together and accepting the responsibilities of moral and political leadership that history plainly intended them to bear," close quote. Here's the second quotation, the last issue of "The Economist" magazine. Quote, "China is increasingly sure that America is in a long-term irreversible decline. China is now applying calculated doses of pain to shock Westerners into realizing that the old American-led order is ending," close quote. Convince our listeners in just a few sentences, convince our listeners that the old American-led order is not ending. HR?
H. R. McMaster: Our greatest competitive advantage is our democracy gives us the ability to get better, to reform short of revolution, right? Because the people have a say. We have a say in how we're governed. I wish we would celebrate that more. I wish we would celebrate freedom of speech, freedom of expression, rule of law, all of these freedoms that are absent in China. So I would like to see us end what I think is our most recent infatuation with self flagellation and restore pride in our nation. Richard Rorty who was a leftist philosopher said that, "National pride is to nations what self respect is to individuals, a necessary element for self improvement." And so I think that all of us, despite the traumas we've been through in the past year, we oughta do our part to regain our confidence in who we are as a people and in our democratic principles and institutions.
Peter Robinson: Matt?
Matt Pottinger: Yeah, I couldn't say it any better than that, and we're well into our third century as a self-governing republic. We're the oldest republic. We're the oldest democracy, the longest running democracy. I remember reading that the average dynasty throughout Chinese history, there've been some long ones, but the average is 70 years. The People's Republic of China turned 70 just a little over a year ago, and communist parties have not fared well with good reason, and it has to do with the fact that people do crave free will. They were endowed with free will, and they succeed when they exercise it in the right ways and responsible ways. China is moving in the exact polar opposite direction from that right now. I lived in China in the 90s, in the early 2000s. It was a free country then compared to what it is right now, and it does not bode well for the longterm success of that system. We just have to now manage the overweening ambition, the insecurity, and dangerous impulses of a system that, deep down in its heart, has grave self doubt.
Peter Robinson: HR McMaster and Matthew Pottinger, both of the Hoover Institution, thank you. For "Uncommon Knowledge," the Hoover Institution and Fox Nation, I'm Peter Robinson.

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