German Economy is Down & Expect to Contract Again (Part 7)!

Hello everybody and welcome to Geopolitical Trends, where truth matters. Excited to be with you as always. I know I told you, uh, when we did our earlier, uh, live stream at noon, I told you we're gonna be having Carl Zah here. So he is right here, so I'm gonna just bring him in and we're gonna get into the topic because there are a lot to cover. But just heads up, guys, remember to join me tomorrow for the community conversation at 12:15 Central Standard Time. So I look forward to that one. All right, let me bring in Carl here. Hey, Carl.

Hi, David, how are you?

Good, good to see you, man. Finally you are here. Everybody was wondering how's Carl doing. I said, well, I'm hoping he's doing fine, recuperating, and here you are. Good to see you, brother. I'm very, very glad that, you know, uh, your health is improving and all that. It was scary moment when I heard about the accident, and I was like, no, let's hope not, uh, something major. So I'm glad things turned out.

It was scary for me too, David. It was scary for me.

Well, it's, it's— yeah, I didn't realize, Carl, it was a motorcycle. I thought it was a car, it was a vehicle, but motorcycles are far more dangerous than than a vehicle. But in any event, glad to see you in one piece, glad to have you as always here. So we're gonna get into our conversation because we got a lot to cover. So, so I'd like to start, Carl, with one particular event that just took place on the 25th of this month. We're talking about 2 days ago. What are you guys looking at is the Japanese Maritime Self-Defense Force that crossed through the Taiwan Strait. What do you make out of this, Carl? Why the heck the Japanese, uh, the, uh, self-defense, uh, maritime force here is going through Taiwan Strait? What's the point of all this?

Well, this is just an increasing, uh, level of provocation from US and its vassal states. Now, this is not the first instance, uh, in fact The couple months ago, the Japanese warship actually went in. So, so when they transit through Taiwan Strait, they claim, okay, it's international water, whatever. But a couple months ago, the Japanese warship, a Japanese destroyer— excuse me— actually went inside China's territorial water. And whoa, yes, that was a big deal. And, and Just recently, uh, China of course raised a protest, and, and, uh, and, and just recently Japan has said they have sacked the captain of that ship which, uh, which intruded into the Chinese territorial waters. But this is just a series of provocations from all these US client states, you know. It's not only Japan. There's recently— there's also Germany. Germany also sent warships through Taiwan Strait. Germany and Italy, you know, all these European countries that you would think have nothing to do in East Asia are sending their warships through Taiwan Strait. And the only reason they're doing that is now to please their master in Washington. You know, it's really a pledge of allegiance, like, hey, we are still loyal to you, we, we are respect you as a big mafia dong, so we do whatever you want us to do. I mean, this is what's it about. This is why there's escalating tension in South China Sea, in between Philippines and China. Even though there was a period in July when it looks like the things have calmed down a little bit, when— yeah, when Philippines and China actually negotiate a deal to return to the 2014 gentleman's agreement, but US came back in the next day and offered Philippines $500 million worth of military aid. And, and by the way, those military aids are not free, you know. Like, when people talk about military aid from United States, those are not free. The only, only freebies that US will give out is to Israel. Like, if you're— if your name is not Israel, you're not going to get freebies from United States. It's either a loan or, you know, all this money gets cycled back to the, uh, US military-industrial complex, of course. So, so after that, you know, the tension worsen in South China Sea. Now we have more, uh, uh, ship bumping incident between Chinese Coast Guard and the Filipino Navy. And this is all to, uh, justify the continued existence of US military in East Asia and expanding US military presence. But this is interesting because, uh, you— this is happening at the same time when what's happening in Israel, in, in the Middle East, is requiring US, uh, naval presence over there. You know, US keep on sending aircraft carriers to, to Mediterranean, to, to Gulf of Oman because they wanted to intimidate Hezbollah and Iran from retaliating against Israel. Um, at the same time, uh, I guess like it's almost like the United States is wrong, like, uh, it's a many-headed beast. There's like many factions fighting on how US hegemony should be run. You know, there's a lot of who wants to concentrate all the resources in East Asia to confront China. But then there's like the NATO bureaucrats who wanted to, you know, plow more resources into Ukraine war. And then, then of course, Israel lobby in Washington wants everything to go, go into Middle East to, to, to confront Iran. So yeah, so yeah, like this is an imperial overreach problem. And, and like, this is not— in the end, you know, US is not doing well in either of the front. I mean, like, all, all three fronts, uh, you know, United States is not, um, able to constrain Israel in his escalation because everyone knows Israel is just trying to start a wider war and they want to drag United States in deeper.

And it's the US that's going to be fighting the war, so Exactly.

They want US to bleed and die for Israel. And the US politician can't say no because that, you know, they all bought and paid for, especially the Congress. You know, we have the best politician money can buy in the Congress.

Let me back to your point earlier about the South China Sea. Just to think in terms of from a security perspective, do you believe that this kind of maneuvers suggests that the next conflict front is South China Sea?

Well, um, I, I think South China Sea flashing point is actually more, um, it's more of a hotspot than, say, Taiwan, actually, because, okay, you know, like, China, China, the, the split between China and mainland China and Taiwan has happened over 70 years. And, you know, China is pretty patient on that front. But, uh, US right now is trying to leverage the US-Philippine Mutual Defense Treaty as a way to pivot back to Asia, pivot to, to confront China. Now, this, this really depends on how much Pentagon wants to start a hot war because they can't— they can't die. They are the one who can dial, really dial up the tension if they want because right now they're letting Filipino taking the brunt, uh, of this, of this conflict and that while they sit in the back, uh, but if they decide, okay, it's time to send in the U.S. Navy, then, then that's gonna be— then it's, it's quite likely that there's going to be some, uh it could be escalating to a conflict. But I don't think Pentagon at this point is ready for the reasons I listed about, because the US involvement in Ukraine and also, um, also Middle East. So those two theaters have to wind down first, you know. This is what a lot of the US strategists are arguing about. It's like, okay, like John Mearsheimer is arguing we should, we should wrap up Ukraine, uh, make peace with Russia, and and we should get out of Middle East so we can concentrate on China because the US, US resource is limited, you know, like, like people in Washington don't realize, you know, the, uh, it's not the unipolar world anymore. US, uh, Empire's resource is limited. You can't fight three-front war, uh, but you know, right now we have a complete political paralysis in Washington because we're in an election year. You know, Joe Biden, I— nobody knows what he's doing. And then, and then you have, uh, uh, you know, Kamala, uh, and then, then, then, then Trump. We don't even know who's going to be the president, right, at this point. So, so, so right now I don't expect a, a big blowup before the election. That's my take.

Well, I'm sure they're gonna be waiting till the outcome. But in the meantime, uh, I'm sure you're aware of what Congress— the legislation that Congress passed for the $1.6 billion dollar for the propaganda against China and so forth. But also what's been reported in Wall Street Journal about the submarine, the Chinese, which I was laughing at. If you can, you share that story, Carl. I'm sure a lot of people don't know much about it.

So this is, uh, the timing of this Wall Street Journal story is very suspicious, you know, right after China's successful test of ICBM, that was launched from China toward South Pacific. Wall Street Journal immediately came out a story says senior US official claim that back in, uh, May and June this year they had intelligence saying there may have been a, a, a accident happening at a Chinese shipyard in Wuhan where a, uh, the latest, latest model of Chinese nuclear submarine has sunk. And they have ships trying to salvage it. Now, the only evidence that present is a picture of the Wuhan shipyard where they have, um, a bunch of dredging ships that was lining up. So this picture was actually, um, like, this story actually broke a few months earlier by like a, a U.S. naval watcher, Tom Shugart, and it was being debunked because First of all, why would China build a nuclear submarine 1,000 kilometers away from the sea, you know, deep in the, in the Yangtze River? All the Chinese shipyards that build nuclear submarines are on the coast, either in Huludao in Shandong Province or the Jiangnan Shipyard near Shanghai. Um, you know, why do you— what's up? Like, it doesn't make sense to have a shipyard building a nuclear sub in— on the Yangtze River, 1,000 kilometers away from the sea. And, and when people look into it, um, the, the average depth of Yangtze River in, in, in Wuhan is about 5 meters, 5 meters deep. And the latest Chinese, uh, nuclear sub that, that US claimed that was sunk, its draft is 7.5 meters. So you can't even sink. You would just like sit there and like you, you will see like the top of the sub above the water. But that's not what we saw in the photo. All the photos saw, we just saw a bunch of dredging ships, and it's most likely what they're just trying to, trying to dredge up, uh, that section of the river rather than trying to, uh, salvage a so-called sunk submarine. So it doesn't make sense. And, and the Wall Street Journal even goes even further to speculate, says, oh, there may be a, a nuclear, uh, new radioactive leak. Now The first of all, they, they put up a speculation which is totally ridiculous, and then they speculate on top of that speculation, and they, they use weasel— whenever they use weasel words like 'may,' like, 'may' is doing a lot of work, you know, basically saying we have no evidence, but this could happen. If a nuclear submarine sunk, then maybe there could be radioactive leak. Which means they know nothing. They're— and again, that the timing of the story is really suspicious because you can't— yeah, this story basically, uh, this, this was an internet rumor that was circulated for a couple of months on Twitter, and suddenly Wall Street Journal pick it up and publish it right after a successful launch of, uh, Chinese ICBM. And mind you Chinese— a United States intelligence official also claimed that Chinese rockets are filled with water. This was from like a couple years ago. They reported the Chinese strategic rockets were filled with water. So I guess those same rockets that just filled with water just try travel 12,000 kilometers. I mean, this is the same type of Yeah, and, and this is— I think this is also why China decided, um, try to do the ICBM test, because this is the first Chinese ICBM test in 44 years. The last time China launched ICBM to South Pacific was 1980, when I was like 4 years old. And, and I think this is a reminder to the dumb-dumbs in Washington that they shouldn't believe in their own propaganda. No, Chinese rockets are not filled with water. They can travel. And, and this ICBM, uh, it looks— I look at a different analyst report, they think this is a model Dongfeng 31, which is not the latest generation. The latest generation is Dongfeng 41. Yeah, which will travel further. But this is how China normally publicize their test. They, they don't, they don't like publicize the result from their latest weapons because they want to keep United States, guessing. So they, they tested their older generation ICBM, uh, Dongfeng 31, which travels, uh, have a range of 12,000 kilometers. Now what does 12,000 kilometers mean for people who are listening? 12,000 kilometers means China can target anywhere inside continental United States. Um, that, that, that's what it means. This, this is And this is why, like, people say, why, why China test— testing ICBM? You know, like, uh, they don't need to put Taiwan on notice or Japan. I'm like, look, look, China does not need ICBM to hit Taiwan or Japan. So the only signal, only signal they're sending is, is there's only one possible country they're sending this signal to, and that's United States. They're showing United States like, look, we can hit anywhere, uh, on continental United States. That's what they're saying. Like, don't believe your own propaganda from Wall Street Journal that says our rocket is filled with water, or, or our sub— nuclear submarine has sunk in the Yangtze River. I mean, um, yeah, so right now I, I, I don't know how much— like, these kind of—

I have a picture.

Go ahead, go ahead. Like, but these kind of stories from Wall Street Journal, they're just copions. They're just copions to tell people like, don't worry, if we get into a hot conflict with China, they won't have second strike capability to hit United States, so we can, you know, we can go ahead and push China's buttons. That's what, what those articles really doing. And maybe this is part of the $1.6 billion, uh, uh, dollar, uh, Congress approved for the anti-China propaganda. Maybe Wall Street Journal got their money early.

I wonder if they're gonna retract the story, Carl. I, I, because I, I don't know if they will admit that, yeah, it wasn't true story. Will they have the guts to retract the story? So I don't know.

But, you know, that's— it doesn't really matter, David, because what they— even if they come out with a correction couple months later, they will do it like, like in a, a small print And then nobody— everybody would have forgot about it already. And usually the— it's a correction never make as much, uh, never has a wide— as wide reach of the audience than the first wild claim. You know, all the wild claim about social credit, you know, people still believe the social credit story even though that has been debunked. And that has been, you know, for— I think it was Foreign Affairs published an article on how the social credit story is, uh, is, is, uh, is a myth. But nobody, nobody seemed to read the debunking article. Everybody remembered the first original claim. But this is how propaganda works, David. They first make the claim that have this idea circulate at the, in the widest circle, and then they publish like retracting article which nobody, nobody reads. But, but, but their aim has already accomplished. Their aim was to see this, this propaganda inside people's head, and then, and, you know, it has a life of its own. And that, that's how it works. I mean, and the US is master at this.

Uh, I have pictures here, Carl, for the DF-41. That's, that's— yeah, those are the advanced ones for Chinese.

So DF-41 is a, is the latest, uh, Chinese ICBM. They can actually have a range of, uh um, of 15,000 kilometers, uh, which, you know, they don't even need that to, to reach, uh, the Dongfeng 31 can already reach all the cities inside continental United States. But, but I mean, Dongfeng 41 will be overkill. But anyway, like, that's why they haven't even tested it, because they want— before this latest ICBM test, China actually informed Russia and they inform United States. So US actually sent out its spy planes to monitor the trajectory because China don't want— don't want like Russia and United States to, to have the wrong ideas about this is a— this is an attack. So, so they actually informed the two countries beforehand. Now there are countries like Japan was being butthurt, like why didn't China alert us? Like first of all, that the ICBM was not even like anywhere close to, toward Japan. And also Japan doesn't have its own, uh, missile capability to strike China, so China doesn't have to worry about it. It's like, why, why do I need to inform you?

You're useless.

Yeah, exactly. Why do I need to inform you? And, and then, uh, but they did inform US and, and Russia. So the two countries that do have nuclear strike capability— don't get misunderstanding So this is— but again, it's— this is just a way to— since it's a signal, it's a way to, uh, send a signal to, to let people in Washington know, like, hey, our rockets are not filled with water. They can't— they can't hit you.

Incredible. So before we jump into talking about the German economy, I like to take your— I like to have your take on the upcoming BRICS Summit, which is going to be in October. 22nd through the 24th in Kazan. So, you know, my wish was always to attend it as an observer. So, but anyway, uh, where— what do you see coming out of that summit? Uh, we're looking at about 54 countries planning to attend.

Well, first of all, it shows that US and NATO's effort to isolate Russia internationally has failed. And, you know, when all these countries are traveling to Russia to attend the BRICS summit. And two, it's just amazing, this, uh, BRICS acronym originally coined by Goldman Sachs as a marketing ploy is now becoming a real alternative to the West-dominated, uh, uh, international forums. And now everyone wants, wants to be Like everyone who is not part of the US NATO, you know, alliance now wants to be part of the BRICS because they're the new kids on the block. Um, yeah, I mean, like, this is a— US will probably huff and puff, you know, they just like how they protested how China is supporting Russia through trade. Um, now everyone is traveling to Russia, you know, basically that US will see that as a middle finger to them, but there's nothing they can do because, um, you know, US is not that popular outside of the so-called collective West. People are kind of sick and tired of, you know, uh, kind of the, the just US hegemonic designs on their part of the world. So, so that's that.

Very, very interesting. All right, let's talk about Germany. Germany and where it is headed with the kind of where their economy is and so forth. So, well, I had a chance to read a report, and by the way, guys, I will put the link for you later on in the description. The, the shares of the, uh, Mercedes— I have a picture right here, Carl, uh, if it shows up. There we go. So the shares of Mercedes Benz fell by more than 7% recently after the German carmaker lowered its full-year profit outlook due to further deterioration. And this has to do with the Chinese demand. Another word, less Chinese demand has sank Mercedes down. Now there are these studies that they are suggesting that the German economy is about to contract in this year 2024. Where do you see— I mean, going on, what's causing, what's causing this?

Besides that, I mean, Germany has been self-sabotaging for like many years now. That, you know, just 2 years ago, foreign, uh, foreign brand automakers, they, they, they dominate more than 50% of the Chinese car market. The Chinese auto market is actually the world's largest car market. It's bigger, much bigger than United States. So if you want to make money, you have to be in China. And for decades, you know, all the, the Germans, Japanese, Americans, they were all in China making money, headed over hills. Uh, but then they got complacent because they're like, okay, these Chinese guys, they will never, you know, they, they, they, they, they're, they're not a threat to us. We, we dominate the majority of the Chinese market. We have all these local partnerships. All these new Chinese upstarts are not— they're not threat. This is why, like, 10 years ago, uh, Elon Musk, when he was asked about BYD, he will— he laughed. He laughed. He's like, BYD, they have to survive in China first. But what happened was the electric vehicle, uh, transition, the new energy transition because all these big automakers are so, so comfortable resting on their laurels and their dominance of the market. They didn't see the change coming. Like, Chinese government rolled out a, a roadmap on how the country is going to transition from a traditional fossil fuel to, um, to new energy vehicles. They, they had a— they had like a 5-year plan, many 5-year plans on when they're gonna do this. But these foreign automakers, they didn't take it seriously. Uh, you know, they thought this is like the California mandate, right? They thought this is a California mandate for new— because I remember I, I, I moved to LA back in 1995 for college, and, and back then California already had this ambitious roadmap. But, you know, forget, forget about that.

So California is gone. California is gone now.

So, so what, um, just this month, for the first time, Chinese, uh, new auto sales— more than 50% of the new car sales are new energy vehicles, are, are, are electric, uh, vehicles. That's huge. I mean, China is the world's largest car market, and suddenly more than 50% of the new cars sold are now in new energy vehicles. And the German automaker in particular, German and Japanese as well, also. They did not, um, they were so invested in the old, uh, internal combustion engine cars, they did not catch on to this transition. And this is what allowed the domestic Chinese car brand to kind of leapfrog the technology. You know, they, they realize, okay, we're couple gener— we're always couple generations behind of Japanese and Germans in terms of internal combustion engine cars. But you know, the new energy vehicle, this is completely new. It's a level playing field. We can actually take a lead here. And that's what they did. They, they jump— they put all their capital and jump into that, uh, market. Now they're leading the world in the— in, in terms of, uh, electric vehicles. And this is why, um, when they talk about Chinese overcapacity, what they're actually talking about is all these, uh, German, Japanese, and even American cars that were originally made in China for Chinese consumers, now they're not being sold because Chinese consumers are buying new energy vehicles. So they have to export these, um, these cars that, that's sitting on the lot that no Chinese consumer are buying. So they have to export them back to the home market. And, and this is why the car sales car export numbers out of China is skyrocketing. One big part is these, these, these domestic— these foreign car makers are exporting their, their, their own, uh, overcapacity back to their home market. And, and, and so, so, so, so Germany also, they, you know, they also have the problem of they cut themselves off from the Russian gas, you know, and now all the German industrialists are decamping to United States where they can still have a cheap natural gas. Um, and it's, it's a tough— this is, this is a problem when you are united, when you are like a puppet government of the US, you know, you do what's for the best interest of Washington, you're not doing what's best in the best interest of the German, uh, consumers or German workers. Um, and, and this is why, uh, you know, I don't know, man, I don't know when the European voters will ever wake up to the fact that You know, their leaders are not beholden to them. Their leaders are beholden to Washington, and that's, that's a real problem.

And this is why, like, Germany now is purchasing gas from the US at a higher price. So I was like, you know, surprised and shocked at that decision. And now I see why the recent trip to China by the Spanish Prime Minister, uh, Pedro Sánchez. He was in, uh, he was in China, and I think he's going against the EU regarding the decision of the tariffs because he's seeing where things are moving with the markets in, for example, uh, Hungary, in Serbia. And even the Polish president now is hinting at the Chinese to consider certain type of investments.

So, so is this why you're European car Yeah, I mean, this is why China is pouring investment into Serbia and Hungary. They're willing to invest, you know, into, into other, uh, countries to do— but it's, it's the U.S. and Europe, EU, they're putting up the trade barrier. They want to protect their own, you know, their own corporate interest. And, and, but, you know, remember what Donald Trump said. Donald Trump said he would allow the Chinese to invest in, in U.S. You are welcome, the Chinese, uh, uh, EV makers to come to U.S. to invest in factory. But the problem with the U.S. is, you know, okay, even if Donald Trump gets elected, what happens after 4 years? You know, like, exactly, U.S., the, the investment, you know, to put down a factory and to get a return on the investment, it takes like more than 4 years. And, and the Chinese automator could have to think, okay, if I put a lot of money in US, are they going to change their policy after another election and throw all that stuff out? I mean, that happened before. So indeed, why, why don't they just put their factory in Mexico, right, where they, they don't have the same problem? And, and, and this is another problem in the, uh, uh, Right now, the thing is, China— it, it all comes down to the US right now is losing competitive edge versus China. And, and actually, I just recently saw an article from Business Standard. It says, uh, right now, the, uh, the, the biggest reason for peace between China and US is disappearing. And that the article's arguing because This is because the US businesses are losing their competitive edge in China, so the US business lobby are no longer going to bat for engagement with China, which is kind of crazy argument.

It's stupid.

Oh, okay, so, so, so if US companies are not making profit in China, then we have to go to war? I mean, like, it's not a binary choice, guys. This is never a binary choice. But this is actually the the same logic underlying the decoupling policy that's pushed by Pentagon. Because the idea is, well, if we have less economic entanglement with China, if a hard hot war breaks out, then we have, you know, less backlash to worry about. So let's move our supply chains outside of China so it's easier for us to get into a hot conflict with China. I mean, this is really crazy logic. You're like It doesn't— what, like, oh, it's almost like the peaceful existence. Yeah, doesn't— it's not in their vocabulary. Uh, you know, it's either we have to make a profit or we're gonna go into war against you. This is like really crazy.

Doesn't make sense. Yeah, well, this is why— this is why Apple is maintaining its operations in China. They don't care what the government, the US government says that, because they are realizing To my knowledge, they have moved some of their operations out of India and bring them back to China because they're realizing there is no— otherwise Huawei will overtake in due time Apple products. I mean, to me, I see it, I see the writing on the wall.

This is why when back then when Obama asked Steve Jobs, when Steve Jobs was still alive, like Why can't you move the iPhone factory? Why can't we make iPhones in United States? And Steve Jobs told him like, no, no, because there's no skills in United States. We, we don't have this manufacturing skills in US because what Steve Jobs is saying is US has hollowed out its manufacturing industry for so long, for so many decades, you know, for last 40 years. Now there's a knowledge gap. There's a man— you like, when you don't manufacturing for 40 years you lose the people with the knowledge of manufacturing. And, and China is full of, of, uh, skilled labor. And this is what— but again, this, this shows another side of how US is really the business that's calling the shots. You know, you, you can never imagine Jack Ma tells Xi Jinping, like, no, I'm gonna move my factory to another country, I'm not gonna— like, Xi Jinping will be like, no, okay, I'm sorry, then Alibaba is going to be locked out of the Chinese market. What are you talking about? Like, like, the, the U.S. president can never say no, you know. Even Obama, as the president of the United States, he could— he would just— with the answer like that from Steve Jobs, there's nothing he could do because ultimately money runs the, the United States. But, but in China, it's vice versa. The government gets to tell the business what to do, you know. If, if Jack Ma tells Xi Jinping like, no, we're not going to invest in China, Xi Jinping was like, what are you talking about? Like, you, you want me to break up Alibaba into smaller companies? I mean, that's what's gonna happen. And so, so this is, uh, yeah, this is another— there's another reason U.S. is falling behind, basically, because we are, we're kind of being run by this business oligarchs who are more interested in monopoly and, and not really interested in competition.

Yeah, and very interesting how the example you provided between Jack Ma and President Xi, and, and, and that's to me, beside that, that kind of scenario, it highlights the importance of serving the people. It's because for the interest of the people why the decision will have to be, to be made the way it has to be made. So makes perfect sense, and I can see now the changes as to why We are here in the US very concerned about the, the, the, the progress of the technological advancements in China, to the point that we are like a lot— there is, there is a conversation behind closed doors here, Carl, I tell you, because I talk to some people who are well connected, and the, and the conversation is always, how can we compete? How can we compete? We don't produce our, our universities are not producing those kind of skills. The, the, the, the system in itself is not set up to push things forward instead of you have to care about this and care about that. The Chinese, they don't have that.

But, but, but David, but David, for decades now, United States had been, uh, doing like basically a brain drain on the rest of the world to choose the top talent to come to US to make make up for the lack of college graduates in the STEM field. So that's why in the 1990s, when I first came to United States, I visited my dad's lab in University of Illinois. Like, all the research researchers are Chinese. And, and, but, but, and, and, and, you know, if you go to Silicon Valley, like, engineers are either Chinese or Indians. But now what United States government has been doing since the Trump administration is they're hounding all the Chinese origin researchers, scientists, uh, you know, like, because it's, uh, it's, it's not even just racism. It's just, uh, people like some ambitious bureaucrats in FBI, if they want to further their own career, you know, the easiest thing they could do is go target some ethnic Chinese scientists and researchers and claim they're, they're involved in some kind of espionage. And this is for them a way to climb the career ladder. This is how US is run, right? Everything is about jobs and career. And, and, and, and, and what ended up happening, they put up so much pressure on ethnic Chinese researchers and scientists. Now they're returning in droves back to mainland China. I mean, they were already returning since 2000 because after Chinese economy start taking off and there's more opportunity in China. But now even the ones that has decided to stay in US because maybe they're complacent and comfortable in US now feel pressure to return to China because they're being harassed by the FBI. And, and again, this is another self-sabotage, uh, uh, the US government is carrying out on its own economy. Like, one of the pillar of, of the US technological edge is the ability to draw talent from all over the world., you know, to power Silicon Valley, for example. But right now they, they are just, you know, they're just cutting out half of that because like Silicon Valley, you go to Silicon Valley, it's either Indian or Chinese. And now they're saying the Chinese engineer and Chinese scientists are, are not welcome. You have dumb-dumbs like Tom Cotton in Congress saying, oh, when the Chinese students come over, they're welcome to study humanities, but we shouldn't let them study we shouldn't welcome the Chinese to study science and math in our universities. This is crazy. Like, you— like, these congressmen probably don't even realize how much US research institution relies on Chinese labor. But, you know, then again, they don't know anything.

I was, uh, I was aware of the case. Yeah, you're right. I was aware of the case of, uh Uh, uh, what's her name? Cherry— Sherry— Sherry Chang, if I'm not mistaken. I have kept a picture in my computer from way back, and that's an old story that the FBI, uh, uh, yeah, yeah, let me dig up his— her picture right here. You know, this is, uh, this is, uh, Sherry Chang, was a hydrologist at the National Weather Service, uh, uh, right here at MIT before she was fired. And she was wrongfully terminated, wrongfully terminated. And later on, the judge awarded her about $2 million because it was wrong what they did to her at MIT. And she's a scientist of Chinese descent. So you're absolutely correct. And a lot of scientists— there is now a brain drain in the US. It's moving out.

This was actually, this was actually, uh, happening long before. I mean, like, I, I'm, I, I'm in US long enough to remember the Wen Ho Lee case back in 1998 during the Clinton administration. Wen Ho Lee was a Taiwan, uh, uh, uh, he was, he, he was originally from Taiwan and he moved to US to pursue his career, and he was a nuclear physicist working in Los Alamos. Nuclear laboratory. And when, when the news came out when China possessed MIRV capability, which is one, one ICBM can carry multiple nuclear warheads, you know, all Americans immediately say, okay, China must have stole that technology, so let's find out who is the Chinese mole. So of course they look for the ethnic Chinese scientists in Los Alamos and the, the, the zero on Wen Ho Lee because he had some trips, like family trips, uh, business trips to mainland China. And then, uh, they— in the end, they never found anything about Wen Ho Lee, but that got Wen Ho Lee fired. Uh, in the end, the US agreed to pay Wen Ho Lee a couple million dollars to pay for the legal fees, but they refused to pay like, um, like a compensation because if you pay compensation, you will admit US government did something wrong.

Wrong.

So they only— yeah, so they only pay like the legal fees. Um, and, and the one who— Lee wrote a book. And anyway, like, this is this kind of witch hunt. This— yeah, this started back in 1998, but it just got a lot worse like in the recent years. And again, it's kind of stemmed from this belief: any kind of Chinese advancing technology, oh, they must stole it from U.S. You know, so the way we're gonna stop that is we're gonna remove all the Chinese working in the science, in the top science fields, which is really crazy. You know, like just two top, uh, top nanoscientists from US, uh, two Chinese researchers, they just decide to go move back to, to China and to, uh, and, and to sign on with Chinese universities because, you know, they find it impossible to continue their work in US anymore. And, and, and, and in the end, is the US is losing talent. You know, one of the edge that US had was the ability to draw talent from all over the world. Now they're saying like, okay, we don't want talented people from China because we're afraid of like informational leakages that allow China to, to advance technologically, which is really crazy.

Yeah, well, that's why there's, uh, my, uh, sort of a dear friend of mine, Dr. Dashuan Fang. He sent me a link one time too, and that's what I saw, the stats. 45% of brain drains now are leaving the United States and going back to their home country. As a matter of fact, I don't know if you know this, Carl, or not, but over, over, I think, either 55 or 60% of PhD holders right here in the US are foreign-born, not Americans. So I happen to be one of those. So I wasn't born here. So, uh, but, but you're absolutely correct, there is this brain drain now that is going. But also because we are realizing our institutions here, academia, that is, it's not producing enough. Well, because the curriculum and how— and well, without getting into academia, uh, the setting and all that, there is no more teaching here in the US institutions. Because you have to worry about how students feel, or rather how they think. Because, yeah, because that's what it was, Carl. I remember when I was in a classroom and I had the— in a master's degree, and I would challenge the students, and they were— half of the class were foreign-born. They were eager to learn. You know, I am not here to worry about how you feel. I'm here to worry about how you think. And we don't have that anymore in the US. And that's, to me, the sign why Personally, I decided not to teach anymore here in the US, and I am considering, uh, uh, uh, some options outside. I, by the way, uh, uh, Carl, I was told I need to check Fudan University in Shanghai. Do you know anything about that?

Fudan University? Yeah, F-U-D-A-N. Oh yeah, that's correct. Fudan University is one of the top universities in, in China. Okay, like like Fudan, Tsinghua, Beijing University, they're all like top universities. Okay, so just whether you want to live in Beijing or Shanghai. If you, if you want to live in Shanghai, then Fudan University is a way to go.

University, I'm gonna check it out. So yeah, all right, let's, uh, let's talk about, uh, one other aspect that, uh, just want to get again, uh, when I have you here for our monthly conversation, I always like to pick your brain on usually, especially with the events that, that took place and so forth. Well, one of them, Carl, has to do with the US backing two permanent seats for African nations at the UN Security Council. But there is a caveat to that. They told them, we will not give you veto power.

So this is another point. It's an insult. This is the instance where US realized they have an image problem in the Global South. You know, they wanted to, they wanted to compete with Russia and China for influencing the Global South. So they come up with this idea, okay, well, let's, let's do this symbolic thing of backing African countries, uh, entry to permanent, uh, uh, membership in the Security Council. Which nobody could argue that, you know, like that— how nobody can argue against that, right? But then they have to put into like, well, actually, we don't actually want them to be actually be able to say no. We don't want them to ask the African to actually veto ourselves, so we're gonna take away their veto power. I mean, like, what's the point? What's the point of promoting them to the permanent security a council then? Like, the whole point of permanent membership is they can veto. And yet, you know, US of course do not want anybody to be able to say no, uh, to their proposals in UN. So, so they come up with this kind of hair— like half harebrained scheme like this. I mean, it actually— like, it was a good idea, you know, to promote African membership, um, But you're going to take away the veto power. What is the point? I mean, it's just PR stuff. That's what it is. It's public relations stuff.

That's why when I read that, I kind of just shook my head because to me, I looked at it like an insult, which is an insult to begin with. No, you don't do— because that's how you perceive Africans to be, by giving them orders. So, hey, you're going to sit at the table. It's like you have your lunch or dinner with someone, someone tells you just sit at the table but don't eat lunch or don't eat dinner.

It's an insult. It's like, okay, I will give you the Security Council seat, but it's a second-class security seat. You know, this is a second-class security seat we reserve for Africans. You know, yeah, of course it's an insult.

I think, Carl, I think the US wanted to do this to allure African countries because they are seeing the changes regarding the economic ventures that they are doing with China, the African countries with China. Also what we've seen in the Sahel region after kicking out the US out of Niger permanently, and of course with the nationalization of the two gold mines in Burkina Faso. So I think they're seeing all this by saying, well, how about if we give you a seat? But I don't think so, Africans gonna buy that because they can't trust the US government. That's, that's what's at the heart of it. So the way I see it. All right, let's, let's take some questions from our, uh, uh, uh, members here, community. First of all, I want to say thank you to Boone. Good to see you, Boone. Boone is, is coming to us from Germany, so good to see you. Question: would Russia end the Ukraine war before or after US elections be more strategically beneficial? Thanks, get well soon, Carl.

Well, thank you, Alboom. I— the, the thing is, I think, um, for Russia right now, they're pursuing the war for their own interest, so they're not timing this, uh, according to the US election. I mean, US, it doesn't really matter, um, I think either way. I, I know Trump has publicly said that he would try to negotiate for peace in Ukraine. And he want to— but we saw what happened in the first Trump term. Trump said the same thing. He said he want to reset with Russia, but Trump lost the fight with the deep state. You know, like, the deep state pushed him to have even worse relationship with Russia. So I, I don't think Trump is good. Like, people think, okay, Trump is fighting against deep state. Look, Trump never won against the deep state. He's not gonna win this. I don't think he's gonna win this I mean, even if you win the presidency, the deep state is still going to run the show. Um, so I, I, I don't expect, uh, any— I, I mean, Russians probably smart enough to realize that too. They're gonna, they're just gonna continue to pursue the war to maximize the territorial gain and, and also their own, maximize their own security on that front. Uh, you, regardless of the election results in United States. Yeah, I think that's—

and one of, on one of the things, Trump already said that he, if he wins the election, he's going to impose tariffs on Chinese. Yeah. So, so the right hand, you know, Trump is a showman. He's, you know, he doesn't understand doing so is going to impact the average citizen here as far as prices. He just doesn't get it.

Yeah, yeah. I mean, he's, he's, he's like— I saw the debate he had with Kamala. He's building like the, the tariff on China is a great success because it gave us all this money. But you know what? All that money is not coming from China, that's coming from the US consumer. You are taxing the— it's a, it's a tax by other means. You know, you are increasing the— by jacking up the price, the US consumer just pay— have to pay more.

That is true, that is true. Uh, speaking the truth, Give Peace, thank you very much for your super sticker, truly appreciate you for that. So, so here is a question for you from me, Carl. Where do you see the U— uh, the US-China relations post-American presidential elections? What do you anticipate and what do you expect?

Well, unfortunately, I don't see much prospect for improvement, and whether Trump or Kamala wins the election— I mean, Kamala administration is just giving the same old, same old policy from Biden administration. And Trump, there might be some initial confusions because, you know, Trump, he's a wild card. He might throw some— the, the, the US, uh, deep state into a loop for a little while, but he's not going to win the fight against the US deep state. So it's going to be the same policy toward China. And, and it— and his— and the, the, the factional Republicans that Trump represent, they're not really friendly toward China anyway. They just want to make up with Russia and then but still compete with China. So So the US-China relationship, unfortunately, we're on a trajectory. It's a downward— it's a downward trend, and, and it's not gonna— we are basically looking at Cold War 2.0 right now. We are in an undeclared Cold War 2.0. I mean, and this is all— this is mo— this is brought on by the US government. China does not want this. President Xi Jinping has said more than once, the globe, the world is big enough for both China and US to prosper together. We don't need to, we don't need to make a competition. But US repeatedly said we want to, we wanted to make this a zero-sum competition. And, and unfortunately, you know, as long as the hegemonic mindset is on the, in the brain of US elites, this situation is not going to improve. So, um, I'm a little bit pessimistic about this, but What I'm positive about is the, the ability of U.S. to influence the global events is becoming more and more diminished. So, you know, no matter what U.S. do and U.S. say, China, the Global South, they will power ahead. There was power ahead to forge their own relationship. They will continue to grow their economic ties, and, and, and, and there's not much U.S.

could do about And speaking of Global South, which leads us to the next question from, uh, Francis Tango: does that mean that other countries can sanction the United States?

Well, I don't think other countries are interested in sanctioning US. I mean, even China wants to do business with US. It's a, it's a US that want to sanction everybody, but what happens when US sanction China? It sanctions itself because everything is made in China. So this is the kind of the conundrum that, that the US elite is facing with that they, they are, are, are, they're, they're, they're, they're caught screaming because they don't really know how to solve this problem. That's why they think they will magically decouple with China and then, you know, they can— that make their problem go away. But it's, it's just that just create even more problems right now. All the decoupling has done is the, the previously the Chinese goods that shipped directly from China to United States, they, they get rerouted through Vietnam and Mexico, and Chinese— US consumers pay a premium, and that's what happened.

Wow. Yeah, well, even the Europeans been talking about decoupling, but it was just, uh, just hype, no more, no less. So you can't trust Western leaders anymore because there is no competency left whatsoever, because the interest of the constituents is not a priority. That's the way I see it. So, well, Carl, I can't thank you enough, man, for really, really uh, carving out time for us here. As always, I, I always look for this monthly conversation with you, and I look forward to the one next month, uh, at the end of October, and I'll be back from Asia at that time. So once again, thank you so much, Carl, on behalf of the entire community. I say thank you. And by the way, guys, uh, hold on a second before you guys leave, or, uh, I need to show you where to get the links for Carl's up. I have them right here. I'm gonna post them for you on the screen by creating a banner. Here we go, add the banner and put it right there. So this is the YouTube channel for Carl's. He has a YouTube channel there. Uh, what, what is the channel about, Carl, for those who do not know?

Well, um, you will find interviews like this where I talk with people about China. I mean, it's— my channel is all about China, basically. Culture, politics, Hey, that's— yeah, yeah, this is what I'm passionate about. Uh, you know, I can talk for, for hours about any topic on China.

Well, you provide insights and a different perspective that others don't, don't, don't get a chance to hear. And second, thanks, you guys see there, that's Carl's, uh, uh, handle on Twitter, X. So I follow him on, uh, on X. Uh, if you guys just go to @carlza, and just follow him there. He posts a lot of stuff there. I read his, his posts and comments and all that stuff. Very, very informative if you are interested in learning something. So once again, Carl, thank you so much and greatly appreciate you being here. All right guys, hope you find this very informative and remember to join me tomorrow at 12:15 for our community conversation. And I'll be sharing with you some pictures from my recent trip to Eastern Europe. I was also near the Baltic Sea. I had to go, uh, check out a few things there. In addition to when I go on speaking event, I get some day off or 2 or 3, whatever that is, and I, I, I kind of just look around, uh, so I can share some information with you. So, so I look forward to seeing you tomorrow. As always, remember, geopolitics impacts your daily life in more ways than one. Till next time, guys. Bye-bye.