How Bad is Trump's Loss to China? W/Einar Tangen & Warwick Powell!

Hello everybody and welcome to Geopolitical Trends, where truth matters. Excited to be with you once again, but I, I am even more excited for my dear friends Einar Tengen and Warwick Pao who are here. So we're going to be having a very, very interesting conversation on a host of issues. Before I bring my guest to the studio here, let me share with you quickly some housekeeping. Items tomorrow. Remember to join me at 12:15 Central Standard Time for my conversation about, uh, uh, Iraq and how Washington is furious that Iraq has asked the US to get out of Iraq. So very, very interesting dynamics. And, and on the 20th, I will be having, uh, Melissa Park. Let me share a picture with you guys so you know who she is. We will be talking about nuclear disarmament. I look forward to that conversation with her. And on the 22nd, we'll be having a conversation with none other than Carl Zah. He will be here soon. So let me bring in my two dear friends, Einar Tangen and Warwick Pao. Hello, gentlemen.

How are you?

Good to have you here. Uh, to those who do not know who Warwick is and who Einar is, which you should know by now, but I'm gonna give you a brief, uh, intro here quickly. Uh, Einar Tengen is a senior fellow at Tahi Institute. He's also a founder of Asia Narrative, in addition to being senior fellow for the Center for International Business Ethics, uh, which is, uh, a University of International Business and Economics. And by the way, uh, Einar, didn't you just add another title of the senior fellow for CIGI in Canada?

Oh yeah, I'm in the process of collecting fellowships, senior fellowships, so, you know, this is— I thought I would add it on. No, actually, I'm quite honoured. This is the Centre for International Governance Innovation. It was started by the founders of RIM, which many people remember as the company that owned BlackBerry, and it's very prestigious. They have a business school and I look forward to doing it. It also kind of balances out because people always say, oh, you're always pro-China because you're on all those things. That's ridiculous. Well, you know, okay, so if I have another think tank from the West, perhaps, uh, you'll, you'll think that I'm a little bit more balanced. Uh, I simply say what I feel.

So, well, great.

Of course, the facts I've invented.

Of course. So let me introduce Dr. Warwick Powell. He's an adjunct professor at Queensland University of Technology. In addition to being a senior fellow at Tahi Institute in Beijing, he is also the author of China: Trust and Digital Supply Chains: Dynamics of a Zero Trust World. I have a copy of the book here. It's a very interesting read, uh, guys. If you are interested in learning more about supply chain and technology, this book— and by the way, it was published by Rutledge Rutledge is very, very reputable, well known in academia, so I highly recommend the book for you. So, uh, gentlemen, I'm gonna start with the one question that I like the community to have your insights about, uh, and this has to do with the recent US summit, uh, US-Russia summits in Alaska. I'll start with you, Oleg. What do you make out of it?

Um, Well, I mean, we've had the summit, and we've now had a meeting in Washington between the European— or a collection of European leaders, President Zelensky and President Trump. There isn't a lot of detail, to be honest with you, about it. And a lot of the discussion has revolved around the atmospherics of the summit, as to, you know, who won, who played whom, and those sorts of things. I think one of the difficult things for people to get their heads around is that the only reason this summit actually occurred is because of what's happening on the battlefield. So regardless of what the atmospherics were and what the political theater was, whether or not a red carpet was rolled out, whether or not there was a handshake with a, with a hand on a shoulder and a double hand, or whatever it happened to be, you know, all the body language analytics, um, the, uh, the reality is, is that there wouldn't have been a summit had the collective West been prevailing on the battlefield. And the reality is, is that as time has gone on, the, uh, the Russian military has progressively, uh, refined its particular approach to this operation and has been executing with increasing degrees of success an attritional war. And that has delivered to to Russia a very strong position in relation to any possible negotiations as far as bringing this particular operational war to an earlier conclusion. Now, if these discussions don't materially deliver an end to the, to the fighting and perhaps lead to the creation of something that actually resembles a peace settlement as opposed to a ceasefire, which now is off the table, um, uh, Russia will continue with its operations until it meets its objectives. I, I don't think that there is anything in any of the comments around the summit or since suggest that Russia is in, uh, any mood to, um, to curtail this operation unless it achieves its objectives. It's either going to achieve its objectives on the battlefield or achieve its objectives at the negotiating table. And that's where I think things sit at the moment.

Einar, how do you see it?

Well, I'm going to agree with Warwick on this. I mean, when you don't have substance, what do you do? You start looking at form, and that's where all this stuff about, you know, whose hand was on who and who was more macho than the other guy. The truth is, I don't think anything really substantive happened. I mean, everything that Trump has talked about has been suggested before, and I don't even mean before the latest conflict. I mean, this is going back to 2014 and '15, '16, and '18 when they were talking about trying to settle the war. There was always this issue about China. I mean, Russia feels very strongly that it has to have security guarantees. They don't like the encroachment of NATO. And they certainly had told everybody loudly and clearly, and the message had been received by US diplomats who all said, "If we go into Ukraine, either directly or indirectly, the Russians will fight." So, I mean, it was a predictable outcome. That does not excuse all the deaths that have happened. Russia did what it felt it had to, but, you know, the people who have suffered here are the Russians and the Ukrainians. What I object to is this notion in Europe that's still there that they're willing to fight to the last Ukrainian. I mean, it's puzzling at best. I mean, the Ukrainians clearly from the graph want peace. They do not want a continuation of a war which they are losing day by day, and, you know, as Warwick pointed out, the military logistics of this are inescapable. Russia is going to continue to gobble up land. They're going to achieve their objectives. The question is how many more people need to die before they do it. You know, I see this peace table or this conference table, whatever it is, is basically built on the corpses of those who have fallen on the field, and it wasn't necessary. You could, you could walk to a table and start negotiating at any time. You didn't have to wait until the body count reached a certain amount or until you thought, you know, you, you were disadvantaged or you advantaged. I mean, the situation was the same. It was never going to be won on the battlefield. Yet you still have people in Zelensky's administration saying that the only way through is victory on the, uh, you know, at, on the ground. I mean, it's just, it's delusional at best. But you can definitely see this very, very clear cleavage between the elites who are ruling Ukraine and the Ukrainian people. I think you referenced a latest poll which indicated that the Ukrainians are like 64% in favor of a negotiated peace, with a small minority saying, yeah, let's fight till we're all dead. It's like— but getting back to these supposed peace talks, it was sound and fury. Not signifying much, as I said. All old stuff that's being thrown out, out there. I think the timing, especially given Donald Trump's, you know, desire to eclipse the Epstein files, is very suspicious. I mean, this is the only thing that he's thrown out. He threw out, oh, we're going to position nuclear submarines because there's going to be a nuclear war. That didn't work. He tried a whole bunch of things, taking over Washington, D.C., you know, with— 3 months before, he had said it's a great city, everything, crime is on the decline, and then 3 months later, all of a sudden, I have to bring in the National Guard because the city is in crisis. So I don't think people should discount the fact that Trump is very anxious to change the narrative that's going on right now. The MAGA base is in critical mass. He's at his lowest approval rating. And quite frankly, much of his media arm within the media, within the MAGA movement, is deserting him or staying on the fence.

Warrik, how about— I just want to ask one more question before we move on into— and by the way, guys, we're going to be covering a host of topics that includes India, that includes AI, that includes technology. That includes the Philippines. So I just— but I wanted to touch on one particular aspect regarding this summit. Is there anything we could think of regarding the thinking of Donald Trump as far as the rapprochement and the partnership between Russia and China? Is, is there any aim on part of Washington establishment to break away that partnership that is emerging stronger between the Russians and the Chinese?

Well, that's been a name for a long time, so, um, you know, in, in that sense, uh, I would say that any, any effort by, by Trump to, um, cultivate a better relationship between the United States and Russia would in part have that in mind. I think the other thing to bear in mind, David, is that This, you know, the atmospherics and the dynamics of this summit seeks to position the United States as some kind of a mediator in this process, and it's anything but an independent mediator. The United States has been leading this war from the rear for well over a decade. In fact, ever since George Bush Jr. invited Ukraine into NATO in 2007-2008, um, we have been on a slippery slope towards this particular conflict. And there have been a number of opportunities where this conflict had off-ramps, whether it was in 2014 with the Minsk agreements, or whether in fact it was with the draft treaties and draft agreements that Russia put forward in 2021, December 2021. And of course, we all know about the sabotaging of the agreements that were initialed, um, in Istanbul in March-April 2022. So this has been, um, a, an American and NATO-inspired conflict together with Russia. You know, they are the belligerents. The United States is not a neutral mediator in this process, and Trump is, I think, seeking desperately to position the narrative so that the United States and himself in particular can be seen to be the peacemakers. The fact of the matter is that the United States has lost this battle. And as I mentioned earlier, this is why this particular summit is taking place, notwithstanding the media distractions that Einar touched on as well. And the United States—

we lost the sound here. Let me go back to where— to Einar. Waiting for Warwick to come back here. Uh, yep, can you hear me?

Okay, yeah, no worries. Um, look, I was just saying that, um, that notwithstanding the, uh, the sort of tactical distraction issues that I touched upon, and I think, you know, in the, in the cycles of news and politics, those things are of course very, very real. Um, the, uh, Trump would simply not have entertained this kind of summit and the discussions that have been catalyzed since, had it not been for the fact that Russia has defeated the United States on the ground and now is seeking to shift the blame elsewhere.

Einar, one more thing here before we move on to another topic. Where do you see the role of Europe given now how Trump is treating the Europeans? When I say Europeans, I'm referring both the EU and NATO for that matter. How do you see it playing out moving forward?

Well, I think it makes a nice rug. I mean, there's lots of different countries, you patch them together and you have a quilt, but it's certainly not in the forefront. You know, obviously showing up in Washington as a show of support for Ukraine, it sounds good. You know, we're united, but Europe is not united. And quite frankly, this idea that they're going to salvage something for themselves is kind of nonsensical. The fact is there is no peace agreement. And there is really, you know, this path to peace, as I said, is based on old elements. And as Warwick had pointed out, it's because they're losing the war. I don't, you know, this, you've heard already, the Europeans are still willing to fight to the last Ukrainian. I don't think that works for Ukraine anymore, but until these four countries can come together, I don't see a viable peace plan. If the U.S. walks away, fine. Donald Trump says, oh, I, you know, I won, victory, give me a peace prize. What happens in Europe? Europe continues to buy U.S. weapons, which Donald Trump is happy to sell them, although he's, quote, walked away, and they continue to feed them into Ukraine, which continues to lose more and more ground. The question is, at some point, there has to be a peace. It's either going to be on the battlefield in terms of force, when they get to the, to the River Dnieper, and they're looking across at Kyiv, maybe Kyiv will finally say, okay, it's time to throw in the towel and get serious about negotiating. But Europe, you know, it's, it's incredible. There's this incredible blind spot that they have. I've talked to many ambassadors here, and it is as if their eyes glaze over the moment you say, well, how did this war start? They always say, well, it started with the Russians invading Ukraine. And I said, well, how about 2014? They see that differently than you. And you go back to the promises made after the fall of the Berlin Wall. They say, that's not relevant because what they've done is they violated human rights. And I say, well, you know, that's your perspective. Um, but even now I don't hear any other message coming out of— from the Europeans. Uh, now obviously their ambassadors are toeing the line, but given this kind of rigidity, uh, it's going to be very difficult to see how this is going to go through. They have floated this idea that they would bring in China. Of course, no one's talked to China about that, or maybe they bring in other parties. But, you know, in the typical slipshod fashion of Donald Trump making stuff up on the moment, nothing is settled. He's just throwing it out there, and as Warwick has, you know, quite well-eloquenced, that he is just simply seeing what sticks so he can walk away.

Yeah, I will have a hard time believing that the Washington establishment, either Washington or Brussels, will reach out to China for this matter. They're not going to want to have Chinese getting involved and resolving because China is all about results. I just don't see this moving into that direction. I hope it does, but I just don't see it.

Russia has mentioned it as a co-guarantor. Yeah, it's been pushed out on that side. Obviously, who knows what the reception would be.

Indeed, indeed. Uh, let's move on to talk about the what's going on with the whole theme about this particular live stream here. And one of them has to do with many analysts are sort of, uh, arguing and expressing their concerns. And I'm one of those, you know, I don't express concern. As a matter of fact, I'm saying that Trump has no leverage when it comes to his dealing with the Chinese. No, would I be wrong in this assessment? Given that this comes on the back here, on the backdrop of the Chinese economic outlook for moving forward, is about to be about 4.5 to 5% for 2026 as far as growth. How do you see it, Warwick?

Well, you know, whether or not there's leverage, even if there was, won't necessarily mean that a country will bend. You know, the United States has had leverage over Cuba for the last 50 years, and Cuba has refused to yield. So this idea that somehow you can force other countries to, um, to fold their hand, um, is part of the nonsense framework that Washington think tankers and others often bring to the table. You know, this idea of peace through strength, the idea that somehow you can use leverage to, to force other countries to do certain things. You're just not going to do that with a country like China for a few very obvious reasons. One, it's got a history of, um, coming out of 100 years of what it sees as humiliation at the hands of the West, and it's never going to let itself, um, be put in that position again. That's the first one. Um, the second one, of course, is that China has, for the best part of the last 8 or 9 years, particularly post-Trump 1.0, been preparing itself for, for America taking more cracks at it. America took more cracks at China with the Biden administration that continued and in some cases extended the punitive measures introduced by Trump 1.0. The technology restrictions in terms of exports of high-tech were implemented by Biden and escalated ever since. And China has literally taken all of this in its stride. Of course, after Trump launched his, or announced his, subsequently aborted global tariff regime on the 2nd of April this year, the expectation coming out of Washington— and if you listen to folk like, um, Bessant, uh, the expectation was clearly that everyone would, would, um, fall to their knees, um, they would come and pucker their lips And Trump himself made it very clear that people could come and kiss his ass. And he believed that there was a whole conga line of national leaders from around the world who were preparing to do that. What they didn't expect was China reciprocating. And China reciprocated within 24 to 48 hours. And that escalated for over 2 weeks to a point where in the end, the United States had no choice but to come back to the table and reach a temporary détente, with China to wind things back to where they were at on the 1st of April and has since then extended the negotiation timetable on two occasions. Now, in the meantime, of course, Washington has thrown various things into the, into the works, and China has responded with introducing more stringent administrative controls over the export of rare earths. The fact of the matter is, is that the Americans can produce dollars till the cows come home, Um, Bessant and Co really believe that that was actually where they had the leverage. But what they don't understand is that you can produce dollars as long as you want, but if you don't have the real materials, uh, to do real things with, it really doesn't matter. You know, these are fundamentally nothing more than state-created IOUs, and China's got plenty of them in any regard. So where are we at? Well, uh, Trump has extended on two occasions now. You get people like Lindsey Graham bloviating about mega sanctions against China and, and India because they buy oil from Russia. And, um, and China, India, Brazil, Russia— none of them have flinched. The fact is, is that, um, contrary to ambition, uh, the United States moves in this particular space have caused a whole bunch of countries around the world to realize why it is vitally important for them to remain cohesive, united, and committed to open rules-based trading regimes that Trump is seeking to unilaterally undermine.

Very, very interesting. Uh, uh, uh, Einar, you had a— you wrote a piece on August 7th. I had a chance to read it, uh, uh, which titled The Rakes Progress Redux. So by the way, guys, I'm gonna put the link for you in the chat, in the chat box, for those who wants to read uh, uh, Einar's article on Substack. Very, very interesting. Uh, you wrote, and I quote here, uh, by any measures, the unraveling of Donald Trump presidency is no longer a slow fizzle but a spectacular implosion. What began as a calculated strategy of destruction and domination has metastasized into a tragic convergence of self-inflicted wounds. And the toxic strategies inherited by Roy Cohn. And the article continues. Can you please elaborate on this and explain to the, uh, community here, just to understand how the ill-conceived policies of Trump are sort of backfiring at him in a way that he never expected, and at the same time harming the American, the average American citizen?

Yeah, first, just in terms of background, I want to explain that Roy Cohn was the legal counsel for Senator Joe McCarthy as he pursued his Reds Under the Bed, um, you know, a pogrom across the United States, uh, bagging intellectuals, uh, doing in essence everything that Donald Trump is doing right now— hacking universities, uh, uh, saying that the government is full of, uh, dis— you know, Communists who cannot be trusted, etc. So, you know, and Roy Cohn was— and Donald Trump has acknowledged many, many times that he was in fact, uh, the— his mentor, that what he learned about business and how to deal with people and public relations, you learn from Roy Cohn. Roy Cohn died broke and, uh, completely, uh, he was disbarred and he, he ignominiously, let us put it that way. I was trying to draw this thing that these tactics, uh, that you use, these bullying tactics, double down when you're losing, don't admit you're losing, just simply double down and say, you know, take it up to the next level. Uh, this is exactly what Donald Trump is doing. He had this notion in his head, um, you know, that he's— he in his first term, he wasn't tough enough, that he should let Trump be Trump, let him be the bully, uh, that he is naturally. He has always been, and he thinks this is the way you get your way in life. And it wasn't successful. He wasn't the most successful, um, real estate magnate out there.

And by—

I talked to a friend in New York and he said, well, Donald Trump is really kind of beneath the top 10. He's not somebody we take very seriously. So, what is he doing? He's induced these tariffs. He's turned the world against America and himself, and he's left countries, ironically, and this touches upon what Warwick said, like China, where they have to think beyond the models, the colonial models that were out there is, you know, what's good for me, you know, who cares what it— what it means to everyone else. China actually believes this idea that you have a common, uh, you know, destiny for mankind and that you have to work at it. So they have to be the adult in the room. Ironically, as Trump thrashes around, uh, they're the ones who have to say, okay, how do we deal with this guy? Because he's going to be around for 3 and a half years, assuming nothing else. Um, and, you know, we have to slow play him. And that's exactly what they're doing. Um, but, you know, Donald Trump is the greatest gift to China, um, well, since WTO, although WTO wasn't particularly a gift. It was pretty hard, um, pretty hard negotiating on behalf— it was the worst deal of any country it had gotten up to that point, but it still allowed China to, to, to open up. But at this point, uh, China has to figure out some way of keeping him occupied with different things so that he doesn't go back on this bullying tirade. So everything he's doing is rebounding against him. He gets rid of migrants. Well, yeah, who's going to pick the crops? You're already seeing across the United States prices of fresh produce are skyrocketing because no one is going to be able to, um, you know, go out in the fields and to bring in the crops. He's attacked the universities. Well, that's great. Universities are where you have to have people who can create the next economy. This myth of industrialization is nonsense. The amount of money and time it would take would be far beyond 3.5 years. We're talking 10 to 15— trillions and trillions of dollars, which no one is going to put up. He's created uncertainty across the world because no one knows what he's going to do. You know, they've been— his nickname is, as everyone knows, is Taco Trump, always chickens out. In fact, they trade on it. In fact, his own Secretary of Commerce, his kids are creating vehicles where you can bet that anything Trump says he's going to chicken out on. Uh, what does that say? I mean, these are guys who are financial, uh, people. They, they don't do this to make— to have fun. They're doing it, I think, despite the fact that goes against their father's position, uh, in this. And so you, you have, uh, continuing the, the situation internationally, the way he bullies people around. It's rebounding. Now, the most important part here, and the thing that people should be paying attention to is at the last BRICS meeting, it was India and Brazil who said, let's listen, uh, we can call out without naming the U.S. as, you know, pushing these, um, you know, tariffs unilaterally, but let's not make it personal. Let's, let's keep a balance here. Let's keep the door open. Well, since that time, both have been hit with 50% tariffs, right? You have South Africa at 30%. Unknown as to China and Russia. But what does this pattern tell you? Trump will take advantage and press on any country that he perceives as weak or showing weakness. Russia and China have stood up to him, and what is he doing? He's tiptoeing around them, right, because he has no choice. So this should be a clear signal. Lula started it. He called everybody and said, listen, you know, it's time to have an emergency meeting. I think things have changed dramatically since just a few months ago when we met, and it's time that we come together. I mean, 40% of the world's GDP, majority of people, markets, resources, 4 times as much manufacturing as the US added up. Yeah, they come to Washington 10 countries strong, or the wherever they choose to go, and they say to Donald Trump, knock it off. Under your own theory of bullying, we're the bigger bully. So if you want to fight with us, it's going to go badly for you. And at that point, Trump stays true to his nickname, Taco. He figures out some way of declaring victory out of defeat, and then he moves on to his next spectacular moment to distract his voters from understanding that he is losing everything for the United States.

Liking this video so far? Don't just be a watcher. Go ahead and hit the like, share, and subscribe button. And don't forget to tap the bell so you will not miss any of my videos or livestreams. This way, you will be supporting a channel that stands for for the truth and objective reporting. The choice is yours. Thanks for your support. Well, I, I couldn't agree more, Einar. Indeed, uh, sort of he is finding— I mean, in Trump, that is finding out that in the case of China, in the case of Russia, those are not your average countries you're just gonna bully. He can get away with that with the Europeans, and I'm sure they're finding that out. So, uh, Warwick, I want to get back to one particular— I had a chance read an article in which, uh, uh, Bassett was questioned, uh, there. And one of the things he came up with, which really, really, uh, surprised me in a way, uh, he stated, and I quote, China is most imbalanced economy in modern history. I mean, I read that from Bassett himself, and I kind of just shook my head. What do you make out of this statement, and what could be the motives behind such a statement, in your opinion, Warwick?

Look, there's been a trope going around now for a few years that the causes of America's trade deficit is the result of an excess of manufacturing in China, which is the result of insufficient domestic consumption. So that's the sort of economic argument, is to say that there's too much investment in China, too much manufacturing, not enough consumption, and therefore the world's woes can be sheeted home to China. And what China needs to do is increase consumption as a share of GDP, and everything else will fall into line thereafter. Of course, If you want to just to take that at face value, the flip side applies as well, and that is if China is unbalanced, then by definition America must be similarly unbalanced the other way. So, um, we have an excess of consumption in America, much of which is driven by private household debt. We have inadequate investment in America undermining American capability, both in infrastructure terms and in manufacturing output terms. Terms. We have a services sector, particularly in the areas of health services, legal services, accounting and financial services, as well as the real estate industry, that makes a greater claim on GDP than in any other part of the world, filling the pockets of rentiers at the expense of ordinary working people. You know, so whatever it is that Besson says about other countries, in this case China, he might be well advised to take a good hard look in the mirror himself. The reason why America is in the hole that it's in on their own terms, right? So let's, let's, you know, let's, let's focus on how it is that they define their own problems, which is insufficient manufacturing. The reason why that's the case is that for the best part of 40 years, people like Bessant have been cleaning up in the financial markets at the expense of real investment in real industry. So if you want to really understand why the United States is where it's at today, you've got to understand why it is that manufacturing, particularly in employment and output terms, has remained relatively flat as a proportion of GDP. Take a good hard look at why people like Bessant are in the positions that they are in, right? So folk out there in voter land in the United States, if they are genuinely concerned about the productive capability of America, other than its ability to, to produce US dollars and fictitious capital until the cows come home. Take a good hard look at the people in the White House and around the White House. So Bessant, when he throws ideas of imbalance around, really is typical of an American politician who makes allegations about others when in fact they are nothing more than confessions of their own sins.

Oh, very, very interesting. Uh, on— I know, it's kind of like when I read that, I just shook my head. I'm not an economist, but it's just for him to be stating what he's stating. And speaking of just statements, and this one for you, Einar, because here is another statement from Bassett himself. It is what he stated. He stated that he expect the trade issues with China to be finished by October. What do you make out of that?

Well, it's distraction. That's all I can say. I don't care about his hairdo or the way he talks about things or the fact that he was Soros's right-hand man.

Indeed.

Who, if you go back and see what Trump has said about Soros, it's very interesting. I completely agree with Warwick on this financialization, this idea that I don't wait for a company to be successful. I just simply bet on what the Fed is going to do. I leverage, I borrow lots and lots of money and I figure, okay, I think this is going to happen. And if it happens the way I think, I'm going to make a lot of money because I'm going to be betting a lot of money. And then if that fails, I'll simply I'm going to take the next bet and even bet even more to cover my losses and to make it so I have a great big bonus at the end of it. These are people who don't care about the fundamentals of economics. What they care about is their, you know, quarterly and yearly bonus. The second part, which Warwick pointed out, is the US made a decision back in '73. They went off the gold standard. That was fine. Uh, they created the petrodollar. That's fine. But they decided they wanted a strong petrodollar so that gas would be cheap, because that's politically good stuff. People have these huge gas guzzlers. They want to be able to fill them up for very little. But what that did is it made anything made in the U.S. more expensive. And as a result, you saw a decline in manufacturing. Now all of a sudden, that's uh, you know, China's fault. Um, and you have people like Bessin up there who— I mean, he had the nerve actually a few months ago at the very beginning to talk about how financialization is ruining America. A guy who's worth a half a billion dollars because of financialization, of making bets on things, who had two failed attempts that had to be reeled in by Uncle Soros. I mean, the height of hypocrisy. And, and this is what you have to understand— don't believe anything these guys say. It is simply convenient politically to say these things and then just kind of move on if they don't deliver. Well, it's like, I'm gonna end the war in 24 hours. Well, does everyone— everyone remembers that, but you know, now Trump is just razzle-dazzle tap dancing on stage, stage, trying to convince people that there are other more important things. And this is really where I become very, very concerned. At what point does he feel that he's in such danger that he does something militarily because he thinks that it's the only option to distract America? And these are things that, uh, you know, I, I weigh lay awake at night thinking about. Does he follow through on invading, uh, Panama? Does he try to do something with Greenland or Canada? Uh, follow through on what he's planned for Gaza? On the dead bodies of these children, all he can see is real estate opportunities. These people are hardly human. They don't consider what is going on with people. They're completely indifferent to the suffering. They just look at their own power and their own money, and they, you know, pat themselves on the back because they have it. Indeed.

One more point on this particular theme here before we move into something else, and this for you, Warwick. It's about the outlook for the Chinese economy. I had a chance to read, and majority of some economists arguing that it's generally positive for 2025, with the most forecasts sort of projecting growth around 4.5 to 5%, despite some headwinds. And this— one of the aspects that drew my attention has to do with the property sector within the Chinese economy. That is, it remains some sort of a concern because it continued to show some sort of weakness in the construction and the investments, uh, aspects of it. However, when you consider the other side of the equation, I'm talking about strong exports and I'm talking about a robust domestic consumption. Those are expected sort of to drive growth. How do you see it holding up for the end of the fiscal year this year here? Into 2026.

Well, David, it's already collapsed. I think we all know that, um, it's collapsed at 5.3% growth for the first half of the year. Um, all jokes aside, um, the, the, um, the, the issue of property I think is an important one to understand. So 6 years ago, the property or the real estate industry contributed almost 30% of GDP. Credit growth in real estate had reached almost 20% per annum, and the sector was clearly overleveraged. There were great concerns from about 2017-2018 onwards that, that the, that the real estate industry was leveraged to a point where China faced the risk of its own Minsky moment, as described by the then head of the People's Bank of China. So there was a concerted effort to deleverage that industry, and that effort was initially done through moral suasion, which was public pronouncements that property was— or housing was for living in, not for, um, speculation. Um, eventually some directions were given out, um, gentle nudges, so to speak, to major property developers to sell down some of their assets, particularly those around the world that were not part of their core property development or real estate portfolio to reduce debt. And eventually, for those companies that refused to act on the, um, the strong suggestions from government and regulators that they need leverage, they introduced the three red lines. Um, some companies ignored all of that and, um, and pursued, um, private funding through the issuance of corporate bonds, um, into the international market. And a whole bunch of American venture venture funds or private equity funds dived in, and they're the ones who of course have had their hair cut ever since, as what has been the world's largest ever consciously managed sector deleveraging was executed by the Chinese government. Now what's remarkable about this is that two other things happened at the same time. On top of the fact that we had the United States putting external pressure on China through trade and technology restrictions, as well as the pandemic, right? So what happened, um, as the deleveraging was being executed was a rotation of the social capital, available finance and resources, into accelerating development in high technology, robotics, etc., etc. And the aggregate effect of all of this has been a structural natural transition of the Chinese economy whereby now real estate represents about half of what it did from a GDP contributions point of view only 6 years ago. Manufacturing, high technology, EVs, etc., have, um, accelerated. And in fact, renewable energy was the biggest driver of GDP growth last year. Um, and the critical measure, particularly the one that goes towards social stability and ongoing economic development, is that unemployment remained at about 5.2%. So whilst you're deleveraging a sector that was one-third of your GDP almost, and maintaining unemployment levels steady, you're doing something right. Especially when the adjustment in the labor market took place whilst real wages, real household incomes continued to go up, right? So this has been one of the most successful deleveraging structural transitions that has ever been undertaken of this scale anywhere in the world. So where are we at today? Well, we're at a situation where the economy continues to be underpinned by ongoing expansion in domestic investment demand as well as consumption demand from the household sector. Um, household incomes, real disposable incomes, have been growing in rural areas faster than in urban areas. And we see that evidence macro-wise through the reduction in the Gini coefficient, which is a measure of income inequality. And this has been the case since 2012. And what that is doing is that it's boosting in real nominal terms the available income that households have in China to consume the growing array of products that are being developed and manufactured in China. So the economy is relatively solid. Um, there is a recognition that there's likely to, uh, require some fine-tuning, particularly in terms of, um, ensuring that there's, uh, adequate growth in domestic demand in light of the risks of reduction in growth in international, um, markets, particularly on the back of, um, Trump's tariffs. But interestingly, despite what's going on with Trump's tariffs, or perhaps because of it, China's trade relationships with everyone else but the United States has actually improved in the last 6 months. So, um, perhaps China could be thankful ultimately, uh, for the effects of the Trump tariffs in accelerating the ongoing development of the multipolar trading environment.

Yeah, very, very interesting insight. Thank you so much for that, Warwick. I mean, I wish those people who write articles coming out of Washington or whatever else presented the full picture instead of just cherry-picking. And this is again what I'm left like, why don't you present the full picture and let us make the decision and reach our conclusions? So you, you mentioned war bonds, and Einar, I'd like to get your take on this because it's very important. First of all, I'd like the community to understand what bonds are. That's one. And second thing is, I like to have your, uh, your insights into how does China selling US bonds affect its rate, meaning the bond rates.

Bonds are simply just debt. It's a promise to pay. So you have two varieties, uh, basically you have corporate the private sector, and then you have the public sector. You're referring to the public sector bonds, the treasuries, which have been the gold standard of the world. When, when the U.S. dollar is supreme, and for— in terms of doing trade, what countries do is they have to settle in, in dollars rather than in every transaction taking their currency, trading into changing it into dollars, paying off the other side, receiving their currency, uh, which has changed into dollars, and then bringing it back into the native currency of the, of the first party. They simply keep dollars and they just exchange them back and forth, which means that you need somewhere to hold those dollars. And since the U.S. Treasuries used to be, uh, very, very stable, countries would hold them in U.S. Treasuries. And this created a huge demand. It was very good for Wall Street, lots of money floating around. And it was also very good for the US government. They could borrow at very, very cheap rates because you had this huge demand for treasuries. They do it. So the US over time has accumulated now over $27 trillion, which is, you know, well over 120% of US GDP. And they're, they're going at this, uh, kind of saying, well, you know, it'll— you can go on forever. We can never go completely, um, bankrupt. Why? Because, you know, we can print dollars. But that depends underlying this that people are willing to buy U.S. Treasuries right now. Yesterday they announced that the amount of U.S. Treasuries bought was at a record high. It was over, uh, $9 trillion in the last quarter. But the fact is, um, those are being bought by entities of banks, uh, hedge funds, everything like this. And that despite the fact that during the first quarter, uh, up to this date, the US dollar has lost 10%, more than 10%. So when you look at Treasuries, if I buy $100 worth of my currency on current currency. In January, I bought $100 worth, all right? And then today, what is that worth? It's worth $90. I just took a 10% hit, right? But that isn't deterring people because there's so much uncertainty out there that they say, well, even taking a 10% hit is, is better than, you know, losing 15%. So people don't have a lot of options. And they're not investing money. You look globally, the amount of investment is down considerably, except in certain hotspots. You see it flowing back into China as people realize that there's a real market here, and they're looking more and more at the emerging markets, not as an alternative to things, but as the only safe area because it has economic drivers, as, uh, Warren was pointing out, as countries trade more amongst themselves. This is the kind of economic activity that leads to profits. So this is what they're going for. Now, as we go forward, what happens? And this is the, you know, the $24 million— trillion-dollar question. Of course, $27 trillion, I should say. Um, if China has been selling down, they only keep enough dollars to cover their their trade. So they're not, you know, the cost of trade isn't too high. So at this point, all the sovereign banks except for Japan and Great Britain have been drawing down how much they have. Well, when you have a lot of smaller investors, sovereign— not so much sovereign wealth funds, but PE firms, things like that, who are parking money in the US, and all of a sudden they feel afraid you could have a run, and this would be disastrous for the U.S. They'd literally have to print the money to, to give them— them to give their money back. The dollar would plunge, people would stop buying, the U.S. Treasury would have to absorb all of these things, and then this would set off a downward spiral where people's confidence in the dollar goes down. That means that rates have to go up. And as rates go up, that means the U.S. is paying a larger percentage of its annual budget to fund its deficits. And this, as I said, downward spiral, not good. And, uh, this is what a lot of central banks are hedging against. They do not— no one wants a collapse of the dollar. This is nonsense. The collapse of the dollar is being driven by the inability of the United States to plan. Everything that Warwick lined up, you know, talked about was China recognized a problem with its real estate industry and they did what was necessary. It wasn't always good for everybody. A lot of young people, for both for COVID and because of dislocation issues, have not had jobs. But overall, they know that the economy is going to do better. They have a plan. They have a compass. They know what they want to do. They want to help their people. In the United States, our only compass is greed, what you can take and what you can get and who you can control. And this is the stark contrast that is emerging between the United States and China in terms of how they approach governance.

Well, thank you so much for that, Einar, at least for the community, because there have been some questions to, uh, asking about what is bonds and so forth. And I said, you know, when Ana is here, I'm gonna ask the question, uh, since you mentioned she's better at it than me. Well, I'm gonna, I'm gonna get to Warwick in a minute here, but I'm glad you mentioned about the first and second quarter because, uh, and by the way guys, I did send, I did post the link in the chat box regarding the, uh, how China has significantly reduced, uh, its holdings of the US Treasuries. Uh, I found that from the, the data coming out of the US Treasury Department, that from April, or in April 2025 of this year, there was about $8 billion. That was the what the Chinese end up dumping, for the, the, the US Treasuries. So that's a major, a major number in my opinion that's going to have a sort of an impact on the value of the dollar. Will I be wrong in this, Einar?

No, you're, you're, you're right. That goes back to my point about it's not just China. Um, the drawdown of, of, uh, Treasuries is directly linked to the drawdown in terms of the amount of trade that China is doing with the U.S. They need less dollars to settle their trade, uh, motion. Um, but, you know, once again, China is forced to be the adult in the room. Uh, they don't want a sudden drawdown. They don't want to precipitate some sort of massive, uh, you know, collapse of the U.S. dollar. Does nobody any good. The U.S. is still a huge part of global demand. Um, the collapse of the dollar would It would be disastrous. It would lead to a depression. But some air has to be taken out of this situation, which is unsustainable. I mean, you know, do you know that one quarter of all the debt accumulated of that $27 trillion was done during Trump's term? This is a guy who's going to return America to greatness. Well, you know, we know from his past that he's bankrupted 6 of his companies. How did he do it? Too much debt. Always thinking that it's all going to work out, but he was never on the hook for it. He was always able to escape personally. Yeah, but the companies went down, and my fear is this is the pattern he's going to follow in the United States.

Well, that's unfortunate. Uh, Warwick, I wanna, I wanna turn into some, uh, uh, other topic here, or theme rather. And this one has to do with the upcoming summit of the SCO, the Shanghai Cooperation Organization, which is going to be, uh, uh, August 31st through September 2nd, if I'm not mistaken. Uh, given the geopolitical tensions that's going on, given the economic uncertainty that exists on the global market, given now that the US just today or yesterday review— and now they canceled the trade negotiations with India. So, till further notice. So what do you see the role of SCO under this kind of conditions moving forward?

Look, the SCO has been an underappreciated piece of the Eurasian, um, architecture. It has a very expansive membership. It's been around a couple of decades now. And it emerged in the era after the, um, the— well, in the context of the so-called War on Terror. And, uh, and it enabled countries across Eurasia to coordinate a whole bunch of information sharing and initiatives that were necessary to manage, uh, the risks of terrorism and political instabilities caused by terrorism, in particular in the early days across the Eurasian continent. Since then, the SCO has expanded and matured as far as being a forum in which countries are able to coordinate their security initiatives in a way that recognizes that the security of one country and the security of its neighboring countries are intimately intertwined. So I would expect the SCO firstly to continue down that path, consolidating the reason why it came into existence and consolidating its particular work practices, which is to, um, to convert into reality the ambitions that, uh, are often described as in terms of indivisible security. So the security of one doesn't come at the expense of the security of the other, and in fact Rather than that, the security of one is made possible by supporting and ensuring the security of others. It's also begun to play an important role as far as being a forum for dialogue is concerned for economic cooperation relationships. So, so we're starting to, I think, see the SCO extend a broader sense of what security means to encompass economic collaboration, because security grounded by economic collaboration is a much more stable form of security, particularly again in the context of the idea of indivisible security. So, you know, the SCO, many people don't know much about it. Yeah, particularly when we focus on talk of, uh, organizations like NATO as being security providers, but SCO arguably offers a very different model for how NATO operates. So SCO doesn't actually operate on the basis of defining an enemy out there in some other country or group of countries. It's focused on, on the issues that impact political instability, terrorism, and those sorts of things. And, um, and it delivers a very different operating model. Now, one last thing that I'll mention, and, and perhaps this may, uh, gather a bit of a head of steam, particularly again in the context of Washington's war on everybody else, is that last year, um, Russian President Putin and Xi Jinping, President of China, actually reached a very high-level agreement concerning the idea of a Eurasian Security Club. And the, uh, the SCO is an obvious institutional home for something like that, which would see the security footprint delivered by the SCO extend into countries like Vietnam and the rest of Southeast Asia to really become a comprehensive, um, Asian security, uh, organization. So, um, look for those sorts of things coming out of the meeting in Tianjin.

Very interesting. Uh, Einar, on, on this subject, on the SCO, there is one particular now conversation that is emerging, and this one has to do with India, given how it's been punished by the US. I've been reading certain white paper or analysis coming out of New Delhi. All of them converge on one particular theme, and the theme is Oh, Mr. Modi, or Prime Minister Modi, is going to meet with President Xi Jinping. However, I didn't find any confirmation elsewhere. The Chinese have not said there will be one-on-one meeting, and the visit of Modi to China is not as a state visit but rather attending the SCO. So the question that I want to ask you, Anna, because a lot of people are sort of raising the red flag. Should China trust India, given how India has been used by the United States as a counterweight against China?

Well, I mean, when you have a neighbor, um, they don't go away. So at this point, China has to figure out how to work with India and vice versa. When you get to the SCO, I mean, Obviously, India has had its issues bringing both Pakistan and India in at the same time. The idea was to make these two parties realize that security, as Warwick was pointing out, depends not on external but on internal, sharing security as opposed to enforcing or creating security. So right now, the SCO could go in another direction. Originally it was about anti-terrorism, separatism, all these things. It was physical, physical security. But increasingly they're talking about trade, uh, normalizing procedures through this idea that you have to go into other sovereign countries, and when you do that, how do you treat goods and things like this. So they're pushing in that direction. In terms of Modi going there, he's definitely— I did 4 shows last night on Indian television that were all consumed with this idea of what was going to happen. Uh, right now, Jaishankar is meeting, or yes, he's just finished meeting, uh, with, um, the, um, Wang Yi, Foreign Minister. They've been talking and preparing for the trip that Modi is going to be making to China, setting up a sidelines. Now, this has to be seen once again, and this is going to be the litmus test. India is at an asymmetrical disadvantage versus the United States. It cannot hope to go toe-to-toe with the U.S. They can say, "We're a proud nation, we won't give in," but what does that mean economically? The only way it can get out of the situation is if it bands together with the rest of BRICS. And, uh, if they— you throw in SCO, that's, that's great too. But it has to be BRICS because it's the only way that, uh, both Brazil, South Africa, and also— I should say not both, but all three— um, India can get a fair shake from the United States bullying Uh, it's, it's literally— I can't think of anything else. I'm not that bright, but I— at this point, it's the only alternative. Now, when you go on Indian TV, they don't like to talk much about it. It's only entered the conversation, uh, recently. Last night was the first time that I heard a news presenter actually say, well, there's this idea floating around that we should, uh, use, uh, you know, BRICS as a counterweight to U.S. bullying. But it wasn't discussed much. But it's better than it was, uh, over this last week where they basically wouldn't say anything about it. I would talk about it and they would just say, hmm, yeah, okay, let's talk about something else.

Yeah.

Uh, so maybe this idea is good. Now, if India— and there's suspicion, uh, in, uh, Washington— in Beijing, if they're simply coming to China to try to get some sort of leverage with Washington. This is not going to be looked very well by Beijing. They don't want to be used, you know, by some sort of Machiavellian plan that he has to somehow leverage things against it. Um, and I'm quite frankly, I don't think it has any, uh, leverage with Trump. It's not an issue that his base is going to respond to. He doesn't really care about India. He's set his terms It's, uh, he sees it as so de minimis, it's not worth his while. So I, I think hopefully India realizes that it's better to be part of a larger group and get fair terms, as opposed to trying to go it alone and being swallowed up or bullied into very poor terms. We'll have to see where that works, but trust between these countries is important. 2013, Xi Jinping said that the, the fate of, well, the, the future of Asia and by extension the world was going to depend on the relationship between India and China. I still think that is true, but it's a question of India recognizing where it has advantages as opposed to playing the smaller games.

Yeah. Well, I'm a, I'm a student of history, and I will raise a red flag regarding this particular issue. And the reason for that, Einar, and I'm using again, uh, sort of examples from past events that took place in which India was involved, because India has been— I mean, there is a record out there— has been a roadblocks in both the SCO and in BRICS. And you know what? It did not at that time did not want to join China earlier this year, as a matter of fact, when, uh, sort of China wanted to have a united Global South, or global unit, that is. So India was like acting, no, no, no, no, no, I'm gonna be gravitating towards the United States, because India at that time was thinking, well, that's sort of, we can count on the Americans. So Of course, things have quickly soured, but that's why I have my doubts. I have my doubts. Am I wrong, Warwick? Would I be wrong in this if I have my doubts about trusting India?

Well, often you have to work with countries that you neither trust nor distrust.

Yeah.

And the issue of India, India's own sense of who it is and what it needs to do. Ultimately will see India navigate its path in accordance with how it views its own interests. That's really, I think, the, the position that I would say. The, the point nonetheless is that Indian economic development would be substantially enhanced by accelerating its trade and investment relationships with other countries of the Global South, and that of course includes China. India has been a substantial exporter of services to the United States, principally as a result of American technology firms investing in call centers in India, exploiting the fact that India has a competency in information technology and of course has a large cohort of people with strong English language skills. America, of course, has also raided the best and brightest of India to take clever Indian people into the United States who never actually go back to India. And I would suggest that as India starts to look at its own economic resilience and its own ambitions as far as technology development and manufacturing, industrial development is concerned, um, it would pay for India to be thinking a lot harder about the, uh, the net effects of its current economic relationships with the United States and whether or not that ultimately delivers the kind of structural benefits that India, I think, needs to achieve as part of its own development journey. The ambitions around manufacturing that have been articulated over the course of the last few terms of the present government, um, have in the eyes of many been something of a disappointment. And, um, and yet there is tremendous capability in such a large population, and a population that has access to, um, a broad range of educational and skills development potential, um, to ultimately, um, you know, work its way up the, the economic value ladder. There are issues, of course, in infrastructure provisioning, whether it's in transportation, energy services, or information technology. And interestingly, I think, David, that on the information technology front, India itself is actually incredibly well positioned to develop its own native or indigenous information technology competency that reduces the risk exposure to American big technology., right? And in fact, um, can develop its own ICT industry as part of a significant contribution to, um, to digital sovereignty, um, capabilities, not only for itself but also for other nations in the developing world. So India can, I think, find a very constructive pathway forward, but it clearly needs to reflect upon the extent to which its historic ambivalence, I guess, towards the Global South in some respects, and certainly its tilt towards Washington has delivered for it so far.

Well, that one will have to start, in my opinion, will have to start with resolving the border issue between China and India. Till India is willing to do that, in my opinion, and again, because I'm kind of seeing where the tensions is gonna persist, uh, because where China is today, of course, you— China worked strategically to get to where it is. When you see the numbers speak for themselves, India, on the other hand, kind of counted on the Americans. But to me, I will be worried that if the Americans will give a carrot to India India will turn around and stab China in the back. Will I be wrong, Einar?

Um, I don't know if it's that simple. I mean, there's a, there's a certain trust level. It's, it's not just, uh, the issues you've talked about. I mean, Modi is really, really steaming over a number of issues. One, uh, he, he perceives that the U.S. interfered in the general election, and that cost him the majority, the supermajority he wanted to have in order to reform India's structure. Right now, it has a strong province, a weaker central government. People think that India speaks with one voice, but actually, it's— to get anything done in India is extremely complex. He wanted to change that. He also blames the U.S. for the Color Revolution in Bangladesh, and he thinks that that was in retaliation for him going to Moscow and having a big toothy hug with Uncle Putin.

Yeah.

So, and then the final straw has been this issue about the Pakistan-India conflict, where Donald Trump has said, you know, 40, 50 times now that he was the one who settled this. For strongmen like Modi, who sells himself to the Indian people as, you know, we don't need anybody, India stands alone, we don't, you know, brook interference from anybody. This is an almost every other day reminder, uh, to him that Donald Trump doesn't think much of him and doesn't care about his political image. So there are other things going on. Whether that trust can be reestablished— I mean, Jay Shankar has been the lead on that. His son was with the Heritage Foundation, the one that put together this 225 plan that the administration said they don't know anything about, or Trump said he didn't know anything about, but which they're executing line by line. And, uh, when that became a brouhaha in India, for some— somehow he, uh, son went from the United States, uh, directly back to India where the Reliance Group, uh, funded a very, very nice, um, think tank just for him. There is a clear bias on Jay Shankar's part towards the United States. The question is, has he learned his lesson? You know, the one that everyone talks about— to be Washington's enemy is dangerous, to be Washington's friend is fatal. And we've seen that on so many occasions. The question is, will he realize that? And will Modi still take his counsel, given all the setbacks that have been there. The US has not been reliable. This 50% on top of everything is like the cherry on top of the dessert, except this one is sour and hard for Modi or India to accept.

Indeed. Well, we reach— we have one more top, one more theme, and this one for you, Eric. This one has to do with AI. I had a chance to read, uh, a white paper just came out recently. Of course, I was— once again, I was alarmed by the language, how it was written. And, uh, and I want to get your take on, to, uh, on, on this one here. Here is what it says, and I quote here: although models are improving on a wide range of skills, one stands out. Open Brain focuses on AIs that can speed up AI research. They want to win the twin arms races against China, whose leading company we will call it DeepSend. Um, and, and the, the, the argument or the analysis continue by saying chip exports controls and lack of government support that left China under-resourced compared to the West, which by the way, I don't, I don't, I don't buy that argument, by smuggling banned Taiwanese chips, buying older chips, and producing domestic chips about 3 years behind the US-Taiwan frontier. And the argument continues. So what I want to ask Warwick What I want to ask is, when I read the— it's, it's a long, long white paper, uh, and one thing that stood out for me is moving forward, the AI domain is going to require the cooperation of countries if we are to manage this new frontier. Do you believe, in your expertise and your knowledge work, do you believe that it will be cooperation between China and the US in the AI domain moving forward?

Well, it won't be easy. So, um, they've got very different views as to what artificial intelligence means for humanity and what artificial intelligence as a technology and a capability means for nation-states. The United States has articulated a very clear view about what it thinks artificial intelligence is all about, and it's largely about America seeking a pathway to reclaiming some sense of primacy at a global level. So as its material foundations of hegemony have diminished over the course of the last 20 years, um, it is now seeking to reassert hegemony through control over critical technologies. That in and of itself, I think, speaks volumes, but it also points to some fundamental errors in thinking about these technologies and how they ultimately may or may not work. So the United States, um, I think, is in large part, um, uh, living in a relatively deluded world where it still thinks it can control, um, these sorts of things when in fact it can't. And it has already experienced quite a number of disappointments over the course of the last half a dozen years or so as it seeks to, um, implement a chokehold on other countries, and in particular China's ability to develop, um, its own, uh, technology capabilities. So starting off with hardware, it has sought to strangle China's ability to access the latest and best semiconductors and, uh, GPUs necessary for the operationalization of some some of the more advanced models. Well, what has been the result of that? Well, yes, there has been some strangulation of access to the best chips that are available in the world, but the response has been the acceleration of the development of Chinese alternatives, number one, to a point now where Chinese, uh, technology developers, industry regulators, financiers, government, and other interested experts would pretty much tell you that they're quietly confident that they've overcome the, the, the, the efforts to contain. So they've weathered the storm, quietly confident that this is no longer going to be a massive issue. The second thing is, is that Chinese companies have, by dint of necessity, focused on developing ways in which they can make use of existing technologies, even if are not the best in the world to achieve high-performance outcomes. And they've done that through enhancements in design as well as in algorithms. So software has enabled many Chinese companies to overcome hardware limitations. And thirdly, and this is probably the most critical issue of them all, is that this AI as an industry is fundamentally about energy. And it doesn't matter, uh, how good you are at the other things if you can't have access to reliable low-cost energy. And this is the one area where China has clearly excelled. It has, I mean, the energy infrastructure that is delivering costs of energy at rates considerably lower than many other parts of the world. And it also has the ability to grow that very, very quickly and easily because it's operating with, um, a security margin of 80 to 100%. So its energy generating capability in terms of raw resource is operating currently at about 50% of capability. Basically, it means it can absorb and support rapid growth in information technology requirements, particularly AI. So this is where I think things are at. The United States wants to impose a US-dominant big tech model, which is proprietary in nature. Chinese companies have released their foundational models as open source, and that ultimately is going to mean that countries and organizations anywhere in the world will be able to take advantage of Chinese-developed AI models at very, very low cost. And as, as we like to say in technology, you can't beat free. And, um, and this is, this is more or less what, what we're looking at. So America wants to have high costs, high barriers, exercise incredible control over others. China's infrastructure is being developed in a way that will empower others to develop their own capability.

Yeah, I really, I was perplexed when I read the whole analysis. That just didn't make sense to me when you read between the lines. For example, he's talking about—

they're deluded.

Yeah, well, yeah, yeah.

Um, think of it like this, think of it like this, um, the, and, and the community will remember the movie The Matrix, right?

Oh yeah.

Uh, so The Matrix was based on the philosophical ideas of Jean Baudrillard, a French philosopher who talked about the simulacra, which is essentially a world in which, um, imagined, um, simulations end up talking to other simulations in effect, where the world becomes simulations built on simulations. And you'll remember there's a scene in the movie where Cypher, one of the characters, ends up, um, uh, going back into the Matrix and eats that imaginary steak. And he says, you know, ignorance is bliss. And this is precisely where these folk are at in Washington. They've decided that reality is just a little bit too hard to cope truth, and they've dived back into their self-concocted simulacra where they get to fabricate their own imagined pieces of information. And they've just chewed into their imaginary steak, and they're savoring the juices of the imaginary steak as they dribble down their cheeks, and, and loving every moment of ignorance. Believe it or not, right, ignorance is bliss. And if they're blissful, then so be it. Leave it be.

Yeah.

Well, I, to, to me, Warwick, it's like an insult when they are saying nonsense because again, when I read stuff like what China's falling behind in, in AI algorithm and, and quantum computing, what, that's an insult. That's to me kind of, you know, we know where to look for information. We know how to evaluate that information, but you know, you're, and Sadly, majority of us Americans are not willing to use critical thinking into really reading between the lines.

But I'm sure I could tell you, David, that in— that there's another difference, and that is that China has a very pragmatic attitude towards tools like artificial intelligence. Yeah, there's very, very little talk about, you know, this pursuit of godlike powers through AGI, artificial general intelligence. That seems to be a Western indulgence and an obsession to somehow, you know, replace God. China has a much more grounded view about these technologies, and so it has become a very, a very powerful adopter of technologies in industry and society. And, um, and as a result of that, it is already benefiting from artificial intelligence in port operations, logistics, um, traffic management, you know, urban design, etc., etc. So, um, you know, there's just a different sensibility around what these technologies are about. Um, you know, they're not really there to enable humanity to replace God. They're just there to enable humanity to be better at being human.

Indeed. Before I give you guys the last word, each one of you, I want to share this short clip with the community. And by the way, guys, I hope you all enjoyed listening to, uh, Warwick and Einar. This is, this is what, to me, why I created the channel to begin with. It's for you to learn something, and, and we couldn't ask for better guests here. So here is what I'm going to share with you. I'm going to share with you guys this clip here. This one has to do with China accelerating the building of its own Starlink. So take a listen here. All right, well, on that note, by the way, what you are looking at, guys, my community, you're talking about— we're talking about 6G. China is already moving into that direction. Uh, uh, Einar, I give you— you first, you go with your last word here. What, what should we take out of really the changes that's taking place before our own eyes on the global stage? We're talking geopolitically, we're talking economically, and how that's going to shape now the trajectory of the world moving forward.

Well, I think Warwick did an admirable job, as always, pointing out that you have two very different outlooks in the world. One is extractive, dominant, empire-like, you know, I'm going to take over everything, I'm going to extract value, I'm going to control everything, but ironically not having a plan, no endgame. Lots of noise, lots of chest thumping, but no delivery either at home or abroad. Then you have a situation where China has said, look, extractive doesn't work. That's a vestige of a colonial empire that is now collapsing. What you have is you have a, you know, you have mankind and we're on a boat. It's called the world. And if we don't take care of it, it's going to kill us. And we are not going to rely on Elon Musk. I don't know why anyone would. But they also, I think they've changed their tune quite clearly. I mean, did you know that, uh, 98, 97% of all the data in the world flows through Virginia? That's where the internet was created. So, you know, every time you send a message, it's going through there. For a long time, China was very interested in having hard lines, but they realize all of a sudden that there's leakage. So I think they want to have their own Starlink system because it's not going to be going through an American apparatus which has shown its willingness, as the revelations, um, security revelations have shown. We routinely violate our own laws, international norms, to do whatever it is we think we need to do. Now, I would add one more thing to what, um, Warwick was talking about in terms of AI. Absolutely, you can't run a machine without power, and power is what is going to be absolutely critical to running these kind of huge, um, you know, databases and things like that. But you also need data. Not only data, you need clean data. It's like water. I can go outside my door and drink in a puddle where perhaps a dog was a few hours ago. Not going to be very satisfying, and I'll probably die, and anything that comes out of it, it's not going to be good. I can, you know, go to a stream and hope that it's clean, or I can drink from municipal tap and hopefully they've done everything necessary to make sure the water is reliable and isn't going to kill me. Data is exactly like water. Unless you have clean data that is reliable, all the energy in the world, all the algorithms aren't going to help you. Because they can only rely on what they're fed. And if they're fed garbage, you will get garbage coming out. So China has, uh, their own ideas about, uh, how to do this, uh, so does the rest of the world. But it's important if we as a shared community are going to extract the value from these new digital tools that we start thinking about how we can share data. There are privacy concerns, there are national security concerns. You can't put those away, but you can figure out a way in which information can be used to help people live longer, to address pandemics, uh, the weather, crops, you name it. There's so many things out there. That can be valuable to our, you know, life on Earth, but only if we cooperate. That's the Chinese model. The U.S. model is the exact opposite of that. We'll control it and we'll eke it out to you and you'll pay us for it. So when people are listening to this, we've discussed a lot of issues, But at the end of the day, it's about what kind of world do you want to live in and on what kind of premise.

Yeah, thank you so much for that, Einar. Warwick, your last word, my friend. Uh, the way you see this multipolar world that is shaping in front of our eyes, in, in your expectations, how much technology is going to play a role in in steering out in the right direction without having any particular dominant country that's going to dictate the terms? How do you envision this new multipolar setting?

Well, firstly, I just endorse everything Anna said. We are heading into a, a defining moment. And, uh, and it's defining not because we're defining whether or not the world will be multipolar or not. What we're defining is what kind of multipolarity we're going to have and how quickly we're going to get there. Yeah, we can have a multipolarity in which large countries seek to dominate spheres of influence and continue to dictate terms to everyone else. That's an extractive form of multipolarity. Alternatively, we can have a multipolarity in which countries are treated with a greater level of respect, in which their sovereignty is actually acknowledged, and in which their interests are taken into account in every respect possible. It's going to take a lot of work to get to that second option when the dying hegemon is going to do all it can to enforce the first option, where it will continue to exercise significant hegemonic authority over certain parts of the world. Not only parts of the world that are geographically close to it, but perhaps even parts of the world that are far away from it. So that's where I think, um, you know, we're at, at the moment. I'm actually mildly confident, um, that we will end up with something that will approximate the second type of multipolarity rather than the first type. But it's not going to be an easy struggle because those with the power are not well known for volunteering to give up that power and authority. And the, the upside is that there is a vast swathe of humanity over 80+% of the world's population, and in fact, you know, upwards of 70+% of global economic wealth and value actually want to see a fairer, more equitable, and a more respectful, collaborative global environment than one in which they continue to be subjugated to what is in effect a new form of colonialism. So fingers crossed. And but, you know, strangely enough, because I'm not well known for being an optimist, I'm reasonably, well, perhaps a little bit more hopeful rather than optimistic.

Well, that's, that's spot on. So, well, my dear friends, on behalf of the entire community, I say thank you so much for sharing your knowledge. Your insights, your words of wisdom. And this is again to me what, what really this YouTube channel is all about. It's learning from each other. And like, I remember what you said last time, uh, Warick, I didn't forget it, uh, that it's always important to hear a different perspective. And that's usually how we evolve. And, and I'm very, very grateful and thankful to you for really carving out time for us here to learn from you, buddy. Thank you so much for your time and greatly, greatly appreciate you. And I look forward to having you again next month for our monthly conversation. You take care, my friend. My pleasure. All right, guys, I hope you enjoyed listening to Warwick and Einar. Very, very insightful. And, and we are very thankful to them. They busy people, they have their things to do, but they carve out time for us here so you can learn a new perspective. I take this opportunity to say thank you to Globalist Shredder for your Super Sticker. Truly appreciate you for that. And just to remind you guys, for tomorrow, remember to join me at 12:15. I will be talking about Iraq and its decision to ask the US to permanently leave its territories once for all. So I look forward to seeing you then. As always, remember, geopolitics impacts your daily life in more ways than one. Till next time, bye-bye.