US is Playing up the 'China Threat'! More Tensions on the Horizon?

All right, hello everybody and welcome to Geopolitical Trends, where truth matters. Excited to be with you as always. Of course, it's the end of the month and you know who my guest is, which he's kind enough of him to allocate time for us once a month, every, uh, uh, last weekend of the month or so, to come here and share his knowledge with us. So it's none other than Carl Zaha. Let me bring Carl here. Hi, Carl.

Hi, David. How are you, sir?

Good, good to see you, Carl, and very excited as always, uh, because we— I learned from you a lot, and I am not saying it to be Mr. Nice. I think you figured out that about me by now, Carl. I'm a straight shooter. So I greatly appreciate you, greatly appreciate you sharing your knowledge and insight to help the community understand, you know, the whole developments that's taking place not only in that part of the world where you're at but around the world as well. So, all right, let's get into this. Hope you guys are enjoying the end of the year and celebrating whatever, whatever part of the world you're in. So, all right, let's get into our conversation here, Carl, and I want to talk to you first about how China has issued now a sort of a sharp rebuke after the President of the United States signed the National Defense Authorization Act. It's known as NDAA, and this is for the fiscal 2025. I read it and I was like just shaking my head again because we allocated about $825 or $895 billion. Part of that is going to go to the, uh, uh, the Asia-Pacific Theater. How do you think China is seeing this and how China is going to react to this, in your opinion?

Well, I mean, China already issued a sharp rebuke. I mean, it's to be expected because ever since the collapse of Soviet Union, the US defense industry, the military-industrial complex, has trying to find someone to fill the boogeyman's shoe. And, you know, they decided it's going to be China. That's why there has been an inflation of China threat ever since 1990s. But back in 1990s, early 2000s, you know, back at that time, China is not as economically developed as it is today. Uh, you know, at that time, it's a little bit hard, hard to convince people that China is going to present a peer competitor threat to United States, whereas today in 2024, the picture has looked a lot different. And US itself is in all sort of troubles. This is where, um, you know, back in 1990 during the unipolar moment of the collapse, in the aftermath of the collapse of Soviet Union, at that time United States and its elite and also its people are very confident. They're very, you know, you have books like, uh, from Fukuyama, right, End of History. And, and now that, that sentiment is gone. The sentiment is gone. A lot of people inside United States already realize there's a lot of problem with the society. But, uh, like, there's all kind of proposal on to fix that, but the US elite's proposal is, okay, let's blame China, let's frame everything as competition with China. Uh, whereas you never hear China talk about US as its number one threat, or US is the number one competitor, or US— uh, China does, does not do that. Because, you know, every time Xi Jinping meets with Biden, he said the world is large enough for both United States and China can coexist. And China is just focusing on its own development. Now, as for response for US justification for Voicemail. First of all, you know, it's almost $900 billion. It's, it far exceeds the next 10 nation defense budget combined. And then we know that's not even the true figure because the Pentagon hasn't passed an audit in decades. And, and, you know, I, I don't know if you saw that, uh, Pentagon, uh, uh, a press conference where the The Pentagon spokesperson said, oh, we just come to our attention there are actually 2,000 US military personnel in Syria instead of like 800. You know, we are led to believe that Pentagon doesn't know how much, how many military it deployed to Syria, and you're telling me they know? They, they, uh, they're following the, the book strictly on how much to spend? I mean, there are a lot of The military spending, that's not even included in that budget because all the money, hundreds of billions, that's going to Ukraine, that's not included in that, in that, uh, $900 billion, uh, budget. United States spent way more than that, and yet it's not getting much, to be honest. It's not getting much. But the US military budget is designed to be overblown, overinflated, to feed the— into the pockets of the defense contractors. We all know how that game is played. Um, but for concrete response, China on Mao's birthday, which just happened a couple days ago, yeah, they're up to 2, not 1, 2 type of 6th generation fighter jet. Uh, this is a big shock in a lot of the, uh, U.S. aviation watcher community because United States supposedly they claimed they had a test flight of the 6th generation, uh, fighter. It's a so-called NGAD, the Next, uh, the Next Generation Air Dominance. Uh, they, they supposedly had a test flight like 4 years ago, but nobody's seen it. Nobody was— nobody has actually seen it. There's no picture, no video. China flew their 6th generation plane over residential apartment blocks to make sure you saw it. And There's a lot of speculation right now on the internet on whether they are 6th generation, but, but the thing is, this is one area China is clearly ahead. And, and the one of the reason the US, uh, NGAD plane never took off, because Pentagon calculated it will cost $300 million per plane. So they, they decided, okay, maybe, maybe we got to go back to the drawing board. So they actually scrapped their original plan. They're going back to the drawing board to cut— to think— they're, they're trying to come up with a smaller, a slightly less expensive version. But you know, this is going to take years. And, and, and this is how China is responding to US overinflation of the China threat. China— and it's not just a 6th generation, uh, uh, fighter plane. They also roll out a— the world's largest, uh amphibious assault ship, uh, Type 076. It actually holds a— it has an electronic catapult that can launch fighter planes on its deck. Now this is another area where United States, when they came out with the Ford Air— super aircraft carrier, you know, most advanced aircraft carrier in the world, it's— it has— it's the first one to have electronic, uh, catapults. And, and, but just couple years later, China came out with their aircraft carrier, uh, Sun, uh, aircraft— they came out their aircraft carrier Fujian, also had the electronic catapult. So China is catching up very quickly, quickly. And China can also produce, uh, its naval ships or airplanes a lot faster, a lot faster development cycle, a lot more cheaply Uh, US recently went to, uh, US Navy recently went to South Korea to study how South Korea can build a licensed copy of US Arleigh Burke, uh, uh, destroyer, but at one-third the price. Um, you know, Wall Street Journal reported on it, and it says, okay, US probably going to need help from South Korea and Japan to, to help with this naval buildup against China. But, you know, the thing they don't tell you is the US budget, the US military spending, is designed to be expensive. It's designed to be bloated, so there's a lot more opportunity for kickbacks. And, and this is how we get the F-35 boondoggle, you know, the most expensive, uh, uh, fighter jet program. So, so I— it's— and China, you know, as Pentagon paper mentioned, it has like 300— it has like 235 times, uh, naval, uh, naval building capability than United States, like shipbuilding capability than United States. So China now builds like 50% of the ships for the world, you know, whereas US back in the World War II, they has shipyards all along its coast. Yeah, now there's only 3 US shipyards that produces for, for US Navy. And this is part— this is part a result of the great deindustrialization that was initiated by Wall Street back in the '70s to offshore and, and move out all the manufacturing out of United States as a big F you to, to labor unions and to chase higher profit margins. And, and, you know, 40 years later, this is the result. People, uh, in U.S. like, okay, no problem, we'll just have another Sputnik moment. And this is the Sputnik moment when we saw the Chinese, uh, you know, 6th generation fighter jet in the air. We'll just repeat what we did in the Cold War when, uh, Soviet first launched MiG-25, but we built a better plane, F-15, that we dominate. What is just going to lead to the next generation of US dominance. But look, today's United States is not the same United States back in the '60s, '50s. Today's United States has experienced 40 years of deindustrialization. We're talking about two generations of talent, of skilled labor, gone, totally gone. All that knowledge for manufacturing, that's not being retained. This is all these people there are— there are the people that used to work in the manufacturing there, they all moved somewhere else or they retired. No, there has been no new generation of people that's been trained to do the job. So US Treasury, they can print money all they want, but all that US dollar is not going to buy you human capital. It's not going to buy you the manufacturing expertise. So all people are still in United States are still in fundamentally deny— they're still in the denial phase of the 5-step grief cycle about rise of China. They still, you know, when the— I saw a lot of comments on Twitter, everyone says, oh, but made in China, so it's probably cheap quality, you know, they just copy, they just stole our tech. Um, there's still a lot of copium right now. The only overcapacity in the United States is copium and opium. And, and so, yeah, so I'm done with my rant. That was my rant.

Well, no, actually, actually, you brought a good point about the, uh, the, uh, the 6th generation, because I got a video here. I'm gonna share it with the community. I want you guys, uh, to take a look here. So Let's just take a listen here, if you will. All right, let me just click on it here.

J-36 fighter jet has just been spotted. Once this is ready, it's going to change everything. This is the J-36 by Chengdu Aircraft Industry Group. This new aircraft is the future of military aviation, and it has advanced features that make it different. With its sleek, tailless design and delta wings, the J-36 can fly at supersonic speeds while remaining nearly invisible on enemy radar. But its technology is crazy. The J-36 is designed to be an integrated space-air fighter, which means it should be capable of conducting strikes from orbit. It's powered by 3 WS-10C turbofan engines, meaning the aircraft can reach speeds of Mach 2.5 at altitudes well above 80,000 feet. However, to make things even more futuristic, the J-36 has advanced AI systems. These allow for autonomous threat detection and decision-making, But this project is part of China's vision for 6th generation fighter jets. If all goes as planned, the J-36 could compete with the United States' NGAD program. China's new 6th generation J-36—

not even a matter of compete. The US NGAD program is not even in the running. They scrapped it. They scrapped the original plan. So we're, we're now talking about China is clearly leading.

Yeah.

And they're not just leading in weapon platform. They, uh, they just— China just came out with a Deep Seeker, which has shown that, uh, this AI program, which is 10 times cheaper than OpenAI, and you can train for, uh, you know, you can train on it for 24 hours straight and cost only $1.50. And this is, you know, the whole United States chip sanction against China was designed to stop China's AI advance. And just couple month ago, uh, Eric Schmidt, the former Google CEO, who is an architect by the way, a major pusher for the US chip sanction on China, he admitted in an interview China is only a few months behind in AI despite fight all the sanctions. And, and now with the rollout of Deep Seek, it doesn't look China is behind anymore. It looks like China has reached parity. And this is after 2 years of US— very stringent US chip sanction against China that's designed to slow China's AI advance. And that didn't happen. Um, and, and so all these attempts by United States to slow down China's progress only made China stronger because now that forced China to indigenize its, uh, semiconductor supply chain. That, you know, that this is one area where China had difficulty catching up before because, yeah, all the Chinese, uh, in a globalized world, all the top Chinese companies, they rather buy from established American, European, Japanese, Korean a, a, a brand because, you know, that— because they, they're trying to rush their product out to the public, um, and, and they, they didn't want to go buy domestic, which at the time was a couple generations behind. Now they had no choice. So this forced a coordination— so US sanctions actually solved a coordination issue within the, the Chinese tech industry. Now all the Chinese tech companies are now working together because it's It's together or die. And you know, because they have no— they're cut off, they're cut off from, from, uh, supply, the, the supply chain outside of China. So they have no choice but to depend on domestic supplies. And all the money now is plowing into, uh, high-tech development in China. This is another thing people talk about China's, uh, economic problem. They don't realize what's actually happening in China. In China, yeah, the, the real estate bubble popped. This is why it's causing the economic slowdown. Um, this— some economic problem China experienced is real because the real estate bubble finally—

yeah, of course.

Yeah, at the same— at the same time, what happened was all those money that used to pour into real estate, billions Now those money are leaving that market and being invested into high-tech, high-end manufacturing. And we are seeing the result of that in just last 2 years. You know, Chinese EV industry came from nowhere to dominate the world. Now China produced 60% of the EV vehicles in the world. Um, and that, that was like nobody saw that coming because, yeah, only 3 years ago, foreign, foreign brands— German, Japanese, Americans— still dominated roads of China. They still, uh, they had like 60 to 80% of China's domestic market, the, the world's largest auto market. Now they're being phased out of China's market, and this is going to create more panic in Washington. This is why Biden slapped 100%, uh, percent tariff on Chinese EVs because they know that Detroit 3 would not be able to compete. But this gonna— this same dynamic is going to play out all across the field, not just in defense or AI, but in everything. And, and, and this is quite unprecedented because we have never seen rise of economy on China's scale, you know. And, and, and despite— China had a lot of problem.

China has had like every other country, like Yeah, like every country has problems.

That's true. Like Peter Zeihan talk about, you know, China have a demographic problem, is experiencing decline. But what people are not focusing on is the deepening of the Chinese human capital. Because 40, 50 years ago, very few Chinese, uh, uh, youth are going to college. And now more people are graduating college, and among the, the, the college graduate, a huge portion are grad— STEM graduates. And China graduate about 4 million, 4.5 million, uh, STEM graduate a year, whereas United States graduate about 500,000. And, and, and so China actually produce graduate more STEM graduates every year than the rest of the world combined. Combined. And, and then the, the total number of STEM graduates in China is increasing year after year. Um, so even as a total demographic and the total workforce in China will decline in the next few years, but the, but the portion of the STEM graduates and the total number of STEM graduates keep on rising. So from now to like 2043, the, the deepening of human capital in China will continue. And one of the thing, uh, uh, you know, about back to the AI competition, China produced the largest number of a, um, AI, uh, uh, AI talent. But for the past few years, for, for the past decade or so 50% of almost half of those AI talent that's produced by China, they came to United States. They came to United States to work. Um, this is— this kind of propels the, the AI development in U.S. And now with all this, uh, all these anti-immigration sentiment in United States coupled with kind of anti-Chinese sentiment, uh, that led to, you know, the, the China initiative under Trump. And now they're prosecuting all the Chinese researchers and scientists as potential spies. Uh, what is gonna happen is before that, 50% of the Chinese AI talent that's going to United States now more and more are returning back to China. So this again feeds into China's future rise. So it's like right now it almost seems like whatever United States government is doing is making China great again. So that's where we are, David.

Yeah, well, I want to— two points I want to go back to regarding Peter Zihan. Uh, I— he was way off. I'm aware of the guy's background when he was at the US Embassy in Australia and so forth. Uh, especially when he said one time that China's economy is about to collapse. I just shook my head. I was like, what are you— why are you smoking, man? You know, second thing regarding the EVs, I was in China and I saw, I saw that I— the manager for, uh, for, uh, uh, BYD granted me audience and allowed me to do recording on the floor looking at those vehicles right there. And incredible for what I saw. I even brought, uh, here, hold on a second.

All right, it's my show now, guys.

Check this out, Carl. I brought a copy from another, another company in China regarding their vehicles. It was incredible. When I asked, when I asked about the pricing, it was no more than $20,000 for a luxury car. A luxury car. And now we're finding out that the US— here's another image of it, check this out, incredible. I sat inside and saw the how advanced these vehicles are, and the US is about to put 100% tariffs on it and so forth.

So it was a—

so you're absolutely correct about the EV. It's same. I have a family visit right now from Holland, Netherlands, and they are telling me now that In, in the Netherlands, they run into problems. They couldn't afford to have the battery charges in on the locations, and they pushing with this tariff along with Germany, France, and so forth. So I, I see your point. So, uh, let me go back to the, uh, the spending, uh, bill that the president now authorizes. Just for you guys to know, this is about $895 billion Okay, the bill, that's what authorizes, uh, a 1% increase over the last year and the largest defense budget in US history. That's— here is where the kickers that I need you to understand, and this is why I like having Carl here, because he'll break down for you guys to understand, for all of us, not just you, all of us to understand. $15 billion out of that is allocated to the U.S. Pacific Deterrence Initiative. Let that sink in. $15 billion is allocated to the U.S. Pacific Deterrence Initiative, and this is where you are looking now on some changes taking place. In your opinion, Carl, do you believe this has to do with what's going on in Philippines? Because the Philippines Army wanted to purchase the Typhoon and THAAD systems That goes about 200 nautical miles. What the heck's going on?

Yeah, I mean, so definitely United States first brought Typhoon missile in the— to the Philippines earlier this year, uh, to participate in the largest joint military exercise between US and the Filipino military. And after that, they say, oh, okay, we're going to remove those Typhoon missiles they're just here for the military exercise, uh, but they didn't. And now the Philippine government is saying, we're thinking about acquiring those Typhoon missiles.

Hmm.

Oh yeah.

We're frozen. Yeah, yeah, yeah, yeah. Internet, Carl, you're frozen. Okay, we'll wait for Carl till he comes back, so not a problem. But anyway, just to guys let you know, uh, uh, it's the idea of now, uh, the, this act, the, the military one, the bill that is authorized, is now up to $300 billion— uh, million dollars, I'm sorry, not billion— $300 million in in military aid for training. Guess to whom? Can you guys guess? Let me just see in the chat box if you can. If you— I like you to type in on the chat box to whom the $300 million is going to go to. That was the whole reason for why we have these tensions in the South China Sea. No, not the Philippines. No, not the Philippines. Good try, Army with Harmony. Uh, no, not the Philippines. One more guess to you, Ali. That would be nice, right? $300 million. Uh, Australia? No, no, no, no, no. It goes to a specific entity as to why we have tensions with China. Not Raytheon. It goes to one particular location over in Asia. Oh, you got it, you got it, Army with Harmony. Taiwan. It is Taiwan. That's where that $300 million is going to be allocated. So now you can understand why this is important to, uh, have an understanding about why this bill matters. And that's why I wanted to address this for you guys with Carl because I need you to have an understanding as to why it matters. That's the importance of it. I'm gonna wait till Carl comes back and I'll share with you, uh, another, uh, clip that I got from another location. Oh, here is Carl coming back. There you are, here you are, Carl.

Hi. Yeah, I need, I need No worries, man, no worries.

Things happen with, with, with communication. Anyway, anyway, I was explaining to the, to the community here about, uh, uh, the purpose for that, uh, uh, $895 billion, and $15 billion out of it, uh, of it is allocated to the US Pacific Deterrence Initiative, with specifically $300 million going to training for Taiwan. We all know what it means. We all know what it means. And now when I see what's going on in the Philippines, I can understand why the Chinese are pissed, and rightly so. So, and this is why I wonder, how, how did China is going to move forward in your opinion, given the changes that's taking place militarily with the US and Philippines?

Well, China, China is investing a lot in its defense right now. Um, you know, we saw results of that with the newly rolled out of its 6th generation fighter, the, the new, uh, amphibious assault ship, and a new, uh, AWACS plane. You know, all this, China showcased everything in span of 24 hours on Mao's birthday. Uh, this, this is China's capability, and that's tied with China's manufacturing capability. You know, China is the world's factory right now. It's the world-leading manufacturing power. United States, you know, a lot of the planners, they think when they talk, think about confrontation with China, they're thinking they're gonna fight Pacific War 2.0. But what they don't realize that back in 1941 You know, US is a much stronger industrial power than Japan, you know. So it was kind of hopeless for Japan when the war, war finally broke out. But today, in terms of comparison of the manufacturing power, United States is the Imperial Japan in 1941. China is the United States of 1941. That's, that's kind of the power differential in terms of manufacturing power. A lot of people, uh, are in Washington are still in denial about this. Uh, you know, they're still talking about turning Taiwan Strait into a hellscape for China by using unmanned drones, uh, unmanned, uh, ve— vessels. But like, look, you're gonna compete with China on producing drones? I mean, China can produce Tens of, like, millions of them. I mean, like, this is just— there's not even a question. And you're fighting a war right on China's doorstep, you know. The Chinese— this is one thing, uh, United States complain about China is that all the missiles that China placed on in China can cover all the way up to Guam, you know. And, and this is why U.S. response, of forces placing Typhoon missile in the Philippines, which could cover much of southern China. And, and this is very dangerous escalation, of course. This is because, as we have observed in Ukraine, all the attacking missiles that U.S. supplied and that have fired into Russia, those attacking missiles were not manned by Ukrainian personnel, they're manned by American personnel. The, the, the target is based selection. This target are selected based on satellite intelligence provided by U.S., you know. It's basically, it was, it's not, uh, so much a proxy war against Russia anymore. It's like a U.S.-Russia war. There, these U.S. military personnel are firing U.S. weapons, uh, on targets selected by U.S. intelligence. And this is what happened, going to what be what happened on the Philippines as well. You know, those, those Typhoon missiles, they're not going to be operated by Filipino military personnel. They're going to be operated by Americans. All the target selection, it's going to be done by Americans. So this is, this is American trying to, you know, sneak in into the— it's a sneak deployment of US military hardware asset. It into Asia Pacific, just like their— the whole AUKUS deal with Australia. You know, the AUKUS, the, the, the, the linchpin of AUKUS is United States is going to provide Australia with a nuclear submarine, you know, 40 years down the road. And then, but in the meantime, Australia must construct a port, a submarine port in Perth that will, uh, host— be capable of hosting nuclear submarines. So in the meantime, the US nuclear submarine can park there, can use it as a base. So basically, US is making Australian taxpayers pay for US deployment, for paying for US deployment of military asset into Australia. Uh, it's a, it's a great deal for US. And, and this, again, this is something similar that, that they're doing in the Philippines. They're going to make the Filipino pay for it. And, and, and so Uh, that's how the industrial complex works, you know. It's all, it's all a big grift.

So, so it becomes clear that maybe this guy— or not this guy, President Marcos— needs to step down if he's not gonna be serving his country. I mean, it's common sense. What do you think, Carl? Would it make sense for him to step down?

Well, I mean, that, that's, that's Filipino domestic politics.

Yeah, you're right.

It's not exactly very popular at the moment, right? There was a big public spat between him and his vice president, Duterte's daughter, by the way. And, and she actually claimed that, uh, there's a plot to assassinate him by Marcos. And in return, she said if she ever gets taken out, uh, if she ever gets taken out, uh, by assassins, then she already have people who will carry out assassination against Marcos. So, so this is— this drama is still unfolding in the Philippines. We're gonna have to see how, how it plays out. But you know what, what, uh, Marcos has done effectively is cutting off, uh, Chinese investment into the Philippines. Yeah, he's making the, the investment environment very hostile for the Chinese investment right now. So the Philippine It's one of the standalone countries in Southeast Asia that's not, uh, where China is no longer the— China is not the largest foreign investor. You know, China is largest foreign investor in Indonesia, in Malaysia, in Thailand, uh, in Cambodia, Laos, etc. And, and, and Marcos decided, you know what, It's more important for me to get my dad's money that's frozen in the US banks.

Ah, let me— before we'll move to other, uh, topics I'd like to cover with you, I want to address one more thing that, uh, uh, with this defense bill, because there was one key word that came out, uh, that I, I read the, the, the bill, and one key word that was used is how the the Chinese represent a threat. It's been said before and so forth, but that's not about that. What I want to share with you guys, and, and with you too, Carl, and I'd like to have your, your, uh, feedback on it, is a clip from none other than Michael Chung. And anytime that guy comes on a screen, I know that the narrative has been provided by the establishments inside Washington. So So let me share a screen with you guys here and take a quick listen what he's saying about the—

whether they will actually do it or not is a different question, but they're making preparations to kill Americans.

To kill Americans. Are we prepared for this?

No, we're not. The President of the United States, the one with the constitutional duty to protect Americans from foreign attacks, his number one constitutional duty, He doesn't talk to the American people about this. His budgets don't reflect priorities of getting us ready to go to war. And unfortunately, we have an American— we have American people who think they're at peace. But yeah, we're at peace right now, but we could be on the edge of conflict.

Okay.

This one was a recent recording. And by the way, I invited Michael Chung to come here because I wanted to. Put the real questions for him as to where is he coming with those ideas, and I never received a response, just for you guys to know. What do you guys— what do you think, Carl?

Oh, I call him Uncle Chang, and, and, uh, Uncle Chang has been, uh, a regular feature on American mainstream media. This is a guy whose claim to fame is he wrote a book in 2001 about the coming of China. You know, 23 years later, he is still the go-to guy for American mainstream media. There's some— I mean, the only reason he is still employed is because he's telling people what they want to hear. And he— what want people want to hear is China is doing bad, China is collapsing. Um, you know, to address one of the questions that, that one of the guys say, oh, if China's economy is so good, why there's still people sneaking across the border to United States. Okay, first of all, China is a country of 1.4 billion people, and out of that 1.4 billion people, hundreds of millions have traveled. Uh, there's 100 million have traveled outside of China. And, and guess how many are coming to United States? Uh, by the estimate of US Border control, they're talking about 30,000 Chinese that came across the border, uh, this year. I mean, that's, that's a drop in the bucket, not only in terms of total Chinese population, but it's a drop in the pocket— but a drop in the bucket compared to the total number of migrants came over the border from Mexico. I mean, 30,000 people is, it's not a lot. And, and, you know, when you have one— I'm not, like I say, I'm not saying Chinese economy is hunky-dory. There are problems. You know, one of the problems, as I mentioned, was a pop of the real estate bubble. So now the— it's a real economic realignment is happening. The realignment is all the investments are now leaving the real estate market, are going to the high-end manufacturing, high-tech manufacturing. And we're already seeing the result of that, uh, you know, coming out of China. Now, this transition is going to be painful for a lot of people, you know, especially people who are directly, uh, employed in the real estate sector. Um, you know, some people are going to feel the hard times, you know, and, and, and, and there are also some people who, you know, took on a lot of debt, a lot of microloans, and they just decide, you know, screw it, I'm not going to pay back, I'm just gonna go to the United That happens too. So just all I can say is just travel to China. Seeing is believing. And you have been to China, David. I mean, you can tell us and your audience what China is like. Does China look like an economy that's verging on collapse?

No, not at all. And I did a video, guys, for— I'm sure you guys saw it— upon my return. I compiled a whole, almost a documentary, if you will, with the images and everything. So that's why I didn't believe— I didn't buy the arguments that some were making in Washington as far as the upcoming collapse of China. Like, what are you guys talking about? I'm right here on the ground. I can see— usually I always see signs for when a collapse of an economy is coming down. You'll see. So I didn't see any of that. So let's move on to one other topic that I need to have your input about, and this one has to do with BRICS and Indonesia and Thailand. Let's, let's tackle the Indonesia one because, uh, I have a map here that I want to share, especially when it comes down to the Malacca Strait. So I just wanted to get your feedback regarding Indonesia and BRICS. How is that going to transform BRICS vis-à-vis ASEAN, in your opinion?

Okay, this is big news because Indonesia is huge. People don't, don't realize how big Indonesia is because we usually use a map with a Mercator projection, which makes the northern countries really big, like Greenland is huge, and, and whereas countries like in the south, like, like on the equator, Indonesia don't appear as big. But if you superimpose a map of Indonesia to Europe, Indonesia will run from City of London all the way to the border of Afghanistan. That's how big Indonesia is. It's, it's pretty much a mini continent by itself. And it's also the most popu— one of the most populous country, you know. Indonesia is the world's fourth most populous country after India, China, and United States. Um, it's also the world's, uh, uh, uh, most, uh, it has the world— the country with the most Muslims in the world. It's, it's, uh, you know, because it's a Muslim-majority country. So, so by any metrics, Indonesia is very important, and it's, it's the largest country in ASEAN. For many years, Indonesia was sitting on the fence on the BRICS, on joining the BRICS, because it did not want to offend United States. It knows United States very sensitive about BRICS and nations joining the, the, the BRICS grouping because US sees BRICS as the anti-West, anti-US alliance. But whereas Indonesia wish to keep its options open, Indonesia wants to be friends with everybody. He wants to keep its ties with United States and he also continue to welcome Chinese investment because that's very important for development of Indonesian economy. So now it looks like Indonesia decided, you know what, we don't need to pretend anymore. We don't need to pretend we're sitting on the fence anymore. We're just going to join the BRICS. Go for it. Because this is a major development, uh, uh, and it, it shows that the kind of the movement toward BRICS is, is inevitable. It's kind of almost unstoppable in is particularly in the Global South countries. Yeah, um, it, it makes sense because, um, the Indonesian economy is increasingly tied with the BRICS country, with, with China, uh, but with, with other members of the BRICS country as well, you know, especially with the, with the just recent complete construction of Changkai Port, uh, in Peru by China. That's going to link South— into all of South America to Indonesia as well, because Indonesia is going to sit on this transit route. Uh, you, you show the map of Malacca Strait, that's what most of the Chinese trade with China will go through, the Malacca Strait to into South China Sea. Um, all the Chinese exports, uh, and Chinese import will go through Strait of Malacca to Middle East, Africa. And, and so this is, uh, this is also, you know, US Navy has always talked about, oh, we're gonna choke up Strait of Malacca in case of war. But it's, it's unrealistic. First of all, they never practiced it, you know, they're not serious about it. Because for something, if they're gonna stop the, the traffic in Strait of Malacca, they're not just stopping the traffic to China. They're stopping the world trade there because China is the center of the world trade. They're— when they stop the, the Strait of Malacca, they're essentially blockading the world. They're blockading the entire East Asia. Uh, so that, that, there's no way that's gonna fly. And, and, but, but Indonesia is important because it's sits on the other side of the Straits, Malacca. Um, and, and Indonesia right now, China is the largest direct foreign investment Indonesia, and, and China is helping Indonesia climbing the, the, the ladder in the manufacturing, in the, in terms of manufacturing, you know, China, because Indonesia has ambition to be a major suppliers of coal, nickel, and cobalt two essential ingredients for making batteries for EV. And, and traditionally Indonesia export these raw materials to be refined elsewhere, but Indonesia has banned export of nickel, uh, because so they can be processed inside Indonesia. That attracted a lot of Chinese capital. Now it's mostly Chinese capital that's coming into Indonesia to set up factories to refine nickel and cobalt. And so, so that will help. Uh, and China also has the most expertise in making batteries. You know, Chinese battery maker dominate the, the battery market, so they will have, they will have a lot of expertise, uh, to, to share with Indonesia to set up factories over here as well. I mean, as I mentioned before, I, I, I'm waiting for the BYD, uh, factory to be up and running. Their plan is to have the first BYD factory in Indonesia to be pumping out EVs by January 2026. So that's what I'm waiting for. So for the price of Chinese EV in Indonesia even to come down even further, because by producing domestically Indonesia, that will allow the you know, a lot of the, uh, you, you will avoid the tariff because Indonesia also have a high tariff on, on, uh, foreign auto imports to encourage foreign automakers to, to, uh, manufacturing car domestically. So that's what BYD is doing, um, you know, and a lot of other Chinese companies are, are doing. They're coming to Indonesia to, to open up factories, and this is going to be great for Indonesia because Indonesia is still very, uh, a youthful country. A lot of people needs employment. Um, and so things are looking up, things are looking up where I am right now. A lot of people are very optimistic about a few— about their future Indonesia.

Well, especially after the visit of Prabowo to China, which he was— he had a great welcome there and red carpet treatment, and the agreements that Indonesia and China signed sort of suggests what lies ahead as far as the Chinese money into the Indonesian market. So I'm, I'm, I'm very optimistic about it because I am thinking about visiting Indonesia on one of my trips to Asia because I, I'm going to come back to Asia next year. So I am thinking about— because I'd like to see the developments of countries like that, even Thailand and Philippines and so forth. If I get a chance on my visit. Speaking of Thailand, uh, I'm sure you're aware of the invitation that they got from BRICS. How is that also going to change the economic calculations in Asia?

Uh, so we have talked about Thailand on your show last month. I remember Thailand had traditionally maintained a very friendly relationship with China since late '70s, uh, you know, so it's been 40 years, uh, of friendly relationship between Thailand and China. And now Thai Navy, they purchase their naval warships from China, uh, they purchase tanks from China, uh, personal armored personnel vehicles from China, uh, so, so there's a lot of ties between. But at the same time, Thailand also has good ties with United States, similar like in, like Indonesia. But, uh, China is the largest investor in Thailand. Uh, I already mentioned, uh, I mentioned BYD. BYD actually opened their first plant in Southeast Asia in Thailand. So right now, a lot of the EVs that's available in Southeast Asia, including Philippines, uh, a lot of BYD, uh, EVs are coming out of their BYD plants in Thailand. Um, so, so we talk about Philippines, but even Philippines— in the Philippines you can buy BYD electric vehicles. In the Philippines. I mean, I mean, this is just kind of the gravitational pull of the Chinese economy in the region. And, and it makes sense, it makes sense for, for Thailand to join the BRICS grouping because fundamentally BRICS started as an economic, uh, kind of cooperation forum for, for countries. And, and, and, and it makes sense for Thai— for countries like Thailand and Indonesia, which already have very close tie with, uh, with China, to join the, join the BRICS grouping. So they will have a say in how they want things to, to, to develop in their own country, um, because they're receiving a lot of Chinese investments. Yeah.

Well, the way I see it moving forward, Carl, with the— those economic alliances and so forth, that's gonna like, uh, sort of overtake the EU and, and even G7 for that matter. So it would be— the question is how the next US President, Trump that is, is gonna react to that or deal with that change. So far I'm looking, I'm keeping an eye on the nominee for the cabinet. All of them are Chinese hawks. And that tells me right there what kind of foreign policy is going to be. What do you think?

What, what? Hey, I, I know what you mean because, uh, Colby Albrecht, you know, he got selected as Under Secretary of Defense. You know, he's a big China hawk. He's advocate— he's one of those people that advocating, okay, well, forget about Ukraine, let's withdraw from Middle East, let's throw out— because our resource is limited, so let's throw all our resources together to confront China in East Asia because this is the most important region for the economic future of the 21st century. Um, but you know, Trump right now, it has a lot of priorities. It's, it's kind of all over, you know. There's a lot of Iran hawks that want him to go to war with Iran for benefit of, uh, Bibi Netanyahu. And there's There's talks that he wants to go to Panama. He wants to go take back the Panama Canal. He wants to go to Mexico to fight the cartels. And all these people are so excited about the US going a big way into Latin America. So if any of those things happen, you know, US is not going to have any resources left to go to be devoted to Asia Pacific. But, you know, it's still too early to tell. I'm sure— so it's— we're gonna— and, you know, Trump cabinet traditionally have been known to very, uh, fluid and, and highly volatile. You know, like, uh, you know, John Bolton, you know, he was there for a while. After he, he did his damage, he got kicked out in the first term. So we'll have to see who is gonna like be a long-term presence on, on the, on the Trump cabinet. It's, it's too early to tell right now because he's been— his cabinet is kind of all over the place. There's a lot of priorities, you know. There are people who want to focus on Latin America, people want to focus on Iran, and then there's some, some like Albridge who want to focus on, on China. But, but, but remember, Elon Musk being one of the big Trump backers, he has a vested interest to keep things peaceful with China because his Shanghai Gigafactory, that's where 50% of Tesla have been made right now. So, so, so there's that factor that, that might have, um, uh, uh, uh, play some, some kind of influence in, in Trump's decision. But overall, I think Trump is, uh, his instinct is still as a businessman. Um, he might be looking for some kind of deal with China, like he might play tough, but in the end of the day, he, he might negotiate for some kind of, uh, some kind of deal. We'll just have to wait to see what kind of deal that is, because I remember the first Trump, there are a lot of people, not a lot of neocons especially, they're scared that Trump is going to trade away Taiwan for some kind of trade privilege with China. So we still have to see. We still have to see how, how, how that— Trump is a wild card, right? So we all know that. Uh, we just have to wait and see.

Yeah, this is with the assumption that when he sit down, when he sits down with the Chinese, he will sit down on an equal footing, which I don't see the US administration doing that anyway because they're thinking— there is one more thing on the list of the things you mentioned about Trump. That might get your attention. It also has to do with Greenland. Trump is focusing on wanting Greenland. Look, what the heck? Yeah, we got enough domestic issues here and he's going to be thinking about Greenland. Go figure. So it will be, will be very interesting to see what those dynamics and Canada— well, yeah, he put in tariffs on them and Mexico. It's like, which direction do you want to take with this guy here? Those are into the USMCA, the, the, the, the treaty they signed, the replacement of NAFTA. All of a sudden you're putting tariffs on them. And I think the one for, for Mexico specifically, it has to do with the concern that the Chinese have, have been in talks with Mexico about establishing the manufacturing there for the EV batteries.

Yeah, I mean, right now, right now, Chinese, uh, electric vehicles, uh, they, they are once, uh, I, I, one-third of the Mexican new car sales. I mean, that's, that's huge. They came from nothing. Yeah, just few years, they, they took over a third of the Mexican car market. And, and because of NAFTA Mexico, you know, there's a very— there's not much of strong barrier to keep all these Chinese cars south of Rio Grande. I mean, like, what if American person just go to Mexico and buy it and then drive across the border and then save like $20,000? And, and, uh, so we're gonna have to see what— how that's gonna play out. But, but 25% tariff on your largest trading partner, that's ridiculous. Because after China's trade decline with United States, Mexico and Canada are now the largest trading partner with United States. So I mean, you are just slapping tariffs everywhere, you know, with China, Canada, Mexico. There's 3 largest trading partner with United States. I mean, you're gonna choke off the whole— you're gonna choke up everything that coming to US and That's when people are going to realize how dependent US is on the overseas supply chain. Well, we still have to see, you know, it's— we still got a month. We still got a month.

A lot can happen between now and then. Yes. Well, at the same time, most Americans do not understand this kind of dynamics. They're really— I'm not, I'm not generalizing here, but majority of Americans have no clue that what those tariffs is going to do to their purchasing power. They just have no idea, and they think, well, we're gonna impose this on this country and that country and so forth. We're gonna end up paying the price. So, and I mean, I looked at when these vehicles— when I was in China and did the math, did the calculations, when I realized, you know what, if the US government is going to impose 100% tariffs on me for bringing a car from overseas, you know, with the cost of the freight, insurance, and so forth, you know, it just doesn't make any sense anymore. A car that is cost $20,000 and I end up paying the same amount just in tariffs, forget about it. So anyway, I give you a last word, Carl, before I let you go. Where do you see the, the, uh, the, the geopolitical landscape moving forward, not just in your area but also in Europe, Latin America, and Africa as well?

Well, Europe is screwed. I mean, Because none of the European leaders have backbones to stand up to US and say, no, this is— you are, you're killing our economy, you're cannibalizing our industry. You know, like, like this, this your whole Ukraine war has been devastating for the German industry. They, they got caught up, cut off from, from cheap Russian gas, and now the Americans are forcing them to decouple from China, their largest market. Um, it's, uh, so, so, so there's— and this is how a lot of the German industrialists are moving their factories to United States, where they're— at least they have access to, you know, the, the cheap gas that's, uh, that you got from all the fracking. And, and, and, and this is how— this is US— oh, this is a feature, not a bug, by the way, because, uh, you know, if you remember, the NATO was designed to keep the Russian out American in and the German down. And that's exactly what they're doing right now. It's keeping the German down. And, and the, uh, at the rate, the current rate, uh, things are going, uh, not Europe is going to let be left further and further behind because they're following the self-destructive policies, uh, their leaders basically, the, the Americans have imposed on them. And all the, all these leaders in Europe, you know, whether, uh, you know, von der Leyen or, or Baerbock, these, these people all have been groomed from a very young age by Atlantic institutions to take over, to, to act as the spokesperson for United States. And, and, you know, unless, you know, the European voters throw these guys out, there's not much hope for, for Europe in the immediate future. Uh, now back in Asia, things are looking up. You know, none of the people in Asia are looking for a, a, a war or confrontation because everyone know that the war will be fought in the neighborhood. It will be devastating for everyone involved. People are much rather, uh, be just engaged in trade a mutually beneficial trading relationship, and that is continued to deepen. Like, like I said, even in the Philippines that you can buy, uh, BYD cars at an affordable price. And, and in— same thing is going to happen in Indonesia, uh, uh, Thailand. Um, you know, the, the— there's a lot of, um, the Chinese automakers actually putting a lot of pressure on the Japanese automakers in Southeast Asia right now, because traditionally Japan kind of dominated Southeast Asian car market. You know, even right now, Indonesia, a lot of the car brand, you just see it's almost all Japanese. You hardly see any American or European cars here, uh, because the, the Japanese have entrenched themselves in Southeast Asia for many decades, you know, since 1960s. 1960s, 1970s. But now that's changing, you know. The, the Chinese EV makers are now taking away market share because they're making cars that's cheaper. It costs cheaper, it's cheaper to operate because, you know, the, the, the, the, the run on electricity, which is much cheaper. And they, uh, and those cars, uh, you know, they appeal to— and they have— they're packing with more features. So, so, so a lot of young people, first-time car makers right now, they're looking at the Chinese EVs. And I think the trend is going to continue. That's why you see recently there's talks of a merger between Nissan, Mitsubishi, and Honda, because all these Japanese car makers are in big trouble. They, they are already closing plants, you know, all across Asia, in China, in Southeast Asia. The idea is like if two companies are in trouble, maybe we can combine together and make bigger trouble. I don't think it's going to work, but the only one that's holding out is Toyota because it's brand power and it's still a more— have a better entrenched position. But even Toyota is feeling pressure from from the Chinese EV makers. So, um, at least in Southeast Asia. So, so what I see is deepening, deepening of economic integration between Southeast Asia and China. Oh, by the way, Vietnam, they just voted to build a high-speed, uh, I heard connecting north and south, and, and they're, uh, they're gonna connect, um They also had agreement with China to build the, uh, a standard gauge railway linking, uh, China with Vietnam. Because traditionally, even now, like, the, the real existing rail link between China and Vietnam, they're basically date back to the colonial era, you know, it was built like 100, more than 100 years ago by, by the French, uh, just smuggling opium. And now, now they're gonna be getting an update. They're gonna get an update with standard gauge rail, which allowed them to connect directly with China. That was— that will facilitate integration, uh, between Vietnam and the Chinese economy, especially when there's a lot of, uh, Chinese factories are now being outsourced to, uh, Southeast Asia. Many of them go to Vietnam, Indonesia, Cambodia, etc. Uh, one is because the wage is coming up in China, so they're moving a lot— they're already moving a lot of labor-intensive, uh, manufacturing outside of China, and, and that's further been pushed by the US sanction, trade sanction against China. So now they're manufacturing in a third country like, like Vietnam, Indonesia, to get around of the, the US trade, trade selection. So all this is very positive for Southeast Asia. There's going to be a lot more investment, a lot of more factories moving in the country, which also only ties them even closer to the Chinese economy. Um, the, the, the, you know, we— you already know the, the China-Laos Railway. Thailand currently is building its own high-speed rail from Bangkok Bangkok. They're eventually going to connect to the Thai border. So they're going to connect the— one day you can take high-speed rail from China all the way to Bangkok. And but, but Malaysia is also in talks with China to build that railway to, to Thailand. So even— so one day you'd be able to take, take a rail, a high-speed rail, all from China all the way to That's a vision of the Pan-Asia rail network, and I believe that I would, you know, we will be able to see that coming to fruition in the next 10, 20 years. So things are looking good, things are looking good.

Very interesting. All while the United States is having a hard time establishing economic partnership with countries in Asia. I just read the report about 3 days ago or so And they just wording it in a nicer way, sort of we waiting for the inauguration of the new president and so forth. The reality is we are having a hard time establishing economic cooperation with other countries. Don't want to deal with us economically speaking. So I can see your point into what you're saying. So Carl, I can't thank you enough, brother. Truly appreciate you sharing your knowledge and insights. And this, this to me is a treat. Once a month I get to chat with you. The next— our next conversation is going to be after the inauguration of Trump. We see what he's going to do for that first week and a half, the disasters that's going to happen. So I look forward to that. So once again, on behalf of the entire community, I like to extend my sincere thanks to you and wish you and your family a happy, happy New Year.

Thank you, Carl.

Appreciate you, my brother. Oh guys, hope you enjoyed listening to Carl. He's, he's, he is informative. He's well knowledgeable. And this is the reason why I like certain topics, I address them with Carl because he will have a better understanding since he live in the region. Someone from on the ground will give you a better assessment in understanding before you start reading different, uh, uh, uh, narratives from mainstream media. Uh, remember to join me tomorrow for the community conversation. Tomorrow will be at 12:30. I'm gonna have Dr. Stewart join me to answer some of your health questions regarding Parkinson's, Alzheimer's, and dementia, since he is, uh, uh, very, very familiar with those kind of chronic diseases. And he'll provide some insights. I'm also going to be releasing a video for you. I just did an analysis and my editor just sent it back regarding China and the US. You do not want to miss that one. When you get a chance, I will release it towards the end of the year. So, but before I say bye, I want to give thanks to Fernanda G. Thank you so much for your Super Sticker. Truly appreciate you for that. And also want to say thank you to Ping Yu. Uh, Gordad is a good novelist. You are right, you know what you mean. Thank you so much for your super sticker. And to all of you, I truly appreciate you. As always, remember, geopolitics impact your daily life in more ways than one. Till next time, guys. Bye-bye.