Xin welcome, it’s good to have you here.
Unprecedented opportunity to speak to you and to speak to audiences in the ordinary houses in the US.
I have to get it straight, I am not a member of CPC.
This is on the record, please don’t assume that I am a member. I don’t speak for the CPC and I’m here today I’m only speaking for myself as Liu Xin a journalist working for CGTN. So if anybody wants to quote me, please put my name there at least.
Ok appreciate it. Give your current assessement of where we are on these trade talks. Do you believe a deal is possible?
It is true that the satellite connection is not very good, but I believe you are asking me where we are in terms of the trade negotiations. I don’t know. I don’t have any insider information. I knew that talks were not very successful last time when they were going on in the United States, and now I know both sides are considering what to go next. But I think the Chinese government has made its position very clear that the US treated the Chinese government, treated the Chinese negotiation team with respect and show the willingness to talk without using outside pressure. There is high possibility that there could be a productive trade deal. Otherwise we might be facing a prolonged period of problems for both sides.
I would stress that trade wars are never good. They are not good for anyone. So I wanna believe Xin I wanna believe that something can get done. And this is certainly a challenging time. I realize there are a lot of rhetorics out there. But let me term one of the issues. That’s IP rights…You fundamentally… I think we can all agree that it’s right to take something that’s not yours. And in going through some of these cases, cases of the independent WTO that China is a member of as well as the DOJ, the FBI cases, you can actually see some of them are on the screen right now. There is evidence that China has stolen an enormous amount of IP, hundreds of billions of dollars worth. But truly, I think we shouldn't care hundreds of billions of dollars are just 50 cents. How do American businesses operate in China if there are risks of having their ideas or intellectual properties stolen?
Well, I think Trish you should ask American businesses whether they want to come to China, whether they find coming to China and cooperating with Chinese businesses has been profitable or not. They will tell you their answers, as far as I understand, many American companies have been established in China very profitable. The great majority of them, I believe, plan to continue to invest in China and explore the Chinese market. Well now US president Donald Trump’s tariffs make it a little bit difficult, make the future a little bit uncertain. I don not deny that there are IP infringement or copyright issues or there are piracy or even theft of commercial secrets. I think this is something to be dealt with. I think the Chinese government, the Chinese people and me as an individual, I think there is a consensus because without the protection of IP right nobody, no country, no individual can be stronger, can develop itself. I think that is a very clear consensus among the Chinese society. And of course there are cases where individuals where companies just go and steal, and that’s a common practice probably in every part of the world. There are companies in the United States who sue each other all the time for infringement on IP rights. You can’t say simply because these cases are happening, America is stealing or China is stealing or the Chinese people are stealing. And basically that’s the reason why I wrote that rebuttal because I think this kind of blanket statement is really not helpful, really not helpful.
It’s not just a statement. It’s multiple reports including evident from the WTO. Let me ask you about Huawei. That’s in the headlines right now. (Sure. I don't deny those.) As I said, we can all agree, if you do business with someone, it has to be based on trust. and you don’t want anyone stealing your valuable information you spent decades working on. Anyway China passed a law in 2017 requiring tech companies to work with the military and the government. It’s not just individual companies right? They might be getting access to these technologies as the government itself, which is an interesting nuance. But I get that China is upset that Huawei has not been welcome to the US market totally. So let me just ask you this, it’s an interesting way to think about it. What if we said, you know, sure, Huawei, come on in, but here’s the deal you must share all the technological advances that you’ve been working on. You get to share with us. Would that be ok?
I think if it is through cooperation, if it is through mutual learning, if you pay for the use of this IP or high technology, absolutely fine. Why not? We all prosper because we learn from each other. I learn English because I had American teachers. I learn English because I had American friends. Still I’m learning journalism because I have American copy editors. I think that is fine as long as it is not illegal. Everybody should do that. That’s how we get better right?
But you mention something very important, which is that you should pay for the acquisition of that. You know, look, I think that the liberalized economic world in which we live and have valued intellectual property and it’s governed by a set of laws, and so you need kind of to play by the rules and play by those laws for going to have that kind of trust between each other. But I think you bring up some good points. Let me turn to China right now, which is now…wow…the second largest economy. At what point will China abandon its developing nation status or stop borrowing from the World Bank.
Well I think discussion is going on and I have heard a very live discussion about it. Indeed, there are people talking about China already big, why don’t you just grow up? I think we want to grow up, we don’t wanna be dwarf and underdeveloped all the time. But it depends on how you define developing country, right?
If you look at the overall size of the Chinese economy, yes we are very big. But don't forget we have 1.4 billion people, that is over three times population of the United States. But when it comes down to per capita GDP, we are less than 1/6 of that of the United States and even less than some other more developed countries.
It’s a very complicated issue, because as I said it’s very small, but overall it’s very big.
We can do a lot of big things, and people are looking upon us to do a lot more around the world.
So I think we are doing that, we’re contributing to the United Nations, we’re the world’s biggest contributor to the UN peace keeping commissions, we’re giving out donations and humanitarian aids. Because we know we have to grow up and Trish, thank you for the reminder.
Let’s get to the tariffs, I’ve seen some of your commentaries too, and Xin I appreciated it you think China could lower some of it’s tariffs. I watch to see that and I totally agree with you. In 2016, the average tariff charged on the American goods in China was 9.9%, and that was nearly three times what the US was charging, so what do you say about this?
I think that would be a wonderful idea, I mean don’t you think? I mean for American consumers, products from China will be even cheaper, and for consumers in China, products from US will be so much cheaper too. I think that will be wonderful idea.
You talked about rule-based order, this is the thing, if you want to change the rules, it has to be done in mutual consensus, basically, if you talk about tariffs, it is not only about China and US, I understand, if you lower tariffs just between China and the Unites States, the Europeans will come, the Japanese will come, the Venezuelans will probably come and say, hey, we want the same tariff. But you can’t discriminate between countries, so it’s a very complicated settlement to reach.
When the world agreed on the tariff reduction China should commit to……was exactly the result of years of difficult negotiations of the United States saw in its interests and decided to what degree they can agree, or to what degree they can lower their tariff, and China agreed to, although in some difficulties, lower our tariff considerably, it is all the decisions of countries according to their own self interests, now things are different.
20 years later, what are we going to do? Maybe these old rules need to be changed. Let’s talk about it, let’s do it according to the rules. If you don’t like the rules, let’s change the rules, but again, it must be a multilateral decision.
you go back the trade view of 1974 Section 3, I wonder. There was a rule that enable U.S to use tariffs trying to influence behavior of China should have been taken in stealing our intellectual property. And I think in some ways that is part of what come in for human’s sense of trust. I hear you on the force technology transfer. And I think that some of the American companies perhaps admit it is a mistake in terms of being willing to overlook what they might have to give up in the new turn. But this is an issue where the country as a whole needs to step in and we’re seeing the United States do that perhaps in a way that hasn’t happened. I mean it’s been in a background. Don’t get me wrong. I think previous administration have Identify the challenges but have really been a little bit unwilling to take on. We’re living in this very different times. How do you define state capitalism? No, force technology is part of it……. Hang on one second, Xin, I wanna say that I think your economic analysis is very interesting because you know you’ve had a capital-assistant but it’s state-run. So, talk us about that. How do you define?
Well, we’d like to define the socialism with Chinese characteristics where the market forces are expected to play the dominating or the deciding role in the allocation of resources. Basically, we wanna be a market economy, but there are some Chinese characteristics. For instance, some state-owned enterprises which are playing an important but increasingly smaller role in the economy. Everybody thinks that china’s economy is state-owned.
Maybe in the economy and everybody thinks that china’s economy is state-owned. Everything is state-controlled everything is state state state. But I let me tell you it is not the true picture if you look at the statistics for instance 80% of Chinese employees were employed by private enterprise. 80% of Chinese exports were done by private companies, were produced by private companies. About 65% of technological innovation were achieved were carried out by private enterprises.the largest, some of the largest companies that affect our life for instance some internet companies some 5G technology companies, they are private companies, so we are yes socialist economy with Chinese characteristics but it’s you know that not everything state controlled, state-run it’s not like that. We are actually quite mixed and dynamic and actually very very open as well.
Well I think you need to probably keep being open and that you know as a free trade person as myself. I think that’s the direction to pursue. And ultimately that leads to greater economic prosperity for you and better economic prosperity for us. And so let me get a win-win.
This was interesting. I appreciate you’ve been here. Thank you.
Thank you so much. If you wanna have a discussion in the future we can do that. If you wanna come to China…
I’d love it.
You are welcome. And I’ll take you around.