 senior advisor of Pacific Forum here on global connection. So let's start with China as China, inside China and COVID. We should understand what's going on there because it's not a small thing. What's going on there, Carl? They are basically every time they have an outbreak, they're shutting down the city, locking people down, corralling them in their apartments. So I mean, ultimately you can do anything in China, you can die from anything in China except COVID. I mean, to put it bluntly, they've become so obsessed with the policy that they've kind of lost track of the larger context of people are dying for lack of medical care because everybody's locked up over COVID. And it's sort of an overblown case of what we had here in the United States where people were putting off medical care for fear of catching COVID and there was the lack of capacity at the hospitals. There, it's just a lack of capacity for caring about anything other than controlling COVID. This is really disturbing in the sense that it reflects either A, what do you want to call it, a government culture point. We'll pick the agenda and you better follow or else than nothing else matters. For B, Xi Jinping has a specific intention in mind and some people have suggested that this is one way he enhances his power by just showing you just how strong he is. Is it one or both or neither of those two possibilities? What do you think? It's both. I mean, I don't want to give Xi Jinping all the credit because I think he operates in a political system that requires him to gather some support for what he's doing. But certainly, it's the weakness of a centrally planned government where you become obsessed with a particular goal and you lose sight of the larger social contract that you have with the people of the country. And I think this is a glaring example of what happens when people lose sight of what their real responsibility of the government is. That's a revelation of sorts because up to this point, just thinking me, I'm a novice about this, I thought that the Chinese government had the followership, they had the control and they knew what to do for COVID. But now you wonder if their decision process in general is flawed, their perception of the public opinion is flawed, their relationship with the public, with the Chinese people, 1.4 or 5 billion of them, it could be flawed. They don't have to do this is the point, right? I mean, it reflects a lack of adaptability for one thing. I mean, I think that's really one of the key elements here. And again, it's a key element in any centrally planned organization or government, if you will, in this case, that if you don't maintain connectivity to the people, then you lose sight of what really is happening. And I think it's a classic case. If you look at what's happening now in China and Taiwan, it's really kind of interesting because what you see in the Taiwan papers today and over the last couple of weeks is we're not going to do this, what China's doing. We're going to recognize that we need to make some adaptations and we can't just maintain the zero COVID policy. So they're in the position now where they have a lot of cases of homegrown cases, which in the past, Taiwan were doing fairly draconian measures in their own right, but now they've recognized that people are complaining, people are concerned, people are worried, and so they've made the adaptation. China isn't making the adaptation, just like in Hong Kong happened, but in Hong Kong is the other example, which of course went through that same lockdown. So you can see how the different systems play out when you are confronted with something that requires adaptation. Well, autocracy, and I would have to say that, I consider China an autocracy, leads to brutality. And what they're doing here is brutal. And worse than that, it's brutal in terms of dealing with their own citizens. It is applying the same kind of brutality you see in Xinjiang against the Uyghurs, against all the people in China, or the people in Shanghai and Beijing, but it is also, they have lost their mojo with many millions of people who are kicked off at them. And in public, making public statements against the government, we are in a different time, don't you think? I wouldn't, I would be careful in going too far because they've also been very careful to control that narrative inside China. I mean, again, we from the outside looking in want to blow this bigger than it might be. And so I would be careful how they actually play this out. If they do start responding to some of the criticism that they're getting from inside China, because you do see some of it, it'll show up on Weebo for a little while and then it'll disappear. And so there's, they've got to be seeing what's happening. And so it'll be interesting to see how this plays out because they are gonna have to move off zero COVID. It's just a question of how they do it and how fast they do it, I think. Well, why, is this a hard one? And I don't know if you or I would know, but why did they have this surge anyway? I mean, it may not be extraordinary number of cases, but it's more than ever before in terms of day by day infections. What happened? I thought they had a handle on this. I mean, I think there's a combination of things. Is one, there is still traffic in and out of China. And two, the vaccines that the Chinese made vaccines apparently are not as effective as some of the mRNA ones are that they've refused to let in. So, they don't have access to the mRNA vaccines. And so I think that's part of it. But then also, you just simply can't control, especially when it comes to Omicron, the Omicron variants that they're going to get in, no matter what kind of a wall you build, no matter what kind of a tight seal you try to put around these cities. Just a hard one, Drew, of what could happen in the United States? Well, no, I don't think so, because I mean, first, the United States is much more vaccinated with the mRNA. And we've let this sort of natural immunity build by having a lot of cases. So that's kind of the combination of people have had COVID and so they're not as vulnerable anymore. And then the mRNA is a more effective vaccine. So I don't think so. I think that the United States, not just the United States, but also Europe and the rest of Asia are coming to this realization that you have to learn how to live with COVID. So that's why I think you see people like Dr. Fauci saying, it's time that we move on, we're past the pandemic phase and we're now into the end of the phase. You know, one thing in China culturally is the metric for a successful government is the economy. How well people are doing, their lifestyle, you know, whether they have sufficient money and resources and consumer goods available and so forth, all of that. But there have been reports, even from China, I don't know how accurate or maybe they're crossing the line in terms of dealing with the propaganda machine. That say that the economy is being affected. Plants have been shut down. Important economic resources have been tied up because of the draconian steps on COVID. That could have a long-term effect, no? It could be affecting what shows up in your port too. I mean, that's just it. It's not just affecting the Chinese economy. It's affecting the world economy. I mean, there now they're talking, we're taking percentage points out of GDP because there's a bottleneck created in China over consumer goods that aren't leaving the port, aren't leaving Shanghai port, aren't leaving Hong Kong ports. And so it not only affects China, certainly it does, but it also is affecting the rest of the global economy. Will this affect Xi Jinping's power? Will it call for reform? Is there enough displeasure out there whether it's articulated in the media or not that will change China? It could. I mean, it's hard to predict at this point, I think. I mean, certainly these kinds of things demonstrate that his grasp on power isn't as great as some people would like to believe it is. That he's not really all that secure in getting this position of president for life or whatever your ruler for life, whatever you want to call that position. It's really, you shouldn't call it president. It's really not a presidential position. It's really a chairman of everything, a position. And I think that it certainly challenges his ability to impose his will to the extent that just COVID would do that, I don't know. But certainly the economic downturn, certainly the dissatisfaction with the way they've been handling the ability to travel, the ability to move between cities is certainly going to create a lot of displeasure with how the government is running things. Yeah, so much of China seems to me these days is base. They wanna look strong and look like they're in control. They wanna project that as an element of power or maybe a big element of power around the world. And it does give them advantages in their projects in various continents. Is this daff or I shouldn't say daff, that's too strong a word. Is this problem affecting their face, their projection of power? Sure, I mean, it just like it affects his Xi Jinping's power in China. It affects China because people are people from the outside are reporting this. People are reporting the sort of draconian measures. They can't control the media outside of China as well as they can inside. So some of that is out and of course, people in the rest of the world can see it. So yeah, so it hurts their credibility and it reminds people just like we just discussed, reminds people that there are weaknesses in centrally controlled governments. And this is one of the big ones, is you don't have a voice telling you you're headed in the wrong direction. That's a natural segue is the interaction of whatever is going on there, whatever effect it has among the people and in the image of China, the image of Xi Jinping on the question of Ukraine. It's almost like the news from China is not as important as the news from Ukraine. That China is somehow a secondary priority on the world interest and current events. And the fact that Xi Jinping has been unsupportive of the coalition somehow affects that. I think a lot of people, I'm just suggesting to you, a lot of people, a lot of thought leaders in the world say, well, they're doing this thing. They don't wanna support the coalition. They wanna make a mess with Putin. So they're gonna support Putin, but in a very mild mannered way and they marginalize themselves in the global conversation, haven't they? Well, I think we need to be careful by overstating that. I mean, China has been very good at not supporting and supporting both sides. They've been really, really non-committal, but they're not the only ones. I mean, Farid Zakaria had a good piece, I think it was last week, where he pointed out that it's not just China, it's India, it's Indonesia. Those are big democracy. And then he goes on, of course, Mexico, Brazil, Argentina, Nigeria, all these countries have been pretty non-committal. And even for that matter, the rest of Southeast Asia, absent Singapore have been pretty non-committal about what's happening in Ukraine. So he's playing, I think China is trying to play a very careful game here where they don't support Russia, but they don't not support Russia. So you've seen on the margins, you've seen like the drone company, quit selling drones to both Russia and Ukraine. You've seen the cancellation of an oil project with Russia. But also, I think China sees this as an opportunity to basically make China much more dependent, to make Russia much more dependent on China. And so they don't really want to alienate Russia either. So they're playing a very, I think a very trying to play a very careful game of showing, just not showing, I mean, I have to say it in the negative, non-supporting both sides is ultimately, other than blaming the United States and Europe for NATO expansion as the real cause. But beyond that, there's been really no support or non-support beyond them. There's a risk in playing on the fence that way, isn't there? For example, and I, who knows how this is gonna wind up? Suppose the Ukrainians win, suppose they win. How does China come out of that? Or alternatively, suppose they lose in a horrendous debacle and disaster for Western Europe. How do they come out of that? What are the risks for China either way? Well, see, I think the downside risk is trying to lean too far one way or the other in their case. And I mean, I would say that sitting the fence has been a fairly effective strategy for Southeast Asia for a long time. I mean, this is sort of something that Asian governments like to do is not make commitments to one side or the other. So they want both sides. They wanna be able to take advantage of the economic relationship and yet maintain the security relationship with the United States. And I think, in some respects, I think China sees this as the real opportunity. Clearly, they've learned lessons about what it means to go against the United States and Europe when they work together to impose sanctions. And I'm sure that China has rethought its reserves and how it holds U.S. bonds. I'm sure it's working hard to try to create an alternative to the swift system of moving money around. They have the SIPs, the China Interbank Processing System. I'm sure that they're working hard to create that system as more to make that system more robust so that people can use that as opposed to the Western-controlled institutions. And so I think that's how China sees it, that they're playing this middle game to take advantage of whichever side ends up winning, that they haven't alienated either one. And so I think that that's how they view it. And I think that's probably an accurate assessment because if Russia wins, they can say, hey, we were there for you, Russia. We continued to buy your goods. There's some talk that the Union Pay Credit Card has replaced Visa and MasterCard. And there's obviously a lot of exchange going between Russia and China with oil and gas. And so I think they're playing that side. And yet if Ukraine somehow wins, and I'm not sure what a Ukraine win looks like at this point beyond retaking the Donbas, I think that then they can come back and say, well, we never really supported China. We didn't give them any military assistance or we didn't really facilitate any procurement of military equipment. So we're still your friend, Ukraine. And they've made overtures to both Europe and specifically to Ukraine, saying that they call for a peaceful settlement and all that. So I think that they see, and I think they're correct at this point that they can take advantage of either way. No, you mentioned doing their own swift system and all that and it raises a very clever thing that Putin did to insist on payment in ruples for oil to avoid the US dollar. I mean, is the US dollar under pressure here? Is one of the benefits that China could achieve is to change the reserve currency, maybe even present the RMB as reserve currency? I mean, I'm not smart enough to know the yes or no answer to that, but I've certainly seen enough argument in the media to support the idea that China is going to try to take advantage of this, of facilitating or increasing the speed of the globalization of the U.N. So I think that that's probably something that they're not resisting. I don't know if they're actively doing it, but they're certainly not resisting people who want to increase the trade in U.N. and whether they're supporting the ruble. I mean, I would guess that they probably are paying for their gas in rubles. I mean, if you look at what happened to the ruble, it went way crazy up at what, 140 or something and now it's back down to where it was pre-war, it's back down around 90 again. So it looks clearly somebody supported that currency to get it to come back down. So I wouldn't be surprised to see that because China and India for that matter and other places in the world in Africa continue to support purchases in ruble. That in fact, again, but it's not an obvious support. It's sort of a passive accommodation. I think that's the way that the Chinese see it and what they're trying to do is they're trying to be accommodated to the Russian situation. And then they go back and argue that that's consistent with their policy of non-interference. And that's why they continue to talk about the conflict in Ukraine as the special military operation. They sort of take that piece of Russian propaganda and use it for their own benefit because that way they don't have to choose sides and they can say it's something other than outright oppression. It's clever. You gotta say it's clever. Well, but I mean, yeah, I mean, it's clever but it's also should be rather unsettling because you can see that they're really playing the longer game here of trying to hedge their bets on both sides. I'd like to talk for a minute about the Security Council in the United Nations. One of the things that seemed to emerge early on here is that of course, Russia as a member of the Security Council would veto any action against Russia. But it's also clear that China would do the same. And to the extent that the United Nations could refer Security Council could refer cases, war crimes cases to the International Court of Criminal Justice, they're not doing that, even though it seems obvious. And there's been a fair amount of revelation about the United Nations and how it's a failed organization. Isn't in China's best interest to do that? They seem to be standing up with Putin in the same place on all the United Nations decisions where they're vetoing or threatening to veto and stopping any United Nations process. Does that really work in their favor? I think what China has done is they've abstained at the Security Council because they have Russia, they know that Russia is going to object. And so they can basically abstain, which of course is what a lot of countries did in the context of the General Assembly. The countries that aren't part of the Security Council abstain and in the case of China, they didn't vote with Russia, as you know, they abstained in the Security Council vote. So again, they're trying to play that game that says, hey, we believe in non-interference, and yes, we agree that sovereignty is important and that we respect the UN processes without making any commitments beyond what's in the interest of China, which is to avoid making a commitment on this. You know, they say that this war in Ukraine and all the events around it are changing the global world order, the liberal world order anyway. And I guess one of the decisions that China would have made is that's okay with us. We'd like to see it changed. We don't really care to have a liberal world order. We like it to be the way it serves our purposes. I hear you disagreeing, Carl. Yeah, I'm gonna disagree. I think China does benefit from the liberal order and that's why they don't try to push too hard in supporting Russia. That's the other side of the China story, is they're not, they're being very careful to avoid being criticized or accused by the United States of evading, of helping Russia evade sanctions. The only thing they're doing is they're saying, well, we aren't stopping commerce, but they aren't supporting sanctions. Again, everything that China's doing is in the negative. It's non-support. It's not that they're actively supporting either side. It always runs back to non-support. So no, China is the biggest beneficiary of the international liberal order out there. And so they're not going to say, no, we wanna change the order. But as you know, what they want and that's why they keep harping on this, what they want is they want to be able to have more influence on the international order. They wanna be able to maintain their state-owned enterprises. They wanna maintain their supply chain integrity just like we do. They wanna be able to act with impunity just like we do. So they're not suggesting that they wanna overturn the international order. They simply wanna be able to say, we want more control over the international order because we believe that the United States by imposing unilateral sanctions is trying to disrupt that role. So I think that's how I would characterize it. I wouldn't say they wanna overturn the international order. They wanna use it to their advantage, just like, I mean, they wanna be just like us. They wanna be just like Russia. And so I think that's a more accurate description of what China is trying to accomplish here. And I mean, how do we stop that? I think you have to think about how you characterize what's happening. And when we point out to the Chinese that, no, the international liberal order is at risk because people are violating the law, the international norm of sovereignty and using military force, then we force them into a position of having to justify how they are not condemning Russia's action. So it's a dialogue. And on that, my last area of inquiry with you today, Carl, is in all of this, given COVID and the problems they've had with COVID, given the economy problems they've had and maybe the confidence of the people problems and given the path they have chosen in dealing with Ukraine and the Western coalition, in all of that, how was their relationship with the United States doing? And how is our relationship with them doing? Certainly, these things over the possibility that that relationship has changed or is changing or will change. What do you think? Yeah, well, it's a good area to think about because as I was thinking about the show, it occurs to me that what's happened, I think, is China has come to the realization that the United States is going to be a competitor, the choice, and again, they'll put it on us, they're gonna say the United States has made the choice to compete with China. And since we know that, since we Chinese now know that the United States is going to want to compete, we have to protect our interests. And the way we protect our interests is we solidify our own supply chains. We do what the Chinese call dual circulation where they build their own consumer base and they make sure that they have technological advantages in certain areas, they become less dependent on the United States for the financial system. In other words, moving away from Swift, moving away from buying treasury bonds and they have a better sense, a better control over the technology that they produce and their reliance on Western technology. So of course they're pushing their semiconductor industries and the whole technology 2025 push that Xi Jinping has introduced to develop high tech industries like electric vehicles, surveillance equipment and all that stuff. They're looking at pursuing those areas because they see ultimately this is going to become a technological battle between the United States and China. And they're probably right. What about the rhetoric? Has the rhetoric changed? Will it change? What is Joe Biden saying about them that may be different than a year ago? What are they saying about the US may be different than a year ago? Is there any tension is what I'm asking? Yeah, there's tension because there's competition. And I think both sides are falling into this binariness a little bit where it's either us or China. So the United States is pushing hard to get commitments out of the rest of Asia on supporting the United States versus China. This whole Indo-Pacific economic framework that's coming out here in the next while is going to be a big challenge because the United States is pushing it and it's very much looks to the rest of the world like a China containment policy. And China is going to push that narrative, I think that you guys need to be careful what you're doing with the United States because they're making you choose between China and the United States. And what we want is inclusivity. We can show you that through the regional comprehensive economic partnership. You can see that we're trying to become part of the comprehensive and progressive trans-Pacific partnership. All those economic agreements that China is trying to get on while the United States is trying to push its own framework is going to become I think the next area of competition beyond just the natural competition between the countries in Asia and the competition in South China Sea over territorial claims and all that. So yeah, I think the rhetoric has changed and it's reifying itself into very stern terms of us or them kinds of choices. So what's your advice to Joe Biden? Well, my advice to Joe Biden is to really think hard about what he wants in terms of economic engagement in Asia. And I mean, it's sort of a vain, vain request at this point, but you really need to think about how much benefit there is to joining the comprehensive and progressive trans-Pacific partnership. I mean, after the fact, you know, after we walked away from it, it's almost impossible to believe that we could get back to that. But this new economic framework is not gonna do that. It's going to create an even hardened line between US and China and force the Asian countries into having to figure out how to deal with that. And then, you know, I mean, I just think that we are short-sighted. I would say to the President Biden that the Americans are being short-sighted by thinking that we can get away without trying to figure out where areas we can cooperate in. And that seems to be lost. You know, John Kerry has kind of thrown his flame out there and it doesn't seem to be burning very bright these days about, you know, cooperating on climate change. There seems to be a divergence between what China thinks is doable and what the United States thinks is doable. And certainly there's no talk about, you know, other areas of cooperation in terms of non-proliferation or anything like that. And that would be better to find points of cooperation. But what, you know, what you portray here is we are in a time of change with major events happening around the world, that each one of them has the possibility of changing the world. And thus, a relationship with China is likely to change somehow going forward. And that means, Carl, we'll have to keep on watching it. Don't you think? I mean, in the aggregate, it's clear that there's change coming. And, you know, and it's just a question of how big the change is and how well we can manage the change. You know, it's not going to be a light switch that goes off. I hope it's not going to be a light switch that goes off. But, you know, I mean, I think the best case scenario is that we see the change, we manage the change and we accept that China is going to play a bigger role and is going to play a role, a bigger role, independent of its relationship with the United States. That it's looking at how it can influence the rest of the world. And that's what we need to really think about how we manage. How do we manage the narrative that goes along with China gaining more and more influence in the rest of the world? Not just in the U.S.-China relationship anymore, but in the rest of the world. And that has to be managed and it has to be managed intelligently, not us or them kind of mentality, but how can we share responsibility for them? That's, I think, the big challenge. Mark Wood and all of that. Carl Baker, Senior Advisor Pacific Forum. Thank you so much for coming around and contributing to our shows, Carl. We really appreciate it. Thank you. Aloha.