 Welcome to this show. We're the state of the state of Hawaii on Think Tech, Hawaii, of course. And I'm your host, Stephanie Stolt-Dalton. Our topic for this show is a focus on Hawaii's position and politics in the vast Pacific region. Hawaii is the most isolated ocean archipelago in the world. But its relations with numerous other neighbor island nations has endured for centuries and has been active all that time. However, there is now a newcomer in the region, China. China is seeking association with numerous Pacific island nations. What does China intend to do or to change or to live within new relationships? What is this all about? And what is the effect to be on Hawaii's role and on US policy, perhaps? We have a knowledgeable guest tonight from the Eurasian group to help us think about this with a little more clarity and maybe a few more facts and understandings. And he can explain some of these developments in the regions and their contexts and what might be happening to make things move as it looks like they are. And this is, of course, Ralph Winnie, Jr., who directs Eurasia Center's China Center. It's Eurasia Group's China Center and where he does international business dealings and practices international law. So welcome, Ralph, to Think Tech. Aloha, Stephanie. Glad to be with you. And you are a Hawaiian. I'm sorry? You're in Washington, D.C. now, but you are a Hawaii boy. Correct, yeah. Local guy, yeah. Graduated from Kona'ho. Yeah. From Kailua. That brings quite... What was that? I'm from Kailua. Oh, and from Kailua. Okay, well, that just shows your investment here is authentic and driven by good intentions and hopes for the state of Hawaii. I wanted to point out that recently, as you know, China has sent its foreign minister, Wang Yi, and he has visited at least nine Pacific Islander nations. And in these visits, I've read, and maybe you can tell us a little more about it or what its association is all about, he's intended to build a pan-Pacific agreement among island nations. However, he finished up his visit with perhaps only one or two associations put in place which were tentative, but at least he's put out the message at what his goal might be. So I thought maybe you could start us off with helping us understand what that means that China's foreign minister is in the Pacific hanging out and making friends. So where are we going with this? Well, I think it's very interesting that China is now wanting to grow and expand their sphere of influence in the Asia-Pacific region with a focus on Hawaii, Micronesia, Guam, Saipan. Not only does it have military significance, right? Because the US military is very ensconced in near Guam, Wake Island, near the Philippines. But at the same time, the Chinese are trying to develop markets where they can extract and engage with the new leaders in order to get resources to grow and expand the Chinese economy. As more and more Chinese are moved out of poverty into the middle class that creates increased energy needs and is driving up domestic consumption throughout China. And it makes sense for China to want to engage with different countries in the Asia-Pacific region with an eye to expanding their sphere of influence. And as some people say, a direct competitor against the United States. But I think that still remains to be seen exactly whether there are gonna be any malign repercussions from China's engagement in the Asia-Pacific region. Right, you're moving forward to that unfortunate consideration we probably learned from you in some discussion of it. But I had read that Chinese are after fish because they've got billions of people to feed and the fisheries of these nations are rich and large, gigantic and also at this point reasonably managed, but with China going in for something like that could change those dynamics really fast, but is it really about fishes? Is it really basically fishes or is there more to it? Well, I think it starts with needing these natural resources to help stimulate and grow the Chinese economy. And it's also about engaging in a form of soft power or as their detractors would say, trying to exert domination or control over their countries. I think it's important that we engage with China on a personal and professional basis in order to grow and expand their relationship. Yes, that's very longstanding and it's between the United States and China that can create a positive dynamic for both countries. For instance, we should be engaging small and medium-sized companies with between China and the United States. We shouldn't focus necessarily on a multinational. We should focus on small and medium-sized companies, help get them into China and help Chinese small and medium-sized companies engage in Hawaii and in the mainland United States because that's the engine of growth, the small business. Oh, yeah, okay, of course, of course. So I wondered about the position of, well, the West, well, in U.S. I suppose, is it correct to describe the relationship over the last couple of decades and since the independence in the 70s is when the territorial relationships ended, but has it been more a matter of benign neglect in the relations among the Western countries or the U.S., which is a- Well, we have to understand that the Chinese think well, very, very long-term, and they engage on the personal level to develop the business strategy. The United States thinks differently. We have the Western mentality and it's all about going over there, trying to do the business without necessarily understanding the history or the culture of the Chinese and that has not served foreigners well, traditionally, but someone like Nixon who has had the idea of the U.S. being a strong ally and partner of China as a way to bridge that divide between China and Russia to allow the U.S. to become the dominant player in the region by having that close relationship with China I think is key. And the Chinese recognize that America never tried to occupy them, never tried to dominate them, like the Europeans did. We helped them in their fight against the Japanese and there is their reservoir of goodwill and support because of that. Now, we've had to challenge them, the Chinese on the mercantilist policies, which is what Trump was doing in opposing these tariffs. And as long as you can produce desired results that will benefit Chinese and American, small and medium-sized business, you're gonna have a win-win situation. When the mayor of Huntsville, Alabama came to New York and he spoke to an organization called the National Committee for U.S.-China Relations, which I'm a member of, it was very inspiring to hear his talk about how the Chinese, when they first came into the community, everybody was scared, they thought they were gonna come in and dominate them. And what the Chinese did instead was ingratiate themselves in the community, get themselves involved with the church, with the PTA, with the soccer unions, and ingratiate themselves with the people. And from there, they were able to develop strong partnerships in the community and also serve the people of Huntsville when they wanted to go overseas to China to be able to grow and expand their businesses. And this is what is gonna need to happen for the U.S. and Chinese relationship in order to grow and expand in a very positive way is for the community, the people, to have the people, the people exchange in a relationship building based on mutual respect and trust. Well, does there have, okay, so getting to the state level in Hawaii's role, is it a matter of tourism with China? What is Hawaii's main relation? As you know, Linda Lingle had Ted Liu at the time sign a memo of understanding what the Chinese to open up flights to encourage Chinese tourism to Hawaii. And that was very much a success. And it was- That was her governor, the former republic, governor of the link. Right, right. That she believed that it was important to expand Hawaii's opportunities to the Chinese that you could not just rely on Japan because if there was a recession in Japan, it adversely impacts Hawaii because they're not gonna have the influx of tourists. So they looked at China and they looked at this billion dollar market. And at the time, the Chinese government was looking to increase domestic consumption. What people don't understand is the Chinese saving and invest so much, they don't spend enough which affects and impacts their economy. We, of course, in the United States have the opposite problem. We spend too much, we don't save. So what was happening is the Chinese were saving so much, they weren't spending and the government had to figure out what kind of industry can we support to encourage our people to start spending? So they looked at tourism and leisure development and they started lifting the travel restrictions and started expanding the domestic airline routes in China. They started encouraging automobile ownership and it became a status thing to travel and take a vacation. And I noticed this when I was in China being on the airline, domestic airlines flying to look at various projects. And there were people on the planes that had never left the province. It was the first time they were flying and they were gonna go and visit us and take a vacation. And the government was mandating companies provide vacation time for their Chinese employees. And projects were opening up in areas where there were natural pristine beach areas to promote and develop resorts. So Linda Lingle understood this and made it a point the science memorandum, which would allow domestic Chinese to be able to travel to Hawaii. Now, the problem that we find with Hawaii and the Chinese is it's very expensive. It's much easier for Chinese to go to Cuba, to go to Jamaica, where they can go on, yeah, really cheap travel tours and they don't have to spend as much money as they would if it comes to Hawaii. Yeah, now, so why are those trips less expensive when it's twice as far from China? Because of the cost of the hotel, the cost of transportation, being in Cuba, I know because it's very easy to just get a little contraption that will take you around the island. The hotel rooms are very modest. You can do bed and breakfast and the government maintains a very tight reign but at the time, they were starting to allow bed and breakfast, allow people to have their own small businesses focused on tourism and leisure over there in Cuba. But now in Hawaii, there are a lot of state regulations, the income tax, the hotel, the par rental, the tour packages, I mean, it's just been increasing. So that's been a challenge to get the Chinese to commit to Hawaii for that reason. But nevertheless, Hawaii is still a natural attractive destination for Chinese because they are more culturally accepted per se or they feel that they're gonna be more culturally accepted in Hawaii because of the strong Asian presence in the islands. Yeah. Well, that's interesting. I wanted to get back into the Pacific Island areas where I have a little bit of experience and I've heard even more, but where does they get to those quicker than they get to Hawaii? But I've seen that they're self-contained when they go. For instance, in Palau, I mean, they go in on chartered Chinese planes, they see in Chinese hotels, they run everything up. Yeah, so how is that? Is that key to keeping their expenses low or why do they do that instead of putting into the economy? I mean, isn't that the way the relationship towards development usually? Well, that's been a criticism of the Chinese is how much engagement do they have with the local community? Are they actually investing in the local economy and are people benefit? Traditionally, when they went to Africa, they just did everything and took all the resources and lab and the people didn't appear to benefit. And there was a backlash towards Chinese investment there for that reason. The Chinese started to change their approach and because they were bringing over convicts into Africa to do a lot of the construction. And they didn't believe the Africans had the acumen or the war with all to be able to properly finish the project, per se. So there's that mindset on the part of the Chinese that these people are not up to our level or our standard. So it's just easier for us to send our people and do everything ourselves. So they're internationally comfortable in general. I mean, just generally speaking, the Chinese and the business people there, they're not comfortable working internationally with other nations. Well, traditionally, they have focused on what's in the best interest of China and it's sort of a new thing to be able to go and engage overseas. But as more and more Chinese go abroad and they work and they study in the United States and Europe and go to Africa, the whole dynamic has changed. And they realized how important it is to make friends in the local community, which is why I gave that example of Huntsville, Alabama. Why they realized when they came into Huntsville that they could not afford to just be adverse in the community. They had to engage on a personal and professional level in order to achieve a win-win situation for both parties. And that's what they're gonna need to do in order to be successful in the Asia Pacific region. They're going to have to engage with the locals and create a positive dynamic to improve the quality of life of the locals and to help grow and expand the Chinese network and the acquisition of the resources that they need. Well, are you thinking that that is gonna be the major thrust of their outreach? Because there's a lot of criticism of their diplomacy and also the debt tracks that they said. Right, yeah, Sri Lanka, right, it's been very forceful and vocal about that issue with the port. You know, again, people need to know what they're getting into when they engage with the Chinese. They have to realize the Chinese are very hard bargainers, they're very tough negotiators and you have to be ready for what they propose and figure out if it's gonna be the right situation for you. I mean, even in this country, I mean, we borrow a lot of money, but people are so desperate that they don't care that they may have to take these high interest loans because they just need the money right away. Yet these loans are considered very usurious but they're allowed at certain levels to get people over that hump. So if you understand that you're dealing with the Chinese and you're dealing with a situation where, you know, you could get caught up in the per se debt trap. You have to know how to get into it and when to exit. So you're not adversely effective, but you have to go in with, you know, what is your ultimate goal? Well, yeah, there's that issue and then what's been described going on, you know, at the local level in the island nations. And that they are susceptible to, and desperate enough, then with climate change wreaking, all kinds of happen. They need big bucks to do the kind of development that'll protect them and their nation. Well, it gives the US an opportunity to go in, you know, and to help these countries if they are so uncomfortable dealing with the Chinese. But many of these countries don't feel that way. They want to welcome the Chinese investment into their community. Now, what is the end result of them is going to be the key question moving forward because the Chinese have been criticized, you know, repeatedly for their business practices. Sometimes, many times unfairly, but at the same time, you know, if you develop a bad reputation, people are not going to want to deal with you even if they are hurting so bad, you know, they'll look to another partner. So it's in the Chinese interest to make sure that the other side, you know, feels like it's a win-win relationship and that they are going to get. And at the same time, the US should treat it as an opportunity to exert US soft power and to show how we are exceptional in engaging and trading with other countries. I mean, we don't occupy, you know, we're that shining city on the hill where people come to escape oppression and know that when they come to the United States, that if they work hard, they can achieve the American dream. And that's what we need to instill and promote when we're engaging, you know, with other countries. Well, the alarm of what that foreign minister, the Chinese foreign minister accomplished is at least one, if not two nations that agreed to shift their allegiance to the China One policy and would stop relating to Taiwan and would only relate to the China One policy, which was alarming as they had been on the Western side of things. So do you think that the US is attending to this? And does it seem like it needs to have some attention? We need to have a direct approach with China. And at the same time, we need to stay active and engage in the Asia Pacific region. We can't afford to alienate our allies or our partners. And at the same time, we have to stand up strong against the Chinese who respect strength. They don't respect weakness. And we don't have anything to apologize for. I mean, that's a big key. You know, we have a lot to offer the country as a force for good. And that's what needs to be promoted to the countries in the Asia Pacific region. And you'll see more and more of them wanting to lie with the United States, but still maintain a strong relationship with China. The Chinese need to continue to do a better job of engaging in the community and working with the people rather than being perceived as someone that's coming in and just wanting stuff and then is gonna leave. And that the country is gonna be left in a worse off position. That's not necessarily the case, but that's the perception. And when you have that perception, you have to work really hard to change the mindset of people. Well, Hawaii could work on that. The state of Hawaii actually could take an initiative or the step towards making some things happen in the state. I don't know that presently is an ongoing initiative in the state. Do you? Well, Hawaii is facing many challenges right now because of the effects of COVID. Hawaii desperately needs tourism dollars. And Hawaii desperately needs to diversify and expand into other areas. The industries and that's gonna mean more changes. People come to Hawaii, they don't necessarily know the right way to do things in Hawaii and it revs the locals the wrong way. You're gonna face more and more of these issues as Hawaii continues to get more and more business or coming into the state. But right now, people wanna get to Hawaii, they want that vacation, but it's becoming more and more expensive. And hopefully the new governor is gonna be able to put an economic package together that's gonna be able to attract and engage new business and to be able to bring more and more local people back from the mainland to Hawaii because it's so expensive to live there. Yeah, more and more. Yeah, and the whole Hawaii, Ohana, the family is so important. And I think that that's a role model and example for the rest of our nation. Oh, then this is true, that's a very good point. But it also would embrace Chinese too. The Chinese people would find, I've certainly find themselves welcome in Hawaii. Oh, absolutely, because family is very important in China. And they can respect and understand the Hawaii, Ohana. We just need to get more and more of them over to Hawaii and make it more affordable for them to spend their vacation. But I think there's a lot of good opportunities and possibilities, especially with Hainan Island and also engaging directly with the tourism ministry in China like Linda Lingold did. So I'm hopeful that the next governor will take that same approach and talk and engage with the Chinese and say, how can we make it affordable for them to take the trip and spend time in Hawaii as we really want their tourism dollars. And at the same time, we know there are projects that they can involve themselves here in Hawaii that will benefit our economy and benefit our local people. So then speaking of initiatives that China has in play I did see that they've got a 20 year old initiative that's like a $4 trillion effort that is labeled the Belt and Road Initiative. Yes, one belt, one road. Yeah, one belt, one road. Yeah, it's a form of soft diplomacy. It allows China to be able to trade and engage with central Southeast Asia as a way to exert Chinese influence, guidance, support and engagement with these various countries. They think that by promoting strong economic development within between China and central and Southeast Asia you will be able to create a win-win situation where everybody benefits and there won't be the need to have control and well, disorder and war and famine and disease, pestilence. There will be a strong economic political and social framework that will be developed that where the economies of these countries will grow and expand and China will be able to benefit and their people will be able to continue to grow and develop more and more people out of poverty in the middle class and more jobs available, more expansion of opportunities within China to develop the provinces. So the key will be what will the personal relationships be that develop from the Silk Road Initiative? What kind of economic projects will develop that will allow for a continued personal growth and expansion of the political and social dynamic? That's a very good point. And that operates at the US policy development level, as well as what the state of Hawaii can contribute to that effort here in the Pacific. And it is a state, not a country, so in a little different position as far as trying to grow that relationship, but nevertheless, there is a lot that can be done according to what you say. And we have to worry about North Korea, okay? Because Pearl Harbor was attacked, right? When the US was attacked it was Pearl Harbor, North Korea could fire a missile one day and it could obliterate Hawaii, unfortunately. So you need to have a strong relationship with China who has strong influence with the North Korea for that reason as well. Yes, and I think that that's such an important point as we're running out of time here, Ralph. Let's come back and talk about the whole risk issue. Given things can go sideways and downwards on occasion and we would like to try and intervene before anything like that happens. And these efforts of development and cooperation and that we talked about are the ways to build the bridges that will keep us from getting into that kind of a mess because here we see it right on a powder keg. So... And Hawaii has that unique perspective in terms of dealing with the West and the Asian side of things that can bring people together in a very positive way because people have a positive support and belief towards Hawaii, the positive outlook which is very important. But now Hawaii needs to harness that and they need to create tax breaks and various other incentives to bring in business that will work and engage with the locals so that the Ohana spirit is promoted, maintained and enhanced and not destroyed. And Hawaii's very humble and doesn't brag about what it has to offer and it's very rich. Correct. Forces that that way human resources and could really contribute in some significant way. So let's talk about it again because we have a new administration coming on and new challenges. And as you say, the North Korea thing is there too. So that's an important place to have a state knowledgeable have awareness heightened about what are these and risks for us. Well, it's been a pleasure having you here to discuss this potential relationship we have with them and how it is that we can avoid ones that are not productive. So this is the state of the state of Hawaii and our guest has been Ralph Winnie Jr. from the Eurasian Group China Center and we're pleased to have that on the information he's imparted tonight. Thank you so much Ralph. And look forward to seeing you all again on Think Tech Hawaii in two weeks. I'm Stephanie Stoldahl, tenure host Aloha and Mahalo. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, Twitter and LinkedIn and donate to us at thinktechhawaii.com. Mahalo.