two, out of the clear blue sky i got a telephone call from the smith richardson foundation asking me if i would be interested to write something about how we should be dealing with china and i said yes. so i began in february and at a moment when u.s. policy was very much the same as it had been when i was in the reagan administration in 1982 and that is to say policy was what we call positive engagement and the idea was to negotiate with china and bring them into what we call the global systemti and hope tht economic development was result in china and political liberalization if not democratization. that policy added to change on march the first 2018 when the economist magazine cover story

said that the west had made the wrong bet on china and what i've written about is how we made the wrong bet and what we should be trying to do about it. >> host: when do you think -- your titleor says the world turd upside down and when do you think in terms of the u.s. and china relationship things became upside down? >> guest: well, i think beginning in the or it began really as i said at the early 1980s when we began to embrace china and try to meld china into the world trading system and into the broader global system but things really got going when we or after we brought china into the world trade 2001.zation in we brought china in 2001 with the belief and hope that china

would become a market economy and that it would become a so-called responsible stakeholder in the global rules -based order that economic liberalization would lead to political liberalization and what china had been doing and then increasingly did was to focus on industrial policies, focusing on developing industries like artificial intelligence, semi conductors, roboticsmi to achieve what they called made in china 2025 and the idea is that china would become the global leader in a lot of these cutting-edge technologies and in doing thatut china engaged in a lot of policies that we have seen before in theol cases of korea d taiwan in which they target

particularly industries and they subsidize them and protect them and promote trade in those industries and tend to wipe out those industries in the u.s. and in other western countries. they tend to run very large trade surpluses while we are running large trade deficits and particularly in the case of china not only is this an economic issue but it's a very much political and moral issue because effectively when you do with china they begin to imposeu the chinese communist party and they begin to impose [inaudible] and you remember last year the houston rockets festival team managersk tweeted in support of demonstrators in hong kong. immediately, nba games were broadcast that china was halted. i have many more examples butut the point is that it wasn't what

was happening was the opposite of what we had hoped. china did not become a responsible stakeholder in the global system. and now we are faced with the issue of okay, if they're not going to play nicely or play the game the way we thought they were then how can we? >> host: your book written during the trump administration now coming out so what to think the legacy will be or is of the trump administration policy of u.s. towards china and in several areas and in trade and and military struggles and other areas? >> i think one of the positive things that the trump administration did was to change the direction and the thinking or the assumptions and the fundamental awning pinning assumptions of u.s. and up until

the trump assumption had been the china was a liberalist and that china was going to become more like us. we were at the end of history and inevitably globalization will lead to the marketization we just had to be patient and continue to negotiate with china and endless high-level meetings but with the trump administration saw even before the economists that they shifte. one could argue about the particular techniques that the trump administration pursued but i think the big thing is that there was a recognition that it wasn't working and that our assumptions were wrong and we had to do something different. we have been and you know, it's interesting to me that the biden administration has not rejected

the trump policy and the biden administration is keeping in place the trump policies and thinking about how to become may be more sophisticated and how to be include our allies in a better way but essentially the move here is based on an understanding in the biden administration that china is again not playing the game the way we had hoped they would. >> host: our guest is clyde prestowitz, author of the new book on u.s. china relations and the worldrl turned upside down n america and thee china for struggle for global leadership. we welcome your calls and comments and the lines are 2,027,488,000 ###-###1 for a publicans, (202)748-8000 for democrats and all others (202)748-8002 and we will get to your comments momentarily. on the biden administration the in "the new york times" on that call last week, biden

raises concerns with china's president xi and the first call since the election and i just want to play brief comments from the president after that call and he met with several senators in the oval office but here's what president biden had to say. >> last night i was on the phone for two straight hours with president xi and you will know as well as i do these folks and we had a good conversation and i know him well and we spent a lot of time together over the years i was vice president. but you know, you don't get moving they will eat our lunch. they have major, major initiatives on rail and it can easily go 200 miles an hour and they are working very hard and i think we will have to do and i think the automobile industries are already there and so is labor and they're working very hard to try to move in a

position where they end up being the source of a new way in which to power automobiles and they will invest money in billions of dollars in dealing with a whole range of issues that relate to transportation and environment and the whole other things. we have to step up. >> host: , those common saying' china will eat our lunch. >> guest: yeah, i agree with him. china is eating our lunch. we have a trade deficit with china ofit about $400 billion ad interestingly when we negotiated to bring china into the world trade organization we had a trade deficit of about $80 billion annually and at that time theim u.s. trade representative charlene and

president clinton and later george w. bush all told congress that by bringing china into the world trade organization our deficit would be cut in half and they said that because we have already had low tariffs on chinese imports and they had high tariffs on our imports so the argument was they would have to reduce their tariffs and we would not have to reduce hours and that was create a surge of u.s. exports to s china. quite the opposite happened we are now at $400 billion at deficit to china and you know, whole u.s. industries have moved to china. something like three or 5 billion american jobs have been moved to china between 2001 and today and so they are eating

our lunch and i think that president biden and i'm pleased that he recognizes that. >> host: would we be in a better position trade wise if we had entered the transpacific partnership there at the end of the obama administration beginning of the trump administration? >> guest: trade wise it would've made no difference. in fact, trade wise we might have been in a little slightly worse position because that agreement was not going to open a significantly any significant markets for us in asia. remember, we called it a transpacific agreement but aside from japan the other major asian countries will be vietnam, malaysia and singapore and those are not big markets. we did bring japan into it but nothing in the agreement was going to increase our exports to japan. you could argue politically that it was a mistake for us not to

stay in but economically trade wise, no, it was a nothing. >> host: we have several calls waiting for it let's go to bob who is on the independent line. paul in michigan, good morning. >> caller: good morning. mr. prestowitz, you are being very nice about china and i know you have to be not as radical as i thank you would like to be in the bottom line is is that china wants us gone and they are not a trading competitor and they are not anything of the sort. they want us gone off the face of the earth and they have a guy in president xi who is mao and the books publish suits. if anyone doesn't believe that that's one of the few things and there are very few things that donald trump got right. but that was one of them. >> guest: well, as i said earlier i think trump did recognize that thinking about

china over the past 40 years had been mistaken and i would say that and i think that we have to look at china in two ways. there is china, 1.4 billion people and i don't think that all 1.4 billion chinese want us off the face of the earth. my own wife is chinese and i think shehe likes to have me around. but i think the chinese communist party very much wants to dominate us and they want to dominate whatever they touch. the chinese communist party has stated straight out in black-and-whitetr it is opposedo free speech and it is supposed to constitutional democracy and it is opposed to the concept of universal values and it has declared the policies that it wishes to follow to reduce american influence and reduce,

not just american influence but the whole concept of human rights and the whole concept of democracy and rule of law, due process and it wants to reduce that and so if you do it china you run it into a devil's bargain which the chinese will allow you to make money but only if you talk the way they want you to talk. >> host: sonya in rushford, minnesota. you're on with clyde prestowitz. >> caller: hello. this is interesting to me because my mom and dad and i'm 80 years old and already said in the 60s and 70s that china would ownth us someday. through my years of having to shop and everything we went from quality products to not quality and we have filled our landfills with junk. you have bought cheap but it

didn't last.t. this whole talk reminds me that the communists are taking over our country, not china and parts of china is taking over our country. >> host: clyde prestowitz, let me add onto that comment from another viewer. rebecca treats this, she says the u.s. politics don't hesitate to bash china but business people don'tto hesitate is to me business to china as well as trade with them. >> guest: yeah, that's very good and interesting point. one thing that is not recognized typically in the public discussion of this is the role of american multinational corporations. the multinational corporations, many of them, a good example is the general electric. this is amazing. the chairman of general electric

and he was also at that time in 2011, 2012 was president of mr. obama's commission on jobs and competitiveness so he was supposed to be trying to figure out how to create more american jobs and make america more competitive but at the same time he announced that ge was moving its avionics division so avionics are electronics for air and it was moving the division from the u.s. into a joint venture with state-owned chinese company called [inaudible] in china. avionics are not something that is labor-intensive. it is not cheap wages that you need for avionics. you need technology and special skills. effectively what he was saying was that ge was going to go to china and teach the chinese these skills in this technology and i

scratched my head so why are we doing this? avionics is what we theoretically are supposed to be good at doing so why are we putting it in china. the answer came back loud and clear because the chinese have made it clear to us that if we want to sell avionics in china we better done will make them in china. now, i have often wondered on the one hand here is the chairman of the commission on jobs and competitiveness and did he ask himself, you know, is there anyis contradiction betwen my job for president obama and what i'm announcing i will do with my avionics division and secondly, did president obama call him up and say jeff, what the hell are you doing? i don't know the answer to either of those questions but it demonstrate exactly what you pointed out which is that the u.s. global corporations have found it very convenient to move their production to china.

let me tell you something that is absolutely of key importance. in america these corporations are very powerful and they make big political donations and have armies of lawyers and lobbyists in washington and have instant entrée to the white house and congress and they write a lot of law in america and in beijing they have no stroke and they are on their knees and they are begging so effectively they have become hostages of china.es what tends to happen is ceos of american companies whether the head of the chamber of commerce and other organizations in america will go to congress and testify and they will introduce themselves as the voices of american business when in fact, they are much more the voice of chinese business. this is, i think, an aspect of the u.s. china relationship that president biden must change

dramatically. >> host: do you think in that transfer of avionics technology in the case of general electric and other sensitive technology has been damaging to u.s. national security?ee >> guest: absolutely. yes, i do. that is something that jobs and american economic welfare so yes, damaging. >> host: coral in chicago next on the democrats line. >> caller: my comment is that reason why we are so far behind is because america decided to invest all their energy and resources into a war for 20 years while china we invested our money and expanding around the globe m and the chinese aren just about every possible country and we are still

invested in bullets. >> host: thank you, carl. >> guest: i think that's a very wise statement. you are exactly right and we have expended in norma's resources in endless wars that are of marginal significance to us in too much of the rest of the world. we have not recognized the challenge from china and we have squandered our resources and we need to stop. >> host: are you able to quantify the success of china belton road project worldwide? >> guest: i would haved us say i'm not able to quantify but i would say what has happened is that, two things. one, china has made in china has

become more severe to more countries in the world while america has become less significant to more countries and i would say that to give you an example the european union operates on the basis of unanimity. if the european union is going to announce a policy position all of the members of the european union have to vote for it. china has cleverly bought the port of [inaudible] in greece and is building a high-speed rail from hungary to serbia. >> live now to a virtual hearing of the house, science, space and technology coronavirus vaccine. we hear from public health