years ago -- >> ask not what your country can do for you -- >> throughout history, presidents have delivered pivotal spaces during inauguration and farewells. on saturday, watched a 10 part series speeches that defed the presidency on american history tv. here the words of presidents. this week will feature ronald reagan's 1981 in yard roll address, declaring the government is not the solution to the problem, government is the problem. in984 on the 40th anniversary of d-day, esident reagan spoke from normandy, rognizing the veterans. >> behind me as a memorial that symbolizes the daggers thrust into the top of these cliffs. before me are the men who put them the. these are the boys. [applause]

>> watched a 10 part series speeches that dened the presidency saturday at 9:30.m. and p.m. eastern on american history tv on c-an 2. continues. host: we are taking a look at aspects the uted stes and china like mility, his geopolitical influence of today we focus on the economy. joining us for this discussion is scott kennedy from center for strategic and international studies. good morning and tnks for joining us. whats the st way tthink abouthe relationshi ecomical that the u.s. has with china? guest: we have a monster relation, 750 billion in trade, investments, we are integrated with their supy chains.

the same me, we are strategic competits where we are facing off with each other with what we want t intertionalrder to look le. we are deeply integrated but at the sa time we face monumental political stggles. we have to figure out how to collaborate, compete fairly but also deal wi the national security implications that come with it. host:he economic concerns unrlie every decision the united statemakes with chi? guest: ecomics tnational security. issueslay a large ro. we are worried aut u.s economic cpetitiveness. our employment picture, inflation as well as many different industries are going to go from autonomous vehicles and other tys of ai to

quantum,emiconductors and all of that has national security implications. you can have a conversation about china witho the national security side. washington sees that economic integratiowith china is negative for our national security and it's a mixed picture. we can't decouple from china. we have to figure out how to use the kind ocoupli that we do have to advance our national security. not just play defense. host: economic figures that show imports and expor increased to 590 billion. consumers bought more chinese goods, exports from china 194

billion. guest: all of the talk about decoupling, there are areas like semi conductors where we have imposed significant restraint. new investments of slow down but overall trade has grown during the pandemic, we had almost no travel between the two countries and that will start to go. we are adjusting our relationship, not eliminating the relationship. host: as far as the adjustment, what is that look like? est: when the u.s. and china started increasing their trade relationship you saw a lot of american multinationals go. we saw that effect jobs in the united states. and he saw china uses an export platform for the rest of the world. a lot of the trade we have

between the two countries, companies that are doing businessith china in china, for china, those whose china as their global supply chains are still there but moving to southeast asia, india. you are seeing a transition in the way the industry is run. china was primarily competitive at the lower end of technology anclothing, toys, games. now they are competitive at the top of the market. it's a very different kind of relationship. we are both targeting the same instries, the same positions so that makes our relationship more competitive than it was two decades ago. host: our guest is with us until 9:00 if you want to ask him questions about the

economic relationship between china and the united states. the lines are (202) 748-8000 democrats, (202) 748-8001 republicans, (202) 748-8002 an independents. the chinese premier spoke on these d american economies have benefited from our du development and there is great potential and u.s. cooperating to the outside world . no matter how the external situation changes we will ceainly move forward. guest: that is well put from a chinese official perspective. the new premier who takes over from the old premier is framing the challenge of the relationship from the beijing official perspective. both beijing and washington are concerned about the

vulnerabilities of these overexposed and dependent on eachther. china started this. you can't participate in china's social media market. foreiginvestors have limit cess to their markets. china has a great industrial policy, the largest in the world. they have already been somewhat closed. now it is the u.s.'turn with the imposition of export controls. more concerns about investments going to china and talking about the need to decouple from china. reduce the overdependence on ina as a place of production and supply. both sides are conrned about where we are going. you have nationalist convertion that

predomance and beijing and was washington. a lot of the conversations nversation about t citie th don't reesent the total trip to parishere the economy the relationship is going. host: this is the chinese foreig ministe the competition by the.s. is a zero-sum game of lifand death. guest: the chinese goal is to betray themselves as guiltless in this decline of the relationship and they are peaceful and inevitable. everyone shod just accept it. therore tohrow shade on everything t u.s. is doing saying that everything they are doing to china is illegitimate,

and appropriate and unfair and it wiltake the u.s. to make the relationship right. i think that's a smart diplomatic tactic. the biden admistration is not falling for that. they he been pushing back hard and pointing out where the chinese are wrong economicay, politically, on military issues. you see both sides pointing the finger at the other. that is why we are in the stalemate. the chances of things going off the rails are still quite high. host: wt would be the tipng point then? guest: on the securi front the number one issue is on taiwan and whether something might go on there. we have enough deterrence to make it unlikely for the chinese to take any acti in the near term. but that is the number one place that people are looking at on the ecomic front we have an

integrated economy but also ecomies thahave significant weaknesses. we have inflati, we now have financial chalnges. china has lots of nancial challenges, that over 320% gdp in a variety of things that may push them to close even further. and of course, y have ukraine out there and china providing military support t russia and then you would have secondar sanctio and all the micro steps that you would have to take would fail in comparison to what comes next. that relationship would face a lot of difficulties. host: you have been to china several times, what d you learn about the way the economy

functions there that we don't get? guest: the quotes you read me or from top officials in beijing given the p.r.c. official line in the trip that i took to china in the fall when i was tre for six weeks and i'm going again next week. china' economy is driv by his private sector. politically shunted china, you have seen the challenges of the founder of ali baba lives in tokyo. the private sector accounts for two thirds ofnvestment a 90% of new jobs. last year, they we on the mat. they did not increase their investment at all. concerned because of zero covid policy and the attacks on the private seor.

in terms of looking at where china's ecomy is going to go is a in the private sector. we see some signthat they are tuing things around but nonetheless, it is dicey, china's recovery. instead of focusing only on what chinese officials say or state owned binesses, the private sector is where the chinese economy is located. host: part of our series taking a look at china tod and its economy. we hav dave from west virginia, go ahead. call: quite the conunum. three-dimensional stress on eroids. we have become so interwov with china and yet they are such a threat. how do we unravel this so that

it works for the u.s.? it's hard to compete with china when you manufacture stuff. vitamins all come from china. how do we get out of this? how do we set up a pre-boycott and how could we do that and affectur relationship and make china pay attention to the free world, like the russian oil thing. we boycott and resistance to china and their big machine that needs money to keep going. free enterise provides, i didn't know they had a private sector in china. how do we unravel is? how do we use our free people of the world to pressure china t acquiesce and say hey, we all

need to live togethe guest: that's a great question and your itial concerns are justified and your worries are justified. the idea for what to do ian understandable starting point. we hava deep relationship th the strategic competitor so recing that relationship helps your national security. as far as their economic model and rules that they follow are not identical ours. from the perspective of our economy and national security, we gain a lot if we can manage th economic relatnship in our self interest. during the first decade of china's entry into the wto in 2001 there were significant job

losses in the united states. every economist that has run the nuers says that over the last 10ears, even as our trade deficit continues to rise, our manufacturing sector in the u.s. is growing. in addition to that, we've been able to innovate. we are overreliance on china and that is why you are seeing diversification from american countries there. apple has announced new significant investments in india because they don't want to have all their eggs in one basket either. on the national security front, interdependence is not a guarantee to avoid war or conflict. no one should be under that illusion. it does give us leverage to. and why is china not giving military aid to putin in ukraine?

they know where their economic bread is buttered in the united states and the west. they know that hmer of sanctions will come down on them superhard. that kind of leverage is somethinyou don't want to throw away. i agree with the frustration and concerns but i think the smart answer is not to decouple and isolate them and wait for their economy collapse. we can use the leverage we have a smartly as we can to manage a complex relationship. host: this is bert's in georgia on the republican line. caller: good morning. i'm in ask you aut this deal with t u.k. and saudi arabia where they are trying to get off the dollar as the world's currency. they want to gto a gold backed

economy wherever they are buying oil. it is backed by gold. if you have that, wl the unit states go to the gold stdard? orill th continue to try to ba it with the good faith of the united states crit? will get offnd listen to your answer. host: thank you bert. guest: i think people are really concerned about the obal financial system. right now, the dollar is still preeminent and we have seen concern about that because the u.s. overall debt is 30 trillion. it's another reason why the u.s. needs to pay all of hibills because if we don't, then the global financial system and our

ecomy would be at risk. what i have heard in terms of looking into aernatives to the dollar system. a lot of people have been talkg about, will china push the yen as alternative to the dollar. china is a monster superpower when it comes to trade but international financ of puny power because their capital account is closed. they are worried that dollars will come in and flow out. they have kept their capital account closed a as a result, cha's currency is not very important internationally. it accounts for under 5% of daily international transactions. in oil, chinese trade with saudi

arabia was recently done in their currency but that's an exception to the rule. you have seen discussions of digital currencies, t just cryptocurrencies but central government backed currencies. that might present somkind of stability for regulators but does not address the core issue. the world operatessing a currency in the government that issues the currency has significant debt constraints. host: whathe coequenc would be withemiconductors made in tain? guest: over the last 20 plus

years but global semi conductor industry has transformed itself. we had a great number of factories that make semi can conductors. factoriehave ris in east asia and taiwan which produces 90% of the most advanced chs. 60% of the chips in general. all the iphones produced in china, those chips start in taiwan. the world is entirely dependent on that. psmc china's most irreplaceable company. if there was some nd of conflict and you could not get

access to those chips it would hurt every sgle industry including the uned states. it would massively damage china's economy. we have mutually assured destruction here. we are testing, the country that dependsn tsmc if they turn their ghts off. if taiwan declares independence or china becama patient as people are concerned that they would, there could be war. that would have a devastating effect on access to chips. we have to figure out how to ep the peace and in dition expand productions, d and reduce our dependence on chips from tt part of the world. that 60% from taiwan, you won't

rece that to 5% with the step of the fingers. it will take decades to make those shifts. as with our economic relaon, there is no easy solution. you have to manage a giant challenge and improve our position. host: the president signed the chips act which would help american companies. as firewall against china and are there other means the unite states can build those walls? guest: let's rememberwhen we talk about competition in chips, the concern is that so much manufacturing occurs in taiwan that an attack or war would reduce access. taiwan is an efficient producer and is good for the u.s. economy. it's over concerated there in a vulnerable place. the chips act will increase

manufacturing of chips. there are a few other factories under construction. companies that support those factories are also establishing in the u.s. as well. that will help with the most advanced cps that we have but will i replace theeed for the production lonterm but you have to start someplace. so the chips and science act is a goodtart. we neeto do even more than that and tre arether industry where they ed to expand manufacturing because we are in a global race in the chips and scienc act is not the

only piece of legislation regarding government support for semiconductors. south korea, china, japan brazil. in somways the competion requir.c. and industry to collabore. cedric from texas, you are up next. caller: yesir good morning. i have a questio i am a truck driver and we have started t see the container rate down the companies are cutting back on the rates and they are cutting on the rat on the competition forhe jobare just declining. i'm am not workingoday because they cut my shift as well.

in the previous administration, some of the customers were telling me that instead of sending it to america they were sending it to other couries. i am trying to understand ho they do that? guest: if i understand your concern what you are suggesting that what we are seeings a sldown in the u.s./china trade, fewer imports which is affecting contair shipments which is affecting the rest of the economy including the trucng industry and yo from when i was in china in the fall and they re going through zero covid during the pandemic, there economy grew 3% last year. i uld be sprised if that's what it was. china because of itown supply

chain issues decreased exports for a significant period. the u.s. and the western economies slow down. as our demand went down, there were less exports out of china. in dollar terms, exports continue to rise. i think what we are seeing is a cyclical slow down. a temporary problem. china's economy is starting to recover. we are seeing some of this diversification out of cna. eventually it will come back to the u.s. at some point because as some of our trade from china has droppedur imports from india, vtnam have increased significantly. what we arseeings that over the long term a replacement of

cha as opposed to just simply having everything produced domeically. i expect when we get through this cyclical downturn there will be more containers coming and there will sti be need for significant transportation of those containers around the u.s.. i am not saying it is quicker sy or help any individual case. we are seeing thisyclical downturn and an adjustmt occurring at the same time. host: vw is looking to invest in china for ev's. how many other companies are looking to invest other than germany? guest: china's economy has slowed down 3%. this year they aim for around 5%. they will probably hit the target. if you are not growing at all and had the worst year in 30 years the next year you will see

some growth. china's economy is very large, 65% of the u.s. economy and is projected to continue. even a slow-growing economy in china is still a big opportunity. the auto sector is of particular focus because china sector it is the biggest with 30 million being purchased each year, four times the americ market. all of the big automakers from the u.s. and europe, japan, korea have plants in china. tesla opened a big plant. most of their production is for the chinese market. it is quite large including the electric vehicle market which is a quarterf their market, larger than the rest of the world. they are trying to export from

china to southeast asia, latin america, europe. they have not started to export to the u.s. but if they did, the folks in the building right across from us and down the street at the white house would pay a lot more attention. we never thought about china being an auto exporter but that could occur. other industries, medical device industries, chinese exports and significant investment. because of the concerns abou strategic competition and the possibility of war. no one knows which export controls could be imposed next. you are seeing a concentration of investment by a few companies. it's aut 4, 5 companies including volkswagen. you are seeing smaller, medium

size companies much more concerned and hesitant and risk-averse when it comes to new investments. host: you talk about capitol hill, there is a electronic committee taking a look at issues to do with china. mike gallagher of wisconsin talked about economic conces is security concerns. i want to play a little bit of what he had to say. [video clip] >> we may call this a strategic competition but it is not a polite tennis match. this is an accidental struggle over what life will look like in the 21st-century and fundamental freedoms are at stake. for the time being it is up to uso decide if that is the future we want for our children but it will be for much longer.

time is not on our side. just because this congress is divided, we cannot afford to waste the next two years lingering andegislative limbo are pandering to the press. we must act with a sense of urgency. i believe our policy over the next 10 years will set the stage for the next 100. we cannot allow the ccp tech dystopia to prevail. we must learn from our mistakes. we tried to win the ccp over with economic engagement that would lead to reforms ichina. it did not work out. the ccp laughed at our naivete as they took advantage of our good faith. that era of wishful thinking is over. we will not allow the ccp to lull us into complacency or maneuver us into submission host: there is the opening

statement from the committee.

>> and understand that people are concerned that china holding you is that they give them some kind of leverage. people may do the same when talking about china's dominance, but for the most part, they hav never pulled the trigger on these because they would only be hurting themselves significantly. but we also have leverage in this relationship. we demand from most tech industries where the chinese need us, they are operating as before. the dollar dominated the world.